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Home My WebLink About04/05/2005, C6 - MANAGEMENT EMPLOYEES' COMPENSATION council °°° j agenda Repoat Ift-1 CITY OF SAN LUIS OBISPO FROM: Monica Moloney, Director of Human Resources SUBJECT: MANAGEMENT EMPLOYEES' COMPENSATION CAO RECOMMENDATION Adopt a resolution approving the 2005 management compensation and revising the Management Pay for Performance System. DISCUSSION The current management compensation package and Pay for Performance System was extended by resolution through December 31, 2004. A Management Compensation Committee was formed in February 2005 to propose overall adjustments to management compensation. The committee received parameters to keep proposed increases in line with other recent Council approved compensation packages. Staff is recommending the following actions apply to all management and department heads during the calendar year 2005: (1) A Cost of Living Adjustment(COLA)of 3%effective April 7,2005. (2) The Pay for Performance system suspended for those employees at the top of their salary range. (3) The PERS contract amended to include the Optional Settlement 2 Death Benefit. (4) Cafeteria contributions increased by$10 per month to$610 per month effective April 1,2005. Cost of Living Increase A cost of living adjustment was not recommended for management employees last year. This was due to uncertain economic conditions at the time. This year, as City staff prepares the 2005-2007 financial plan, each department has received a targeted amount for budget reductions. Strategies to reach these reductions should be sustainable and therefore, short term approaches such as salary freezes or salary reductions have not been encouraged. In fact, during difficult financial times, it becomes even more important to retain qualified employees. Therefore, this proposal provides an equitable compensation adjustment for the management employees that is comparable to the San Luis Obispo City Employees' Association Memorandum of Agreement which approved a 2% COLA in January 2005 and a 1% COLA in July 2005. The management compensation proposal realizes savings during the first quarter of 2005 in that the recommended 3% COLA is not effective until April 7, 2005. Pay for Performance.System The Management Pay for Performance System was developed and adopted by Council in 1996. The system is designed to recognize and reward excellent performance by management employees and to provide an incentive for continuous improvement and sustained high performance. This CCP - ( Council Agenda Report—Management Employees' Compensation Page 2 year the program will be suspended for any management employee whose salary is at the top of the salary range, affecting approximately 50% of the management employees. However, the program will remain in effect for those employees not yet at the top of their range, about 30 management employees. In this way, such employees can move through their salary ranges like all other City employees, except that movement is based on performance, not time-in-grade step increases_. Movement is also typically in smaller increments than in the step-system. Optional Settlement 2 Death Benefit The Public Employees' Retirement System (PERS) contract will be amended for miscellaneous employees effective July 1, 2005. The amendment will provide the "Optional Settlement 2 Death Benefit" for employees, which allows the spouse of a deceased employee, who was eligible to retire from service at the time of death, to select a monthly retirement allowance instead of the monthly lump sum death benefits currently available. This option was approved by Council for the San Luis Obispo City Employees' Association on January 18, 2005. Under PERS regulations all "miscellaneous"employees must have the same level of coverage. Cafeteria Contribution Staff recommends increasing the cafeteria contribution from $600 to $610 per month effective April 1, 2005, for all management employees. This increase in cafeteria contribution meets the priorities of many management group members as well as keeps the contribution somewhat competitive with that of other associations within the City as well as with local employers. This change is noted in Exhibit`B", Department Head and Management Fringe Benefits 2005. FISCAL IMPACT The proposed compensation package is within the Council approved parameters. Additionally, the proposed changes to the Pay for Performance System will result in added one-time savings during the year. Funding for the proposed package is available in the MOA adjustment account. ATTACHMENT: Attachment 1: Resolution with Exhibit"A" Salary Schedule and Exhibit"B"Fringe Benefits GAagendareports\ManagementCompensation2OO5_rev.DOC Attachment 1 Page 1 of 2 RESOLUTION NO. (2005 Series) A RESOLUTION OF THE CITY COUNCIL OF SAN LUIS OBISPO REVISING MANAGEMENT COMPENSATION AND THE PAY FOR PERFORMANCE SYSTEM FOR APPOINTED OFFICIALS,DEPARTMENT HEADS AND OTHER MANAGEMENT PERSONNEL AND SUPERSEDING PREVIOUS RESOLUTIONS IN CONFLICT WHEREAS, the City Council is committed to a comprehensive policy that strengthens the recruitment and retention of well qualified and effective appointed officials and management personnel; and WHEREAS, in 1996 the City Council established the Management Pay for Performance System, which has included periodic reviews and updates; WHEREAS, the City Council wishes to provide an appropriate compensation package for its management personnel; NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Luis Obispo hereby revises management compensation and Management Pay for Performance System as follows: SECTION 1. The management compensation package and the Management Pay for Performance System will continue for a one-year term commencing January 1, 2005. SECTION 2. The City agrees to provide a 3% cost of living adjustment to all management employees effective April 7, 2005 and to adjust management salary ranges accordingly as shown in Exhibit"A". SECTION 3. The City agrees to amend the PERS contract to include the Optional Settlement 2 Death Benefit effective July 1, 2005. SECTION 4. The City agrees to increase the cafeteria contribution to $610 per month effective April 1,2005. SECTION 5. The City shall continue to provide employees in those classifications listed in Exhibit"A"certain fringe benefits as set forth in Exhibit`B",fully incorporated by reference. SECTION 6. The Director of Finance and Information Technology shall adjust the appropriate accounts to reflect the compensation changes. Ccs-3 Attachment 1 Page 2 of 2 Resolution No. (2005 Series) Upon motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this day of , 2005. ATTEST: Audrey Hooper,City Clerk Mayor David F. Romero APPROVED AS TO FORM: ity orney Jonathan Lowell GARESOLUTIONS AND ORDINANCESUdanagementComp2005_rev.DOC - T 'bit A I of 2 APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE Effective April 7,2005 Salary Group Position Title Range Low Range High I City Administrative Officer $9,502 $11,879 II City Attorney $8,677 $10,844 III -A Police Chief $7,936 $9,924 III Assistant City Administrative Officer $7,851 $9,817 III Director of Finance and Information Technology $7,851 $9,817 III Fire Chief $7,851 $9,817 III Public Works Director $7,851 $9,817 IV Director of Community Development $7,487 $9,362 IV Utilities Director $7,487 $9,362 V Director of Human Resources $7,090 $8,864 V Parks and Recreation Director $7,090 $8,864 VI Deputy Director of PW/City Engineer $6,519 $8,148 VII Assistant City Attorney $6,208 $7,760 VII City Clerk $6,208 $7,760 VII Deputy Director of CD- Development Review $6,208 $7,760 VII Deputy Director of CD - Long Range Planning $6,208 $7,760 VII Deputy Director of Utilities/Wastewater $6,208 $7,760 VII Deputy Director of Utilities/Water $6,208 $7,760 VII Deputy Public Works Director $6,208 $7,760 VII Finance Manager $6,208 $7,760 VII Information Technology Manager $6,208 $7,760 VIII Chief Building Official $5,559 $6,949 VIII City Traffic Engineer $5,559 $6,949 VIII Economic Development Manager $5,559 $6,949 VIII Natural Resources Manager $5,559 $6,949 IX Construction Eng Manager $5,327 $6,657 IX Fire Marshall $5,327 $6,657 IX Supervising Civil Engineer $5,327 $6,657 X Neighborhood Services Manager $4,983 $6,229 X Parking Manager $4,983 $6,229 X Principal Administrative Analyst $4,983 $6,229 X Principal Civil Engineer $4,983 $6,229 X Principal Transportation Planner $4,983 $6,229 X Public Works Administrative Services Manager $4,983 $6,229 X Recreation Manager $4,983 $6,229 X Risk Manager $4,983 $6,229 X Transit Manager $4,983 $6,229 X Utilities Engineer $4,983 $6,229 G:\agenda reportsWlgtranges04_07_05 0-e ',� Exhihit A Page 2 of 2 APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE Effective April 7,2605 Salary Group Position Tale X Water Projects Manager $4;983 $6,229 X Water Treatment Plant Supervisor $4,983 $6,229 X WRF Plant Supervisor $4,983 $6,229 XI GIS Manager $4,700 $5,876 XI Human Resources Analyst $4,700 $5,876 XI Industrial Waste Coordinator $4,700 $5,876 XI Senior Administrative Analyst $4,700 $5,876 XI Senior Planner $4,700 $5,876 XI Telecommunications Supervisor $4,700 $5,876 XI Utilities Conservation Coordinator $4,700 $5,876 XI Wastewater Collection Supervisor $4,700 $5,876 XI Water Distribution Supervisor $4,700 $5,876 XI Water Supply Supervisor $4,706 $5,876 XII Accounting Supervisor $4,338 $5,421 XII Customer Services Supervisor $4,338 $5,421 XII Facilities Maintenance Supervisor $4,338 $5,421 XII Fleet Maintenance Supervisor $4,338 $5,421 XII Golf Course Supervisor $4,338 $5,421 XII Parks and Urban Forest Supervisor $4,338 $5,421 X11 Program and Project.Coordinator $4,338 $5,421 XII Recreation Supervisor $4,338 $5,421 XII Streets Maintenance Supervisor $4,338 $5,421 XIII Administrative Analyst II $4,144 $5,180 XIV Administrative Analyst 1 $3,767 $4,707 XIV Ranger Services Administrator $3,767 $4,707 G;\agenda reports\Mgtranges04_Q7_05 ((e Ce Exhibit`B" DEPARTMENT HEAD AND MANAGEMENT FRINGE BENEFITS 2005 Section A Medical,Dental,Eve Care The City shall establish and maintain medical, dental and eye care insurance plans for coverage by department head and management employees and their dependents. The City reserves the right to choose the method of insuring and plans to be offered. The City has elected to participate in the Ca1PERS Health Benefit Program with the"unequal contribution option" at the PERS minimum contribution rate, currently $32.20 per month for active employees and$10.61 per morith for retirees. The City's contribution toward retirees shall be increased by 5% per year of the City's contribution for the active employees until such time as contributions for employees and retirees are equal. Employees with proof of medical insurance elsewhere are not required to participate in the medical insurance plan and may receive the unused portion of the City's contribution (after dental and vision insurance is deducted) in cash in accordance with the City's cafeteria plan. Those employees will be assessed$16.00 per month to be placed in the Retiree Health Insurance Account. This account will be used to fund the City's contribution toward retiree premiums and the City's costs for the Public Employees' Contingency Reserve Fund and Administrative Costs. However, there is no requirement that these funds be used exclusively for this purpose, nor any guarantee that they will be sufficient to fund retiree health costs, although they will be used for employee benefits. Employees will be required to participate in the City's dental and vision plans at the employee- only rate. Should they elect to cover dependents in the City's dental and vision plans,they may do so, even if they do not have dependent coverage for medical insurance. Employees shall participate in term life insurance of$4,000 through payroll deduction as a part of the cafeteria plan. Section B Cafeteria Plan Contribution The City shall contribute$610 per month for cafeteria plan benefits for each regular, full-time employee covered by this resolution. Less than full-time employees shall receive a prorated share of the City's contribution. The City agrees to continue its contribution to the cafeteria plan for two (2) pay periods in the event that an employee has exhausted all paid time off due to an employee's catastrophic illness. Section C Life and Disability Insurance The City shall provide the following special insurance benefits in recognition of management responsibilities: Resolution No. (2005 Series) EXHIBIT`B" Management Fringe Benefits 2005 Page 2 1. Long-term disability insurance providing 66 2/3% of gross salary (maximum benefit $5,500 per month) to age 65 for any sickness or accident, subject to the exclusions in the long-term disability policy, after a 30-day waiting period. 2. In addition to$4,000 term life insurance purchased by the employee through the cafeteria plan, $100,000 term life insurance for department heads and$50,000 term life insurance for management employees, including accidental death and dismemberment.. Section D Retirement The City shall provide the California Public Employees' Retirement System's (CalPERS) 2.7% at 55 plan to all eligible employees including the amendments permitting conversion of unused sick leave to additional retirement credit, the 1959 survivor's benefit (Level Four), one year final compensation and pre-retirement Option 2 death benefit. The Police and Fire Chiefs shall receive the same retirement benefits as sworn personnel in their departments. The City agrees to pay the employee's contribution to CalPERS (8% for miscellaneous, 9% for safety). These amounts paid by the City are employee contributions and are paid by the City to satisfy the employee's obligation to contribute the current percentage of salary to CalPERS. An employee has no option to receive the contributed amounts directly instead of having them paid by the City to CalPERS on behalf of the employee. It is further understood and agreed that the payment of the employee's CalPERS contribution is made subject to I.R.S. approval and reporting procedures. The City shall report as salary all Employer-Paid Member Contributions (EPMC) to CalPERS for the purposes of retirement credit in accordance with Government Code Section 20636 (c) (4). Section E Supplemental Retirement The City shall contribute 1% of salary for management employees and 2% of salary for department heads to a defined contribution supplemental retirement plan established in accordance with sections 401 (a) and 501 (a) of the Internal Revenue Code of 1986 and California Government Code sections 53215=53224. Section F Vacation Vacation leave is governed by section 2.36.440 of the Municipal Code, except that it may be taken after the completion of the sixth calendar month of service since the benefit date. Vacation leave shall be accrued as earned each payroll period Provided that not more than twice the annual rate may be carred over to a new calendar year. G:\agmda reports\MgtComp2005ExhbtB.doc Resolution No. (2005 Series) EXHIBIT`B" Management Fringe Benefits 2005 Page 3 However, if the City Administrative Officer determines that a department head has been unable to take vacation due to the press of City business, the City Administrative Officer may approve a two-month extension of maximum vacation accrual. The City Administrative Officer may, within two years of appointing a department head, increase the rate of vacation accrual to a maximum of 120 hours per year. Vacation schedules for management employees shall be based upon the needs of the City and then, insofar as possible, upon the wishes of the employee. A department head may not deny a management employee's vacation request if such denial will result in the loss of vacation accrual by the employee,except that, a department head may approve a two-month extension of maximum vacation accrual. However,in no event shall more than one such extension be granted in any calendar year. Department Head and management employees are eligible, once annually in December, to request payment for up to 40 hours of unused vacation leave provided that an employee's overall performance and attendance practices are satisfactory. Section G Administrative Leave Department heads shall be granted up to 80 hours of administrative leave per calendar year. Department heads shall have the option of taking such leave as additional paid leave or receiving cash for up to 80 hours at year end upon approval of the City Administrative Officer. Management employees shall be granted up to 48 hours of administrative leave per calendar year. Administrative leave hours shall be pro-rated when a department head or management employee is appointed or leaves employment during the calendar year. The employee's final check will be adjusted to reflect the pro-rated hours. Department Heads and Managers are considered exempt from the overtime provisions of the Fair Labor Standards Act(FLSA) and not eligible for overtime payment.. In general, management employees are expected to work the hours necessary to successfully carry out their duties and frequently must return to work or attend meetings and events outside their normal working hours. However, when specifically authorized by the department head due to extraordinary circumstances, a management employee may receive overtime payment of time and one-half for hours worked above and beyond what would be considered normal work requirements during an emergency event lasting at least eight (8) hours. GAagenda reports\MgtComp2005ExhbtB.doc CIP Resolution No. (2005 Series) EXgEBTT "B„ Management Fringe Benefits 2005 Page 4 Section H Holidays Department heads and management employees shall receive 11 fixed plus 2 floating holidays per year. The floating holidays shall be accrued on a semi-monthly basis and added to the vacation accrual. Section I Sick Leave Sick leave is governed by section 2.36.420 of the Municipal Code. An employee may take up to 16 hours per year of sick leave if required to be away from the job to personally care for a member of his/her immediate family as defined in Section 2.36.420. This may be extended to 40 hours per year if the family member is part of the employee's household and to 56 hours if a household family member is hospitalized and the employee submits written verification of such hospitalization. If the family member is a child,parent or spouse, an employee may use up to 48 hours annually to attend to the illness of the child,parent or spouse, instead of the lesser maximums above, in accordance with Labor Code Section 233. In conjunction with existing leave benefits, department head and management employees with one year of City service who have worked at least 1,280 hours in the previous year may be eligible for up to 12 weeks of Family/Medical Leave in accordance with the federal Family and Medical Leave Act and the California Family Rights Act. Sick leave may be used to be absent from duty due to the death of a member of the employee's immediate family as defined in Section 2.36.420, provided such leave shall not exceed forty working hours for each incident. The employee may be required to submit proof of relative's death before being granted sick leave pay. False information concerning the death or relationship shall be cause for discharge. Upon termination of employment by death or retirement, a percentage of the dollar value of the employee's accumulated sick leave will be paid to the employee, or the designated beneficiary or beneficiaries according to the following schedule: (A) Death—25% (B) Retirement and actual commencement of Ca1PERS benefits: (1) After ten (10) years of continuous employment— 10% (2) After twenty years of continuous employment— 15% Section J Workers' Compensation Leave An employee who is absent from duty because of on-the-job injury in accordance with State workers' compensation law and is not eligible for disability payments under Labor Code Section 4850 shall be paid the difference between his/her base salary and the amount provided by workers' compensation law during the first ninety (90)business days of such temporary GAagenda reports\MgtComp20o5ExhbtB.doc r Resolution No. (2005 Series) EXHIBrr `B" Management Fringe Benefits 2005 Page 5 disability absence. Eligibility for workers' compensation leave requires an open workers' compensation claim. Section K Vehicle Assignment For those department heads who require the use of an automobile on a regular 24-hour basis to perform their normal duties, the City will, at City option, provide a City vehicle or an appropriate allowance for the employee's use of a personal automobile. The use of a personal automobile for City business will be eligible for mileage reimbursement in accordance with standard City policy. Section L Layoffs In accordance with Section 2.36.320 of the Personnel Rules, the City Council of San Luis Obispo shall determine when and in what position classifications layoffs are to occur. Section M Appointed Officials The fringe benefits outlined in this exhibit for department heads apply to appointed officials, except where they have been modified by council resolution. GAagendareportAMgtComp2005ExhbtB.doc r^ r