HomeMy WebLinkAbout03/01/2004, C3 - MANAGEMENT EMPLOYEES' COMPENSATION council
j acenaa uepont G3
CITY O F SAN LUIS O B I S P O
FROM: Monica Moloney, Director of Human Resources
SUBJECT: MANAGEMENT EMPLOYEES' COMPENSATION
CAO RECOMMENDATION .
Adopt a resolution approving management compensation for 2004 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, 2003. A Management Compensation Committee was formed in
December to examine the Pay for Performance system,make recommendations regarding that system,
and propose overall adjustments to management compensation. Staff is recommending the following
actions apply to all management, department heads, and appointed officials during the calendar year
2004:
(1) No Cost of Living Adjustment(COLA)be granted.
(2) Salary ranges increase 3%effective March 11,2004. No corresponding adjustment to salaries
will be made at that time.
(3) The Pay for Performance salary increase scale will be reduced from zero to six percent to zero
to five percent. The percent increase is recommended by the employee's evaluator,based on
the employee's performance during the past year.
(4) The Pay for Performance system will be modified to eliminate lump sum payments to
employees at top of range.
(5) Cafeteria contributions increase by $40 per month to $600 per month effective December 1,
2003.
(6) Restate and amend the list of management fringe benefits.
Cost of Living Increase
Given the economic uncertainty that the City faces, staff concluded that a zero percent cost of
living adjustment was appropriate. A cost of living adjustment typically means that both ranges
and salaries move at the same rate, thereby maintaining an employee's position in the range. No
cost of living increase means that potential range movement is independent from individual salary
movement.
Salary Ranges
Staff recommends increasing management salary ranges by 3% effective March 11, 2004. The
range movement is in line with range movement recently negotiated with SLOCEA and allows
1
I
Council Agenda Report—Management Employees' Compensation
Page 2
those employees at the top of the current range (66% of the management group) to obtain salary
increases up to 3% in July, 2004, based on their performance. The proposed increase in salary
ranges does not guarantee an increase in individual salaries as would be the case if the 3% range
movement was proposed as a COLA. Because the majority of management pay for performance
increases are due in July, halfway through the year, the financial impact of the increase is
significantly lowered.
Pay for Performance System
The Management Pay for Performance System has been in place for eight years and is well thought
of by both department heads and managers. It is important to the management group that the
integrity of the Pay for Performance system be maintained, while modifications are made based on
current fiscal conditions. The current pay for performance system allows for salary increases
based upon performance to range from zero to six percent. Staff recommends adjusting this scale
downwards to zero to five percent. This aligns the pay for performance increases with the step
increases available to employees in other associations and job classifications, and is appropriate
given the City's overall financial constraints.
Currently, an employee at the top of the salary range who is rated overall as "meeting
expectations" or above receives a lump sum payment equivalent to the recommended amount of
increase that exceeds the top of the range. Although this provides the same pay-for-performance
incentive as that available to other managers, staff feels that given the fiscal challenges facing us,
any perception of management staff receiving "bonuses" is not appropriate. Therefore, staff
recommends eliminating the lump sum payment feature for this year.
Cafeteria Contribution
Staff recommends increasing the cafeteria contribution from $560 to $600 per month effective
December 1, 2003, for all management employees. This increase in cafeteria contribution meets
the priorities of some of the management group as well as keeps the contribution somewhat
competitive with that of other associations within the City as well as with local employers. The
effective date of December 1, 2003, is due to the fact that health insurance premiums increased
effective January 1, 2004, and deductions were taken in December to account for the premium
increases.
Fringe Benefits
The list of Department Head and Management Fringe Benefits was last updated in 2000. Since
then, some inconsistencies have been discovered in the treatment of vacation accruals and
administrative leave between the department heads and managers. Retirement benefits and the
City's contribution to the cafeteria plan have also changed since then. The proposed revisions
clarify practices and reflect approved changes since the last update.
In addition, a change in the way that the employee's contribution to the retirement system is
handled for appointed officials is proposed. Currently, the 8% mandatory employee contribution
to the retirement system is included in the salary ranges for the appointed officials (City
Administrative Officer and City Attorney) and the contribution is deducted from the employee's
salary on a pre-tax basis. Staff proposes to reduce the salary ranges and salaries for the appointed
CADocuments and Settings\slouser\Desktop\ManagementCompensation2004.doe C3 -a
Council Agenda Report—Management Employees' Compensation
Page 3
officials by 8%. The City will, in turn, begin making the 8% contribution directly, consistent with
the way this benefit is reported for department heads and managers.
FISCAL IMPACT
The proposed compensation package is within the Council parameter. Additionally, the proposed
changes to the Pay-for-Performance Plan will result in added one-time savings during the year.
Funding for the proposed package is available as part of the current two-year Financial Plan.
ATTACHMENT:
Resolution with Exhibit"A" Salary Schedule and Exhibit `B"Fringe Benefits
CADocuments and Settingslslouser\Desktop\ManagementCompensation2004.doc
C3
Attachment 1
RESOLUTION NO. (2004 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
WItEREAS, 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 for a two year period,revised it in 1998, in 2000, and 2001;
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, 2004.
SECTION 2. The City agrees to increase management salary ranges by 3% as shown in
Exhibit"A" effective March 11, 2004.
SECTION 3. The City agrees to increase the cafeteria contribution to $600 per month
effective December 1, 2003.
SECTION 4. The City agrees to modify the Management Pay for Performance System by
the elimination of lump sum payments for management employees at top of range and reducing the
annual salary increase scale to 0% -5%.
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 City elects to pay 8% of the normal member contributions as Employer
Paid Member Contributions (EPMC) in accordance with Government Code Section 20691, and
report the same percent (value) of compensation eamable {excluding the special compensation of
the monetary value of EPMC paid to Ca1PERS by the City under Government Code Section 20636
(c) (4)} as additional compensation. The value of EPMC shall be reported as an item of special
compensation consistently for all appointed officials and shall be effective March 11, 2004. Salary
ranges for appointed officials shall be reduced by 8% to correspond with the change in payment of
C3 - 4
Resolution No. (2004Series)
the normal member contributions.
SECTION 7. The Director of Finance and Information Technology shall adjust the
appropriate accounts to reflect the compensation changes.
Upon motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this day of
2004.
ATTEST:
City Clerk Lee Price,CMC Mayor David F. Romero
APPROVED AS TO FORM:
Citytto y Jonathan Lowell
CADocuments and Settingslslouser\Desktop\ManagementComp2004.DOC
1
APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE
Effective March 11,2004 Exhibit"A"
Salary Group Position Title Range Low Range High
City Administrative Officer $9,226 $11,533
11 City Attorney $8,424 $10,527
III Assistant City Administrative Officer $7,623 $9,531
III Director of Finance and Information Technology $7,623 $9,531
III Fire Chief $7,275 $9,531
III Police Chief $7,631 $9,531
III Public Works Director $7,623 $9,531
IV Director of Community Development $7,269 $9,090
IV Utilities Director $7,269 $9,090
V Director of Human Resources $6,882 $8,605
V Parks and Recreation Director $6,882 $8,605
VI Deputy Director of PW/City Engineer $6,329 $7,911
VII Assistant City Attorney $6,028 $7,534
VII City Clerk $6,028 $7,534
VII Deputy Director of CD- Development Review $6,028 $7,534
VII Deputy Director of CD-Long Range Planning $6,028 $7,534
VII Deputy Director of Utilities/Wastewater $6,028 $7,534
VII Deputy Director of Utilities/Water $6,028 $7,534
VII Deputy Public Works Director $6,028 $7,534
VII Finance Manager $6,028 $7,534
VII Information Technology Manager $6,028 $7,534
VIII Chief Building Official $5,396 $6,746
VIII City Traffic Engineer $5,396 $6,746
VIII Economic Development Manager $5,396 $6,746
VIII Natural Resources Manager $5,396 $6,746
VIV Fire Marshall $5,171 $6,463
VIV Supervising Civil Engineer $5,171 $6,463
X Neighborhood Services Manager $4,838 $6,048
X Parking Manager $4,838 $6,048
X Principal Administrative Analyst $4,838 $6,048
X Principal Civil Engineer $4,838 $6,048
X Principal Transportation Planner $4,838 $6,048
X Public Works Administrative Services Manager $4,838 $6,048
X Recreation.Manager $4,838 $6,048
X Risk Manager $4,838 $6,048
X Transit Manager $4,838 $6,048
X Utilities Engineer $4,838 $6,048
X Water Projects Manager $4,838 $6,048
G:\agenda reportsVngtranges02_18_04
APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE
Effective March 11,2004 Exhibit "A"
X Water Treatment Plant Supervisor $4,838 $6,048
X WRF Plant Supervisor $4,838 $6,048
XI Construction Eng Manager $4,564 $5,704
XI GIS Manager $4,564 $5,704
XI Hazardous Materials Coordinator $4,564 $5,704
XI Human Resources Analyst $4,564 $5,704
XI Industrial Waste Coordinator $4,564 $5,704
XI Senior Administrative Analyst $4,564 $5,704
XI Utilities Conservation Coordinator $4,564 $5,704
XI Wastewater Collection Supervisor $4,564 $5,704
XI Water Distribution Supervisor $4,564 $5,704
XI Water Supply Supervisor $4,564 $5,704
XII Accounting Supervisor $4,211 $5,262
XII Customer Services Supervisor $4,211 $5,262
XII Facilities Maintenance Supervisor $4,211 $5,262
XII Fleet Maintenance Supervisor $4,211 $5,262
XII Golf Course Supervisor $4,211 $5,262
XII Parks Maintenance Supervisor $4,211 $5,262
XII Program and Project Coordinator $4,211 $5,262
XII Recreation Supervisor $4,211 $5,262
XII Streets Maintenance Supervisor $4,211 $5,262
XII Urban Forestry Supervisor $4,211 $5,262
XIII Administrative Analyst II $4,024 $5,028
XIV Administrative Analyst 1 $3,658 $4,570
G:\agenda reports\mgtranges02_l8_O4
Management Pay for Performance Resolution
Series (2004) Exhibit`B"
DEPARTMENT HEAD AND MANAGEMENT FRINGE BENEFITS,2004
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 CalPERS 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 month 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$600 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:
C6 �g
Management Pay for Performance Resolution
Series (2004) Exhibit`B"
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), and one year
final compensation.
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 Ca1PERS 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 carried over to a new calendar year.
C3 -9
1
I
Management Pay for Performance Resolution
Series (2004) Exhibit`B"
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.
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.
C3-� o
Management Pay for Performance Resolution
Series (2004) Exhibit`B"
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 beabsentfrom 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 CaIPERS 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 disability
absence. Eligibility for workers' compensation leave requires an open workers' compensation
claim.
Section K Vehicle Assignment
For those department.heads that 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
c3 - i �
Management Pay for Performance Resolution
Series (2004) Exhibit`B"
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.
GAManagement CompensationTay For Performance 2004.doc n ^Ica
council mcmoizanIbum
f February 27, 2004 _—
RED-FILE
TO: City Council MEETING AGENDA
------vIA: Ken Hampian, CAO DAT !�/ ITEM #
FROM: Monica Moloney,Director of Human Resource
SUBJECT: Appointed Officials and Management Salary Schedule—Correction
During the process of updating the Appointed Officials and Management Salary Schedule for
inclusion in the Council Agenda Report titled Management Employees' Compensation, the
Police Chief salary range was inadvertently included in Salary Group III. Since August 1, 2002,
the Police Chief salary range has been in Salary Group III-A. The attached Appointed Officials
and Management Salary Schedule, Exhibit "A" revised, corrects the error by placing the Police
Chief in Salary Group III-A.
This attachment, Appointed Officials and Management Salary Schedule, Exhibit "A" revised
February 27, 2004, should replace Exhibit"A"previously attached to the Council Agenda Report
and Resolution revising Management Compensation and Pay for Performance System.
L�C01JNCIL ❑ CDD DIP
i!C.AO ❑ FIN DIR
yACAO ❑ FIRE CHIEF
[IATTORNEY ❑ PW DIR
LERK(OP,IG. ❑ POLICE CHF
I u DEPT HEADS. ❑ REC DIR__
El ❑ UTIL DIR
❑ H° DIF;
APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE
Effective March 11,2004 Exhibit "A", Revised 02-27-04
Salary Group Position Title Range Low Range High
I City Administrative Officer $9,226 $11,533
II City Attorney $8,424 $10,527
III-A Police Chief $7,705 $9,634
III Assistant City Administrative Officer $7,623 $9,531
III Director of Finance and Information Technology $7,623 $9,531
III Fire Chief $7,623 $9,531
III Public Works Director $7,623 $9,531
IV Director of Community Development $7,269 $9,090
IV Utilities Director $7,269 $9,090
V Director of Human Resources $6,882 $8,605
V Parks and Recreation Director $6,882 $8,605
VI Deputy Director of PW/City Engineer $6,329 $7,911
VII Assistant City Attorney $6,028 $7,534
VII City Clerk $6,028 $7,534
VII Deputy Director of CD- Development Review $6,028 $7,534
VII Deputy Director of CD Long Range Planning $6,028 $7,534
VII Deputy Director of Utiilities/Wastewater $6,028 $7,534
VII Deputy Director of Utilities/Water $6,028 $7,534
VII Deputy Public Works Director $6,028 $7,534
VII Finance Manager $6,028 $7,534
VII Information Technology Manager $6,028 $7,534
VIII Chief Building Official $5,396 $6,746
VIII City Traffic Engineer $5,396 $6,746
Vill Economic Development Manager $5,396 $6,746
VIII Natural Resources Manager $5,396 $6,746
VIV Fire Marshall $5,171 $6,463
VIV Supervising Civil Engineer $5,171 $6,463
X Neighborhood Services Manager $4,838 $6,048
X Parking Manager $4,838 $6,048
X Principal Administrative Analyst $4,838 $6,048
X Principal Civil Engineer $4,838 $6,048
X Principal Transportation Planner $4,838 $6,048
X Public Works Administrative Services Manager $4,838 $6,048
X Recreation Manager $4,838 $6,048
X Risk Manager $4,838 $6,048
X Transit Manager $4,838 $6,048
X Utilities Engineer $4,838 $6,048
X Water Projects Manager $4,838 $6,048
G:\agenda reports\mgtrangesrevised02_27_04