Sacramento City Manager Howard Chan gets sixth raise in 7 years

The Sacramento City Council on Tuesday approved giving City Manager Howard Chan his sixth pay increase in the past seven years, despite an expected budget deficit in the forecast. 

Chan’s raise is scheduled to go into effect retroactively to February 2023 and will bring his base pay to around $420,000 a year, a 5% increase compared to his current annual salary of about $400,000.

Sacramento City Manager Howard ChanCity of Sacramento website

Mayor Darrell Steinberg as well as Council members Mai Vang and Katie Valenzuela abstained from voting on giving Chan and other appointed officers — including City Attorney, Auditor, Clerk, Treasurer and Director of the Office of Public Safety Accountability — a raise. The rest of the council approved a 5% raise for the group of city employees in the same vote. 

The raises are based on cost of living increases, according to a city staff report. Steinberg said the amount is reasonable, but the council will consider the raises after adopting a budget for the upcoming 2024-25 fiscal year. Two of the pay increases aren’t scheduled to be effective until July, which is when the new fiscal year begins. 

“Though it would be our intention as a City Council to provide a cost of living increase for our charter officers, given the deficit and given the challenges that we face, there are no guarantees that we will be able to follow through on that,” Steinberg said. “We hope we can, but there are no guarantees.”  

The city could have a deficit of $24.5 million in the 2024-25 fiscal year if it continues current homeless services and doesn’t receive state funding, Budget Manager Mirthala Santizo said in May. Rising inflation, interest rates and labor and liability costs are expected to strain the budget, according to the city's five-year forecast.

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On Tuesday, the council also approved giving Chan an additional 240 hours of leave time, which equals 30 eight-hour working days. The amount comes out to about $48,000 at his rate of roughly $202 per hour. 

The council last approved a raise for Chan in November 2022. At the time, officials gave him a 7.5% raise retroactive to February of that year. Valenzuela casted the sole vote against approving Chan’s raise last year.  

In 2022, Chan made about $548,000 in total wages, according to the California State Controller’s Office. The total doesn’t include health care or retirement contributions.

Out of the cities that reported city manager pay data to the office, Chan received the third most in total wages across the state. Only the city managers of Southern California’s Montebello and Palmdale made more, according to data on the office's website. 

The council appointed Chan to the city’s top executive position in February 2017. He began the city manager role with a $282,060 annual salary, according to his initial contract.

The city manager is Sacramento’s chief executive officer whose responsibilities include preparing the annual budget, overseeing most city departments and making recommendations to the City Council. Chan reports to the council, which has the power to hire and fire the city manager. 

Chan began working for the city in 2002, when he was hired as the parking services manager. He was an assistant city manager for about three years before succeeding former City Manager John Shirey, who held the top position for five years.

Correction: A previous version of this story incorrectly identified the years the raises would go into effect. It has since been updated.