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1994-159-Approving Management Compensation Plan For Fiscal Year 1994-95RESOLUTION 1994 -159 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS APPROVING MANAGEMENT COMPENSATION PLAN FOR FISCAL YEAR 1994 -95 WHEREAS, amendments to the Management Compensation Plan will result in more effective control of leave benefits. BE IT RESOLVED, by the Town Council of the Town of Los Gatos, that the Management Compensation Plan for Fiscal Year 1994 -95 (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 21st day of November, 1994 by the following vote. COUNCIL MEMBERS: AYES: Randy Attaway, Joanne Benjamin, Steven Blanton, Linda Lubeck Mayor Patrick O'Laughlin NAYS: None ABSENT: None ABSTAIN: None SIGNED: MAYOR OF THE T WN OF LOS GATOS LOS GATOS, CALIFORNIA MGR078 A: \CNCLRPTS \71- 21 -5.RES Attachment 2 MANAGEMENT COMPENSATION PLAN 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 in those cases 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 MGRO66;MG194- 95.CMP 1 November 21, 1994 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 ". After initial establishment, the ranges will be reviewed for possible adjustments to be effective on July 1 of even - numbered years and at such other times as the Town grants general or cost -of- living adjustments. 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 Ranee - 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 utilized 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 Ranee - 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 Salat�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 Heads will be effective September 15, 1993. The sole consideration in the granting of within -range salary adjustments shall be performance. MGRO66;MGT94- 95.CMP 2 November 21, 1994 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. also, while salary adjustments will normally involve increases, reductions may be made in instances of unsatisfactory performance. Prior to being finalized, progress plans shall he 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 in subsequent years with deletions or additions made only upon substantial justification. 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. The survey will be conducted in odd - numbered years with any necessary range adjustments made on or about July 1 of the survey year. The survey agencies are in Appendix C. 3.5 Exceptional Contribution Pav - 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 of "one shot" 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: MGRO66;MGT94- 95.CMP 3 November 21, 1994 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 $2,000.00 may be granted by the Town Council upon recommendation of the Town Manager in an amount not to exceed three (3) months' salary of the affected employee. Payment shall be made in a lump sum. 4. GENERAL ADMINISTRATION AND PLAN REVIEW The Personnel Officer shall maintain records on salary adjustments, including effective dates and amounts. This information shall be summarized and distributed to the respective Department Heads during the preparatory stages of development of the fiscal year budget. A study committee consisting of the Personnel Officer and a minimum of two Department Heads and one level two Manager will then be established to evaluate administration of the Management Productivity -Salary Plan and develop recommended Plan changes if deemed appropriate. In even - numbered years, this committee shall also review the results of the management classes salary survey and prepare related recommendation. 5. SUPPLEMENTAL BENEFIT 5.1 Eligibility - Management employees will be eligible for benefits on the first day of the month following their hire date. MGR066;MGT94.95.CMP 4 November 21, 1994 5.1.1 No unexpended dollar amounts associated with selected benefits may be disbursed to a terminating employee. 5.1.2 All benefit selections are subject to State and Federal rules, regulations, and laws regarding employee benefits and tax status. No guarantee is made regarding the tax- exempt status of any and all benefits presented or selected except those allowed by law. 5.1.3 For all current employees, benefit selections must be made prior to the beginning of each fiscal year. No changes to selected dollar ($) 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 amend its contract with PERS to provide 2% at 55 retirement effective January, 1993, with Town to take credit towards future total compensation equal to the PERS contribution increase in any subsequent negotiations that cover the 1994 -95 fiscal year. The PERS contribution increase is scheduled to begin July 1, 1994. Police Management have a 2% at 50 program. All management employees have the option to assume payment of their own PERS contribution at the beginning and during the last one year of their employment with the Town until June 30, 1994. As of July 1, 1994, this option will no longer be available pursuant to State law. The monies previously paid to PERS by the Town to cover the employees contribution will be added to the employee's salary. An employee who does opt for this conversion and proceeds to pay the employee's contribution shall not be forced to retire within one year nor shall the employees have the option to revert back to Town -paid employee contribution. 5.3 Vacation Management I 0 - 60 mos. 61 - 120 mos. 121 mos. & over Management II 15 days per year 20 days per year 25 days per year (4.62 hrs. per pay period) (6.15 hrs. per pay period) (7.70 hrs. per pay period) 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) MGR066;MGT94- 95.CMP 5 November 21, 1994 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) Maximum accrual shall be 400 hours for Management I and II effective January 1, 1995. Maximum accrual shall be 344 hours for Management III. Vacation cash -out is permitted twice a year in December and June if the Manager uses one week of vacation during the prior year. 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 1200 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 each December with the following provisions: a. Have 150 hours in accruals at time of cash -out. b. The balance can be cashed out as follows: 1 - 59 months of service at 25% 60 - 119 months of service at 37.5% 120 or more months of service at 50% 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. MGRO66;MG194- 95.CMP 6 November 21, 1994 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 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 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 $1,155 /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 $5,000 /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. (See Appendix A for IRS regulations). Additional life insurance may be purchased by the employee equal to once or twice the employee's base salary, not to exceed $200,000. 5.12 Employee Assistance Program - Management employees shall have the employee assistance program available to them. The premium shall be paid by the Town. 5.13 Vision Care - Reimbursement for vision care shall be available for employees and /or their immediate families (spouse, unmarried children under 19 living MGRO66;MGT94- 95.CMP 7 November 21, 1994 at home, or under 23 and a full -time student) at a rate of $120 annually. Reimbursement will be available for eye exams and the cost of prescription eyeglasses /contact lenses only. employees shall utilize any medical coverage provided by their medical carrier prior to requesting Town reimbursement. 5.14 Cash Allocation Plan - Allocation available to managers are as follows: Group I - $8,092/yr.; Group II - $7,548/yr.; and Group III - $5,712/yr. (see appendix D). 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. The Town will provide a Flexible Spending Account (FSA) Program. This program will be in accordance with Section 125 of the IRS code. Employees may also choose to receive part or all of their cash allocation plan in cash. Any amount received in tax is taxable. Employees choosing to receive taxable cash will receive it twice a year. All benefits selected from the Cash Allocation Plan (see Appendix D) 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. 5.15 Deferred Compensation - The Town will continue to offer a program of deferred compensation to all managers. 5.15.1 Funding for deferred compensation may only be provided after all other benefits selected by the employee are paid for in full from the maximum benefit provided. 6.1 Education /Tuition Reimbursement - Management employees are eligible for $500 education /tuition reimbursement per fiscal year. All requests for education /tuition reimbursement must be approved in advance on a Request for Reimbursement Form. The employee may select to receive reimbursement before or after completion of the course. All expenses must be documented however, with a copy of the course description, flyer, registration packet, etc. Receipts must also be submitted for any books. MGRO66;MGT94- 95.CMP 8 November 21, 1994 Following completion of the course, documentation must be submitted to reflect satisfactory completion, i.e., passing grade, or verification of completion of the course. If reimbursement (or advance) is requested prior to course completion, documentation of satisfactory course completion must be submitted within 3 months of the completion of the course. Documentation within the prescribed time frames is the responsibility of the employee. If documentation is not received, a deduction will occur on the paycheck to cover the expenses advanced. The employee will be notified in advance prior to any deduction from the paycheck. All other finance and paperwork procedures must also be followed. MGRO66;MGT94- 95.CMP 9 November 21, 1994 APPENDIX A do w od IM" wins na hesoraaso Yee taura6► bN Mo Provided! r osaybrooy General% the costof up to $50,000 ofgraup perm life inearanoecovctage is tax exempt. The coat of coverage in excess of $50,000 is talabk to the emphryee. An employee who is working for more than one cm le most combine all group rem Coverage, and is entitled to exclude the coat for no more than $50,000. If the employee contributes toward the cost of the inmmme, all othis contribution (for coverage up to $50.000 and for excess coverage) is alocable to Coveragie in excess Of $50 ,000. In other Words, he may subtract his full cawibuina from the amount which would odwwW be taxable to him. 1RC Sec. 74. Howevar, the employee canna carry over Item ;rear to year any unused portion of his contributions. The cat of coverage in naegrs of S50.000(the amount which is marble to the employee) is to be calculated on a Monthly basis. The steps are as fol- kmvs: (1) find the total amount of gaup perm life inaarame Coverage for die employee in eachealendar month orbit taxable yesr(ifachategeoccum dur- ing arty month. take the average at the beginning and erW of the month); (2) subtaa 550.000 from each month's coverage; (3) to the balance, if any, for each month, apply the appropriate rate Inset the fdlowiag able of monthly 187 I lieu 1 I„4 MGRO66;MGT94- 95.CMP 10 November 21, 1994 OF tieamorot liken into consnsideration. Coverage i on x after lit basis for the coverage fury 1989, is includable in income Thex s o}'u 000 provided before Jan - dadet Table 1. Notice 89 -110, Oou ofsuch coverage is determined insurance was available to employees through advolun genemrol p term life eAciary association (VEBA) and the em P oyees' ben - West "s to provide administrative services as an independent contractor Eke fife insurance coverage was not a fringe benefit subject to uxariun *Oder Regulation §1.6!•21 Or §1.61.2(d)(2xa0ft Thus, no amount was +,cludabk in uscarne to de employees, Let Ruk 91s1033. r 'whiozw Sadrraios a, There are certain exception$ to the $50,00oceiling on tax exempptt Dever- age. The coat of group term life insurance, even for amounts oru &W.000, Yet a tax exempt: . (q to a forneremployee who (a) has terminated his employment with the employer (as an employee) and has betrome permanently disabled; or (b) (ennnated his employment on of belts, anus the plan (ora predecessor plan) whoa he�etired d the pj nd w n ex�f�i an lamary 1, 1981 d tie plan is a comparable successor to such a plan; or (c) who has terminated his employment (as as employee) aka January 1, M4 having attained age o on or before )anuaty 1, 1984 and having been fence on JJannuuar 1 98/ «e of guy time during 1983 if the plan was in cxis• (artless the individual retires The under the pmpa fter I successor to such a pint minatory, after that date not takingroleco 19n�n6it and the Provided is employees retired �ennuy 1, 1987); (2) if a charitable organiza. tion is dca' nowdetuductionbalb raonufthrye( pfowteedsprbbiunochari (abkew�ttrWt beneficiary unit faslick$designation).or(3) if the employer is ats(urrles> the a required m es Secp2 y(4 a ended y ]} IRC Sec. 79(bk N � over A the y RA'86 S §1';-2;TRA g. §1.79.4T A -1. See aboLet, Ru(. 9149010.' Sec. 1827(bHl); Tentp. Reg. Generally, any contribution toward group term life (but not toward permanent bpkf; s) made by the e insurance fixates, dollar st, the m oislea gos income fog c en amount which u otherwise the tax" yea be m alstim. No reduction is permitted, however, fw a prepayment made by de emplin ee forcoverage alter retirement, at for one a{btable to insurance the cost of which is not taxed because of arcotthe foregoingexceptions. Reg. § §1.79- 2(a)(21,1.]t foxed b ablewith� i�ofthecwtofupt o350 ,0)0ofgrouptermlifeisnorastiil. spier to group term insurance purchased under a qualified employees' trust or annuity Plan; the pmvasioaa ofSectim 72(mN3) and hgg paten �72 -16 apply to the mst of such pmrecnon purchased under P! , and no pan of such cost is exclu�bk from the employee'r gross income (see Q 304), IRC Sec 79(b)t3); Reg. §1.79 -2(d). t" Ta a facts 1 1994 APPENDIX B MANAGEMENT POSITIONS & SALARY LEVEL 1994-95 Police Chief $79,714 Planning Director 71,602 Director of PFM 69,720 Assistant Town Manager 68,714 Library Director 67,505 Director of Building and Engineering 67,505 Police Captain 66,800 Community Services Director 62,031 Sr. Planner 59,964 Finance Director 59,964 Parks /Forestry Superintendent 59,964 Maintenance Superintendent 59,964 Sergeant 53,982 PM Supervisor 51,376 PW Supervisor 51,376 Records and Communications Manager 51,376 Sr. Librarian 46,163 Personnel Manager 44,324 Information Systems Manager 44,324 MGRO66;MGT94- 95.CMP 11 November 21, 1994 APPENDIX C Campbell Cupertino Gilroy Los Altos Morgan Hill Saratoga Review to include: - Average of all agencies listed MGRO66;MGT94- 95.CMP 12 November 21, 1994 APPENDIX D MANAGEMENT SUPPLEMENTAL BENEFITS ITEM GROUPI Assistant Town Manager Planning Director Police Chief Director of Parks, Forestry and Maintenance Services Library Director Director of Building and Engineering Services Community Services Director Finance Director Parks /Forestry Supt. Maintenance Supt. Parks Maint. Supr. Public Works Maint. Supr. Police Captain Pol. Records and Communications Mgr. Senior Planner Personnel Manager Senior Librarian Group III Sergeant MGRO66;MG194- 9S.CMP November 21, 1994 FY 1994 -95 Cash Allocation Plan Tuition Reimbursement $8,092 $500 $7,548 $500 $5,712 $500 13 DATE: TO: TOWN OF LOS GATOS February 14, All Sergeants 1990 FROM: Deborah Acosta, Town Manager Larry J. Todd, Chief of Police SUBJECT: Serceant MdnaQP ent Performance and Lt For purposes of definition and future reference, "Economic Provision" include the following areas as specified in the 1989/90 P.O.A. Memorandum of Understanding: 1. PERS Benefits /Town Contribution 2. Educational Incentive Pay 3. Special Pays 4. Educational Reimbursement 5. Insurance Programs and Rate of To C 6. 7. 8. 9. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Disability, Vision, Unemployment) Uniform Allowance Overtime Vacation Schedule Vacation and Overtime Hold .., ontribution (Life, Employee Assistance Program, and Cash -out i ays and Holiday Pay Sick Leave Personal Leave Annual Sick Leave Cash -out Program Military Leave " Bereavement Leave Leave without Pay Maternity Leave Accrual of Benefits Worker's Compensation Jury Duty DEBORAH ACOSTA Town Manager LARRY J. TODD Chief of Police TOWN OF LOS GATOS SERGEANT MANAGEMENT PERFORMANCE AND COMPENSATION PLAN The Town and Police Department administration recognize that the job requirements for the position of Sergeant are uniquely different from those of the rank- and -file employees. The purpose of this plan is to establish a program and guidelines for a Sergeant Management Performance and Compensation Plan pursuant to the following goals and objectives: 1. Establish a salary system which recognizes the need to keep pace with the external market and internal relationship of other employees, and recognizes the distinct character of management. 2. Promote a system which minitni7 es conflict for Sergeants between Town goals and objectives, and loyalty to rank - and -file employees because of meet and confer obligations. 3. Establish a system which promotes better job performance and provides flexibility in salary setting based on individual performance. 4. Promote the further identification with the management group and the understanding of associated roles, loyalties and responsibilities. 5. Provide a system which allows for appropriate award for extra effort which results in the improvement of Town services. Policy All economic provisions of the, P.O.A. Memorandum of Understanding remain in effect except as follows: Salary ranges for Sergeants will be reviewed annually and will be adjusted in accordance with the Management Compensation Plan as specified under "Salary Ranges ". The top of the range is considered the control point. An individual's compensation adjustment will be based on demonstrated performance as documented under the Police Department's "Employee Evaluation Program ". Adjustments shall be applied to the range and employee salaries, provided, however, that for reasons of unsatisfactory performance an employee may be denied the adjustment. Sergeant Management Performance and Compensation Plan 2: Salary progression within the range shall be reviewed annually on the date of promotion to the rank of Sergeant. Upon initial promotion, the employee shall receive a 5% salary increase above their base officer pay, not including any specialty pay. Normally, within -range adjustments will be 5 %. Adjustments below and above this amount are permitted; however, no increase shall exceed 10% and increases less than 2 -1 /2 % are discouraged. Also, while salary adjustments will normally involve increases, reductions may be made in instances of unsatisfactory performance. (Note: All range adjustments are approximate; i.e., 4.98% or 5.02 %.) 3. After an employee reaches the top of his /her salary range, the level of proficiency appropriate to that salary rate must be maintained or the employee's salary may drop below the maximum. This may occur through a direct salary reduction or failure of the employee to receive additional increases which may be possible due to adjustments in the range. 4. Exemplary performance awards are designed to recognize individual sustained superior performance or a significant contribution to the Town service which exceeds expectations or job requirements. These awards are recommended by the Chief of Police and are discretionary on the part of the Town Manager. Awards may be made on either a percentage or flat dollar amount basis each year up to a maximum of S2,000.00 and shall be considered one -time, non - recurring awards. 5. Family Medical Insurance Premiums or a Cafeteria Benefit Program shall be available to each Sergeant as follows: A. Family Medical Insurance Premiums will provide payment of medical insurance premiums equal to the "Least cost" family medical and dental insurance programs offered by the Town. The determination as to whether this benefit is provided must be made on an individual basis between June 1 and June 15 of during Town designated open enrollment periods of each year thereafter. Employees opting for this medical insurance coverage will not participate in the Cafeteria Benefit Program. B. Cafeteria Benefit Program allocations are utilized to "purchase" those items which best suit the employee's personal needs. Benefits available in the cafeteria program include medical insurance, additional life insurance, medical examination, local health club membership, and deferred compensation. The dollar amount allocated to this program is reviewed annually as part of the market survey. PDFMW k \PERSBTR\MGMT.SOT 2