2007-092 - Approving The Management Compensation Plan For Fiscal Year 2007 -2008RESOLUTION 2007 -092
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
APPROVING THE MANAGEMENT COMPENSATION PLAN
FOR FISCAL YEAR 2007 -2008
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 Year 2007 -2008, a
copy of which is attached hereto, is hereby approved.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 6th day of August, 2007 by the following vote:
COUNCIL MEMBERS:
AYES: Steve Glickman, Diane McNutt, Barbara Spector, Mike Wasserman, and Mayor Joe
Pirzynski
NAYS: None
ABSENT:
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SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
AT 'EST:
CLE THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
TOWN OF LOS GATOS
MANAGEMENT COMPENSATION PLAN
FY 2007/08
TOWN OF LOS GATOS
MANAGEMENT COMPENSATION PLAN
UPDATED FOR FY 2007/08
PURPOSE
To establish a program and guidelines for a management compensation plan pursuant to the
following 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 them with other employees for salary purposes.
• Diminish the possible influence of negotiated salaries for rank -and file employees on salaries
set for management classifications.
• 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 compensation program.
• Appropriately 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 Management, with the
exception of Police Sergeants. Police Sergeants shall receive benefits consistent with POA.
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.
Additionally, 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. Salary Ranges - Management classes are established with a salary range of 35% to the
top of the range. The ranges will be reviewed for possible adjustments to be effective the
first pay period in September. Salary range adjustments are made to ensure the
objectives of this plan are maintained, prevent compaction, maintain competitive pay in
the local labor market, provide for internal and external equity, and to adjust for inflation.
C. Management Evaluations — Evaluations are scheduled to be completed by September of
each year and any resulting salary adjustments or awards are effective September 1. On
the basis of the management evaluations, managers may be advanced in their salary
range and /or provided a lump -sum bonus.
Town of Los Gatos
Management Compensation Plan
FY 2007/08
d. Salary Progression to the Top of the Range - Employees, both upon appointment and
during the course of their employment, may receive any salary amount not to exceed the
maximum of their range. Employees shall be reviewed for salary increases at such times
the Town Manager or department head deems appropriate, provided, however, that at
least one review will be conducted annually. If an individual's level of performance or
experience is less than the norm, the Town Manager may appoint to a salary less than
the 35% range.
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 within parameters established by the Town
Manager. While salary adjustments normally involve increases, reductions may be made
in instances of unsatisfactory performance. Prior to being finalized, progress plans shall
be reviewed and approved by the concerned Department Head or Town Manager in the
case of Department Heads. The Town Manager shall establish the parameters for
implementation and the salary progression guidelines on an annual basis.
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.
e. Performance -Based Awards - The basic salary ranges are designed to ensure that
employees have the 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 extraordinary contributions to the Town which exceeds
expectations. To reward such contributions, the Town Manager may authorize
performance -based awards of up to 3% of base salary. Amounts greater than 3% may be
granted by the Town Council upon recommendation of the Town Manager.
Performance -based awards are designed to recognize and encourage contributions that
exceed job expectations and that result in 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 contributions include:
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, systems, or procedures on his /her own initiative which
results in a measurable significant improvement in Town services.
Labor Market Survey — The Town will periodically survey agencies making up the labor
market to evaluate the competitiveness of management salaries. Surveys shall take into
account scope of responsibility, functions supervised, staff size, budget, and related
factors to determine comparability. Supplemental benefits shall be considered as part of
the total compensation package and included in the survey of other agencies.
Page -2-
Town of Los Gatos
Management Compensation Plan
FY 2007/08
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 (refer individual plan documents for specific details)
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 terminating 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.
f. Vacation
Management I - 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)
Manaaement 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 mos. & over 25 days per year (7.70 hrs. per pay period)
The maximum vacation leave accrual shall be 500 hours. 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.
g. Vacation Cash -out — Vacation leave cash -out is permitted twice a year in December and
June. The amount to be cashed out is limited to the amount accrued.
Personal Leave - Management employees are eligible for maximum of forty -eight (48)
hours personal leave each calendar year. Personal leave has no cash value, may not
be carried over from year to year, nor may it be cashed -out.
Sick Leave - Sick leave accrues at the rate of 8 hours per month (3.70 hours per pay
period) with an accrual limit of 1,100 hours.
Sick Leave Cash -out - Management employees who terminate employment with the
Town, may cash out their accrued sick leave as follows:
Page - 3 -
Town of Los Gatos
Management Compensation Plan
FY 2007/08
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
Management employees cash out their accrued sick leave twice a year in December or
June, pursuant to the schedule above.
In order to be eligible for the sick leave cash -out program, managers must maintain a sick
leave balance of at least 150 hours after the annual cash -out. Managers who terminate
with a sick leave balance of at least 150 hours may cash -out their entire balance
pursuant to the schedule above.
k. 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 100% 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 shall 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.
Administrative Leave - Upon approval of his /her Department Head (or by the Town
Manager in the case of Department Heads), 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 examples include unanticipated emergency situations, extraordinary Council or
Commission meetings, and extensive weekend or evening work.
M. Salary Adiustments 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. 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.
n. Leave Accruals - Management employees shall not accrue vacation or sick leave during
any period of unauthorized leave, suspension without pay, or leave without pay.
Continuation Of Benefits - Management employees shall continue to receive fringe
benefits so long as those employees remain on the Town payroll.
P. 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.
Page - 4 -
Town of Los Gatos
Management Compensation Plan
FY 2007/08
q. 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.
r. Vision Plan - Management employees shall be enrolled in the Town's vision -care health
plan. The Town shall pay for the employee -only coverage. At their own cost, employees
may enroll eligible dependents upon hire and at plan inception.
S. Employee Assistance Program - Management employees are eligible to participate in the
Town's employee assistance program. The premium shall be paid by the Town.
t. Cash Allocation & Family Medical Insurance Plan
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 $950 per month;
• Managers participating in this plan may receive the benefit as cash.
Benefits which can be purchased through the cash allocation plan 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. Employees electing to
receive cash have the option of receiving payment in the first two paychecks of each
month (24x 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 shall 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.
Deferred Comp - The Town will offer a deferred compensation plan to all managers.
Page -5-
MANAGEMENT CLASSIFICATIONS SALARY TABLE
EFFECTIVE 8/26/07
Classification
Maximum Annual
Salary
Effective 8/26/07
Total
Bi- Weekly
Salary
Group I
Police Chief
$173,004.00
$6,654.00
Assistant Town Manager
$160,373.00
$6,168.19
Community Development Director
$160,373.00
$6,168.19
Director of Parks & Public Works
$160,373.00
$6,168.19
Finance Director
$160,373.00
$6,168.19
Police Captain
$150,047.00
$5,771.04
Community Services Director
$143,876.00
$5,533.69
Human Resources Director
$143,876.00
$5,533.69
Library Director
$143,876.00
$5,533.69
Group II
Assistant Community Development Director
$143,876.00
$5,533.69
Town Engineer
$143,876.00
$5,533.69
MIS Manager
$133,503.00
$5,134.73
Superintendent
$133,503.00
$5,134.73
Building Official
$118,314.00
$4,550.54
Finance Manager
$118,314.00
$4,550.54
Assistant Library Director
$113,055.00
$4,348.27
Clerk Administrator
$113,055.00
$4,348.27
Economic Vitality Manager
$113,055.00
$4,348.27
Administrative Programs Manager
$113,055.00
$4,348.27
Parks and Public Works Supervisor
$113,055.00
$4,348.27
Police Admin Services Manager
$113,055.00
$4,348.27
Reflects 3% increase