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HomeMy WebLinkAboutItem 6b. Advisory Body Compensation Item 6b Department: Administration Cost Center: 1021 For Agenda of: 6/2/2026 Placement: Business Estimated Time: 60 minutes FROM: Greg Hermann, Deputy City Manager Prepared By: Sara Armas, Deputy City Clerk SUBJECT: RECEIVE A PRESENTATION ON FEASIBILITY FOR ADVISORY BODY COMPENSATION RECOMMENDATION 1. Receive and consider a report on the feasibility of implementing a pilot program compensating City Advisory Body Members; and 2. Adopt a draft Resolution amending the Advisory Body Handbook to add a Parking and Food Budget section; and 3. Continue the current system of monetary compensation for only Architectural Review Commission and Planning Commission Members as City employees. REPORT-IN-BRIEF This report analyzes the overall impact on budget and workload if all Advisory Bodies were to be compensated in the same method as Architectural Review Commission (ARC) members and Planning Commission (PC) members, based on the recommendation of the Council Compensation Committee (CCC) to conduct a feasibility analysis of such a compensation approach. After completing an analysis of this “employee -style” method, staff concluded that the current process would require extensive administrative and operational updates across multiple departments as well as additional requirements of our Advisory Body Members. Other compensation options were also explored, such as independent contractor/vendor and gift card-style methods of compensation. Both were deemed infeasible and would potentially expose the City to legal liability. In light of these findings, providing monetary compensation for all Advisory Bodies is not recommended at this time. Staff proposes increased parking validations for Advisory Body Members and a food budget be allocated for future meetings. POLICY CONTEXT Section 410 the City’s Charter establishes biennial review of compensation for Mayor and Council, which was later expanded by Resolution to include review of compensation for the Planning Commission and Architectural Review Commission (R-9189, 2001 Series). Although review of the Mayor and Council Member compensation packages is required as stated in Council Policies Procedures Section 2.6.2, the Council Compensation Committee “is not limited” to the review of only those compensation packages. Page 445 of 454 Item 6b DISCUSSION Background Council Compensation Committee At the May 20, 2025 Council Meeting, Council opted to form a CCC to review the full compensation packages for the Mayor and City Council, the compensation for PC members and ARC members and consider if compensation should be provided to the additional City Advisory Bodies who serve on a volunteer basis. After appointment of its members at the July 15, 2025 Council Meeting, the (CCC) met over the course of four months to discuss each portion of Council’s direction. For the Advisory Body Members compensation discussions, staff provided different data points for the CCC’s consideration such as survey results of active and previous Advisory Body Members up to six years ago, as well as number and length of each Advisory Body meeting for the past four years. When forming the Committee’s final recommendation to City Council, members deliberated on the potential of compensation being provided to all Advisory Body Members to reduce the barriers of serving in that role. Ultimately, the CCC decided that additional research from staff was warranted and recommended to City Council to explore the feasibility of an “opt-in” compensation model. At the January 13, 2026 meeting, Council directed staff to evaluate the fiscal impacts of implementing an “opt-in” program providing $25 per meeting to Advisory Body Members who currently do not receive payment. This program, as suggested by the CCC, would not affect the compensation of PC and ARC, who currently receive $86 per meeting, with a maximum amount of $344 a month. Advisory Body Survey Data Staff created and distributed two surveys regarding Advisory Body compensation to collect input for the CCC (CCC Agenda Item 4a, Attachment B). The first survey, distributed to current and previous members who served up to six years ago, posed various questions regarding compensation, including asking recipients if they felt compensation was appropriate for their respective commission/committee and their reasoning. Of the 53 responses outlined in Table 1 below, 41% ranked the current compensation for their commission/committee mostly appropriate for their role (ranked 7-10 on a 0-10 scale), with many referring to the difficulty in determining a fair amount for all bodies and the importance of these roles being voluntary. 23% of respondents ranked the current compensation as not appropriate (ranked 0-3), stating that some members might benefit from compensation if work needs to be missed, or as a possible incentive to get other community members to apply. Page 446 of 454 Item 6b Table 1: Question #6 Results from Current/Previous Advisory Body Members Survey The second survey, posted on the Open City Hall public forum, asked how receiving compensation would influence a community member’s decision to apply and their reasoning. With this question being open-ended, community members had varying responses describing the amount of influence compensation would have. Responses are categorized into level of influence and summarized in Table 2 below. Overall, there was an even split between those who felt compensation had a major influence in their decision to apply for an Advisory Body and those that felt there was no influence. Community members agreed that the potential time commitment and the costs of parking, childcare, or food are important factors. However, while some recognized that financial compensation could help offset those costs, others emphasized the value of serving on these advisory committees as volunteers, consistent with responses received in the Advisory Body Member survey. Page 447 of 454 Item 6b Table 2: Question #2 Results from Open City Hall Survey Annual Advisory Body Recruitment Staff also reviewed data from the recent Annual Advisory Body Recruitments to see if there have been any trends related to interest in serving on an Advisory Body. The chart below shows the total applications received over the last five recruitments showing a general overall increase: Open Positions Total Applications 2022 31 46 2023 34 53 2024 21 71 2025 33 107 2026 28 67 Methods of Compensation The City currently uses an “employee-style method” for compensating PC and ARC members, which includes onboarding each member as an employee and distributing paychecks on a quarterly basis. Staff also reached out to other agencies to see if alternate methods of compensation were in use. Findings indicated that many cities either compensated one or two bodies via the “employee-style method” or did not provide compensation to any of their bodies. A few cities reported that compensation was provided to most or all their bodies; however, these members are paid as vendors/independent contractors as opposed to employees . Each method is explained in further detail below along with an analysis of the use of gift cards. Page 448 of 454 Item 6b Analysis of Time and Cost Impacts – “Employee-style method” Under the City’s current model for compensation, the “employee-style method”, each newly appointed member would need to complete employee onboarding requirements in accordance with current City procedures. This includes live scan background checks, I-9 verification, and mandated state and City employee trainings. Ongoing monitoring would be required from HR and the Clerk’s Office to ensure compliance with the onboarding requirements. Mandatory training courses, such as Harassment and Discrimination Training and Workplace Violence Prevention, would also be required upon appointment and annually. The City’s Oracle payroll system would also need to be expanded to accommodate additional positions. The licensing costs to add the 78 additional Advisory Body Members is estimated to be $30,000 annually. HR and Finance would assume a substantial new workload for payroll setup, timecard processing, tax documentation, and potential CalPERS reporting. Additionally, staff from Administration, Public Works, and Parks & Recreation would need to be identified and trained to track attendance and payroll reporting for their respective bodies. While many of the individual impacts are minor in scope, the cumulative effect of these additional tasks across the City will require increased communication, coordination and training. Considering Advisory Members as City employees may also potentially necessitate compliance with employee-specific policies, which would require additional research and refinement of current existing policies. HR estimates at least a half time (0.5) employee would be needed, equivalent to a Human Resources Administrative Assistant II (estimated cost of $42,000 for salary and benefits) would be needed to implement payment for all Advisory Body Members. Finance would also potentially need assistance from other departments at varying points during each quarter to submit, input and review the number of meetings attended and the distributions of payment. Using the “employee-style method,” the take-home amount for one member who attended one meeting is roughly estimated below: $25.00 Stipend -$1.88 OBRA Contribution -$3.75 Federal & State Taxes -$0.36 Medicare $19.01 Net Payment As many Advisory Bodies only meet on a quarterly basis, some Advisory Body Members would only receive $19.01 per paycheck. When taking into account the time needed for additional required forms, trainings, tax reporting as an employee, the benefit of a $25 stipend may not outweigh the time commitment for a prospective Advisory Body Member. Based on these considerations, it is not recommended to implement an “employee-style method” approach be implemented to compensate all Advisory Body Members. Page 449 of 454 Item 6b Vendor/Independent Contractor Method & Opting In/Out Feasibility As some local agencies use the “vendor/independent contractor” method of compensation, staff also researched the feasibility of that method. Payment issued to “vendors” or “independent contractors” do not tax payments prior to distribution; in this instance, Advisory Body Members would receive an even $25 per meeting attended. However, after review of advisory body roles and responsibilities, and analysis of those roles under the framework of the State Labor & Workforce "ABC Test", the City Attorney’s Office and outside counsel from Liebert Cassidy Whitmore (LCW) advised against compensating Advisory Body members as independent contractors rather than as employees. LCW also cautioned that treating some Advisory Body members as employees and treating others as independent contractors could undermine the City’s compliance with federal tax law and give rise to fairness concerns. LCW additionally advised that, if an Advisory Body is compensated, a member may “opt out” of compensation to remain in a purely volunteer role, but the classification of that member as an employee would remain the same. This means that despite not receiving a stipend, they would still be subject to the same mandated trainings and required forms as the compensated members. That is, they could “opt in” to or “out of” compensation but could not opt in or out of employee status. Taking into consideration applicable state and federal law, compensating Advisory Body members as independent contractors is not recommended. Gift Card Compensation Method Staff also explored the possibility of a gift card compensation method, to see if there was the potential to minimize staff workload while still providing advisory body members an option to offset costs. Staff have determined that this method of compensation is an improper substitute for regular compensation, as gift cards may be subject to income tax if distributed on a regular basis and for services rendered to the organization. As such, this method is not recommended. Food and Parking Budget As many respondents from the two surveys indicated, food and parking are some of the variables that might assist in easing the cost of participating on these advisory bodies. The City has a Parking Validation program in place that offers one-hour validations to community members who attend City Council or City Advisory Body meetings. Advisory Body Members are eligible to receive these validations when attending meetings; however, many bodies have meetings that take longer than one hour. Parking Services can create validations in 1-hour, 2-hour, 3-hour, and 4-hour increments (4-hour being the max amount charged for parking in the garages). Providing the option of parking validations to all Advisory Body Members could minimize the potential cost of attendance. The total cost of 3-hour parking validations for each Member per their regular meeting schedule is estimated to be $1,670 for the calendar year. Advisory Body Members may also park in the City Hall parking lot after 5 pm which has no cost. A food or “snack” budget for Advisory Bodies could also be beneficial for those members who are attending meetings immediately after their normal workday. Full meal s can be difficult logistically when accounting for individual orders, accommodating food allergies Page 450 of 454 Item 6b and dietary restrictions and establishing time in advance of meetings to eat. However, a budget may be established to provide snacks to Advisory Body Members at all of their meetings. The estimated cost for a food or snack budget at $25 each Advisory Body per meeting (as reflected in their regular meeting schedule) is estimated to be $1,800 for the calendar year. Staff recommends this approach at this time based on operational feasibility and feedback from community members and Advisory Body members. Staff have prepared a draft Resolution (Attachment A) amending the Advisory Body Handbook to reference these additional provisions. Public Engagement As part of the Council Compensation Committee information-gathering process, members of Advisory Bodies and general members of the public were given the opportunity to provide input on compensation for Advisory Body Members through survey responses. Members of the public will also have the opportunity to provide public comment before or at the City Council Meeting on June 2, 2026. CONCURRENCE Human Resources and Finance are all in concurrence with staff’s recommendation. 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. FISCAL IMPACT Budgeted: No Budget Year: 2026-27 Funding Identified: No Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $3,470 $ $ $ State Federal Fees Other: Total $3,470 $ $ $ Staff is recommending to use the Ventures and Contingencies Fund or potential carryover funds to provide additional parking and food to Advisory Body Members for meetings for Fiscal Year 2026-27, and will incorporate the on-going cost into the 2027-29 Financial Page 451 of 454 Item 6b Plan. The estimated costs for parking and food are broken down below. Funding Sources Funding for Parking Budget Funding for Food & Refreshment Budget Funding for both Parking and Food & Refreshment Budget General Fund $1,670 $1,800 $3,470 State Federal Fees Other: Total $1,670 $1,800 $3,470 ALTERNATIVES 1. Council may direct staff to move forward with a $25 per meeting compensation for all advisory body members other than PC members and ARC members. Should Council pursue this option, staff would need to complete an evaluation and update of the current advisory body recruitment, onboarding and offboarding processes. Estimated Cost of Initial Implementation Estimated Annual Costs Oracle $30,000 $30,000 Staffing $42,000 Live Scan Services $2,500 $1,300 Monetary Compensation $14,250 Total $32,500 $87,550 Fiscal impacts for this alternative are expected to include the initial cost of adding each member into Oracle and completing live scans, as well as the annual cost of keeping them in Oracle, new member live scans moving forward, additional staffing salary and benefits, and monetary compensation issued to each Advisory Body based off the number of regular meetings scheduled for each body. 2. Council may recommend no changes to Advisory Body compensation at this time. Under this alternative, no additional parking or food budgets would be provided, and PC and ARC member compensation would remain at $86 per meeting, with a maximum of $344 per month. ATTACHMENT A – Draft Resolution amending the Advisory Body Handbook to add a Parking & Food Budget Section Page 452 of 454 R ______ RESOLUTION NO. _____ (2026 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING THE ADVISORY HANDBOOK TO INCLUDE SECTION 1.F PARKING AND FOOD AVAILABILITY WHEREAS, in accordance with the Charter of the City of San Luis Obispo, the Municipal Code, and its own resolutions, the City Council of the City of San Luis Obispo appoints individuals to serve on its advisory bodies; and WHEREAS, on May 20, 2025, Council voted to begin the formation of a Council Compensation Committee to evaluate and make a recommendation on whether Advisory Bodies should receive compensation in addition to their review of compensation for Mayor, Council Member, Planning Commission, and Architectural Review Commission; and WHEREAS, on January 13, 2026, Council approved the Council Compensation Committee recommendation and directed staff to de termine the feasibility of implementing a “pilot opt-in program of $25 per meeting compensation” for the remaining Advisory Bodies; and WHEREAS, staff have conducted research and evaluated multiple options for compensation. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that Section 1.F is hereby added, with all subsequent sections being relabeled accordingly, to read as follows: F. Parking and Food Availability Advisory body members are eligible to receive parking validation per meeting attended. Parking is not guaranteed in any particular lot or garage. Snacks or light refreshments will be available prior to every meeting and during recesses. Page 453 of 454 Resolution No. _____ (202X Series) Page 2 R ______ Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _______________ 20 2X. ___________________________ 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 454 of 454 Item 6b. Feasibility for Advisory Body Compensation Recommendation 1.Receive a report on the feasibility of implementing a pilot program compensating City Advisory Body Members; and 2.Adopt a draft Resolution amending the Advisory Body Handbook to add a Parking and Food Budget section; and 3.Continue the current system of monetary compensation for only Planning Commission and Architectural Review Commission Members as City employees. Background – Council Compensation Committee •May 21, 2025 – Council opted to form Council Compensation Committee •September - December 2025 – Committee met and reviewed various data to assist with forming a recommendation to Council •January 13, 2026 – Council approved Committee recommendations, including direction to staff to “explore the feasibility of an ‘opt-in’ pilot program to provide $25 per meeting for all City Advisory Bodies” Community Member Input – Compensation for Advisory Bodies 41%23% Community Member Input – Compensation for Advisory Bodies Methods of Compensation •“Employee-style” Method •“Independent Contractor” Method •Gift Card Method •Food and Parking Budget - recommended Methods of Compensation “Employee-Style” Method “Independent Contractor” Method Gift Card Method Parking and Food Budget •Current method for Planning Commission and Architectural Review Commission Members •Payment taxed prior to distribution ($19.01 per meeting estimated take- home amount) •Total budget needed: $14,250 Potential issues •Additional requirements for Advisory Body Members •Increased administrative workload •Can “opt out” of compensation but classification remains the same Methods of Compensation “Employee-Style” Method New Requirements for Advisory Body Members •Live Scan •I-9 Verification •Required state and City employee trainings •Potential tax reporting obligations Operational Impacts •Increased workload for Human Resources, Finance, and Clerk’s Office •Training for additional staff in Administration, Parks & Recreation, and Public Works System Impacts •New licensing for payroll system (Estimated $30,000 annually) •Additional review and refinement of employee-specific City policies Staffing Impacts •Estimated 0.5 FTE Human Resources Administrative Assistant II •Periodic support from other Finance staff for payroll processing Methods of Compensation “Independent Contractor” Method Gift Card Method Parking and Food Budget •Method used by other cities •Payment not taxed prior to distribution, but must be claimed as income on personal taxes Potential issues •Potential noncompliance with federal and state labor laws •Can “opt out” of compensation but classification remains the same Methods of Compensation “Independent Contractor” Method Gift Card Method Parking and Food Budget •Method not currently in practice •Gift cards issued ($25 take-home amount) Potential issues •Not appropriate substitute for regular compensation •Potential tax reporting obligations Methods of Compensation “Independent Contractor” Method Gift Card Method Food and Parking Budget •Food and parking referenced as barriers to Advisory Body participation Increased Parking Validations •3-hour validations provided as opposed to 1-hour •Optional “Snack” Budget •Providing snacks to individuals who attend after full workday •Full meals not encouraged $1,670 for 3-hour Parking Validations + $1,800 for “Snack” Budget = $3,470 Annually Recommendation 1.Receive a report on the feasibility of implementing a pilot program compensating all City Advisory Body Members; and 2.Adopt a draft Resolution amending the Advisory Body Handbook to add a Parking and Food Budget section; and 3.Continue the current system of monetary compensation for only Planning Commission and Architectural Review Commission Members as City employees. 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