HomeMy WebLinkAboutR-10920 Management Compensation for Appointed Officials - Dept Heads - Management EmployeesRESOLUTION NO. 10920 (2018 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, REGARDING MANAGEMENT
COMPENSATION FOR APPOINTED OFFICIALS, DEPARTMENT
HEADS, AND MANAGEMENT EMPLOYEES AND SUPERSEDING
PREVIOUS RESOLUTIONS IN CONFLICT
WHEREAS, the unrepresented management employees (Appointed Officials, Department
Heads, and Management Employees) of the City of San Luis Obispo have remained committed to
providing high quality service to the community and recognize the City's commitment to fiscal
responsibility in alignment with the City's Fiscal Health Response Plan; and,
WHEREAS, the unrepresented management employees have demonstrated sensitivity to
the fiscal challenges facing the City and agree to a shared approach including modest cost of
living increases, which are partially offset by employees' increased contributions towards
retirement costs; and,
WHEREAS, the City Council is committed to providing competitive compensation to
attract and retain well qualified employees, as provided in the City's adopted Compensation
Philosophy.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis Obispo
hereby revises unrepresented management compensation as follows:
SECTION 1. Term. The term of this Resolution shall be from July 1, 2018 through June
30, 2021.
SECTION 2. Cost of Livin Adjustments. The City agrees to increase the salaries of
unrepresented management employees with a 1% cost of living adjustment (COLA) effective the
first full pay period in August 2018, a 2% COLA effective the first full pay period in July 2019,
and a 2% COLA effective the first full pay period in July 2020. The increases to salary shall be
partially offset over the term of this Resolution, as set forth in Sections 3 and 4 below.
SECTION 3. Reduction of City Deferred Compensation Contribution. Effective the
first full pay period in August 2018, the City shall cease making a one percent (1%) City
contribution to individual deferred compensation accounts for unrepresented management
employees and reduce contributions to Department Heads and Appointed Officials by one
percent. Those employees will have no further right to receive that City contribution for the term
of this Resolution or thereafter.
SECTION 4. Increased Employee Retirement Cost Sharing Effective the first full pay
period in July 2019, the employee contribution to CalPERS retirement costs shall be increased by
one and one-half percent (1.5%) for all unrepresented management employees. Effective the first
full pay period in July 2020, the employee contribution to CalPERS retirement costs shall be
increased by an additional one and one-half percent (1.5%) for all unrepresented management
employees.
R 10920
Resolution No. 10920 (2018 Series)
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The City shall continue to provide employees certain fringe benefits as set forth in Exhibit "A",
fully incorporated by reference.
SECTION 5. The Director of Finance shall adjust the appropriate accounts to reflect the
compensation changes.
SECTION 6. Authorize the City Manager and Human Resources Director to take actions
to implement this Resolution.
Upon motion of Council Member Pease, seconded by Council Member Gomez, and on the
following vote:
AYES: Council Members Gomez, Pease and Rivoire,
Vice Mayor Christianson and Mayor Harmon
NOES: None
ABSENT: None
The foregoing resolution was adopted this 17`h day of July, 201
Mayor
ATTEST:
r % '
Teresa Purrington, City Clerk
AS TO FORM:
J.1Wstine 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, this 25" day of JJ ZQ 1
Teresa Purrington
City Clerk
R 10920
Unrepresented Management Compensation
Appointed Officials, Department Heads, and Management Employees
Resolution No. 10920 (2018 Series)
Exhibit A
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Table of Contents
Section A Medical, Dental, Vision.................................................................................. 1
Section B Health Flex Allowance................................................................................... 2
Section C Life and Disability Insurance.......................................................................... 3
SectionD Retirement..................................................................................................... 3
Section E Supplemental Retirement.............................................................................. 5
Section F Pay for Performance....................................................................................... 5
SectionG Vacation........................................................................................................ 6
Section H Administrative Leave..................................................................................... 7
SectionI Holidays......................................................................................................... 7
SectionJ Sick Leave..................................................................................................... 8
Section K Workers' Compensation Leave.. ................................................ ................... 9
Section L Work Out-of-Classification............................................................................. 9
Section M Vehicle Assignment .......................................................................................9
SectionN Uniform Allowance...................................................................................... 10
SectionO Appointed Officials.......................•---..............................---.......................... 10
Resolution No. 10920 (2018 Series)
Exhibit A
Section A Medical, Dental. Vision
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The City shall establish and maintain medical, dental and vision insurance plans for
appointed officials, department heads and management employees and their
dependents. The City reserves the right to choose the method of insuring and plans to
be offered.
PERS Health Benefit Program
The City has elected to participate in the PERS Health Benefit Program. The City shall
contribute an equal amount towards the cost of medical coverage under the Public
Employee's Medical and Hospital Care Act (PEMHCA) for both active employees and
retirees. The City's contribution toward coverage under PEMHCA shall be the statutory
minimum contribution amount established by CaIPERS on an annual basis. The City's
contribution will come out of that amount the City currently contributes to employees as
part of the City's Cafeteria Plan. The cost of the City's participation in PERS will not
require the City to expend additional funds toward health insurance. In summary, this
cost and any increases will be borne by the employees.
Health Insurance Benefits for Domestic Partners
The City has adopted a resolution electing to provide health insurance benefits to
domestic partners (Section 22873 of the PEMHCA).
Conditional Opt Out
Employees who at initial enrollment or during the annual open enrollment period,
complete an affidavit and provide proof of other minimum essential coverage for
themselves and their qualified dependents (tax family) that is not a qualified health plan
coverage under an exchange/marketplace or an individual plan, will be allowed to waive
medical coverage for themselves and their qualified dependents (tax family).
The monthly conditional opt -out incentives are:
Opt Out $200
"Grandfathered" Opt Out $790 (hired before September 1, 2008)
The conditional opt -out incentive shall be paid in cash (taxable income) to the employee.
The employee must notify the City within 30 days of the loss of other minimum essential
coverage. The conditional opt -out payment shall no longer be payable, if the employee
and family members cease to be enrolled in other minimum essential coverage.
Employees receiving the conditional opt -out amount will also 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
Employee's Contingency Reserve Fund and the 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
negotiated employee benefits.
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Resolution No. 10920 (2018 Series)
Exhibit A 6
Dental and Vision Insurance/Dependent Coverage
Employee participation in the City's dental and vision plans is optional. Employees who
elect coverage shall pay the dental and/or eye premium by payroll deductions on a pre-
tax basis through the City's Cafeteria Plan.
Section B Health Flex Allowance
Employees electing medical coverage in the City's plans shall receive a health flex
allowance, as defined by the Affordable Care Act ("ACA") and shall purchase such
coverage through the City's Cafeteria Plan. If the health flex allowance is less than the
cost of the medical plan, the employee shall have the opportunity to pay the difference
between the health flex allowance and the premium cost on a pre-tax basis through the
City's Cafeteria Plan. If the premium cost for medical coverage is less than the health
flex allowance, the employee shall not receive any unused health flex in the form of cash
or purchase additional benefits under the Cafeteria Plan.
The current monthly health flex allowance amount for regular, full-time employees is
outlined below:
Level of Coverage
Emglovee O
Employee Only
"Grandfathered"
2018 Monthly
Health Flex
Allowance Rates
$539
$790
Employee Plus One $1,066
Family 1 $1,442
Employees hired prior to September 1, 2008 that are grandfathered in and elect employee
only medical coverage will receive the health flex allowance listed above for employee
only "grandfathered" coverage. As of January 1, 2015, if an employee that is receiving
Employee Only or Opt Out "Grandfathered" coverage changes their level of coverage,
they will be eligible to return to the grandfathered coverage in a future year. If the
premium cost for medical coverage is less than the health flex allowance, the employee
shall no longer receive any unused health flex in the form of cash.
Effective December 2018 (for the January 2019 premium), December 2019 (for the
January 2020 premium), and December 2020 (for the January 2021 premium), the City's
total health flex allowance for group medical coverage shall be modified by an amount
equal to one-half of the average percentage increase for family coverage in the PERS
health plans available in San Luis Obispo County. For example: if three plans were
available and the year-to-year changes were +10%, +15%, and +20% respectively, the
City's contribution would be increased by 7.5% (10% + 15% + 20% _ 3 = 15% x 1/2).
Less than full-time employees shall receive a prorated share of the City's contribution.
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Resolution No. 10920 (2018 Series)
Exhibit A
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The City agrees to continue its contribution to the health flex allowance for two (2) pay
periods in the event that an employee has exhausted all paid time off and leave approved
under the federal Family and Medical Leave Act (FMLA) and the California Family Rights
Act (CFRA) due to an employee's catastrophic illness. That is, the employee shall receive
regular City health flex allowance for the first two (2) pay periods following the pay period in
which the employee's accrued leave balances reach zero (0) and FMLA/CFRA benefits
have been exhausted.
Section C Life and Disability Insurance
The City shall provide the following special insurance benefits in recognition of
management responsibilities:
Long-term disability insurance providing 66 2/3% of gross salary (maximum
benefit $11,250 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, the City
provides a $100,000 term life insurance including accidental death and
dismemberment through the City's Cafeteria Plan.
Section D Retirement
A. PERS Contracts
1. "Classic Members First Tier" non -sworn and sworn employees hired before
December 6, 2012.
The City agrees to provide the Public Employees' Retirement System's (PERS)
2.7% at age 55 plan to all non -sworn employees and the 3% at 50 plan to all
sworn employees. The 2.7% at 55 plan includes the following amendments:
1959 Survivor's Benefit — Level Four, conversion of unused sick leave to
additional retirement credit, one-year final compensation, Military Service
Credit, and Pre -Retirement Optional Settlement 2 Death Benefit. The 3% at
age 50 plan includes the following amendments: Post -Retirement Survivor
Allowance, conversion of unused sick leave credit to additional retirement
credit, 1959 Survivor's Benefit- Level Four, one-year final compensation,
Military Service Credit, and Pre -Retirement Optional Settlement 2 Death
Benefit.
2. "Classic Members Second Tier" non -sworn and sworn employees hired on or
after December 6, 2012.
The City agrees to provide the PERS 2% at 60 plan for non -sworn employees
using the highest three-year average as final compensation. The second-tier
formula for non -sworn employees will include the following amendments: 1959
Survivor's Benefit — Level Four, conversion of unused sick leave to additional
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Resolution No. 10920 (2018 Series)
Exhibit A
retirement credit, Military Service Credit, and Pre -Retirement Optional
Settlement 2 Death Benefit. Employees hired under this plan will pay the full
member contribution required under the plan, presently seven percent (7%).
For sworn "Classic Members" hired on or after December 6, 2012, the City will
provide the PERS 3% at 55 plan for sworn Fire employees and 2% at 50 plan
for sworn Police employees using the highest three-year average as final
compensation. The second-tier formula for sworn employees will include the
following amendments: Post Retirement Survivor Allowance, conversion of
unused sick leave to additional retirement credit, the 1959 Survivor's Benefit —
Level Four, Military Service Credit, and Pre -Retirement Optional Settlement 2
Death Benefit.
3. "New Members Third Tier" non -sworn and sworn employees hired after
January 1, 2013. PERS determines who are "New Members" within the
meaning of the California Public Employees' Pension Reform Act (PEPRA).
The City will provide the PERS 2% at 62 plan for non -sworn employees and
2.7% at 57 plan for sworn employees, using the highest three-year average as
final compensation.
B. Member Contributions
1. "Classic Members First and Second Tier"
Effective the first pay period in January 2012, employees began paying the full
member contribution required under the plan for first and second tier sworn
(9%) and non -sworn (8% and 7% respectively) employees and the City
discontinued their payment of the member contribution. For purposes of this
Section, employee contributions are based on salary and special compensation
as defined by PERS.
Effective the first full pay period in July 2019, all non -sworn and sworn
employees shall contribute 1.5% in addition to the employee contribution
defined in the paragraph above. Effective the first full pay period in July 2020,
all non -sworn and sworn employees' additional contribution shall increase to
3%, in addition to the employee contribution defined in the paragraph above.
These additional contributions are in accordance to the provisions of AB 340,
§7522.30 and §20516.
All of the employee contributions are made on a pre-tax basis as allowed under
Internal Revenue Service Code Section 414 (h) (2).
2. "New Members Third Tier"
Effective on their date of hire, new members will pay 50% of the normal cost,
as determined by PERS.
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Resolution No. 10920 (2018 Series)
Exhibit A
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Effective the first full pay period in July 2019, all non -sworn and sworn new
members shall contribute 1.5% in addition to the employee paying 50% of the
normal cost. Effective the first full pay period in July 2020, all non -sworn and
sworn new members contribution shall increase to 3%, in addition to the
employee paying 50% of the normal cost. These additional contributions are
in accordance to the provisions of AB 340, §7522.30 and §20516.
All of the employee contributions are made on a pre-tax basis as allowed under
Internal Revenue Service Code Section 414 (h) (2).
C. Contract Amendment with PERS
The City will submit a contract amendment to PERS requesting the employee
contributions effective July 2019 and 2020 (1.5% and 3% respectively) be considered
contributions to the employees account. PERS currently requires a secret ballot
election among the employees affected to change the employees' rate of contribution.
The contract cannot be amended if a majority of the affected members vote to
disapprove the proposed plan. In the event a secret ballot is required by State Law
and the unrepresented management group does not vote to approve the contract
amendment, the additional contributions will still be required in accordance to the
provisions of §20516(f). In this case the additional contributions would not be credited
to the employee's PERS account as a normal contribution.
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.
Effective the first full pay period in August 2018, the City shall discontinue a 1%
contribution of salary for management employees and the City contribution will decrease
from 2% to 1 % for department heads to a defined contribution supplemental retirement
plan.
Section F Pay for Performance
In 1996 the City Council established the Management Pay for Performance System for
department heads and management employees. The system is designed to recognize and
reward excellent performance by department heads and managers and to provide an
incentive for continuous improvement and sustained high performance. Instead of step
increases, the department heads and management employee moves through his/her salary
range solely according to accomplishment of objectives and job-related behavior. Further
information about the Management Pay for Performance System is found in the
Management Pay for Performance System Guide.
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Resolution No. 10920 (2018 Series)
Exhibit A
Section G Vacation
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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
or earlier with department head or designee authorization. Each employee shall accrue
vacation leave with the pay at the following rates:
Management Employees
Years of
Annual
Annual
Service
Vacation
Vacation
Accrual Days*
Accrual Hours
0 to 5 years
12 days
96 hours
5 to 10 years
15 days
120 hours
10 to 20 years
18 days
144 hours
20+ years
20 days
160 hours
Appointed Officials & Department Heads
Annual
Annual
Years of
Service
Vacation
Accrual Days*
Vacation
Accrual Hours
0 to 10 years
15 days
120 hours
10 to 20 years
18 days
144 hours
20+ years
20 days
160 hours
*One day is equivalent to eight (8) hours for a 40 -hour per week line -item position.
Vacation leave shall be accrued as earned semi-monthly provided that not more than
twice the annual rate (not including floating holiday leave) may be carried over to a new
calendar year. Effective April 2019, management employees vacation time shall not
exceed twice the annual rate. If an employee reaches the cap at any time throughout the
year, the employee will stop accruing vacation leave.
However, if the City Manager determines that a department head has been unable to take
vacation due to the press of City business, the City Manager may approve up to a six-
month extension of maximum vacation accrual. The City Manager 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 up to a six-month extension of maximum vacation accrual. However,
in no event shall more than one such extension be granted in any calendar year.
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Resolution No. 10920 (2018 Series)
Exhibit A
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Appointed officials, department Heads 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. Payment for unused vacation leave is subject to the availability of budgeted
funds.
Section H Administrative Leave
Appointed officials and department heads shall be granted 80 hours of administrative
leave the pay period that January 1 st falls into.
Management employees shall be granted 48 hours of administrative leave the pay period
that January 1 st falls into.
Administrative leave hours shall be pro -rated on a monthly basis 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, however there
is no provision to receive cash payment for unused administrative hours. Unused
administration leave will not be carried over year to year but can be taken through
December 31 st of each year.
Appointed officials, department heads and management employees 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 I Holidays
Appointed officials, department heads and management employees shall receive eleven
(11) fixed plus two (2) floating holidays per year. The following days of each year are
designated as paid holidays:
January 1 — New Year's Day
® Third Monday in January — Martin Luther King Jr. Birthday
Third Monday in February — Presidents' Day
Last Monday in May — Memorial Day
® July 4 — Independence Day
• First Monday in September — Labor Day
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Resolution No. 10920 (2018 Series)
Exhibit A
• November 11 — Veteran's Day
■ Fourth Thursday in November — Thanksgiving Day
Friday after Thanksgiving
December 25 — Christmas
• One half day before Christmas
■ One half day before New Year's Day
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When a holiday falls on a Saturday, the preceding Friday shall be observed. When a
holiday falls on a Sunday, the following Monday shall be observed. A holiday shall be
defined as eight (8) hours of paid time off for regular full-time employees.
When Christmas or New Year's Holiday falls on a Tuesday or Thursday, the City reserves
the right to close non-essential City services and offices on Monday or Friday (the day
adjacent to the observed holiday). Essential City services are determined at the
discretion of the department head. Employees scheduled to work in non-essential
functions on the days adjacent to the paid holidays would be required to use appropriate
personal leave. The City would notify employees of closure of non-essential City services
and offices no later than October 31 st of the same year in order to provide employees with
ample time to plan accordingly.
The two (2) floating holidays shall be accrued on a semi-monthly basis and added to the
vacation accrual.
Effective January 2019, the two floating holidays (16 hours) will be provided in a floating
holiday leave bank the pay period that January 1 st falls within rather than being accrued
on a semi-monthly basis. Employees will have the ability to use floating holiday leave
hours at any point during the calendar year. Unused floating holiday leave will not be
carried over year to year but can be taken through December 31 st of each year.
If an employee terminates for any reason, having taken off hours in excess of his/her
prorated share of the floating holiday, the value of the overage will be deducted from the
employee's final paycheck.
Section J Sick Leave
Sick leave is governed by Section 2.36.420 of the Municipal Code. An employee shall
accrue sick leave with pay at the rate of twelve (12) days or the prorated shift equivalent
per year of continuous service since the benefit date. An employee may take up to 48
hours per calendar 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, Labor Code
233 and/or Assembly Bill 1522. This may be extended to 56 hours if a household family
member is hospitalized and the employee submits written verification of such
hospitalization.
In conjunction with existing leave benefits, department head and management employees
with one year of City service who have worked at least 1,250 hours in the previous year
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Resolution No. 10920 (2018 Series)
Exhibit A
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may be eligible for up to 12 weeks of Family/Medical Leave in accordance with the federal
Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA). In
the event an employee is caring for a family member and is covered under FMLA/CFRA,
they will be able to use all accrued sick leave to care for a family member.
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 retirement the employee may choose: 1) a payout of the employee's accumulated
sick leave balance based on years of service according to the following schedule, 2) to
convert a portion or all of the employee's sick leave balance to service credit in
accordance with CalPERS regulations, or, 3) a combination of these two options.
(A) Death — 25%
(B) Retirement and actual commencement of PERS benefits:
(1) After ten years of continuous employment — 10%
(2) After twenty years of continuous employment — 15%
Section K 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 L Work Out -of -Classification
An out -of -class assignment is the full-time performance of all the significant duties of an
available, funded position in one classification by an individual in a position of another
classification. An employee assigned in writing by management to work out -of -class in a
position that is assigned a higher pay range which is vacant pending an examination or
is vacant due to an extended sick or disability leave, shall receive no less than five percent
(5%), but in no case more than the top salary of the higher range, in addition to their
regular base rate commencing on the eleventh consecutive workday of the out -of -class
assignment.
Section M Vehicle Assignment
For those department heads requiring 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. Department
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Resolution No. 10920 (2018 Series)
Exhibit A
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heads who are not provided a City vehicle shall receive a car allowance of $236 per
month, paid semi-monthly.
The use of a personal automobile for City business will be eligible for mileage
reimbursement in accordance with standard City policy.
Section N Uniform Allowance
Employees required to wear a uniform, including the Fire Chief, Deputy Fire Chief, Fire
Marshal and Police Chief, shall receive the same uniform allowance as those they directly
supervise. For "Classic Members" as defined by PERS, uniform allowance shall be
reported to PERS as special compensation. Uniform allowance will not be pro -rated upon
separation from employment.
Section O Appointed Officials
The benefits outlined in this exhibit for department heads apply to appointed officials,
except where they have been modified by council resolution.
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