1998-087-Approving Management Compensation Plan For Fiscal Year 1998-99RESOLUTION 1998 -87.
RESOLUTION OF THE TOWN OF LOS GATOS
APPROVING MANAGEMENT COMPENSATION PLAN
FOR FISCAL YEAR 1998 -99
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 1998 -99 (a copy
of which is attached hereto as EXHIBIT A) is hereby approved.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 15th day of June, 1998 by the following vote:
COUNCIL MEMBERS
AYES:
Joanne Benjamin, Steven Blanton, Mayor Linda Lubeck.
NAYS:
None
ABSENT:
Randy Attaway, Jan Hutchins
ABSTAIN:
None
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
r
- -- x o - G�
CLERK OF THE TOWN OF LOS OS
LOS GATOS, CALIFORNIA
ATTACHMENT
June 10, 1998
Summary of Amendments to
Management Compensation Plan for Fiscal Year 1998 -99
1. Reference to general compensation adjustments, based upon settlements with
represented employees, has been removed for all Group I and Group II managers.
Adjustments will now be made to Management I and II salary ranges, and individual
salary increases will be granted based upon merit and job performance in
conjunction with the employee's annual performance evaluation. Group III mangers
(Police Sergeants) received a compensation adjustment on 12 -28 -97 and no
additional adjustment is being made at this time. In the future, Group III managers
will continue to receive the general or cost of living adjustments granted to the
employee association representing sworn positions.
2. Disability insurance coverage levels were adjusted to reflect the amended salaries
of Town employees. The Town's long -term disability and short -term disability rates
did not increase as a result of the adjustment.
3. Adjustments were made to Group I and Group II salary ranges as identified in
Exhibit A. Range adjustments were made to maintain a competitive position in the
labor market.
4. Cash Allocation for medical and dental insurance was increased for Group I, II, and
III managers by approximately 2.6 %.
5. The Town Manager shall have the authority to establish vacation accrual rates for
new managers at the time of hire, based upon years of relevant professional
experience.
6. Language was changed to improve understanding and add clarity. The language
adjustments did not include any substantive changes.
EXHIBIT A
TOWN OF LOS GATOS
MANAGEMENT COMPENSATION PLAN
Fiscal Year 1998 -99
1. Purpose
To establish a program and guidelines for a management compensation plan
pursuant to the following goals and objectives:
1.1 Establish a system for the payment of management personnel which results
in appropriate salary- contribution relationships and competitive salary rates.
1.2 Recognize the distinct character of management jobs and incumbents as
opposed to grouping them with other employees for salary purposes.
1.3 Diminish the possible influence of negotiated salaries for rank -and file
employees on salaries set for management classifications.
1.4 Promote more commitment by management to goals and objectives of the
Town Council and Town Manager.
1.5 Establish a system where salary serves as an effective device for promoting
better job performance.
1.6 Give recognition to impact of the employee on the job and performance level.
1.7 Promote the further identification of management group and understanding
of associated roles, loyalties, and responsibilities.
1.8 Strengthen the role of the supervisor in the compensation program.
1.9 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.
3. POLICY
3.1 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.
3.2 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
on July 1 and at such other times as the Town grants general or cost -of- living
adjustments. For Management Group III, 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. July 1 salary range adjustments shall apply to the ranges only.
Range adjustments may also be made in the event of materially changed job
assignments.
3.2.1 A Range - The "A" range is appropriate for entry level and fully 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.
3.2.2 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 %. Placement in the range is contingent upon the
satisfaction of specific requirements and approval of the Town Manager.
3.3 Salary Progressions Within Ranges - Employees, both upon appointment
and during the course of their employment, may receive any salary amount
not to exceed the maximum of their range. During the first three (3) years of
employment, 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. Thereafter,
employees will be reviewed annually on the date of their employment in the
position they occupy. Department Head evaluations and salary adjustments
will be completed in September of each year. The sole consideration in the
granting of within -range salary adjustments shall be performance.
3.3.1 Salary adjustment 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.
3.3.2 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.
Normally, within range adjustments will average an approximate 5 %.
Adjustments below and above this amount are permitted, however, increases
above 15% or less than 2 -1/2% are discouraged. 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.
3.3.4 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.
3.4 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.
3.5 Exceptional Contribution Pay - The basic salary ranges "A" and "B" 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 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 ECPP is governed by the following:
3.5.1 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:
3.5.1.1 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.
3.5.1.2 Employee initiates a series of innovative approaches to
providing Town services which result in significant cost savings
with no reduction in service level.
3.5.1.3 Employee develops programs or makes suggestions which
result in operational improvements outside his /her normal area
of responsibility.
3.5.1.4 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.
3.5.2 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 $2,000.00. Amounts greater than $2,000.00 may be granted by the
Town Council upon recommendation of the Town Manager in an amount not
to exceed three (3) months' salary of the affected employee. Payment shall
be made in a lump sum.
M
6
GENERAL ADMINISTRATION AND PLAN REVIEW
The Personnel Officer shall maintain records on salary adjustments, including
effective dates and amounts. This information shall be summarized and distributed
to the respective Department Heads during the preparatory stages of development
of the fiscal year budget. A study committee consisting of the Personnel Officer and
a minimum of two Department Heads and one level two Manager will then be
established to evaluate administration of the Management Productivity -Salary Plan
and develop recommended Plan changes if deemed appropriate.
SUPPLEMENTAL BENEFITS
5.1 Eli ibili - Management employees will be eligible for benefits on the first
day of the month following their hire date.
5.1.1 No unexpended dollar amounts associated with selected benefits may be
disbursed to a terminating employee.
5.1.2 All benefit selections are subject to State and Federal rules, regulations, and
laws regarding employee benefits and tax status. No guarantee is made
regarding the tax - exempt status of any and all benefits presented or selected
except those allowed by law.
5.1.3 For all current employees, benefit selections must be made prior to the
beginning of each calendar year. No changes to selected dollar ($)
allocations may be made after that time unless such changes are a result of
a qualified event or permitted by the PERS Medical Health Plan. Dependent
status changes may be made during the fiscal year provided there is a
qualifying event.
5.2 Public Employees Retirement System - The Town shall continue to provide
in its contract with PERS for the 2% at 55 retirement plan. Police
Management have a 2% at 50 program.
5.3 Vacation
Management I
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
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)
Management III
0 - 36 mos. 10 days per year (3.08 hrs. per pay period)
37 to 60 mos. 15 days per year (4.62 hrs. per pay period)
61 to 120 mos. 20 days per year (6.16 hrs. per pay period)
121 to 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 400 hours for Management I
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 leave cash -out is permitted twice a year in December and June if
the Manager uses one week of vacation during the previous twelve (12)
months. Amount to be cashed out is limited to the amount accrued.
5.4 Personal Leave - Each Management employee will be eligible for a maximum
of 48 hours personal leave each calendar year. Personal leave is to be
taken at employee discretion. Personal leave may not be carried over from
year to year, nor may it be cashed out.
5.5 Sick Leave /Sick Leave Cash -out - Sick leave accrues at the rate of 8 hours
per month (3.70 hours per pay period) with a 1000 hour accrual limit. Upon
retirement from the Town, accrued sick leave can be applied towards
medical premiums until such time that the Town provides for 100% of retiree
benefit premiums.
Sick leave can be cashed out in December and June with the following
provisions:
a. The employee must have 150 hours in accruals at time of
cash -out;
b. The sick leave balance can be cashed out 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
5.6 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. This leave is not cumulative from year to year; nor may this leave 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 work.
5.7 Salary Adjustments For Management Employees On Extended Leave - An
incumbent 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.
The employee will then be considered for an adjustment, when a complete
year of work has elapsed since their last evaluation. Time absent will be
rounded to the closest month. Salary adjustments, if any, will become
effective after the employee has completed a full year of employment since
their last evaluation /increase.
Vacation or sick leave may not be used intermittently during an extended
leave to interrupt a determination that an employee is absent for any full
calendar month period. 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 their anniversary date.
5.8 Leave Accruals - Management employees shall not accrue vacation or sick
leave during any period of unauthorized leave, suspension without pay, or
leave without pay.
5.9 Continuation Of Benefits - Management employees shall continue to receive
fringe benefits so long as those employees remain on the Town payroll.
5.10 DisabilityInsurance - 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.
5.11 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.
5.12 Employee Assistance Program - Management employees are eligible to
participate in the Town's employee assistance program. The premium shall
be paid by the Town.
5.13 Cash Allocation Plan - Allocation available to managers are as provided in
Appendix B. Benefits which can be purchased by the cash allocation plan
include medical insurance and dental insurance. These benefits are
available on a pre -tax basis.
Employees may also choose to receive part or all of their cash allocation
plan in cash. Any amount received in cash is taxable. Employees choosing
to receive taxable cash will receive it twice a year.
All benefits selected from the Cash Allocation Plan must be paid for in full
from the maximum benefit provided except when the maximum is insufficient
to cover all insurance coverage selected. In such case, the premium amount
not funded by the Town - provided benefit shall be paid through an employee
deduction applied against the medical premiums. These premiums are
available on a pre -tax basis.
Employees choosing to use cash allocation plan funds for medical insurance
must pay all medical premiums from the allocation prior to receiving a cash
allocation.
5.14 Deferred Compensation - The Town will continue to offer a program of
deferred compensation to all managers.
MANAGEMENT CLASSIFICATIONS AND SALARY LEVELS*
1998 -99
Police Chief
$92,800
Planning Director
$86,228
Assistant Town Manager
$84,758
Director of Parks & Public Works
$82,361
Finance Director
$82,361
Police Captain
$80,486
Community Services Director
$78,618
Library Director
$78,618
Assistant Planning Director
$72,950
Assistant Town Engineer /Information System Manager
$72,950
Maintenance Superintendent
$72,851
Parks /Forestry Superintendent
$72,851
Police Sergeant (effective 12- 28 -97)
$63,356
Records and Communications Manager
$62,502
Parks Maintenance Supervisor
$62,418
Public Works Supervisor
$62,418
Senior Librarian
$61,776
Personnel Manager
$60,393
*Net of employee paid PERS contributions.
MANAGEMENT SUPPLEMENTAL BENEFITS
CASH ALLOCATION PLAN
FY 1998 -99
Effective June 28, 1998
GROUP 1 - $8,940
Police Chief
Planning Director
Assistant Town Manager
Director of Parks & Public Works
Finance Director
Police Captain
Library Director
Community Services Director
GROUP II - $8,380
Assistant Planning Director
Assistant Town Engineer /Information System Manager
Maintenance Superintendent
Parks /Forestry Superintendent
Records and Communications Manager
Parks Maintenance Supervisor
Public Works Supervisor
Senior Librarian
Personnel Manager
Group III - $5,860
Police Sergeant