Santa Ana has hired away Phoenix’s city manager and has agreed to an annual salary and benefits package of more than half a million dollars, instantly making him one of the highest paid city employees in California.

David Cavazos, a longtime Phoenix employee who rose through the ranks from intern to city manager during his 26-year tenure, would have a total compensation package of $558,625 in his first year in Santa Ana.


Only the city manager in tiny Indian Wells is listed as having a higher salary and benefits package at $677,172, according to the state controller’s office, which most recently released data for 2011. That paycheck included a severance payout to the city manager, who was stepping down .

In Santa Ana, Cavazos will earn a base salary of $315,000, the same basic salary he made as the chief executive in Phoenix, which has a population of 1.47 million. Santa Ana has a population of about 330,000.


With benefits, the city expects to pay Cavazos $558,625 in the first year of his contract, with the figure dropping to $515,000 in his second and third year, according to a report prepared for the City Council.

Among the benefits Cavazos will receive are $36,000 for housing in the first year and $24,000 per year after that. In addition, he will receive $7,500 in moving expenses, several sick and vacation days, and insurance benefits.


In an interview with The Times, Cavazos said he doubts he’ll reap all of the benefits allotted to him in his contract.

“I haven’t taken a sick day in 10 years. Some of those costs are not going to occur,” he said.


“I’m not leaving for the money. I’m not going there for the money. Just like I came here for an opportunity, I’m going to Santa Ana for an opportunity.”

Though much smaller than Phoenix, Santa Ana is the county seat in Orange County and a political power base. But the densely packed city has struggled with budget problems in recent years.


Cavazos noted that he helped Phoenix emerge from a $277-million budget deficit and that it now has “the highest contingency fund in city history.”

Santa Ana leaders praised Cavazos for his experience and said they believe he will help bring in economic development and federal dollars.


“You get what you pay for,” Councilwoman Michele Martinez said. “We wanted the best and we didn’t want to shortchange our city. He’s very qualified; we didn’t want to nickel and dime.”

Phoenix officials gave Cavazos a $78,000 pay raise late last year, boosting his base salary to $315,000. The raise sparked controversy there. Defenders argued it would help retain a talented manager and put his pay in line with cities similar in size to Phoenix.


Santa Ana was hard-hit by the recession and housing market crash and in recent years faced steep budget cuts. At one point, there was talk of possible bankruptcy. Last year, it passed its first balanced budget after years of fiscal turmoil.

Earlier this year, the city pushed out Manager Paul Walters, who was earning a base salary of $265,000 and had previously been Santa Ana’s longtime police chief. Walters was hired to help resolve the multimillion-dollar budget shortfall and was seen as an ally of longtime Mayor Miguel Pulido, who has become a minority voice on the council


“Right now we’re in a much better condition than we were a couple of years ago,” Councilman Vincent Sarmiento said. “We see this as bringing on somebody who has resources that were not available here in the city.”

Cavazos began his career with the city as an intern in 1987. He was appointed manager in 2009. He announced he would be leaving Phoenix last week. The Santa Ana City Council approved his agreement Tuesday.


“I’m confident that with his experience in business attraction and business retention we’ll be able to make up tenfold the first year the difference in salary compared to what we were paying our previous city manager,” Councilman David Benavides said.

paloma.esquivel@latimes.com