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HomeMy WebLinkAboutItem a - Budget Appropriation for Employee Inflationary Relief Assistance DATE: November 29, 2022 TO: Honorable Mayor and City Council FROM: Hue C. Quach, Administrative Services Director By: Henry Chen, Financial Services Manager Anely Williams, Human Resources Administrator SUBJECT: RESOLUTION NO. 7469 AMENDING THE FISCAL YEAR 2022-23 GENERAL FUND BUDGET AUTHORIZING A SUPPLEMENTAL BUDGET APPROPRIATION FOR A ONE-TIME INFLATIONARY RELIEF ASSISTANCE TO EMPLOYEES IN THE AMOUNT OF $820,000, APPROPRIATED FROM THE GENERAL FUND RESERVE CEQA: Not a Project Recommendation: Adopt SUMMARY This agenda item would authorize a one-time relief assistance payment to employees to cope with the upward inflationary pressure of cost-of-living and in recognition of their commitment to the City of Arcadia in a volatile labor market. It is recommended that the City Council adopt Resolution No. 7469, authorizing a budget appropriation in Fiscal Year 2022-23 of $820,000 to the General Fund for this one-time relief assistance expense. DISCUSSION The nation is currently experiencing inflationary pressures not seen since the 1970’s. This level of inflation has reduced the purchasing power of employee salaries and has caused many employees to seek higher wages elsewhere, leading to unprecedented turnover rates. Known as “The Great Resignation,” this phenomenon creates hiring and retention challenges for both the private and public sectors, including the City of Arcadia. In order to combat this situation and retain quality employees, the City Council has considered offering a one-time inflationary relief assistance payment to existing employees. In order to acknowledge those employees that have remained with the City since the beginning of the COVID-19 pandemic, a higher level of funding would be offered. Specifically, those full-time employees that have worked with the City since the beginning of the pandemic would receive a $3,000 payment, whereas full-time employees that have been hired since April 2020 would receive $1,500. Likewise, part-time employees would receive payments of $500 and $250, respectively; however, those payments would be based on total hours worked in the current fiscal year. Resolution No. 7469 – Budget Appropriation for Inflationary Relief Assistance Outlay November 29, 2022 Page 2 of 2 Flat-rate inflationary payments have been selected since they will provide the greatest proportional benefit to those most affected by the inflationary pressures. It is estimated that the total cost for the relief assistance outlay would be as follows: Full Time Employees 780,000$ Part Time Employees 40,000 820,000$ The proposed inflationary relief assistance payments have been discussed with the City’s five labor associations. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (CEQA), and it can be seen with certainty that it will have no impact on the environment. As such, this matter is exempt under CEQA. FISCAL IMPACT The estimated total cost of providing the one-time inflationary relief assistance is $820,000. Sufficient funds are available in the General Fund Reserve to accommodate this request. RECOMMENDATION It is recommended that the City Council adopt Resolution No. 7469 authorizing a budget appropriation in Fiscal Year 2022-23, for the one-time inflationary relief assistance to employees at a cost totaling $820,000. Attachments: Resolution No. 7469