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Report regarding a resolution approving the Compensation Plan for the Executive Management Unit, dated July 1, 2017 through June 30, 2022. (LaTanya Bellow, Human Resources Director)
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RECOMMENDATION
Recommendation
It is recommended that the City Council adopt a resolution approving the Compensation Plan for the Executive Management Unit dated July 1, 2017 through June 30, 2022.
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BACKGROUND/DISCUSSION
This Compensation Plan was negotiated within the parameters authorized by the City Council, and agreed by the unit’s membership on June 15, 2017. Attached is a summary of the substantive terms of the Compensation Plan.
FUNDING
The Compensation Plan provides for across-the-board salary adjustments that total 15 percent over a five-year contract. Specifically, adjustments are three percent of base pay for all employees. The across-the-board increases for 2017 have been reflected in the Fiscal Year (FY) 2017-18 proposed budget:
• Effective the pay period including July 1, 2018; three percent for Miscellaneous employees,
• Effective the first full pay period of July 2019, the Safety employees will receive an adjustment commiserate with the department’s line personnel, whichever is greater, and the Miscellaneous employees will receive three percent,
• Effective the first full pay period of July 2020, the Miscellaneous members of the unit will be set to the 60th percentile of a market survey, or three percent, whichever is greater, and the Safety employees will receive three percent,
• Effective the first full pay period of July 2021; all employees will receive three percent.
The Compensation Plan provides for a salary survey adjustment effective the pay period including July 1, 2020 for the Miscellaneous employees. The salary survey will include the medical premium cost sharing and the three percent increase anticipated for July 1, 2020. Any classifications below market will be brought up to the 60th percentile of total compensation. Once the salary survey results have been implemented, staff will determine if a budget adjustment is needed, and bring this before the Council at the appropriate time. To avoid compaction for the Safety employees, the Police Chief and Fire Chief, they will receive three percent or a percentage adjustment based on the Police Office and Firefighter/Paramedic salary surveys, respectively, on July 1, 2019, commiserate with the rest of the respective safety units.
The City currently pays 100 percent of the employer share for the CalPERS pension costs for Classic Safety Members. For the first time, in addition to the Classic Safety Member’s employee share for their CalPERS pension retirements, all Classic Safety Members CalPERS unit employees will share in the employer pension costs. First, the Compensation and Benefit Plan provides long-term structural changes in the City’s Safety pension costs for Classic Safety Members. Currently, Classic Safety Members pay nine percent toward their three percent at 50 or three percent at 55 formulas. For Classic Safety Members, the employee cost share would be phased in at one percent effective the first pay period in July 2017 (for a total employee contribution of 10 percent), an additional one percent effective the first fully pay period in July 2018 (for a total employee contribution of 11 percent), and an additional one percent effective the first fully pay period in July 2019 (for a total employee contribution of 12 percent). Effective July 1, 2020, the Classic Safety Members will be obligated to pay three percent of the employer rate, plus nine percent of the employee contribution for a total employee commitment of 12 percent. As for New Members, as designated by CalPERS, they will pay 50 percent of the total normal cost rate, in accordance with Government Code 7522.30.
The Compensation Plan also provides long-term structural changes in the City’s Classic Miscellaneous Member pension costs: Currently, Classic Miscellaneous Members pay eight percent if they fall under the 2.7 percent at 55 formula, or 7 percent if they fall under the two percent at 60 formula. Effective July 1, 2020, the Classic Miscellaneous Members would begin paying 1.5 percent for a total contribution of 8.5 percent for Classic Miscellaneous Members under the two percent at 60 formula, and 9.5 percent for the employees under the 2.7 percent at 55 formula. Classic Miscellaneous Members will pay an additional 1.5 percent effective July 1, 2021, for a total contribution of 10 percent for employees under the two percent at 60 formula, and 11 percent for the Classic Members under the 2.7 percent at 55 formula. As for New Members, as designated by CalPERS shall pay 50 percent of the total normal cost rate, in accordance with Government Code 7522.30. Pursuant to CalPERS procedures, Staff will work with CalPERS after adoption of this Compensation Plan to draft a CalPERS contract amendment to allow for this cost sharing. Staff will bring resolutions to the City Council to effectuate that contact amendment as soon as it receives the appropriate filings from CalPERS.
CONCLUSION
It is recommended that the City Council approve the Compensation Plan for the Executive Management Unit dated July 1, 2017 through June 30, 2022.
Attachment: Exec Management -Summary of Changes