REPORT TO COUNCIL
SUBJECT
Title
Action on Adoption of a Resolution Approving 2022 Salary Plans for Classified and Unclassified Employees, Including City Manager, Pursuant to Council’s Approved Cost of Living Increases effective December 26, 2021 (Continued from December 7, 2021)
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
This item was deferred from the December 7, 2021 Council meeting. The item before the Council is to approve Resolutions, per CalPERS requirements, with the updated salary plans for classified and unclassified positions represented by the Employees’ Association (Unit 578), Miscellaneous Unclassified Management (Unit 9), and the City Manager. The updated salary plans reflect the negotiated and Council approved Cost of Living Adjustments (COLA) included in each agreement for the Units 578, Unit 9, and the City Manager. If the City Council does not approve these resolutions, the City will be non-compliant with CalPERS record keeping and reporting requirements. The City of Santa Clara is a contracting agency with CalPERS and is required to comply with its requirements.
The City has a contractual obligation to implement the terms of the Council approved Agreements and the Administration will proceed with implementing the COLAs effective December 26, 2021. Administratively, the salary increases will occur through the payroll system as scheduled in accordance with the applicable labor contracts. The approval of the salary plans in this Council agenda item will satisfy the reporting requirement to CalPERS, and will not affect the scheduled payroll increases that are legally required and Council approved.
To clarify for the Council, its authority in terms of the action on the December 14, 2021 Council Meeting related to the Salary Schedule Resolutions is solely focused on the annual filing of the Salary Schedule, while complying with the legal requirement to state the City Manager’s salary, and not placing it on the Consent Calendar.
After the December 7, 2021 Council meeting, City staff researched prior actions taken by the City Council to implement Unit 9 MOU-based COLA adjustments for the City Manager position. It appears that in both 2018 and 2019 COLA adjustments were applied to the City Manager without amendments to the employment agreement due to the language in Section 3.2 of the City Manager’s Employment Agreement, which states “Employee shall be subject to all cost of living adjustments to salary and benefits for City Miscellaneous Unclassified Management Employees in Unit 9.”
The Amendment #1 to the City Manager’s contract (January 2020) reflected the deletion of the housing allowance clause and conversion of that housing allowance to salary, as a self-funded merit increase. In order to remain consistent with the prior action regarding COLA adjustments, a further amendment is not necessary in this case.
California Code Regulations Section 570.5 governs and requires the adoption of updated publicly available salary schedules/plan by the governing body. Section 9 of the Personnel and Salary Resolution requires Council approval of compensation plans for classified and unclassified positions. The proposed action satisfies these requirements for past actions approving cost of living increases effective December 26, 2021.
The Classified and Unclassified Salary Plans have been modified to reflect negotiated and pre-approved wage increases by City Council, for two bargaining units as part of their current Memorandum of Understanding (or MOUs). Classifications that are covered by the listed bargaining units shall receive an automatic wage increase as described below effective December 26, 2021, pursuant to the terms of their respective MOUs:
• City of Santa Clara Employees’ Association (Unit 5/7/8): A wage increase of approximately 3.5% which was approved by Council on December 16, 2020.
• Unclassified Miscellaneous Management (Unit 9): A wage increase of approximately 4.5% which was approved by Council on November 17, 2020.
City of Santa Clara contracts with the California Public Employees’ Retirement System (CalPERS) to provide retirement benefits for employees for classified and unclassified positions. When the City makes modifications to the salary schedules, or salary plan, for classified or unclassified positions, the Council must approve and adopt the publicly available salary schedules to comply with California Code of Regulations (CCR) section 570.5. Government Code section 20636(b)(1) and California Code of Regulations section 570.5 require that public salary schedules include specific information to be approved by the governing body whenever they are updated or revised. These changes are administrative in nature as the salary changes reflected in the updated salary plans have already been previously approved by Council.
This action is only focused on the approval of the required Salary Schedule for the purpose of demonstrating compliance with CCR Section 570.5. The City Council has already approved the wage increases for both Classified and Unclassified employees, which are not subject to amendment or further Council action unless the parties re-enter negotiations and subsequently agree to any amendments.
Additionally, the City entered into an employment agreement with City Manager Santana on August 22, 2017 and that agreement provides for appropriate salary adjustments and that the City Manager is subject to cost of living adjustments applicable to Unit 9. These provisions were not altered by Amendment No. 1 to the employment agreement. By virtue of its decision regarding Unit 9, the Council approved two years of 0% COLAs for the City Manager, along with a 4.5% effective December 26, 2021. Since this adjustment is for the City Manager position and based upon the Unit 9 salary adjustment, bringing the action forward on the agenda in this manner is the appropriate process.
A similar action would have been required for the City Attorney, however, that position is currently vacant, and therefore no COLA adjustment for this position is included in this report.
DISCUSSION
Approval and Adoption of the Salary Plan for Classified and Unclassified Positions
The Classified and Unclassified Salary Plans have been modified to reflect negotiated wage increases for two bargaining groups. These changes are administrative in nature as the salary changes reflected in the updated salary plans have been previously approved by City Council. All classifications that are covered by the respective bargaining units shall receive an automatic increase effective the pay period beginning on December 26, 2021.
On December 16, 2020, the City Council approved the 2019-2023 Memorandum of Understanding (MOU) between the City and the City of Santa Clara Employees’ Association (Unit 5/7/8). For the third year of the MOU, the MOU provides for a wage increase of approximately 3.5%, effective December 26, 2021.
On December 16, 2020, the City Council approved the 2019-2024 MOU between the City and the Miscellaneous Unclassified Management Employees (Unit 9). For the third year of the MOU, the MOU provides for a wage increase of approximately 4.5%, effective December 26, 2021.
City Manager’s Employment Agreement
Section 3.2 of the City Manager’s employment contract states she will be “subject to the cost of living adjustments for City Miscellaneous Unclassified Management Employees in Unit 9.” Accordingly, the Unit MOU provides for a 4.5% adjustment and the City Manager will be entitled to that same adjustment effective December 26, 2021. However, if those adjustments exceed the amount set forth in Government Code sections 3511.1 and 3511.2 (referencing the Consumer Price Index), they will not be automatic and will require approval of the Council. The 4.5% Unit 9 adjustment does not exceed the CPI, as follows:
• The adjustment is less than the Consumer Price Index for Urban Wage Earners and Clerical Workers, United States, which according to the Bureau of Labor Statistics is 5.9% over the past 12 months; and,
• The adjustment is less than the local CPI of 4.9% for Urban Wage Earners and Clerical Workers, for the San Francisco-Oakland-Hayward, California area.
The City Manager’s salary after application of the COLA will be $468,673.97, effective December 26, 2021.
Section 9 of the Personnel and Salary Resolution requires City Council approval of compensation plans for both classified and unclassified positions. California Code Regulations section 570.5 requires the adoption of updated publicly available salary schedules by the governing body. The attached Resolution attaches and approves the updated salary plan for the classification of City Manager.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
The general wage increases have a total annual cost (as shown in the table below) of approximately $3.0 million (all funds), of which approximately $1.6 million is in the General Fund and $1.4 million is in other funds.
|
Bargaining Unit |
General Fund |
All Funds |
|
Employees’ Association (Unit 5/7/8) |
$ 760,000 |
$ 1,374,000 |
|
Misc. Unclassified Management (Unit 9) |
$ 814,000 |
$ 1,635,000 |
|
TOTAL |
$ 1,574,000 |
$ 3,009,000 |
Since the Council already approved the COLA adjustments in 2020, the wage increases have already been budgeted and were appropriately reflected in the City’s FY 2021/22 and FY 2022/23 Adopted Budget. As these COLA adjustments are scheduled to take place during the middle of the current fiscal year, the anticipated total fiscal impact for FY 2021/22 is approximately $1.5 million, of which approximately $787,000 is in the General Fund and $718,000 is in other funds. No additional budget action is required.
COORDINATION
This report has been coordinated with the City Attorney’s Office and the Finance Department.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Adopt a Resolution approving the updated and amended salary plans for various classified and unclassified positions including the position of City Manager to satisfy the requirements of California Code of Regulations Section 570.5 effective December 26, 2021.
Staff
Prepared by: Aracely Azevedo, Director of Human Resources
Reviewed by: Sujata Reuter, Chief Assistant City Attorney
ATTACHMENTS
1. Classified Salary Plan (effective 12-26-2021) approved 12-14-2021
2. Unclassified Salary Plan (effective 12-26-2021) approved 12-14-2021
3. Resolution for Amended Classified and Unclassified Salary Plans (effective 12-26-2021) approved 12-14-2021
4. City Manager Employment Agreement
5. Amendment #1 to City Manager Employment Agreement
6. RTC 18-271 (approving City Manager COLA adjustments without contract amendment)