AgdaPkt 2015-12-07 Closed and Joint SA and PFA

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6.3.A. - Page 1 REPORT To the Honorable Mayor and City Council From the City Manager December 7, 2015 SUBJECT Amendments to the Executive Management Salary Plan and Executive Management Summary of Benefits RECOMMENDATION 1. By resolution, approve amendments to the Executive Management Salary Plan and 2. By resolution, approve amendments to the Executive Management Summary of Benefits BACKGROUND The Executive Management employee group consists of Department Heads and Divisions Managers who serve at-will under the direction of the City Manager. Compensation adjustments for Executive Managers are recommended by the City Manager for Council approval on an annual basis. Salary recommendations are developed by the City Manager in consultation with Human Resources, and are based on factors traditionally taken into consideration when determining compensation such as cost of living, labor market surveys, and the financial condition of the City. Council last approved a cost-of-living adjustment of three percent (3%) for executive managers in July, 2013, following two fiscal years of salary freezes during the recent recession. In July, 2014, minor salary range adjustments based on labor market surveys were approved for four executive management classifications, with no automatic increases for incumbents. The remaining classifications did not receive salary increases in fiscal year 2014-2015. Additionally, within the past four years, the City has worked successfully with labor groups to implement benefit reforms in order to maintain a fiscally-sound, equitable, and sustainable compensation program for employees. Since 2011, the City has negotiated benefit cost-sharing agreements with all labor groups, including the Executive Management group, in order to increase the employee contributions to pensions and healthcare premiums. In January 2014, the Council approved further changes to the Executive Management Summary of Benefits to increase the employee contribution to the City's share of pension costs to twelve percent (12%) of salary by January 1, 2016. Council also approved the elimination of the Employer-Paid Member Contribution (EPMC) of seven percent (7%) of salary by the end of 2016, effectively increasing employee contributions by the same amount. These changes represent a combined increase in employee contributions from one percent (1%) of salary to a total of nineteen percent (19%) of salary over the course of four years.