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STAFF REPORT
Administrative Services Department
DATE: August 16, 2011
TO: Mayor and City Council
FROM: Hue C. Quach, Administrative Services Director
Michael A. Casalou, Human Resources Administrator
SUBJECT: Resolution No. 6788 establishing compensation and related benefits for
City Council, Executive, Management and other Unrepresented
Employees
Recommendation: Adopt ,,.-
SUMMARY
It is recommended that the City Council adopt Resolution No. 6788 establishing
compensation and related benefits for City Council, Executive, Management and other
Unrepresented employees.
DISCUSSION
Resolution No. 6788 calls for a continuation of past compensation and benefits, as well
as new items related to pension reform. Effective July 1, 2011, City Council, Executive,
Management and other Unrepresented employees will begin contributing 2.34%
(Miscellaneous employees) and 3% (Safety employees) to offset a portion of the City's
costs related to CaIPERS retirement benefits pursuant to §20516(f) (Employee Sharing
Cost of Additional Benefits). Effective July 1, 2012 and July 1, 2013, City Council,
Executive, Management and other Unrepresented employees will contribute an
additional 2.33% (Miscellaneous employees) and 3% (Safety employees) respectively,
for a total of 7% (Miscellaneous employees) and 9% (Safety employees). In addition to
the above amounts, Miscellaneous employees will continue contributing 1°/0 of the
employee portion of their retirement.
The employee cost-sharing will be accomplished through pre-tax deductions in the
manner contemplated by §20516(f) of the Government Code. The City recognizes that
the IRS has yet to take a position on the pre-tax status of deductions made under
§20516(f) and in the event that, subsequent to the effective date of this provision, the
IRS determines that such deductions do not qualify for pre-tax status, the City agrees
to discuss the effects thereof with all unrepresented employees.
Mayor and City Council
August 16, 2011
Page 2 of 2
Other pension reform changes include amending the current contract with CaIPERS by
adopting 2nd Tier Retirement formulas for new hires of 2% @ 60 for Miscellaneous
employees and 3% @ 55 for Safety employees, both with the Three Year Average Final
Compensation (This staff report is being presented simultaneously and requires
adoption of a resolution and introduces an ordinance to be effective October 9, 2011);
capping the maximum monthly retiree health benefit contribution made by the City for
existing employees who retire on or after January 1, 2012; and employees hired on or
after July 1, 2011 will only be eligible for retiree health insurance benefits at the
mandatory minimum contribution established by California Government Code Section
22892(b).
In addition to the items mentioned above, Resolution No. 6788 incorporates new salary
schedules through June 30, 2014. Effective July 1, 2011, base salaries for Executive,
Management and all other Unrepresented benefitted employees will increase in the
amount of two and thirty-four hundredths of a percent (2.34%) for Miscellaneous
employees and three percent (3%) for Safety employees. Thereafter, the base salaries
for Executive, Management and all other Unrepresented benefitted employees will
increase in the amount of two and thirty-three hundredths of a percent (2.33%) for
Miscellaneous employees and three percent (3%) for Safety employees, effective July
1, 2012 and July 1, 2013 respectively. The salary schedules for the classifications
covered by this resolution are set forth on Exhibit "A" and incorporated herein.
This resolution also contains minor administrative and language changes to the Fringe
Benefit Resolution sections covering Health Insurance (revision needed to conform to
CaIPERS regulations), Military Leave, Sick Leave, Vacation Leave and Bereavement
Leave. Additionally, since the City (at the time of this writing) has not reached an
agreement with one of the three Miscellaneous bargaining units, adoption of this
resolution will not take place until the City has completed that process. In the event the
process is not complete, this item will be continued to a future City Council meeting.
FISCAL IMPACT
The aforementioned pension reform items will provide significant long term savings to
the City. Sufficient funds are available in the FY 2011-12 General and Non-General
Funds Budgets to implement these changes.
RECOMMENDATION
Adopt Resolution No. 6788 of the City Council of the City of Arcadia, California
establishing compensation and related benefits for City Council, Executive,
Management and other Unrepresented employees.
APPROVED:
Don Penman, City Manager
RESOLUTION NO. 6788
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, ESTABLISHING COMPENSATION
AND RELATED BENEFITS FOR CITY COUNCIL, EXECUTIVE,
MANAGEMENT AND OTHER UNREPRESENTED EMPLOYEES
WHEREAS, City Council Resolution No. 5608 sets forth various fringe
benefits and related compensation for officials, officers, management and other
unrepresented employees of the City; and
WHEREAS, Section 36 of that Resolution provides for amendment and
modification of Resolution No. 5608 (the Fringe Benefits Resolution) by City
Council approved resolutions that direct inclusion of any changes as part of said
Resolution; and
WHEREAS, salaries, benefits and other employment related terms for City
Council, Executive, Management and other unrepresented employees (collectively,
"Unrepresented Employees") are adjusted by resolution.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND
RESOLVE AS FOLLOWS:
SECTION 1. COMPENSATION
Effective July 1, 2011, the City agrees to increase base salaries of Executive,
Management and Unrepresented Confidential employees by two and thirty-four
hundredths percent (2.34%) for Miscellaneous employees and three percent (3%)
for Safety employees; and two and thirty-three hundredths percent (2.33%) for
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Miscellaneous employees and three percent (3%) for Safety employees, effective
July 1, 2012 and July 1, 2013 respectively. The salary schedules for classifications
covered by this Resolution are set forth on Exhibit A and incorporated herein.
SECTION 2. RETIREMENT
I. EMPLOYEES HIRED BEFORE JULY 1, 2011
1. All Unrepresented Employees Except Non-Benefitted Employees
a. Ca1PERS Retirement: The City will continue to provide the
Miscellaneous employees with the 2.5% at age 55 Ca1PERS Retirement Formula
(Government Code §21354.4) and Safety employees with the 3% at age 50
retirement formula (Government Code §21362.3).
b. Cost-Sharing: Effective July 1, 2011, employees will begin
making contributions to offset a portion of the City's costs related to Ca1PERS
retirement benefits. The employee cost-sharing will be accomplished through pre-
tax deductions in the manner contemplated by Section 20516(f) of the Government
Code. The City recognizes that the IRS has yet to take a position on the pre-tax
status of deductions made under Section 20516(f) and in the event that, subsequent
to the effective date of this provision, the IRS determines that such deductions do
not qualify for pre-tax status, the City agrees to discuss the effects thereof with
employees covered by this resolution. The cost-sharing arrangement will be
implemented as follows for City Council, Executive, Management and
Unrepresented Confidential employees:
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i. Effective July 1, 2011, Miscellaneous employees will pay
two and thirty-four hundredths percent (2.34%) and Safety employees will pay
three percent (3%) of PERSable compensation to Ca1PERS retirement via payroll
deduction.
ii. Effective July 1, 2012, Miscellaneous employees will pay
an additional two and thirty-three hundredths percent (2.33%) and Safety
employees an additional three (3%) of PERSable compensation to Ca1PERS
retirement for a total of four and sixty-seven hundredths percent (4.67%) for
Miscellaneous employees and six percent (6%) for Safety employees via payroll
deduction.
iii. Effective July 1, 2013, Miscellaneous employees will pay
an additional two and thirty-three hundredths percent (2.33%) and Safety
employees an additional three percent (3%) of PERSable compensation to
Ca1PERS retirement for a total of seven percent (7%) for Miscellaneous employees
and nine percent (9%) for Safety employees via payroll deduction.
c. Normal Member Contribution: Miscellaneous employees shall
continue to pay the one percent (1%) normal member contribution currently paid
by all Miscellaneous employees.
d. EPMC: The City shall continue to pay the normal member
contribution as employer paid member contributions pursuant to Section 20691 of
the Government Code ("EPMC") directly to Ca1PERS in the amount of seven
percent (7%) for Miscellaneous employees and nine percent (9%) for Safety
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employees, and shall continue to report those amounts as special compensation
pursuant to Section 20636(c)(4) of the Government Code.
e. Retiree Health Benefits: Effective January 1, 2012, the
maximum monthly retiree health benefit contribution made by the City to
Unrepresented Employees who meet the eligibility requirements for retiree health
coverage offered through the Ca1PERS health program as governed by the Public
Employees' Medical & Hospital Care Act ("PEMHCA"), will be set at the PERS
Choice two party rate for the 2012 plan year (available to Safety and
Miscellaneous employees) or the PORAC two party rate for the 2012 plan year
(available to Safety employees only)
2. Unrepresented Non-Benefitted Employees
a. Ca1PERS Retirement: The City will continue to provide the
2.5% at age 55 Ca1PERS Retirement Formula (Government Code §21354.4).
b. Normal Member Contribution/EPMC:
i. Effective July 1, 2011, Unrepresented Non-Benefitted
employees who have qualified for Ca1PERS membership, shall pay two and thirty-
four hundredths percent (2.34%) of the normal member contribution via salary
reduction. The City shall pay the remaining four and sixty-six hundredths percent
(4.66%) of the normal member contribution as employer paid member
contributions pursuant to Section 20691 of the Government Code ("EPMC")
directly to Ca1PERS.
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ii. Effective July 1, 2012 and July 1, 2013, such employees
shall pay an additional two and thirty-three hundredths percent (2.33%) of the
normal member contribution via salary reduction for a total of seven percent (7%).
II. UNREPRESENTED EMPLOYEES HIRED ON OR AFTER JULY 11
2011
1. Ca1PERS Retirement: The City agrees to provide a retirement plan
provided through Ca1PERS. This plan will provide the following:
a. 2% @ 60 Ca1PERS retirement formula for Miscellaneous
employees (Government Code §21353) and 3% @ 55 for Ca1PERS retirement
formula for Safety employees (Government Code §21363.1).
b. Three (3) year average final compensation period (Government
Code §20037) for both Miscellaneous and Safety employees.
c. Exception: Notwithstanding the foregoing, an employee hired
on or after July 1, 2011, but before the 2% @ 60 retirement formula is effective,
shall be entitled to earn retirement benefits based on the retirement formula in
effect on the date of hire; provided, however, that the provisions of paragraph 2
below regarding normal member contributions shall continue to apply.
2. Normal Member Contributions: The full share of the normal member
contribution required by Ca1PERS, currently eight percent (8%) for Miscellaneous
employees and nine percent (9%) for Safety employees, shall be paid by
employees via salary reduction from their date of hire.
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3. Retirement Health Benefits: For employees hired on or after July 1,
2011 that retiree from the City and who remain enrolled in a PEMHCA health plan
after retirement, the City will pay no more than the minimum employer
contribution required pursuant to Government Code Section 22892(c) ("Retiree
Minimum Contribution") which shall be paid directly to Ca1PERS. Such retired
employees shall not be reimbursed or otherwise receive payment from the City for
health insurance premiums in excess of the Retiree Minimum Contribution.
SECTION 3. HEALTH AND DENTAL BENEFITS DURING
EMPLOYMENT OF ALL UNREPRESENTED EMPLOYEES EXCEPT NON-
BENEFITTED EMPLOYEES
1. Ca1PERS Health Program: The City will contribute the
minimum employer contribution required pursuant to Government Code Section
22892(b) ("Minimum Contribution") per month per employee for health
insurance.
2. Dental Insurance — mandatory enrollment: The City will
contribute the employee only cost for Delta Care USA insurance per month
("Dental Contribution") toward one of two dental plans. Additional coverage
may be purchased through the Optional Benefits allocation.
3. Optional Benefits: Subject to the limits set forth herein, the City
shall contribute the remaining amount of employee's health and dental insurance
benefit allowance through a contribution to an Internal Revenue Code §125
Cafeteria Plan which, inclusive of the Minimum Contribution and Dental
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Contribution, shall not exceed $1,173/month for City Council, Executive and
Management employees; $859/month for Unrepresented Confidential employees;
and $462/month for Law Enforcement Recruits. Unrepresented Non-Benefitted
Employees shall not receive an optional benefit allocation. If the premium cost of
the health and dental plans in which an employee enrolls exceeds the City's
optional benefit allocation, the employee shall pay through payroll deduction the
difference between the monthly premium and the amount contributed by the City.
The employee shall forfeit any balance should the City's contribution exceed the
cost of the premiums.
4. Except as amended by this Resolution, all other sections of past
Resolutions regarding Health Insurance benefits shall remain in full force and
effect.
SECTION 4. VACATION LEAVE AND SICK LEAVE ACCRUAL
When an Executive, Management or Unrepresented Confidential employee
separates from City employment, if the employee works at least 50% of the pay
period, the employee receives 100% sick or vacation leave accrual for that pay
period. If the employee works less than 50% of the pay period, the employee
accrues nothing.
SECTION 5. MILITARY LEAVE
For Executive, Management and Unrepresented Employees, Military Leave
shall be amended as follows:
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1. Any employee who is a member of the reserve corps of the armed
forces of the United States or of the National Guard or the Navy Militia shall be
entitled to a temporary military leave of absence as provided by applicable Federal
law and State law.
2. To be eligible for paid leave for thirty (30) calendar days of active
military training, an employee must have been employed by the City for a period
of not less than one (1) year immediately prior to the day on which the leave of
absence begins. If the employee has not been employed for a period of one year,
the leave shall be granted without pay. Pay shall not exceed thirty (30) calendar
days in any one (1) fiscal year.
3. An employee on paid military leave shall continue to accrue vacation,
sick leave, seniority and/or holiday in the same manner as the employee would
have, had the employee been in a work status. To be eligible to receive the leave,
an employee must submit a request in writing with a copy of his/her military orders
to his/her immediate supervisor for processing.
4. Pursuant to California Military and Veterans Code Sections 395,
395.01(a), 564 and 566, state military reserve personnel employed by public
employers are statutorily entitled to up to 180 days of temporary military leave for
active duty activities with up to 30 days of paid military leave each fiscal year.
When placed on state active duty this is ordered active duty, which entitles the
employee to 30 days of paid military leave.
8
5. State military reserve personnel also generally have a right to
extended leaves of absence and a right to re-employment after lengthy periods of
ordered duty when called to active duty in certain emergency circumstances and
public employees are entitled to receive their pay from their public employer for
the first thirty (30) days of that period of active duty pursuant to California
Military and Veterans Code Sections 143, 146, 395, 395.05, 395.06 and 566.
6. Before leaving for an extended leave (181 days or more), the
employee must notify the City of his or her intention to return to work upon the
completion of the active duty service. Employees will have ninety (90) days from
completion of extended active service to report back to work to resume their
duties, must submit to the City a copy of the honorable discharge papers, and pass
a medical exam.
7. Additional military leave provisions were adopted by Council on
November 20, 2001, in Resolution 6268. For military leave covered by this
Resolution, the City will maintain the difference between the employee's City
salary and benefits of the employee while on active military duty.
8. Although a military leave of absence is not considered a break in
service in relation to seniority, if the employee wishes to have their extended
military service time credited toward Ca1PERS, the employee may buy back credit
for their leave of absence for active military service through Ca1PERS as Ca1PERS
has determined that payments while on such service are not reportable for
retirement purposes.
9
9. This leave provision does not apply to employees who are drafted or
receive orders to military duty for periods longer than 180 calendar days.
Employee's rights to return to vacant positions after an absence that exceeds 180
calendar days shall be governed by the applicable Federal and State law.
SECTION 6. BEREAVEMENT LEAVE
For Executive, Management and Unrepresented employees, the following
shall be added to the current language regarding bereavement leave: Bereavement
leave, shall be granted based on employee's current work shift up to a maximum of
three (3) shifts; provided, however, if the employee is required to travel more than
three hundred (300) miles from his or her residence, the employee may take an
additional two (2) days which will be charged to accrued sick leave.
SECTION 7. This resolution shall become effective immediately upon
its adoption.
SECTION 8. The City Clerk shall certify to the adoption of this
Resolution.
[SIGNATURES ON NEXT PAGE]
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Passed, approved and adopted this day of , 2011.
Mayor of the City of Arcadia
ATTEST:
City Clerk of the City of Arcadia
APPROVED AS TO FORM:
S'titidadL., 6-aatif
City Attorney
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