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HomeMy WebLinkAboutItem 6c. City Workforce Vacancies, Recruitment, and Retention Trends (AB 2561) Item 6c Department: Human Resources Cost Center: 3001 For Agenda of: 3/4/2025 Placement: Public Hearing Estimated Time: 45 Minutes FROM: Nickole Domini, Human Resources Director Prepared By: Jeff Andrews, Human Resources Manager SUBJECT: CITY WORKFORCE VACANCIES, RECRUITMENT, AND RETENTION TRENDS (AB 2561) RECOMMENDATION 1. Adopt a Draft Resolution entitled, “A Resolution of the Council of the City of San Luis Obispo, California adopting ‘Policies and Procedures for the Public Hearing under AB 2561’”; and 2. Conduct a public hearing regarding, and receive and file the City of San Luis Obispo Workforce Vacancies, Recruitment, and Retention Trends presentation. POLICY CONTEXT Recommendations and information in this report are following Assembly Bill No. 2561, Chapter 409, an act to add Section 3502.3 to the Government Code that was signed into law on September 22, 2024, and became effective January 1, 2025 (Attachment C). DISCUSSION Report in Brief Governor Newsom's signing of Assembly Bill 2561 (AB 2561) introduced new requirements for public agencies to address and publicly report on staffing vacancies and recruitment and retention efforts. As part of this law, public agencies must also highlight hiring challenges and potential policy obstacles. If vacancy rates in a bargaining unit reach a significant threshold, agencies must provide further details on job openings, applicant numbers, hiring timelines, and strategies f or improving compensation and working conditions. Additionally, employee organizations are given the opportunity to present their perspectives during these public hearings. This report outlines the City’s workforce composition, vacancy trends, and strategies to attract and retain employees. While recruitment and hiring remain top priorities, the City also focuses on long-term retention through incentive programs, internal promotion opportunities, and workplace improvements such as flexible scheduling, prof essional development, and employee engagement initiatives. All data collected is from the 2024 calendar year. Page 627 of 717 Item 6c Background On September 22, 2024, Governor Newsom signed Assembly Bill 2561 (“AB 2561”) into law to amend the Meyers-Milias-Brown Act (“MMBA”) and create Government Code Section 3502.3 (GC 3502.3), thereby creating a new obligation for public agencies to publicly address the status of their vacancies. As basis for the new requirements, the California Legislature determined that vacancies are a wides pread and significant problem in the public sector. Vacancies require employees to take on heavier workloads, resulting in burnout and increased turnover, which negatively impacts the delivery of public service. Further, the legislature declared there is a statewide interest in ensuring that public agency operations are appropriately staffed and that high vacancy rates do not undermine public employee relations. GC 3502.3 requires public agencies to present the status of their vacancies and recruitment and retention efforts during a public hearing before their governing board at least once per fiscal year prior to the adoption of a final budget for the fiscal year. During the presentation, the public agency is also required to identify any changes to polic ies, procedures, or recruitment activities that may lead to obstacles in the hiring process. Additionally, if the number of vacancies meets or exceeds 20% of the total number of authorized full-time positions in a particular bargaining unit, the public agency shall include the following information in its presentation upon request of the recognized employee organization: 1. The total number of job vacancies within a bargaining unit. 2. The total number of applicants for vacant positions within the bargaining unit. 3. The average number of days to complete the hiring process from when a position is posted. 4. Opportunities to improve compensation and other working conditions. GC 3502.3 entitles recognized employee organizations, regardless of the vacancy rate, to make a presentation before the governing board of a public agency during the same public hearing in which the public agency makes its annual presentation on vacancies. City of San Luis Obispo Bargaining Groups There are six (6) bargaining groups (four represented and two unrepresented) at the City consisting of 4811 authorized regular full- and part-time positions (478.25 full-time equivalent2 (FTE)). 1 This number does not include the Council – one (1) Mayor and four (4) City Council Member positions. 2 A position is a job role that exists whether filled or vacant; FTE measures hours worked rather than the number of employees, allowing part-time hours to be aggregated into the equivalent of full-time positions for budgeting, forecasting, and staffing purposes. Page 628 of 717 Item 6c Table 1: Count of Regular Full- and Part-Time3 Positions by Bargaining Group as of December 31, 2024 City of San Luis Obispo Bargaining Group Position Count City Employees’ Association 214 International Association of Firefighters, Local 3523 53 Police Officers' Association 71 Police Staff Officers' Association 17 Unrepresented Confidential Group 13 Unrepresented Management Group 113 Vacancies, Recruitment, Retention Vacancies Position vacancies are created for a number of reasons including when newly budgeted positions are approved, there is internal movement such as a promotion or transfer, or when an employee leaves the organization due to retirement, voluntary resignation, or involuntary termination. When vacancies occur, it is a high priority for the Human Resources Department and the City’s hiring managers to fill vacant positions in order to ensure continuity of services, maintain operational efficiency, minimize the need for overtime, and minimize disruptions to departmental functions. Timely recruitment and hiring efforts help the City sustain its workforce, meet community needs, and uphold service standards while also providing opportunities for internal growth and external talent acquisition. Although AB 2561 now requires staff to present annually on the status of vacancies and efforts to recruit and retain staff, it has always been a priority for departments to fill vacancies as soon as reasonably possible. Throughout the 2024 calendar year (CY), the City’s average vacancy rate across all bargaining units was 6.6%. The vacancy rate is calculated monthly as the quantity of vacancies divided by the quantity of positions. As of December 31, 2024, the vacancy rate for each bargaining group was under 20%: Table 2: Vacancy Rate by Bargaining Group as of December 31, 2024 City of San Luis Obispo Bargaining Group Vacancy Rate City Employees’ Association 7.0% International Association of Firefighters, Local 3523 11.3% Police Officers' Association 2.8% Police Staff Officers' Association 5.9% Unrepresented Confidential Group 7.7% Unrepresented Management Group 9.7% 3 There are six (6) City positions budgeted at 50% or 75% part-time. Page 629 of 717 Item 6c In CY 2024, there were four (4) retirements in the Fire bargaining group and three (3) retirements in the Police Staff Officers’ Association. This is important to note because retirements making up almost the entirety of the vacancies for those groups indicates strong employee retention. Retirement does not necessarily indicate dissatisfaction; it is typically planned and predictable and is considered natural turnover which is excluded from avoidable turnover and retention metrics. Voluntary resignations may suggest disengagement or better opportunities elsewhere. Vacancies in the other bargaining groups stem from a combination of factors, including resignations for local or out -of-area employment, retirements, unsuccessful completion of probationary period, and other personal reasons. Recruitment and Retention Efforts The Human Resources Department recognizes recruitment is about identifying, attracting, and hiring the right people, and retention is about keeping employees engaged, satisfied, and committed to the organization long-term. Both are critical for the success of the organization, especially in today’s competitive job market. Pursuant to the Council adopted Compensation Philosophy, it is the policy of the City of San Luis Obispo to recruit and retain well-qualified employees who exemplify the City’s organizational values. To assist in recruitment and retention efforts, the Council approved updates to the City’s Recruitment, Referral, and Retention Incentive Program (RRR Program) (Attachment D) in 2022. The revised RRR Program was enhanced to establish guidelines and procedures for the eligibility, approval, and processing of recruitment, hiring, referral, and retention incentives for employees. Table 3: Recruitment and Retention Incentives Provided in CY 2024 Incentive Type Number of Incentives Provided Accelerated Vacation Accrual 31 Hiring Incentive/Sign-on Bonus 18 Relocation Reimbursement 7 Referral Incentive 9 The RRR Program has helped with recruiting experienced Police Officers, a classification that most public agencies have a hard time filling. As of drafting this report, the City has only one (1) Police Officer vacancy out of an approved 46 positions, and that is due to a promotion. Although trends show a slow-down in the use of sign-on bonuses and relocation reimbursement incentives compared to previous years, they are still authorized by the Director of Human Resources for positions deemed hard-to-fill, such as Engineers and Planners. While these incentives come with a cost, the benefits of filled positions far outweigh the minimal expense. Page 630 of 717 Item 6c Additionally, the City’s Employee Opportunity Program (EOP) was developed to enhance employment opportunities for current City employees who desire to transfer to other positions within the City and/or to promote from one position to another. When a department submits a hiring request for a regular full- or part-time position, all employees are notified of the opening via email and are provided five (5) business days to submit an employment application. Internal promotions are a key performance indicator for the Human Resources Department, with a goal of filling 40% of vacant positions via EOP. In CY 2024, 43% of vacant positions were filled via EOP. For a recruitment to begin, the hiring department notifies Human Resources staff who then open a job posting either internally for an EOP opportunity, or externally to capture other applicants to interview and establish an eligibility list. Upon selecting a candidate, a conditional job offer is provided, the candidate completes necessary pre -employment procedures (e.g., background check, physical, etc.), a start date is determined, and a formal offer of employment is signed. In CY 2024, Human Resources recruitment staff carried a higher-than-normal workload. On average, there were 39 active recruitments per month, whereas a standard and sustainable workload for the one dedicated recruitment specialist is 20 -25 recruitments at a given time. The median amount of time to fill a regular vacant position was 71 days. Throughout CY 2024, 99 position vacancies were created, 104 job postings were opened, and staff successfully filled 107 vacancies. The differential stems from vacancies that were created in CY 2023 then filled in CY 2024. Conversely, vacancies created at the end of CY 2024 will initiate a recruitment to fill the vacancy in CY 2025. The City received 3,217 job applications for regular positions in CY 2024. Advertising sources include LinkedIn, local job boards, state- and nationwide association-specific websites, and job sites such as Indeed and ZipRecruiter . The top sources where applicants learned about job openings were:  The Government Jobs website (the City’s recruitment tool)  The City’s website  A City employee While the City’s average vacancy rate for CY 2024 was 6.6%, hiring for certain regular positions remains a challenge. Contributing factors include the rising demand for talent in specific sectors, such as civil engineers, the high cost -of-living in the San Luis Obispo area, and its geographical distance from a major metropolitan center, which can limit the applicant pool. In an effort to reduce the time to hire and attract qualified applicants, staff is exploring recruitment processes enhancements such as e-references, background checks integrated into the recruitment software, and applicant landing pages for City departments. Page 631 of 717 Item 6c Filing vacancies and recruiting top talent are critical to delivering core services to the community and carrying out Council’s priorities, but retaining that talent is equally essential for sustaining long-term success and minimizing future vacancies. While the City has excelled in employee retention, internal workforce trends are shifting. Employees with less than five (5) years of tenure with the City are leaving more frequently. For example, in CY 2024, 70% of all City resignations stemmed from employees with less than five (5) years of City service. Exit interviews from these employees and national trends indicate that employees are increasingly prioritizing flexibility, remote work, and other evolving workplace values. For CY 2024, the City’s retention rate was 87%, reflecting a strong ability to retain employees. The retention rate is calculated as the quantity of employees at the beginning of CY 2024, divided by the quantity of those employees who remained with the organization through the end of CY 2024. The average tenure for City employees is 7.6 years, demonstrating some stability within the workforce. To meet the changing desires of employees, the City incorporates several retention strategies. First, the City aims to prioritize both physical and mental well -being. The City offers compressed work weeks, such as offering 9/80 work schedules, and hybrid - telework options to help employees balance work and personal life. Employees are encouraged to use their paid-time off to rest and recharge, reducing burnout and supporting a healthy work-life balance. Additionally, the City provides an Employee Assistance Program (EAP), access to a wellness room that can be used outside of normal working hours, and mental health counseling for first responders. Second, the City has a robust training and development program to provide career advancement as well as enhance employee engagement. One of the trainings encouraged and offered to all employees is the Clifton Strengths Finder assessment. Strengths-based training helps enhance employee engagement and satisfaction by focusing on an employee’s individual talents, which fosters a sense of value and purpose. This ultimately leads to higher retention rates, as employees feel more valued, aligned with their roles, and connected to the City’s mission. Professional growth and development are also fostered through the Tuition Reimbursement Program, where employees are eligible to receive reimbursement for the cost of educational programs which are directly related to the employee’s occupational field with the City. This demonstrates the City’s commitment to employees’ long-term professional development. Employee engagement plays a critical role in retention, and the City recognizes its importance. Engaged employees who feel valued and supported tend to be motivated and passionate about their work and feel a strong connection to the organization. Because of this significant impact, the City engages employees on a number of platforms. Managers and supervisors are trained to provide regular performance feedback to employees and to recognize big and small accomplishments. Employees are also recognized formally through an employee recognition committee. Page 632 of 717 Item 6c Communication also plays a pivotal role in employee engagement as it fosters trust, transparency, and a sense of connection between the employee and the City. To this end, the City Manager hosts regular bimonthly all-city briefings where employees are informed about issues that may impact them and provides an open line of communication. Additionally, the City conducts an anonymous and confidential Employee Engagement Survey approximately every three years to gain insights on how to best support employees in delivering core services and achieving Council Major City Goals while ensuring a positive and engaged workforce. Through the survey, employees are empowered to share ideas and concerns. The most recent engagement survey was completed in early 2023, and the return rate was 88%. The following themes were identified and incorporated into the 2023 -25 Major City Goal work plans to highlight and prioritize the importance of investing in the City’s workforce s o each employee can effectively serve the community.  Training and Development. Support and prioritize employee development and growth through investing in resources to train, develop, and onboard new and transitioning employees.  Prioritization of Work. Support employees in managing and prioritizing their workloads by reviewing and prioritizing work efforts, goals, and balancing trade - offs for a new workload.  Meeting Effectiveness. Evaluate and adjust internal meetings to create more effective meeting practices.  Communication and Collaboration. Promote cross-department communication and collaboration amongst employees.  Oracle Training and Communication. Evaluate and enhance the training and usability of Oracle Cloud, the City's Enterprise Resource Planning/Human Capital Management software. In closing, the City has made significant strides in addressing vacancies and recruitment, and it is clear that retention is a crucial element for continued focus. By investing in employee engagement, wellness, professional development, recognition, and open communication, the City can continue to foster an environment where talent not only thrives but stays long-term. Draft Policy for Public Hearings Under AB 2561 Attachment B, Exhibit A to Draft Resolution – Policies and Procedures for the Public Hearing Under AB 2561, outlines the proposed framework and procedures for holding public hearings and reporting on the City’s workforce vacancies, recruitment, and retention efforts in compliance with Assembly Bill 2561, with a purpose to ensure transparency, accountability, and responsiveness to community needs regarding the City’s staffing and employment practices. The draft policy includes definitions, reporting and notice requirements, and time allowed to present for employee organizations. Previous Council or Advisory Body Action There has been no previous Council or Advisory Body action. AB 2561 is a new law that went into effect January 1, 2025. Page 633 of 717 Item 6c Public Engagement This item is on the agenda for the March 4, 2025 City Council meeting and will follow all required postings and notifications. On December 23, 2024, all bargaining units were notified of the City’s intent to comply with Assembly Bill 2561. Further, they were notified they are entitled to make a presentation at this hearing pursuant to Government Code Section 3502.3. No other public outreach was conducted for this hearing. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: N/A Budget Year: 2024-25 Funding Identified: N/A Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund State Federal Fees Other: Total $0 $0 $0 $0 The only cost associated with implementation of AB 2561 it the staff time associated with developing the report and presentation. Although AB 2561 created local mandates, it specifically precludes any reimbursement from the State pursuant to Part 7 of Division 4 of Title 2 of the Government Code (commencing with Section 17500) for costs mandated by the state pursuant to this act. ALTERNATIVES 1. Direct staff to present the status of vacancies and recruitment and retention efforts during a public hearing more than once per fiscal year. The law only requires such reporting on an annual basis before a budget is adopted, and providing updates more frequently does not allow for collection of sufficient data to present accurate and appropriately representative reporting. 2. Modify the Policies and Procedures for Public Hearings Under AB 2561. Council may request changes or additions to the Policies and Procedures, so long as they comply with Government Code 3502.3. Page 634 of 717 Item 6c ATTACHMENTS A - Draft Resolution adopting “Policies and Procedures for the Public Hearing Under AB 2561” B - Exhibit A to Draft Resolution – Policies and Procedures for the Public Hearing Under AB 2561 C - Assembly Bill No. 2561 Local Public Employees Vacant Positions Bill Text, including Government Code Section 3502.3 D - Recruitment, Referral, and Retention Incentive Program Page 635 of 717 Page 636 of 717 R _______ RESOLUTION NO. _______ (2025 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, ADOPTING “POLICIES AND PROCEDURES FOR THE PUBLIC HEARING UNDER ASSEMBLY BILL 2561” WHEREAS, Assembly Bill (AB) 2561, effective January 1, 2025, establishes new legal obligations for the City to report the status of their workforce vacancies and recruitment and retention efforts during a public hearing before the City Council at least once per fiscal year; and WHEREAS, AB 2561 also requires the City to identify during the public hearing any necessary changes to City policies, procedures, and recruitment activities that may contribute to obstacles in the City’s hiring process; and WHEREAS, under AB 2561, the recognized employee organization for a bargaining unit is entitled to make a presentation to the City Council during the public hearing; and WHEREAS, procedural rules and policies regarding this public hearing are intended to ensure a fair, orderly, and efficient hearing process. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo: Page 637 of 717 Resolution No. _______ (2025 Series) Page 2 SECTION 1: The City Council hereby adopts and approves the policies and procedures set forth in Exhibit A, incorporated herein, for public hearings held pursuant to California Assembly Bill 2561, codified at Government Code § 3502.3. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _______ day of _________________ 2025. __________________________ Mayor Erica A. Stewart ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________ ____________________________ Teresa Purrington City Clerk Page 638 of 717 Page 1 of 2 Policies and Procedures for Public Hearings Under AB 2561 PURPOSE This policy establishes the framework and procedures for holding public hearings and reporting on the City’s workforce vacancies, recruitment, and retention efforts in compliance with Assembly Bill 2561 (“AB 2561”) (Cal. Gov’t Code § 3502.3). The purpose is to ensure transparency, accountability, and responsiveness to community needs regarding the City’s staffing and employment practices. SCOPE This policy applies to the City, City Management, and the City Council. DEFINITIONS A. Authorized Full-Time Positions: regular part- and full-time positions that have been officially approved and funded by the City Council during the budget adoption process. B. Recruitment: The process of advertising, screening, interviewing, and selecting qualified candidates for employment within the City of San Luis Obispo. C. Retention: Efforts to maintain a stable and satisfied workforce by addressing factors that contribute to stability in the workforce. D. Vacancies: Unfilled positions with the City of San Luis Obispo’s workforce that require recruitment efforts to fill. POLICY STATEMENT In accordance with AB 2561 (Cal. Gov’t Code § 3502.3) the City of San Luis Obispo shall hold a public hearing at least once per fiscal year prior to the adoption of the final budget and give a report on vacancies, recruitment, and retention efforts. POLICY PROVISIONS The City shall conduct public hearings at least once per fiscal year prior to the adoption of the final budget to present information on vacancies, recruitment, and retention efforts and issues with the policies, procedures, and recruitment activities that may lead to obstacles in the hiring process. Notice of the public hearing shall be provided according to applicable law and City policies. Members of the public and recognized employee organizations shall have the right to present information, concerns, and recommendations prior to the public hearing. Each recognized employee organization shall have five (5) minutes total to present information, concerns, and recommendations at the public hearing. It is up to each employee organization how to allocate this five (5) minute allowance. Page 639 of 717 City of San Luis Obispo – Policies and Procedures for Public Hearings Under AB 2561 Page 2 of 2 REPORTING REQUIREMENTS The Human Resources Department of the City shall present information on the following at the public hearing: 1. The status of vacancies at the City 2. Information on City recruitment and retention efforts 3. Identify obstacles in the City’s hiring policies, procedures, and recruitment activities that may create challenges. SPECIAL REPORTING REQUIREMENTS FOR HIGH VACANCY RATES If the number of job vacancies within a single bargaining unit meets or exceed 20% of the total number of authorized full-time positions, then the City shall, upon the request of the recognized employee organization, include special reporting information at the public hearing as to that bargaining unit: 1. The total number of vacancies within the bargaining unit. 2. The total number of applications for vacant position within the bargaining unit. 3. The average number of days to complete hiring process from when a position is posted. 4. Opportunities to improve compensation and other working conditions. MONITORING AND REVIEW The City Council shall review the effectiveness of this policy on an annual basis and make revisions as necessary to ensure ongoing compliance with AB 2561 and alignment with best practices regarding public transparency. Notwithstanding the above, the City Manager is authorized to amend this policy for consistency with any changes in state law. APPROVAL AUTHORITY: The City Council has delegated authority to the City Manager for future updates to this policy to remain in compliance with the law. Responsible Department: Human Resources Approved By: Date Adopted: For questions regarding this policy or to discuss a particular situation, please contact the Human Resources Department at (805) 781-7250. Page 640 of 717 SHARE THIS: Date Published: 09/23/2024 09:00 PM AB-2561 Local public employees: vacant positions.(2023-2024) Assembly Bill No. 2561 CHAPTER 409 An act to add Section 3502.3 to the Government Code, relating to public employment. [ Approved by Governor September 22, 2024. Filed with Secretary of State September 22, 2024. ] LEGISLATIVE COUNSEL'S DIGEST AB 2561, McKinnor. Local public employees: vacant positions. Existing law, the Meyers-Milias-Brown Act (act), authorizes local public employees, as defined, to form, join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on matters of labor relations. The act requires the governing body of a public agency to meet and confer in good faith regarding wages, hours, and other terms and conditions of employment with representatives of recognized employee organizations and to consider fully presentations that are made by the employee organization on behalf of its members before arriving at a determination of policy or course of action. This bill would, as specified, require a public agency to present the status of vacancies and recruitment and retention efforts at a public hearing at least once per fiscal year, and would entitle the recognized employee organization to present at the hearing. If the number of job vacancies within a single bargaining unit meets or exceeds 20% of the total number of authorized full-time positions, the bill would require the public agency, upon request of the recognized employee organization, to include specified information during the public hearing. By imposing new duties on local public agencies, the bill would impose a state-mandated local program. The bill would also include related legislative findings. The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose. This bill would make legislative findings to that effect. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement shall be made pursuant to these statutory provisions for costs mandated by the state pursuant to this act, but would recognize that a local agency or school district may pursue any available remedies to seek reimbursement for these costs. Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites 1/8/25, 11:48 AM Bill Text - AB-2561 Local public employees: vacant positions. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2561 1/3 Page 641 of 717 THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares as follows: (a) Job vacancies in local government are a widespread and significant problem for the public sector affecting occupations across wage levels and educational requirements. (b) High job vacancies impact public service delivery and the workers who are forced to handle heavier workloads, with understaffing leading to burnout and increased turnover that further exacerbate staffing challenges. (c) There is a statewide interest in ensuring that public agency operations are appropriately staffed and that high vacancy rates do not undermine public employee labor relations. SEC. 2. Section 3502.3 is added to the Government Code, to read: 3502.3. (a) (1) A public agency shall present the status of vacancies and recruitment and retention efforts during a public hearing before the governing board at least once per fiscal year. (2) If the governing board will be adopting an annual or multiyear budget during the fiscal year, the presentation shall be made prior to the adoption of the final budget. (3) During the hearing, the public agency shall identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process. (b) The recognized employee organization for a bargaining unit shall be entitled to make a presentation at the public hearing at which the public agency presents the status of vacancies and recruitment and retention efforts for positions within that bargaining unit. (c) If the number of job vacancies within a single bargaining unit meets or exceeds 20 percent of the total number of authorized full-time positions, the public agency shall, upon request of the recognized employee organization, include all of the following information during the public hearing: (1) The total number of job vacancies within the bargaining unit. (2) The total number of applicants for vacant positions within the bargaining unit. (3) The average number of days to complete the hiring process from when a position is posted. (4) Opportunities to improve compensation and other working conditions. (d) This section shall not prevent the governing board from holding additional public hearings about vacancies. (e) The provisions of this section are severable. If any provision of this section or its application is held invalid, the invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. (f ) For purposes of this section, “recognized employee organization” has the same meaning as defined in subdivision (a) of Section 3501. SEC. 3. The Legislature finds and declares that Section 2 of this act, which adds Section 3502.3 to the Government Code, furthers, within the meaning of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the purposes of that constitutional section as it relates to the right of public access to the meetings of local public bodies or the writings of local public officials and local agencies. Pursuant to paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the Legislature makes the following findings: It is in the public interest, and it furthers the purposes of paragraph (7) of subdivision (b) of Section (3) of Article I of the California Constitution, to ensure that information concerning public agency employment is available to the public. SEC. 4. No reimbursement shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code for costs mandated by the state pursuant to this act. It is recognized, however, that a local agency or school district may pursue any remedies to obtain reimbursement available to it under Part 7 (commencing with Section 17500) and any other law. 1/8/25, 11:48 AM Bill Text - AB-2561 Local public employees: vacant positions. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2561 2/3 Page 642 of 717 1/8/25, 11:48 AM Bill Text - AB-2561 Local public employees: vacant positions. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2561 3/3 Page 643 of 717 Page 644 of 717 RECRUITMENT, REFERRAL, AND RETENTION INCENTIVE PROGRAM PURPOSE The purpose of the Recruitment, Referral, and Retention Incentive Program is to establish guidelines and procedures for the eligibility, approval, and processing of recruitment, hiring, referral, and retention incentives for applicants and employees. POLICY Pursuant to the City’s Compensation Philosophy, it is the policy of the City of San Luis Obispo to recruit and retain well-qualified employees who exemplify the City’s organizational values. To assist in recruitment and retention efforts, the following incentives have been identified as described in further detail below. I. ACCELERATED VACATION ACCRUAL Provide a year-for-year (1:1) accelerated vacation accrual for completed public sector years of service. For example, if an individual is extended a job offer after having five (5) years of public sector service, they will begin accruing vacation leave with the City of San Luis Obispo as if they have five (5) years of service. To be eligible for service credit towards accelerated vacation accrual, the individual must: 1. Accept employment with the City of San Luis Obispo, and; 2. Fill a regular or contract position that is eligible for vacation accrual, and; 3. Have prior public sector work experience, and; 4. Provide details of prior public sector experience to Human Resources staff. II. LUMP SUM HIRING INCENTIVE Lump sum hiring incentives can be extended for regular or contract positions that are deemed hard to fill by the Director of Human Resources. The maximum value of the lump sum hiring incentives is $5,000 for all regular and contract positions, with the exception of Lateral Police Officers and Lateral Communications Technicians (Dispatchers) in the Police Department, as described in further detail below. To be eligible for the lump sum hiring incentive, the following shall apply: 1. The hiring manager shall seek approval from the Director of Human Resources in advance of extending a job offer, and; 2. The individual must be filling a regular or contract position that is deemed difficult to fill by the Director of Human Resources, and; 3. The individual must be a selected candidate through the Employment Opportunity Program (EOP) or through an external recruitment. 4. The department must have sufficient budget to pay for the incentive. Page 645 of 717 Recruitment, Referral, and Retention Incentive Program – Last Updated June 2023 2 Due to the current and significant recruitment challenges for well-qualified employees in our Police Department, the hiring incentive specified below is designed in an effort to attract and retain the best Police Officers and Dispatchers possible to serve the San Luis Obispo community. Lateral Police Officer Lump Sum Hiring Incentive Offer a lateral police officer a signing incentive of up to $16,000 payable as follows: • Up to $5,000 upon hire. • Up to $1,000 upon successful completion of the Field Training Program. • Up to $5,000 upon successful completion of the 12-month probationary period. • Up to $5,000 paid upon successful completion of the third-year anniversary. • Grant up to forty (40) hours of vacation upon completion of the first six -months of employment. The Police Chief has the discretion to grant the 40 hours of vacation leave at a different time on a case-by-case basis. Note: A lateral candidate is someone who has a minimum of one year of recent law enforcement experience and meets the minimum requirements of the position. Lateral Communications Technician (Dispatcher) Lump Sum Hiring Incentive Offer a lateral dispatcher a signing incentive of up to $10,000 payable as follows: • Up to $5,000 upon hire. • Up to $1,000 upon successful completion of the Field Training Program. • Up to $2,000 upon successful completion of the 12-month probationary period. • Up to $2,000 paid upon successful completion of the third-year anniversary. • Grant up to forty (40) hours of vacation upon completion of the first six -months of employment. The Police Chief has the discretion to grant the 40 hours of vacation leave at a different time on a case-by-case basis. Note: A lateral candidate is someone who has a minimum of one year of experience in dispatching for a Public Safety Agency and meets the minimum requirements of the position. The lump sum hiring incentives will be provided to all eligible employees on their first paycheck, or as specified for the police positions above. All employees who receive a lump sum hiring incentive are subject to the continued service requirement outlined below. Continued Service Requirement Regular Employees Failure to continue in the City service for three years, due to voluntary resignation, will result in the need to repay a proportional amount, of the relocation and/or hiring incentive. For example, an employee who receives a $3,000 hiring incentive and is reimbursed and resigns after 24 months with the City, will be responsible for repaying the City $1,000 ($3,000 total incentive divided by 36 months times remaining months to fulfill three-year commitment). Page 646 of 717 Recruitment, Referral, and Retention Incentive Program – Last Updated June 2023 3 The employee agrees that the Finance Department is authorized to make a deduction from the employee’s final payroll check for the appropriate amount of relocation and hiring incentive to be repaid. Employees who are terminated or released from probation are not required to repay the hiring incentive. Contract Employees Failure to continue in the City service for the term of the contract, due to voluntary resignation, will result in the need to repay a proportional amount, of the relocation and/or hiring incentive. For example, an employee with a two-year contract who receives a $3,000 hiring incentive and is reimbursed and resigns after 12 months with the City, will be responsible for repaying the City $1,500 ($3,000 total incentive divided by 24 months times remaining months to fulfill the two-year contract). The employee agrees that the Finance Department is authorized to make a deduction from the employee’s final payroll check for the appropriate amount of relocation and hiring incentive to be repaid. Employees who are terminated or released from probation are not required to repay the hiring incentive. III. REFERRAL INCENTIVES FOR EXISTING EMPLOYEES To encourage employees to actively engage in the recruitment process, the City will pay a referral fee to existing employees who recruit a candidate for the City of San Luis Obispo employment in a regular or contract position who is ultimately hired for the position. Exclusions 1. In order to avoid a conflict of interest, the following exclusions apply: a. Appointed Officials and Department Heads are excluded from receiving a referral fee for any position. b. Appointing authorities or supervisors who participate in the hiring decision are excluded from receiving a referral fee when referring applicants to the position for which they are recruiting. c. Anyone who screens applications, serves on an interview panel, or otherwise participates in the selection and background investigation process are excluded from receiving a referral fee for the positions they were involved in recruiting. d. Human Resources Department employees directly assigned to recruiting are excluded from receiving a referral fee. 2. Referring a current City employee will not result in a referral fee. This includes supplemental and contract employees who are hired into a regular position, or an employee in a regular position who is promoted or transferred to another position through the EOP. Referral Fee Application Submittal and Deadline 1. The Referral Fee Application is available in the Forms and Policies section on SharePoint. 2. Referral Fee Applications must be submitted no later than one month after the new employee’s hire date. It is the responsibility of the employee to Page 647 of 717 Recruitment, Referral, and Retention Incentive Program – Last Updated June 2023 4 ensure that the application is submitted by the deadline. Referral fee applications will be submitted to the Human Resources Department, which is charged with administering the program. 3. The Human Resources Department will track each application submitted. Application Certification The new employee will be contacted by Human Resources to certify that a City of San Luis Obispo employee recruited them. If more than one employee indicates they referred the same new employee, the Human Resources Director shall determine to whom the referral fee shall be paid based on the applicant's indication of which employee actively recruited them. Prior to approving the Referral Fee Application, Human Resources staff will ensure none of the exclusions above apply. Referral Fee Amount After the referral fee application is approved, and the new employee has started work, the referring employee shall receive $500 (or up to $1,500 for employees who refer a lateral police officer or dispatcher), less applicable taxes. Payments will be processed along with the regular payroll check and will be reported as taxable income. The fee is not reported to CalPERS as special compensation. Employees may make multiple referrals within the same calendar year. The second and subsequent approved referrals made by an employee in one calendar year will be paid at the amount of $1,000 less applicable taxes. Exception: Referrals for lateral police officer or dispatcher will remain at $1,500 for each referral. All other sections of this policy apply as described above. Dispute Resolution Any disputes arising from the Referral Fee section of this program may be appealed to the City Manager whose decision shall be final. IV. RELOCATION REIMBURSEMENT Relocation reimbursement is provided in an effort to ease the burden for candidates who accept employment with the City from out of the area and therefore face costs associated with the need to relocate. The City can reimburse relocation costs that are directly related to an employee’s relocation of 50 miles or more to San Luis Obispo County. Eligibility Requirements To be eligible for the relocation incentive the applicant must: 1. Accept employment with the City of San Luis Obispo, and; 2. Relocate their primary residence to San Luis Obispo County, and; 3. Relocate a distance of 50 miles or more, and; Page 648 of 717 Recruitment, Referral, and Retention Incentive Program – Last Updated June 2023 5 4. Fill a regular or contract position that is deemed difficult to fill by the Director of Human Resources. Relocation Reimbursement Amount 1. Department Head positions. Total relocation benefits up to $15,000 (subject to applicable taxes). 2. All other regular or contract positions. Total relocation benefits up to $10,000 (subject to applicable taxes). The reimbursement amount for each position will be determined by the hiring department and Human Resources and will be included in the new employee offer letter. Eligible Expenses Eligible expenses are those incurred in the movement and relocation of a personal place of residence meeting the eligibility requirements outlined above including the following: 1. Movement of household goods. The costs associated with packing, loading, transporting, and unloading personal household goods. 2. In-transit expenses. Gas, food, lodging during the actual move from the employee’s home at time of hire to their new temporary or permanent home in San Luis Obispo County. 3. Temporary living expenses. Hotel or motel, or other temporary lodging such as Airbnb or short-term rentals, necessary to allow the employee to start work. 4. First month rent and/or deposits. Costs associated with securing a residence in San Luis Obispo County such as the first month rent and security deposits for the new residence and costs associated with terminating a lease or rental agreement. 5. Closing costs. Costs associated with the sale of the employee’s primary residence or purchase of a home in San Luis Obispo County. 6. Other eligible expenses as defined by the Internal Revenue Service (IRS) for Form 3903, Moving Expenses. Continued Service Requirement Failure to continue in the City service for three years, due to voluntary resignation, will result in the need to repay a proportional amount of the relocation reimbursement, on a pay period basis. For example, if an employee resigns after one (1) year of employment with the City, they will be responsible for repaying approximately two thirds (2/3) of the reimbursed moving expenses. The employee will sign an acknowledgment agreeing that the Finance Department is authorized to make a deduction from the employee's final payroll check for the appropriate amount of relocation reimbursement to be repaid. If the final payroll check is not adequate to cover the amount owed, the City will invoice the employee under its standard accounts receivable process and full range of collection options, if needed, according to Section 631 of the City’s Financial Management Manual. Employees who are terminated, released from probation, or discontinue employment due to death or Page 649 of 717 Recruitment, Referral, and Retention Incentive Program – Last Updated June 2023 6 permanent disability will not be required to repay the relocation reimbursement, and may not submit reimbursement requests after separating from employment. Relocation Reimbursement Procedures All authorized amounts described above will be documented in a new employee offer letter and the employee will sign acknowledging the benefits, potential tax consequences, and repayment requirements prior to starting work for the City. The City will not pay vendors directly for moving and relocation expenses. The employee has up to one year after their hire date to use and claim their relocation reimbursement. If moving expenses are spread over several months, the employee may submit receipts in up to three separate requests, with a total of all requests not to exceed the authorized amount in the offer letter. Once determined, the employee shall submit a completed Moving Expense Request Form with itemized receipts and a copy of their offer letter to their Department Head for approval. The Department Head will forward the approved documents to Payroll or disapproval to the Director of Human Resources, within five working days. When the Department Head and/or the Director of Human Resources do not approve a submitted expense, an appeal may be made to the City Manager for a final decision. All relocation reimbursements are considered taxable income for Federal income tax purposes. Moving and relocation expense reimbursements may or may not be considered taxable income for California income tax purposes depending on whether they are considered qualified or non-qualified, as prescribed by IRS tax code. Following submission of expense claims, Payroll Services will issue payment and deduct taxes accordingly. V. STARTING SICK LEAVE BANK The City Manager may authorize a one-time starting sick leave bank of up to 48 hours upon hire of a new Department Head. This will be documented in the new employee offer letter. FUNDING SOURCE AND FUTURE CHANGES TO PROGRAM Authorize the City Manager to make future administrative changes to this program in an effort to successfully attract and retain well-qualified employees. If there is a change to a monetary incentive, the department will be expected to cover the cost within departmental salary savings, or the City Manager can choose to move other funding as needed to support this program. Page 650 of 717 Status of San Luis Obispo City’s Vacancies and Recruitment and Retention Efforts in Calendar Year 2024 Nickole Domini, Director of Human Resources Jeff Andrews, Human Resources Manager Complies with AB 2561 Presentation Overview 1.AB 2561 Summary 2.City Vacancies and Recruitment Efforts 3.Addressing Hard-to-Fill Vacancies 4.Retention Trends & Strategies Recommendation 1.Adopt a Draft Resolution entitled, “A Resolution of the Council of the City of San Luis Obispo, California adopting ‘Policies And Procedures For The Public Hearing Under AB 2561’”; and 2.Conduct a public hearing and receive and file the City of San Luis Obispo Workforce Vacancies, Recruitment, and Retention Trends presentation. Brief Overview of AB 2561 •Legislature declared that high vacancy rates lead to: •Heavier workloads •Burnout/Increased turnover, and •Negatively impacts service delivery •Key Takeaways & Mandates: •Annual Presentation on vacancies, recruitment, and retention before formal budget adoption •If vacancy rate in a bargaining unit is at or above 20%, more comprehensive reporting, upon request by the employee group 2024 Year End Vacancy Rate By Bargaining Group City of San Luis Obispo Bargaining Group # of Budgeted Positions # of Vacancies % of Vacancies By Group City Employees’ Association 214 15 7.0% International Association of Firefighters, Local 3523 53 6 11.3% Police Officers’ Association 71 2 2.8% Police Staff Officers’ Association 17 1 5.9% Unrepresented Confidential Group 13 1 7.7% Unrepresented Management Group 113 11 9.7% CITYWIDE TOTALS 481 36 7.5% Addressing Vacancies in San Luis Obispo Recruitment Retention Overview of Recruitment Process Vacancy Created Recruitment Requisition Job Posting Application Screening Candidate Interviews Conditional Job Offer Pre-Employment Process Job Placement Recruitment: A Look Back at 2024 99Position Vacancies 104Job Postings 3,217Applications Received 107Vacancies Filled •Median time to fill vacancies : 71 days •% of vacancies filled with internal candidates: 43% 2024 Vacancy Data Vacancy Reason # of Vacancies Voluntary Separation 43 Internal Promotion 30 Newly Budgeted Position 11 Retirement, Termination, Transfer 15 Total 99 Retention rate = 87.2% Effective Recruitment & Retention Approaches Hiring Incentives Targeted Recruitment Strategies Career Development Opportunities Employee Recognition Programs Work-Life Balance Creating a Positive Work Culture Key Takeaways 1.The City aggressively recruits for vacant positions 2.Addressing hard-to-fill vacancies requires a multi-faceted approach 3.The City invests in ongoing employee engagement and retention initiatives Recommendation 1.Adopt a Draft Resolution entitled, “A Resolution of the Council of the City of San Luis Obispo, California adopting ‘Policies And Procedures For The Public Hearing Under AB 2561’”; and 2.Conduct a public hearing regarding and receive and file the City of San Luis Obispo Workforce Vacancies, Recruitment, and Retention Trends presentation.