2004-137- Approving The Management Compensation Plan For Fiscal Year 2004-2005RESOLUTION .2004-137
RESOLUTION OF THE TOWN OF LOS GATOS
APPROVING THE MANAGEMENT COMPENSATION PLAN
FOR FISCAL YEAR 2004-2005
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Management Compensation Plan for Fiscal yeah 2004-2005, a
copy of which is attached hereto as EXHIBIT A, is hereby .approved.
PASSED AND ADOPTED at a regular meeting of he Town Council of the
Town of Los Gatos, California, held on the l5`" .day of November, 2004 by the following vote:
COUNCIL, MEMBERS:
AYES: Sandy Decker, Diane McNutt, Joe Przynski,lVIike Wasserman,
Mayor Steve Glickman
NAYS.: None
ABSENT: None
ABSTAIN: None
.~
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
..--.
CLERK A]L~IVIINISTRA ~'OR OF THE TOWN OF LOS GATOS
LOS GATOS, Ct~LI.FO'RNIA
EXHIBITA
TOWN OF LOS GATOS
MANAGEMENT
COMPENSATION PLAN
fiscal Year 2004-2.005
'Exhibit A
1. PURPOSE
To establish a program and .guidelines for a management compensation plan
pursuant to the fo lowing goals .and objectives:
• Establish a system for the payment of management personnel which results
in appropriate salary-contribution relationships and competitive salary rates..
• Recognize :the distinct character of management jobs and incumbents as
opposed to grouping there with other employees for salary.,purposes.
• .Diminish the possible influence of negotiated salaries for .rank-and file
employees on salaries set for management classificafions.
• Promote more commitment by management to goals and objectives of the
Town Council and Town Manager.
• Establish a system where salary serves as an effective device for ..,promoting
better job performance..
• Give recognition to impact of the employee on the job and performance level.
• Promote the further identification of management group and understanding of
associated .roles, loyalties, and responsibilities.
• Strengthen the role of the supervisor in the compensafion program.
• Appropriate y .reward those employees whose .extra effort .results in the
improvement of Town services.
2. APPLICATION
This Policy shall apply to all employees occupying positions designated as
Managemerit.
3. POLICY
a. Criteria For Establishing .Ranges -Salary ranges shall be designed to
ensure. satisfaction of the "equal pay for equal work" principle. It has been
determined that the maintenance of a strong competitive position in the
labor market. has a positive effect on the Town's ability to attract and retain
highly qualified personnel.
Additiona'Ily, there are identifiable differences in work requirements
between Los Gatos management and presumptively comparable positions
in other .agencies:. These differences argue against the setting of rates
strictly on the basis of "prevailing wage". To the degree possible, ranges
will reflect consideration of the relative value of positions. This
consideration will take into account differences and similarities in
positions, within the respective management and employee groupings.
The establishment. and maintenance of management ranges shall be
guided by the principle. that no supervisor should receive less
compensation than their highest ,paid subordinate if a similar amount of
time is worked. The establishment and adjustment of salary ranges shall
be effected through resolution of the Town Council.
b. A and B Ranges - All management classes shall have two ranges titled
"A" and "B". The ranges will be reviewed for possible adjustments to be
effective the first pay period in September. For Management Group 111,
the general or cost-of-living adjustments shall be the same as those
granted to the employee association representing sworn positions. Range
adjustments also may be made to prevent salary compaction and ensure
the objectives of this plan .are maintained. Salary range adjustments shall
apply to the ranges only for Group I & I'I managers. Range adjustments
may also be .made in the event of materially changed job assignments.
1. A Range -The "A" range is appropriate for entry level and fu11y
qualified employees. The performance expectations are those
which would normally be associated with these levels. The range is
to be used to initially grant a salary based on anticipated
performance level and thereafter to recognize changes in such
.performance. The "A" range will have a spread of 35% from entry
to top salary with no set steps. The lowest salary in the range
would be appropriate for a new employee who minimally satisfies
job requirements. The top of the range is reserved for employees
who perform at the highest level of expected proficiency.
2. B Range -The " B" range is designed for those employees whose
performance and value to the Town clearly .exceed normal
expectations. The top salary of any .given " B" range shall exceed
the top salary of the A "range of the class 'by 15% (see Appendix
A). Placement in the range is contingent upon the safisfacfion of
specific requirements .and :approval of the Town Manager.
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c: Salary Progressions Within Ranges -Employees, both .upon .appointment
and during the course of their employmeht, may .receive any saiary
amount .not to exceed the maximum of their range.. Employees shall be
reviewed for saiary increases at such times the Town Manager or
department head deems appropriate., provided, however, that at east one
review will be conducted annually.
Management Group I and Group 11 evaluations are scheduled- to be
completed in September of each year. Management Group I and Group l'I
salary :range adjustments in FY 2004-05 will be effective August 29, .20:04.
The sole consideration in the granting of within-range salary adjustments
shall be performance. Management Group 111 salary .range adjustments
are effective January 2, 2005.
Salary adjustments for employees below the level of .Department Head
shall be made upon -the recommendation of the Department 'Head and
approval of the. Town 'Manager. Salary adjustments for Department
Heads. shall be determined and approved by the Town Manager.
It is intended that incremental salary adjustments bear a direct relationship
to .progress of the employee toward satisfying performance expectations.
Upon employment, the employee and his/her supervisor shall develop a
progress plan :including a definition of .performance goals., schedule of
..performance reviews, and outline of possible within-range adjustments.
Range adjustments average .approximately 5%. Adjustments below and
above this amount are permitted. While salary adjustments normally
involve increases, reductions may be ..made in instances of unsatisfactory
performance. Prior to being finalized, progress plans sfiall be reviewed
and approved by the concerned Department Head or Town Manager in
the case of Department Heads.
d. .Labor .Market Survey -Survey agencies making up the labor .market 'base
shall be used as determined appropriate by the Santa Clara County
Employee Relations Service and Town Manager. The determination of
position comparability- shall take into account scope of .responsibility,
functions supervised.,. staff size, budget, and related factors.
Consideration will not be given to factors relating to incumbents, such as
performance, length of service; and competency.. Supplemental benefits
shall be considered part of compensation paid. In order to determine the
position of the Town's benefit package in relation to the labor market,
benefit information shall also be included in the survey of other
municipalities.
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e. Exceptional Contribution Pay -The basic salary .ranges "A" and "B" are designed
to ensure that employees have ahe potential of a salary which is internally
justified.., competitive with salaries paid in other agencies., .and/or should
provide compensation appropriate to ...productivity at the standards
established by the Town. It is recognized, however, that some employees
may make an infrequent or "one time" significant contribution to the Town
which exceeds. expectations or job requirements.
The Exceptional Contribution Pay Program (ECPP) is designed to
recognize and encourage this type of contribution. The contribution
cannot be within job expectations and must result in an identifiable ..and
clearly recognized positive impact on the Town.. Ordinarily such impact
must be definable in terms of dollar .cost reductions and/or increased
productivity without .additional costs.. Examples of indicators of such a
contribution include the following:
• Within the employee's area of responsibility there has been a
consistent, exceptionally high level of productivity with repeated
successful implementations of progressive and up-to-date
operational and managerial systems.
• Employee initiates a series of innovative approaches to providing
Town services which result in significant cost savings with no
.reduction in service level.
• Employee .develops programs or makes suggestions which result in
operational improvements outside his/her normal area of
responsibility.
• Employee develops a program, system, or procedure on his/her
own .initiative which results in a measurable significant improvement
in Town services. or governmental efficiency.
ECPP may be granted at any time by the Town .Manager upon
recommendation 'by the employee's Department Head in an amount not to
exceed 1.75% of salary (Maximum 6-Range compensation)... Amounts
greater than 1.75% of base. salary may be granted by the Town Council
upon recommendation of the Town .Manager. Payment shall be made in a
lump sum.
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4. GENERAL .ADMINISTRATION ..AND PLAN REVIEW
The Town Manager shall be responsible for the annual review and proposed
changes to the Management Compensation Plan.
5. SUPPLEMENTAL BENEFITS
a. Eligibility -Management employees will be eligible for benefits on the first
day of the month following. their hire date.
b. With the exception of the Cash Allocation Program, no unexpended dollar
amounts associated with selected benefits may be disbursed to a
#erminating employee.
c. All benefit selections are subject to State and Federal rules, .regulations,
and laws regarding employee benefits and tax status. No guarantee 'is
made regarding the tax-exempt status of any and all benefits .presented or
selected except those allowed by law.
d. Benefit selections must be made during open enrollment. No change .may
be made after that time unless such changes are a result of a qualifying
event or are permitted by the benefit plan.
e. Public Employees '.Retirement System -The Town shall continue to
contract with 'PERS to provide the 2% at 55 retirement program for non-
safety management personnel and the 3% at 50 retirement program for
safety management .personnel.
Vacation
Management 1-Accrual Schedule
0 - 60 .mos.. 15 days per year (4:62 hrs. per pay .period)
61 - 120 mos. 20 days .per year .(6..15 hrs. per pay period)
121 mos. & over 25 days per year (7.70 hrs. per pay period)
Management II -Accrual Schedule
0 - 60 mos. 15 days per year .(4.62 hrs. per pay .period)
61 -120 mos. 20 days per year (6.15 hrs. per pay period)
121 - 180 mos.. 23 days per year (7.08 hrs. per pay period)
181 rhos: & over 25 days per year (7.70 hrs. per pay period)
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Management III
0 - 36 mos.
37 to 60 mos.
61 to 120 mos.
121 to 18:0 mos.
181 mos. & over
Accrual Schedule
10 days per year (3.08'hrs. per pay period)
15 days per year (4:62 hrs. per pay period)
2D days per year (6.16 hrs. per pay period)
23 days per year (7.08 hrs. per pay period)
25 days per year (7.7D hrs per pay period)
The maxirnurn vacation leave accrual shall be 500 hours for Management
and II. The maximum vacation leave accrual shall be 344 hours for
Management III. Accrual of vacation leave shall cease when the
maximum accrual level is reached. The Town Manager has the authority
to establish vacation accrual rates for new managers at the time of hire,
based upon experience and years of service.
Vacation Cash-out -Vacation leave :cash-out for Management Group I
and Il is permitted twice a year in December and June. The .amount to be
cashed ;out is limited to the amount accrued. Group III Managers are
eligible to cash out up to 40 hours of vacation based on accruals as of
November 30th. Cash-out will be paid during the month of'December.
g. Personal Leave -Management Group 1 and it employees ar•e eligible for a
maximum of forty-eight (48) hours personal leave each calendar year.
For Group I and Group II employees personal leave has no cash. value,
may not be carried over from year to year, nor may it be cashed-out.
.Management Group 111 employees are eligible for a maximum of twenty
(20) hours of personal .leave. Management Group .III may cash out their
personal leave at base pay if it is not used by the end of November.
Management Group III may use personal leave during the month of
December;. however, employees desiring to receive compensation for
those hours shall do so in conjunction with the annual :cash-out in
November.
h. Sick Leave -Sick leave accrues at the rate of 8 hours .per .month (3.70
hours per pay period) with a 1100 'hour accrual limit for Group I and Group
11 Managers, and an 1180 hour accrual limitfor Group III Managers.
i. Sick Leave Cash-out - Management employees who terminate
employment with the Town, may cash out their accrued sick leave as
follows:
1 - 59 months of service at 25% of value
60 - 119 months of service at 37.5% of value
120 or more months of service at 50% of value
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Management Group Ill employees may cash-out up to 40 hours of
accumulated sick leave at 50% of their current salary in December of each
year. Management Group I and li may cash out their accrued sick leave
twice ayear-in December or June., pursuant to the schedule above.
In order to be eligible for the sick leave cash-out program, Group I & 'll
Managers must .maintain a sick leave 'balance of at least 150 hours after
the annual cash-out. Group I & -II Managers who terminate with a sick
.leave balance of at least 150 hours may cash-out. their entire balance
pursuant to the schedule above. Group 111 Managers who terminate with a
sick leave balance of at least 200 hours may cash-out their entire 'balance
pursuant to the schedule above.
Sick-leave :Conversion at Retirement -Employees hired into any regular,
full-time Town position prior to November 15, 2004, who retire from the
Town, may convert 1 Q0% of the value of the .accrued sick leave to a dollar
equivalent at their hourly .rate of pay at the time of retirement. This
amount shall be 'held in an account under the control of the Town. The
account will not accrue interest and will not be paid in cash to the retiree
or any beneficiaries. The employee's portion of their medical payment
shad be withheld from their monthly retirement payment by PERS. From
the account established, the Town will pay the retiree, quarterly in
advance, the .retiree's portion of medical payments until all monies are
depleted from the account or the retiree dies, whichever occurs first. The
retiree will be responsible for 100% of their share of future medical
insurance payments once the account is exhausted.
k. Administrative Leave -Upon approval of his/her Department'Head (or by
the Town .Manager in the case of Department Heads), Group I and 11
.management employees are eligible for up to 40 hours administrative
leave with pay per calendar year. Administrative leave does not
accumulate from year to year, and may .not be cashed-out.
Administrative leave may be granted in recognition of extraordinary work
hours by management ..personnel. Specific examp es include
unanticipated emergency situations, extraordinary Council or Commission
meetings, and extensive weekend or evening work.
I. Salary .Adjustments For Management .Employees On Extended Leave - A
management employee who is on extended leave from his/her position
due to sickness., disability, or employee-initiated leave without pay status
shall receive no salary adjustment until returning to full-time work.
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Vacation. or sick leave may be used to assure continuation of payroll
status in order to retain .insurance benefits under the cash allocation
'benefits program. Employees who are absent from work due to a work-
related disability shall not be subject to the provision above and will be
considered for a salary adjustment on the regular schedule.
m. Leave Accruals -Management employees shall not accrue vacation or
sick leave during any ,period of unauthorized leave, suspension without
.pay, or leave without pay.
n. Continuation Of .Benefits -Management employees shall continue to
receive fringe benefits so long as those employees remain on the Town
payroll.
o. Disability Insurance -The Town will provide for a Short Term Disability
policy effective the 8th calendar .day.; coverage of 60% of weekly earnings
up to a .maximum of $1,:300/week for 12 weeks. Long Term Disability
benefits begin on the 91st day of disability; coverage of 60% of monthly
earnings up to a maximum of $6.,.000/mo.
p. Life Insurance -Management employees shall receive Town paid .life
.insurance coverage providing .cover of $50,000 life and $50,000 accidental
death 'benefit or equal to annual salary, whichever is higher. Additional
life insurance may be purchased in accordance with the Town's current life
insurance carrier and relevant I,R,S. regulations.
q. Vision Plan -Management employees shall be enrolled in the Town's
vision-care health plan {VSP Plan $ - with a $20 co-pay).. The Town shall
pay for the emp oyee-only coverage. At their own cost, employees may
enroll eligible dependents upon hire and at plan inception.
Employee Assistance Program - .Management employees are. eligible to
participate in the Town's employee assistance ...program. The premium
shall be .paid by the Town.
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s. Cash .Allocation & .Family Medical Insurance Plan
Effective January 1, 2004 through December 31, 2004:
• Group I managers. shall receive a cash allocation of $1,076 .per month;
• Group II & Group III managers shall receive a cash. allocation of $1,008
per month;
• Management employees .hired prior to July 1, 2003., may choose to
receive up to $913 per month of their cash allocation in cash.
• Management employees 'hired on July 1, 2003 or later may use. the
cash allocation for the purchase of benefits only.
Effective January 1, 2005 managers will have the option of ,participating in
a Cash Allocation Plan or a Family Medical Insurance Plan as follows:.
Cash Allocation Plan
• All managers hired on or after November 15, 2004 shall receive a cash
allocation for benefits of $400 per month;
• All managers hired before November 15, 2004 shall receive a cash
allocation for benefits of $95'0 per month;
• Managers participating in this plan may receive the benefit as cash.
Benefits which can be purchased through the cash allocation p an include
medical, dental and vision insurance. These benefits are available on a
pre-tax basis. If the premium cost of the .health plan exceeds the Town
contribution, the employee shall pay through payroll deduction the
difference between the monthly premium and the amount contributed by
the Town.
Any amount received in cash is taxable. €mployees electing to receive
cash have the option of receiving payment in the first two paychecks of
each month (twenty-four times a year) or twice a year in December and
June.
Family Medical Insurance Plan
'.Managers shall receive a $1,256 per month .contribution toward
monthly health insurance premiums. If the premium costs exceed the
Town contribution, the ..manager sfiall,pay through payroll deduction the
difference .between the monthly premium and the amount contributed
by the Town. The employee shall. forfeit any balance should the Town
contribution exceed the cost of the premiums.
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Deferred Cornpensation -The Town will .offer a program of deferred
compensation to all managers.
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APPENDIX A
MANAGEMENT COMPENSATION .PLAN
BI-WEEKLY SALARY SCHEDULE
B-RANGE MAXIMUM FY 2004-05
'EFFECTIVE 8-29-.2004
GROUPIMANAGERS
Police Chief $ 6,209.30
Assistant Town Manager $ 5,755.99
Community Development Director $ 5,755.99
Director of Parks & Publio Works $ 5,755.99
Finance Director $ 5,409.71
Police Captain $ 5,385.35
Community Services Director $ 5,163.87
Human Resources Director $ 5.,1'63..87
Library Director $ 5,163.87
GROUP II MANAGERS
.Assistant Community Development Director $ 4,791.59
Management Information Systems Manager $ 4,791:59
Superintendent $ 4,791:59
Town Engineer $ 4,791:59
Accounting Manager $ 4,057.64
Assistant Library Director $ 4,057.64
Clerk Administrator $ 4,057;64
Economic Vitality Manager $ 4;057,64
Parking Coordinator $ 4,,057.64
Parks and Public Works Supervisor $ 4,057:64
Records & Communication Manager $ 4;057:64
GROUPIIFMANAGERS
Police Sergeant: Effective January 4, .2004 $ 4,137,24
Police Sergeant: Effective .January 2, 2005 $ 4,385;47
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