SPECIAL MEETING AGENDA
OF THE JURUPA VALLEY CITY COUNCIL
Tuesday, April 21, 2015
Council Workshop: 6:00 p.m.
City Council Chamber
8930 Limonite Avenue, Jurupa Valley, CA 92509
A.
As a courtesy to those in attendance, we ask that cell phones be turned off or set to their silent
mode and that you keep talking to a minimum so that all persons can hear the comments of the
public and City Council.
A member of the public who wishes to speak under Public Comments must fill out a “Speaker
Card” and submit it to the City Clerk BEFORE the Mayor calls for Public Comments on an
agenda item. Each agenda item up will be open for public comments before taking action.
Public comments on subjects that are not on the agenda can be made during the “Public
Appearance/Comments” portion of the agenda.
As a courtesy to others and to assure that each person wishing to be heard has an opportunity to
speak, please limit your comments to 3 minutes.
B.
C.
1.
6:00 PM - CALL TO ORDER AND ROLL CALL – COUNCIL WORKSHOP
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Brad Hancock, Mayor
Laura Roughton, Mayor Pro Tem
Brian Berkson, Council Member
Frank Johnston, Council Member
Verne Lauritzen, Council Member
2.
PLEDGE OF ALLEGIANCE
3.
APPROVAL OF AGENDA
4.
DISCUSSION REGARDING ESTABLISHMENT OF FUTURE CITY EMPLOYEE
SALARY STRUCTURES, BENEFITS AND RETIREMENT PROGRAM, AND
DEVELOPMENT OF CITY PERSONNEL MANUAL
Requested Action:
That the City Council provide direction to the City Manager for
formalizing salary, benefits and retirement systems for future City employees, finalize
appropriate position descriptions for recommended positions for the initial transition phase to
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City employees, develop the City’s Personnel Manual, and return to the City Council at a later
date for final adoption with all appropriate implementing ordinances and resolutions.
5.
PUBLIC APPEARANCE/COMMENTS
Persons wishing to address the City Council on subjects other than those listed on
the Agenda are requested to do so at this time. A member of the public who wishes
to speak under Public Appearance/Comments OR the Consent Calendar must fill
out a “Speaker Card” and submit it to the City Clerk BEFORE the Mayor calls for
Public Comments on an agenda item. When addressing the City Council, please
come to the podium and state your name and address for the record. While listing
your name and address is not required, it helps us to provide follow-up information
to you if needed. In order to conduct a timely meeting, we ask that you keep your
comments to 3 minutes. Government Code Section 54954.2 prohibits the City
Council from taking action on a specific item until it appears on an agenda.
6.
COUNCIL MEMBER COMMENTS
7.
ADJOURNMENT
Adjourn to the Regular Meeting of May 7, 2015 at 7:00 p.m. at the City Council Chamber, 8930
Limonite Avenue, Jurupa Valley, CA 92509.
In compliance with the Americans with Disabilities Act and Government Code Section 54954.2, if you need
special assistance to participate in a meeting of the Jurupa Valley City Council or other services, please contact
Jurupa Valley City Hall at (951) 332-6464. Notification at least 48 hours prior to the meeting or time when
services are needed will assist staff in assuring that reasonable arrangements can be made to provide
accessibility to the meeting or service.
Agendas of public meetings and any other writings distributed to all, or a majority of, Jurupa Valley City
Council Members in connection with a matter subject to discussion or consideration at an open meeting of the
City Council are public records. If such writing is distributed less than 72 hours prior to a public meeting, the
writing will be made available for public inspection at the City of Jurupa Valley, 8930 Limonite Avenue, Jurupa
Valley, CA 92509, at the time the writing is distributed to all, or a majority of, Jurupa Valley City Council
Members. The City Council may also post the writing on its Internet website at www.jurupavalley.org.
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RETURN TO AGENDA
120
STAFF REPORT
DATE:
APRIL 21, 2015
TO:
HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM:
GARY THOMPSON, CITY MANAGER
SUBJECT:
AGENDA ITEM NO. 4
DISCUSSION REGARDING ESTABLISHMENT OF FUTURE CITY
EMPLOYEE SALARY STRUCTURES, BENEFITS AND RETIREMENT
PROGRAM, AND DEVELOPMENT OF CITY PERSONNEL MANUAL
______________________________________________________________________
RECOMMENDATION
1)
That the City Council provide direction to the City Manager for formalizing salary,
benefits and retirement systems for future City employees, finalize appropriate
position descriptions for recommended positions for the initial transition phase to
City employees, develop the City’s Personnel Manual, and return to the City
Council at a later date for final adoption with all appropriate implementing
ordinances and resolutions.
BACKGROUND
Since the City’s incorporation in 2011, all City staffing has been performed entirely by
contracted staff through various consulting firms. The City Council early on has
expressed a desire to retain permanent regular City employees for certain selected
positions while retaining other positions as contracted staffing. Included in the FY 14/15
budget was funding to develop a compensation and benefit survey, position descriptions
and an appropriate City employee personnel manual for the purpose of moving forward
with transitioning some contracted staff positions to regular City employees. At the
March 5, 2015 City Council meeting, the City Council approved a contract for consulting
services to assist the City in development of these personnel related items.
ANALYSIS
The City as currently structured is deemed what is considered as a “full contract city”,
whereby all City personnel and services are contracted through various consulting firms
and other types of service providers. It has been a goal of the City Council to include a
reasonable mix of contract staff and permanent City employees to ensure a certain level
of corporate and community knowledge base and stability within certain functions and
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levels of City operations, while retaining the greatest flexibility to limiting most City
staffing to only that which is necessary to support a fluctuating workload.
At the March 5, 2015 City Council meeting, the City Council authorized a contract with
an outside Human Resources consulting firm, Koff & Associates, for conducting a
compensation and benefits survey to be utilized as a benchmark for discussions
concerning establishment of compensation and benefits packages for future City
employees. The attached documents reflect the outcome of the compensation and
benefits survey performed by Koff & Associates for the City Council’s referral and use in
this discussion. Mr. Georg Krammer, Chief Executive Officer of Koff & Associates, will
be presenting his survey results and be available to answer any questions.
The following discussion provides some narrative on key elements of a future City
employee staffing plan, and options available to the City Council for consideration in
moving forward and providing direction to the City Manager for implementing a City
employee personnel system and retaining permanent City employees.
Initial Employee Staffing
In order to allow for a strategically balanced transition from contract staff to City
employees, a phased approach will be taken. Selected positions are identified below
that would be included in the first phase. These positions comprise the bulk of the
finance and administrative functions within the City. These positions are generally filled
by regular city employees in most contract cities, and are generally not subject to
workload fluctuations as their duties are required regardless of the level of workload
within the operational function areas such as planning, engineering and building, etc.
Account Clerk
Accountant
Administrative Services Director
Assistant to the City Manager
Deputy City Clerk
Accounting Technician
Accounting Manager
Administrative Assistant
City Clerk
Once these positions are transitioned, other contract staff positions will be reviewed for
potential transition to City employees, taking into consideration the significant benefit of
retaining a high level of contract staffing which provides greater flexibility in meeting
fluctuations in workload. Any consideration of additional positions to be transitioned will
be brought back to the City Council for discussion and approval.
It is the intention of the City Manager to offer employment to any current contract City
staff member occupying the positions indicated above. This will allow for the opportunity
to retain the historical knowledge of the City and its operations related to that specific
position. A recruitment process would be initiated for any position that would be unfilled
if the current occupant decided to decline the offer.
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Initial Employee Salary Schedule
Appendix IV of the Koff & Associates report identifies the recommended initial salary
range for each of the designated positions based on the salary survey analysis
discussed in the report. Establishing salary ranges allows for flexibility in initial
placement of individuals into the salary structure based on qualifications, and providing
flexibility for performance based rewards through a salary increase. Note that this is not
a “step” system. A conventional “step” system is one whereby employees receive
established salary increases based on length of service, with no performance based
considerations. The salary ranges themselves would only be adjusted after they are
established as a function of the City Council desiring to provide increases for items such
as cost of living increases, or as a result of a future salary survey. Below are the Koff &
Associates recommended monthly salary ranges for each position.
Position
Minimum
Maximum
Account Clerk
Accounting Technician
Accountant
Accounting Manager
Administrative Services Director
Administrative Assistant
Assistant to the City Manager
Deputy City Clerk
City Clerk
$2,901
$3,283
$4,307
$6,554
$9,729
$3,283
$7,415
$4,873
$6,086
$3,772
$4,267
$5,599
$8,520
$12,647
$4,267
$9,639
$6,335
$7,911
Salary Structure Recommendation
The salary ranges for each designated position provided by the Koff & Associates
analysis are a reasonable representation of the current market rate for these positions
based on the assumptive factors utilized for development of the salary ranges.
However, it is the sole discretion of the City Council to establish the salary ranges that
the City Council determines to be most appropriate for the City. As such, it is
recommended that the City Council discuss their desires as to salary ranges and
provide appropriate direction.
It is also recommended that for any salary range the City Council establishes for the
designated positions, the City Manager be given the flexibility to fill those positions
within that range at the level the City Manager deems appropriate based on
qualifications, education, experience and other factors as outlined in the position
description for the designated position.
Retirement
In general, as a new city just establishing its initial employee personnel system, the City
Council has great flexibility in determining the best options for a retirement system to be
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adopted for the City’s future employees. Some retirement systems provide more
flexibility than others, and different systems may be defined benefit or defined
contribution programs.
Defined benefit programs are programs that require specified contributions from
employers and employees and then provide defined retirement benefits based on
parameters tied to retirement age, salary, and vesting time periods. Under these
systems, the employer and employee contributions are comingled into the entire
system, and the employer and employee have no control over contribution rates as
those rates are set by the retirement system. Because benefits are defined, unfunded
liabilities can accrue to the member agency if the overall system investments and
member contributions do not keep pace with benefit payments. Additionally, rates to
individual agencies are set each year through annual actuarial studies and can fluctuate
widely from year to year.
Defined contribution programs are programs that allow for the individual member
agency and the employee to establish the rate of contributions into the system and
designated to that individual’s account. However, the benefit is tied to the actual amount
of contributions and investment growth in that individual employee’s account. As such,
no unfunded liability would accrue to the agency as the retirement benefit is only fixed to
the individual employee’s account based on the contributions made and the investment
growth. An example of this type of program would be a 401k program in the private
sector, or a 401a program in the public sector.
The three most common retirement systems utilized in the public sector are discussed
briefly as follows:
Social Security
Social Security is the Federal benefit system that all employees must enroll in unless
they are enrolled in some other form of retirement system that would supplant it. In the
private sector, employees not enrolled in Social Security are a rare exception. In the
public sector, most public employees are enrolled in an alternative retirement system
and not enrolled in Social Security. The employer and employee contribution rate for
Social Security is 6.2% for each. Eligibility for retirement and benefits are determined by
age factors, vesting factors and employee contributions based on total Social Security
wages earned over the course of the employee’s lifetime.
A public agency that desires to utilize Social Security for its employees must enter into a
contract with the Social Security Administration. However, if the agency ever wanted to
offer an alternative retirement program to its employees, it cannot leave Social Security.
The alternative system would have to be offered on top of Social Security. There are a
few cities in California that are either only Social Security, or are Social Security with an
alternative program added.
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Social Security does provide for a very stable and reasonable contribution rate, and can
be implemented very quickly. However, there is a significant lack of flexibility for
providing for an alternative retirement system once enrolled under the required contract.
And any added on alternative system would add additional contributions costs for both
the city and the employee. The least cost impact to a city adding an alternative system
on top of Social Security would be offering a voluntary 401a program with employee
only contributions that they could make to supplement Social Security.
Public Employees Retirement System (PERS)
PERS is the most common public employee retirement system in California. The large
majority of cities in the state are under PERS. The old PERS system, referred to as the
“classic” system has various levels of vesting, age and benefit factors, and contribution
rates. Examples of classic formulas are commonly referred to as 2.5%@55, 2.5%@ 57,
2%@60, etc. These reflect the percentage of your highest year salary for each year of
service at a minimum retirement age.
The recent enactment by the state of the Public Employee Pension Reform Act
(PEPRA) has established a new system for any employee not already in PERS. It is
fixed at 2%@62, 2% of the highest 3-year average of salary for each year of service at
a minimum retirement age of 62. The employee pays the full employee contribution into
the system, up to 8% of salary. The employer contribution rate is established annually
based on actuarial analysis of the agency’s projected retirement liability. The initial start
rate for a new city under the new system is unknown until an actuarial study is
performed, but it is estimated at approximately 8%. Since the City has no employees,
this would be the mandatory PERS system in which the City would have to enroll.
Generally, it takes from eight months to a year to complete enrollment into PERS.
As has been widely publicized, PERS has been experiencing a significant overall
unfunded liability within its investment pool. As such, major employer contribution rate
increases have become prevalent over the last few years, and is anticipated to
continue. It is unknown what the impact will be on the City if enrolled in the PERS
system over time as the City would have no control over its contribution rate.
Additionally, in all probability, an unfunded liability would accrue to the City over time
due to the nature of the PERS system and fluctuations in investment returns for the
system. If the City wanted to withdraw from PERS at any time, the City would be
obligated to pay PERS any amount of unfunded liability that has accrued to the City’s
account.
.
Public Agency Retirement System (PARS)
The PARS system is a public agency alternative to PERS, and is utilized by numerous
cities and other agencies throughout the state. The PARS system offers both a defined
benefit and a defined contribution plan. Both plans are structured under the IRS Code
as a 401a equivalent.
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The defined benefit plan is established by the individual agency based on the desires of
the agency for vesting, minimum retirement age, final pay parameters, etc. The
maximum benefit formula is 2%@62. The employee is obligated to pay up to 50% of the
annual total normal cost of the plan. Due to this requirement, the employee contribution
rate could be much higher than it would be under Social Security or PERS in any given
year depending on the annual actuarial analysis.
Under the defined contribution plan, the employer can select different contribution
benefit levels for different classifications of employees, and exclude or include different
employee classes if desired. The employee selects their contribution rate initially, which
is then fixed over the life of their employment. This allows the greatest flexibility for the
employee to maximize any tax benefit for retirement contributions up to IRS limits. The
agency establishes its contribution rate at any level desired initially, and then can adjust
it each year to suit budgetary needs as necessary. Additionally, since this is a defined
contribution program, there is no unfunded liability accrued to the agency for future
retirement obligations, unlike a defined benefit program such as PERS. This plan also
allows the agency to establish its own criteria for vesting and minimum retirement age.
Retirement System Recommendation
It is highly recommended that the City Council seriously consider that the City’s
retirement system be established as a defined contribution plan through PARS. This
plan provides the greatest flexibility for both the City and the employee in making
prudent long term retirement financial planning determinations. A PARS defined
contribution plan for the City can be established relatively quickly, within 6-8 weeks from
authorization to proceed. A 6-7% initial City contribution rate would be a reasonable
contribution rate, and in line with the required rates under Social Security, and the
estimated initial rate under PERS.
Medical & Other Benefits
Generally most benefit packages for cities include medical, dental, vision, short and
long term disability, and life insurance. These types of benefits are either city provided
and fully paid, or city provided and partially paid. Medical, dental and vision plans may
be employee only plans, or include family members. Another common form of providing
these benefits is a “cafeteria” type plan whereby the city determines a total monthly
benefit amount, and the employee determines how to spend it on the benefits they
desire to obtain, or take it as a cash benefit. Some additional benefits may include auto
allowances for certain management personnel, and voluntary deferred compensation
plans that may or may not provide city matching funding.
Appendix V of the Koff and Associates report provides the benefit packages for the
cities surveyed. As indicated in the report, medical, dental and vision packages provided
by the surveyed cities range from $1,000-$1,968 per month per employee. Most cities
provide life insurance (generally $50,000) for each employee as a city paid benefit.
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Deferred compensation plans may or may not include City matching funds. Auto
allowances for executive staff generally range from $250-$700 per month.
Benefit Package Recommendation
The City Council has several options available for consideration of benefit packages, if it
is so desired to offer these types of benefits to City employees. In order to simplify the
provision of these benefits, and provide the most efficient method of managing these
benefits, the City Council may want to consider establishing a “cafeteria” benefit
package.
This package would include as a minimum medical, dental, vision, and long term
disability insurance, and allow the employee to purchase those coverages as desired
and/or take any remaining benefit as a cash payment. A provision for any medical
benefit plan could be included that would require an employee to provide proof of
separate coverage in order to decline medical benefits. Life insurance and short term
disability coverages could be provided directly by the City. A voluntary deferred
compensation plan could be established for voluntary contributions by the employee of
their salary, with or without a City match.
It is recommended that the City Council discuss its desires regarding any of these
potential benefits, and the type of packages that are desired to be put in place, if any. If
it is desired that a “cafeteria” type plan be established, the City council should determine
the amount of monthly benefit to provide.
Holiday, Vacation, Sick & Other Leave
Appendix V of the Koff & Associates report identifies the various paid leave scenarios
employed by the survey cities. As noted in the survey, there are many variations in the
types of leave, accrual rates, carryover of leave and cash out provisions.
The general leave categories are briefly discussed as follows:
Holiday Leave
Paid holiday leave is standard for all public and most private entities. Different cities
specify different holidays based on the direction provided by their respective City
Councils. The surveyed cities reflect paid holidays from 11 to 14 days per year.
Currently, the City has recognized 11 holidays for calendar year 2015. The City’s
holiday schedule is reviewed in December of each year for setting the following year’s
holiday schedule.
Vacation Leave
Paid vacation leave varies widely by city, both in amount of leave, and in accrual rates
based on length of employment. Generally all survey cities initial accrual is 80 hours per
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year for new employees. Then cities vary depending on length of service up to a range
of 160 hours annually after 5-10 years.
Sick Leave
As noted in the survey of cities, annual paid sick leave generally runs about 96 hours
per year. The cities vary widely with respect to caps on accrual and carryover, and cash
out provision of unused sick leave when leaving employment. A recently enacted state
law (AB 1522) requires all employers in the state, private as well as public sector,
provide at least 24 hours of paid sick leave for specified purposes such as diagnostic
care of an existing health condition for the employee or a family member, or for a victim
of domestic violence. This paid leave must be included in any leave plan the City
adopts.
Administrative Leave
Paid administrative leave is paid leave that is granted generally for management level
personnel. This leave is also referred to as management leave in some cities. This type
of leave is generally offered to offset attendance at night or weekend meetings. The Koff
& Associates survey reflects this type of leave offered by the survey cities form 0-96
hours for these types of employees.
Other (Jury Duty, Bereavement)
Not reflected in the Koff & Associates survey are other types of paid leave such as jury
duty and bereavement leave which are provided by some cities. Generally these types
of leave are for very short periods of time.
Personal Time Off
Personal time off (PTO) is an option available that combines some or all of the various
paid leaves into one category. Combining vacation, sick, administrative and other leave,
or a combination of such, into one leave category provides greater flexibility for the
employee in utilization of leave, and streamlines the administrative management of
leave- one type versus several types.
Leave Recommendation
The City Council should consider how much total paid leave an employee should be
granted for all purposes during a calendar year, and determine how that leave should
be distributed. As indicated above, there are several categories of paid leave for
consideration.
It should be assumed that all designated holidays that the City Council establishes
annually would be paid leave. For vacation leave, the City Council should determine the
amount of initial vacation leave to grant, and then determine if it is desirable to grant
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additional leave time based on length of employment. As indicated above, there is a
mandatory requirement to grant 24 hours of sick leave per year for specified purposes
that must be included in any leave allocation plan. The City Council should consider if
administrative or management leave should be provided for certain employee classes.
The City Council should determine leave carryover requirements and leave buy out
provisions if these provisions are something the City Council desires to grant to the
employees. Additionally as indicated above, PTO is an option the City Council may want
to consider for the purposes previously outlined.
It is recommended that parameters be established for potentially granting some
advanced leave to any current contracted employee who desires to transition to a City
employee. This will allow that person to have sufficient leave to be able to support any
planned vacation that would have been supported through their leave accrual from their
previous employer. Note that this would only apply to positions being filled by current
contract employees who transition to City employees.
Additionally, it is recommended that any plans established for leave provide some
flexibility for the City Manager to modify as part of negotiating certain employment
agreements for those positions considered “at will”. These positions are generally FLSA
Exempt management (Department Head level), and some limited positions that are
generally considered “confidential” class. In some instances, when these employment
agreements are negotiated, potential employees may accept a lesser salary for
additional paid leave. However, certain limitations would have to apply, and would need
to be established.
City staff at this time is requesting that the City Council discuss and provide direction
regarding establishment of salary ranges, medical, dental, vision, disability and life
insurance benefits packages, vacation, sick, and other leave provisions, and retirement
packages. City staff will incorporate all direction given into the City’s Personnel Manual,
finalize all Position Descriptions and return at a later date for consideration for final
adoption with all appropriate implementing ordinances and resolutions.
OTHER INFORMATION
None.
FINANCIAL IMPACT
The proposed budget for FY 15/16 that will come before the City Council at a later date
will be based on all positions remaining contracted due to the as yet undetermined
timeframes that will be necessary to complete the transition from contracted staff to City
employees for the designated positions, if approved by the City Council. As final
decisions are made on a transition plan, appropriate budget adjustments related to the
transition will be brought forward as necessary. These adjustments would reflect
increases in personnel related costs as City employees, and decreases in the affected
consultant contract cost for the position being transitioned.
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