Finance & Business World

When word got out recently that a small town in California was paying its city manager nearly $800,000, the backlash was swift. Residents were furious and national news outlets jumped on the story, putting salaries for city officials under scrutiny across the country.

But, compensation experts say local city officials are not being overpaid.

In Dayton, for example, City Manager Tim Riordan is the highest-paid employee, earning about $145,000 annually. Among all city of Dayton's 1,300 full-time workers, only 20 earn more than $100,000 a year including Riordan; Stanley Early, the deputy city manager; Cheryl Garrett, finance director; Shelly Dickstein, assistant city manager-strategic development; and police chief Richard Biehl.

The national average salary for city managers salaries runs about $106,000. But, in cities with a population between 100,000 and 250,000 - Dayton has 153,000 - the average city manager makes more than $183,000, according to the International City/County Management Association. The average salary for full-time employees at the city of Dayton is about $55,000. Then average person in the Dayton area made $35,344 last year, according to federal statistics.

Click here for database of Dayton city employees that can be searched by name or salary range.

Click here for database of Springfield city employees that can be searched by name or salary range.

Michele Frisby, a spokesperson for the association, said the California case has forced city leaders across the U.S. to defend, or at least explain, their salaries.

"The ridiculous salary that was being paid to the Bell (Calif.) city manager is so unusual; most salaries are in-line with standards for the profession and are certainly not that competitive to private sector or they don't surpass private sector salaries."

When asked about Riordan's salary, Frisby said "he's certainly not getting overpaid."

Riordan - who volunteered to take a 3 percent pay cut shortly before the California issue surfaced during the first week of August - said that situation was a rare example of abuse; that pay for top city officials around the country was not out of whack.

"That is an extreme anomaly," Riordan said. "How the heck did they get that passed?"

As for Dayton city employee salaries, Riordan said "good people cost money," and the city needs good people at a difficult time that includes shrinking tax revenue. Attracting and retaining good people, he said, means paying market-rate for employees, something that applies to any organization, including the city. To bolster his point that Dayton salaries are reasonable, Riordan pointed to local companies where he said executive salaries compared to the lowest-paid workers typically run at a 20-to-1 ratio or greater. At the city, he said that ratio is about 5-to-1.

"Look around at some of the private organizations in this community and tell me that anybody else could match us," he said.

Riordan was appointed to serve as interim city manager in October last year, filling the void left by Rashad Young who took the same job in Greensboro, N.C. Since then, Riordan - who worked for the city from 1972 to 1998, including as interim city manager in 1994 - has since been named the city manager. Young started in Greensboro with a salary of $179,500.

In the city of Springfield, which has about 62,000 residents, Jim Bodenmiller makes about $112,000 annually as city manager. Among the city's 300 employees, only three earn more than $100,000 a year including the city's law director, Jerome Strozdas, and deputy law director, Andrew Burkholder.

Bodenmiller said pay city leader positions in the region is not out of line. However, the trick for Springfield and other cities is maintaining the balance of paying well for talent while being a good steward of public funds.

"Like it or not, governments are like large businesses in many respects and there's a lot of responsibility in those positions," he said.

As union contracts expired in Springfield - both in this year and last year - workers have taken zero pay increases for one- or two-year periods and nonunion workers got no bump in pay this year or last year. Bodenmiller said the city also scaled back or modified benefits, whenever possible, to save money.

"We realize we're no different than any other business, we're struggling to make ends meet," he said.

Dayton city salaries, in general, Riordan said, have been flat for several years as employees have taken a combination of cuts, zero increases and days without pay. And during the past decade, the city has cut about 600 jobs.

"Everybody has done something," he said. "You've got to be real sensitive to (the issue of city salaries) … because this community has been hit hard."

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The Walt Disney Company said Friday it has agreed to sell Miramax Films for around $660 million to an investor group.

The indie film label is being bought by Filmyard Holdings, which is backed by construction mogul Ron Tutor and Colony Capital, the private equity firm headed by Tom Barrack.

The deal includes the rights to Miramax’s library of more than 700 film titles, as well as some books, projects and the the Miramax brand.

Started by brothers Harvey and Bob Weinstein, the art house label’s movies include Oscar winners "Shakespeare in Love," "Chicago" and "No Country for Old Men."

"Although we are very proud of Miramax’s many accomplishments, our current strategy for Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Pixar and Marvel brands," Disney (DIS, Fortune 500) CEO Robert Iger said in a prepared statement.

The sale of Miramax is expected to be completed by the end of the year, Disney said. 

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Toyota brought us the Venza last year, now Honda has the Crosstour. At first blush the two seem like rivals in the spirit of Camry and Accord, the popular sedans that form the basis for the new pair. Both further blur lines already crisscrossed by sedans, coupes, sport utilities etc.

But Venza is more of a wagon than a sport utility, kind of the opposite of most crossovers. Crosstour comes across as more of an oddity, a high-riding midsize hatchback rather than a wagon or SUV.

And that iteration of one of the market's best midsize sedans left me a little disappointed. First, the swoopy hatchback design cuts into rear vision, especially with the big spoiler crossing the rear window. And it didn't draw the compliments like the Venza — shades of Pontiak Aztek. Second, although cargo room may be more versatile than the sedan's trunk, the design limits a major gain.

Beyond those complaints, the Crosstour is another shining example of Honda finesse. The powertrain combines a five-speed automatic transmission with a 3.5-liter, 271-horsepower V-6 engine for a smooth, responsive ride. Gas mileage tops out at 27 miles per gallon on the highway with front-drive models. That's a leap over traditional crossovers such as Honda Pilot, but lags Venza, which gets up to 29, but only when outfitted with its 4-cylincer plant.

Crosstour EX starts at $30,450 and includes more than just the basics, including a power moonroof, remote entry, rear wiper, dual climate control, power seats, cruise control, CD changer, MP3 jack, and compass.

Side airbags and curtains, stability and traction control, fog lamps, antilock brakes with assist feature, and tire-pressure monitor make a nice safety package along with perfect fives in government crash tests.

Leather seats and navigation (which includes needed help in the form of a backup camera) are among extras. It costs at least $34,800 to get into an all-wheel Crosstour, but that also includes an upgrade to the EX-L trim payday advance lender.

That long list of features along with Honda's knack for fit and finish provide for an upscale interior. Front buckets are ultra comfy and rear seats are thick and supportive, but do not recline. Legroom is super front and back. As with Venza, there is no third-row seating option.

Despite its size limitations, the cargo bay offers some thoughtful touches. Rear seats easily flip down, not only from flip-switches in the back seat, but also at the touch of a handle in the cargo bay itself. There also are tie downs and three storage bins under the carpeted floor. The floor also can be flipped over with the plastic side up in case you need to haul a bunch of muddy gear.

Both Honda and Toyota have a full range of choices that make sense for family hauling - from the utilitarian compact Fit and Element to SUVs CR-V and Pilot in Honda's case. Both carmakers are skilled at hitting buyer sweetspots amid a growing and evolving field of competitors. Crosstour is likely to appeal to buyers wanting something a little meatier than the Accord sedan, without going for the full-fledged SUV.

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Two San Antonio Housing Authority leaders have been named to the boards of two national housing organizations.

Lourdes Castro Ramirez, president and chief executive officer of the housing authority, will serve on the Council of Large Public Housing Authorities, an organization which includes the 60 largest public housing authorities in the country.

Meanwhile, Yolanda Hotman, a commissioner in the SAHA, was chosen to serve a two-year term on the board of governors for the National Association of Housing and Redevelopment Officials. The organization focuses on creating affordable housing.

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General Motors reported $3.4 billion loss in the fourth quarter of 2009, but is on track to possibly return to profitability in 2010, the company said Wednesday.

Chief Financial Officer Chris Liddell, who joined the company earlier this year, stopped short of forecasting a profit this year, but said that results in the recently-completed first quarter, which will be reported in May, and the outlook for sales the rest of the year gives the company hope that it is close to returning to the black for the first time since early 2007.

He points out that much of the fourth-quarter loss was due to one-time items, such as a $2.6 billion settlement loss related to the UAW retiree medical plan. Without those one-time items, the loss would have been closer to $600 million in the quarter.

"The underlying profitability is not as bad as it would seem," he said. "We don’t need to make that much of an improvement to get to profitability."

Still, even without those one-time items, the results at GM were far worse than rivals Ford Motor (F, Fortune 500) and Toyota Motor (TM), which both reported profits in the period due to the improving auto sales.

Mike Boudreau, a director at Michigan-based turnaround firm O’Keefe & Associates, said though the loss might seem disappointing, he chalks it up to closing the books on a very difficult year of transition.

"I’m not too focused on 2009; even if they had posted a profit in the quarter, I don’t know if it would have meant much," he said.

He agreed with Liddell’s assessment that making money at some point in 2010 should be in reach.

"They’re going to get a lift from the improvement in the U.S. economy," he said. "I don’t know if they’ll make money for the entire year, but I think they’ll be able to break through and turn a profit for at least a couple of quarters."

The fourth-quarter loss came despite a 15% jump in the number of vehicles sold in the quarter compared to a year earlier, and a 10% cut in the number of worldwide employees. The improved sales and lower labor costs allowed it to trim its losses, though. In the fourth quarter of 2008, the pre-bankruptcy GM lost $9.6 billion.

Technically, GM’s financial results were not comparable to earlier periods as they were reported under what is known as "fresh start accounting" associated with the company emerging from bankruptcy in July of last year.

The accounting process is seen as an important first step to GM’s plans to put its bankruptcy behind it and once again offer shares to the public. Taxpayers own about a 60% stake in GM and will not be able to get back most of the $50 billion given to the company to see it through bankruptcy until that sale of shares.

Liddell said that a return to profitability will be the key to the timing of GM offering shares to the public. Boudreau estimated GM will probably need at least two or three profitable quarters in a row before its IPO.

"They have a shot at at doing it by the end of the year," he said.

Most of the losses continued to be concentrated in GM’s home North American market, where it rang up $3.4 billion of losses, while GM Europe lost $814 million in the period. But European losses were largely offset by a $738 million profit from GM International, which represents its operations outside of North America and Europe. That led to a wordwide total loss of about $3.4 billion.

Driven by strong sales gains in China, GM International sold almost as many cars as GM North America and Europe combined during the quarter. 

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Want to be the first one on your block with a 3-D television? It will cost you about $3,000.

Samsung and Panasonic will start selling 3-D TVs in U.S. stores this week, inaugurating what manufacturers hope is the era of 3-D viewing in the living room. But because the sets require glasses, and there is for now little to watch in the enhanced format, it will take at least a few years for the technology to become mainstream, if it happens at all.

Samsung Electronics Co. announced Tuesday that for $3,000, buyers get a 46-inch set, two pairs of glasses and a 3-D Blu-ray player. Panasonic Corp. will start selling sets Wednesday.

The sales debut comes as moviegoers have shown considerable enthusiasm for the latest wave of 3-D titles in the theater totally free credit score.

Although it’s clear that 3-D sets for the home will appeal to technology and home-theater enthusiasts, it remains to be seen whether other consumers will be enticed to spend at least $500 above the price of a comparably sized standard TV and Blu-ray player.

TV makers hope so, because sets with the last big technological improvement — high definition — have come way down in price, below $500.

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U.K. manufacturers said credit constraints eased in the past two months as the cost of financing their debt stabilized further, according to the Engineering Employers Federation.

The proportion of British companies reporting an increase in the cost of new borrowing dropped to 40 percent from 47 percent in the previous quarter, the EEF said in a report today. The lobby group based its findings on a survey of 328 companies taken between Jan. 28 and Feb. 17.

“Evidence that credit constraints have started to calm down will help build some confidence across the sector,” Lee Hopley, chief economist at the EEF, said in an e-mailed statement. “The key question is whether the banks will be there for manufacturers as a return to growth generates greater demand for finance.”

The EEF forecast last year that the economy, which expanded 0.1 percent in the fourth quarter, will grow 0.9 percent in 2010. Prime Minister Gordon Brown is counting on the credit squeeze to ease further, aiding the recovery in time for an election which he must call by June.

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Spanish Prime Minister Jose Luis Rodriguez Zapatero defended his country’s budget deficit and urged more U.S. investment in Spain during a meeting with U.S. business leaders, as investor concerns caused stocks to plummet in Spain.

Zapatero told a closed-door gathering at the U.S. Chamber of Commerce in Washington yesterday that Spain’s deficit was a consequence of stimulus spending that has peaked, and will be reduced through an aggressive austerity plan, according to an aide to the Spanish leader who briefed reporters and asked not to be identified.

Zapatero told the U.S. executives that his government will reduce spending by 50 billion euros ($68.7 billion) by 2013, the aide said. Spain, with a budget shortfall equivalent to 11.5 percent of gross domestic product, must bring its deficit down to 3 percent of GDP by 2013 to conform to European Union rules, the prime minister noted.

Spain’s benchmark IBEX 35 Index fell 5.9 percent yesterday day to 10,241.7, the steepest decline since Nov. 6, 2008. Stocks also fell in neighboring Portugal on concerns that the two nations will face difficulties like Greece has experienced in shrinking deficits.

Rating Agencies

Zapatero defended Spain’s debt as reasonable, according to the aide who attended the meeting. The prime minister said he was confident rating agencies would maintain a positive assessment of his economy.

Standard & Poor’s cut its rating on Spanish debt to AA+ from AAA in January 2009, and changed the nation’s outlook to “negative” from stable last December. S&P said Spain will experience a “more pronounced and persistent deterioration” in its budget and a “more prolonged period of economic weakness” than expected a year ago.

Speaking later yesterday to the Atlantic Council, a Washington-based public-policy group, Zapatero stressed that Spain’s debt-to-GDP ratio is 20 points lower than the average among EU countries.

Zapatero told U.S. executives in the private meeting that labor reforms would be announced today in Madrid that would reduce public spending, and said Spain is looking to the U.S., the biggest investor in Spain’s economy, to maintain confidence, his aide said.

Senior Executives

Zapatero was joined at the meeting by senior executives from Spanish bank BBVA SA, construction giants Acciona SA and Ferrovial SA, and Iberdrola SA, Spain’s biggest power company, according to the Spanish Embassy and Zapatero’s aides.

In his speech to the Atlantic Council, Zapatero said the Spanish financial system is “strong and solid,” and the country’s banks “have proven to be resilient.”

Spain has shown “its ability to grow and its ability to handle its public resources well,” the prime minister said.

“We know the reforms we need to make and I am certain Spanish society will be with us,” he added.

Zapatero recently announced tax increases and a rise in the retirement age as part of the package to cut Spain’s deficit.

Zapatero in his speech also underscored Spain’s commitment to the NATO-led security effort to stabilize Afghanistan, noting that his country had “heeded the call” of President Barack Obama and would be adding 500 new Spanish soldiers. Spain has lost 90 soldiers in Afghanistan, the fourth-largest number of casualties among the NATO nations.

“It’s a very difficult mission,” he said, adding, “we know what’s at stake in Afghanistan.”

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President Obama will propose a new tax on financial institutions Thursday to ensure that taxpayers who bailed out banks get paid back, according to a senior administration official.

The White House wants to raise as much as $120 billion through a new tax on banks to cover losses in the federal bailout program.

The law that created the $700 billion Troubled Asset Relief Program empowered the president to ask Congress to recoup money if bailouts were not paid back in full.

TARP dictates that the Office of Management and Budget consider such action five years after TARP went into effect in October 2008 to prevent the federal bailout from adding to the deficit.

When the TARP bill was hastily debated, the provision was key to winning enough support from wary lawmakers to push the bill through Congress.

This new proposal to tax banks has been under discussion since August, a senior administration official said Tuesday.

The federal bailout program has always been a controversial topic, but news of executive bonuses now being awarded for banks’ stellar performance in 2009 is throwing new fuel on populist anger.

Congress would still have to approve any proposed new tax.

Robert Gibbs, the White House press secretary, would not discuss on Monday how a possible bank fee would fit into Obama’s fiscal year 2011. But Gibbs said it is the president’s "goal" to ensure the "money that taxpayers put up will be paid back in full."

While most of the big banks have started paying back their TARP investments, the government still has a lot of money on the line and is likely to for years to come.

Last month, the Treasury estimated that the net cost of TARP to taxpayers would be $41.4 billion.

For example, Treasury Secretary Tim Geithner said last month that the bailouts of the automakers and insurer American International Group (AIG, Fortune 500) would not be paid back in full short term personal loans.

"There is a significant likelihood that we will not be repaid for the full value of our investments in AIG, GM and Chrysler," Geithner told an oversight panel.

Yet, the financial industry tax under discussion could impact the entire financial industry, a prospect the banking industry opposes.

Although few details are available about the proposed fee, the administration official suggested banks would be required to pay, even if the losses were incurred by GM and Chrysler.

"Imposing new taxes on top of the increased regulatory costs will weaken the industry, just when the industry is helping lead the economic recovery," said Scott Talbott, chief lobbyist for the Financial Services Roundtable, a bank lobbying group.

And it’s still unclear what, if anything, can be done to prevent the fee from being passed to bank account holders.

U.S. Chamber of Commerce President Thomas Donohue said Tuesday he expected any new fee imposed would be passed on to consumers.

"If you don’t pass it on to the consumer, than you’re going to have smaller profits, and then if you have smaller profits, your stock goes down," Donohue said.

The total revenue collected from the tax would be no higher than $120 billion, since that is the highest conservative estimate of the cost of TARP, the senior administration official said. However, the Treasury Department expects the total loss number to shrink over the course of future years.

- CNN White House Correspondent Dan Lothian contributed to this report. 

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The groundbreaking deal that will see Time Warner Cable Inc. pay News Corp. for over-the-air television programming illustrates the differences between the broadcasting models in Canada and the United States, observers say.

Time Warner and News Corp. agreed on a distribution deal Jan. 1, though details were not disclosed. Other broadcasters, such as CBS Corp., have also said they may seek payment for programming that is currently free.

News Corp. demanded to be paid for the rights to shows on Fox Networks, home of The Simpsons and American Idol as well as sports programming such as college and NFL football games.

If other networks seek similar terms, cable operators may have to fork out as much as $5 billion (U.S.) a year and would likely pass the cost on to subscribers, said Craig Moffet, an analyst at Sanford C. Bernstein in New York.

"The broadcast networks are really struggling to find a viable business mode," Moffett said. "They’re looking at the cable networks that make money both on advertising and the money that the cable operators pay them and saying, `We need a dual revenue stream to survive, too.’"

These battles are playing out just as the television industry is coping with the wrenching changes brought on by new competition from the Internet.

In Canada, the Canadian Radio-television and Telecommunications Commission has embarked on a sweeping review of the cable and satellite television industry business