Waging a War of Wages

It seems that Alex Hekimian (and for the uninitiated, that’s “eye-key-me-an”), a long time Oakland Mills resident and current President of the Alliance for a Better Columbia (ABC) is upset about Columbia Association senior staff salaries. His concern made it into both the Baltimore Examiner and Baltimore Sun newspapers today.

Sara Michaels from the Baltimore Examiner reports:

Five of the seven top Columbia Association officers are pulling in six-figure salaries, and one residents group is questioning how salaries and bonuses are rewarded.

“We don’t think money is being spent wisely,” said Alex Hekimian, head of the watchdog group Alliance for a Better Columbia, who received the compensation data from the CA and provided it to The Examiner.

[C]A doesn’t make these compensation decisions in a vacuum,” CA spokesman Steve Sattler said. The organization relies on consultants to determine average wages. A salary study conducted six years ago, which did not include benefits, showed the salaries were too low, he said. Another study of Brown’s compensation in 2006 showed her pay was also low, and in April she was given a $7,000 raise.

CA is planning another salary study, which will include salary and benefits. However, Hekimian rejected the idea for a salary study, saying it’s a “way to justify raising salaries higher.”

The wages should be compared with state and county government employees, Hekimian said, since the homeowners association is quasi-governmental.

Simlarly, Larry Carson of the Baltimore Sun reports:

The Columbia Association's top officials got hefty cash bonuses on top of
salaries that are higher than those of most county and state employees, and a
local watchdog group wants to know why.

Alex Hekimian, president of the Alliance for a Better Columbia and a longtime gadfly and critic of association management, said the salaries are far too high. "They're into
bonuses," Hekimian said. "We'd like to find out why."

He said county officials typically make less than Columbia Association officers, who manage an annual budget of about $50 million, compared with the county's $1.2 billion spending plan.

"It just seems out of line because of the way CA operates," Hekimian said. "This is a homeowners association."

Other than Mr. Hekimian’s overly confrontational tone (“They’re into bonuses, we’d like to find out why.”), I think his assertion that CA is a homeowners association is exactly the reason why the pay at CA is different from traditional forms of government. Regardless of the quasi-governmental dogma put out by any organization, State and Federal courts have repeatedly held homeowners associations outside of government. The most recent example has been the Twin Rivers, New Jersey case (be warned, your constitutional rights may not apply).

What do the neighbors make?

Perhaps ABC’s press release was serendipitously ill timed. Also in the paper this morning was a story from the U.S. Census American Community Survey. Statistical estimates for 2006 puts Maryland as the richest state (as measured by a median income of $65,144) and Howard County as the richest County (median income of $94,260) in the richest state (overall, third richest in the nation, behind Fairfax and Loudoun Counties in Virginia). Given that the average income in the county is about to push five figures, the fact that some at CA have salaries in that range would not be surprising.

Looking at the whole picture

Let me say I agree in principle with ABC that CA staff should not be over compensated for the work they do. However, I believe one of the best tools available for determining appropriate compensation is comparable studies. As mentioned in both the Baltimore Examiner and Baltimore Sun, two studies have been performed in the recent past and one is currently ongoing. The most recent study of CA President compensation is available on line (scroll down to the last sentence on the page) and was performed by the Singer Group. This study, submitted in 2006, cites comparable salaries for other large homeowners associations (The Woodlands (TX), Reston (VA), Montgomery Village (MD), and Ocean Pines(MD)). The study also looked at salaries for not-for profit organizations in the $25-50M range and city manager positions in the region. All comparables showed that the CA President salary was either on par with or lower than others. It is also important to note that with respect to homeowners association presidents and city managers, all comparables cites (though in my opinion otherwise valid) were for resident populations much smaller than Columbia.

In my opinion, this study seems to better describe the comparables to the CA president than ABC’s simple statement that in terms of pay, quasi-government should equal government. Moreover, Mr. Hekimian’s statement

[H]ekimian rejected the idea for a salary study, saying it’s a “way to justify raising salaries higher.”

Allows for no other recourse for justification of salary other than what his organization “thinks” is appropriate. Indeed, if Mr. Hekimian rejects salary studies as a means to justify pay, I would like to see his organization provide data on homeowners associations that have linked their staff’s pay to surrounding government pay. I am not aware of any homeowner association that agrees with that philosophy. In the interim, the “just because” excuses for assailing the pay of staff is insufficient.