HomeMy WebLinkAboutStaff Report 459-10City of Palo Alto
City Manager's Report
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: HUMAN RESOURCES
DATE: DECEMBER 14, 2009 CMR: 459:09
REPORT TYPE: CONSENT
SUBJECT: Adoption of Resolution Amending the FY2007-FY2009 Compensation Plan
for Limited Hourly Personnel Adopted by Resolution No. 8759 to Revise the
Provisions Related to Term of Employment
RECOMMENDATION
Staff recommends that the Council adopt a resolution amending the FY2007-FY2009
Compensation Plan for limited hourly personnel to revise the provisions related to term of
employment allowing for limited hourly personnel to work more than 1,000 hours in a fiscal year
with the approval of the City Manager.
DISCUSSION
As part of ongoing discussions about the City's financial and budget situation, the City Manager
has been meeting with staff from Human Resources and Administrative Services to identify
opportunities to create additional flexibility for meeting organizational staffing needs while
working within a constrained fiscal environment. The City must maintain the ability to provide
services but with a higher degree of flexibility and responsiveness. One of these ways is through
a mechanism that allows the City Manager to make temporary assignments, which allow for the
continuation of services while organizational structure reviews occur, and giving the City time to
determine the most effective ways for providing the services or whether the services are in fact
critical to the community and City operations. Temporarily filling positions on a limited basis
also generates some level of salary and benefit savings as these temporary positions do not
receive the City's full benefit package.
For management level duties, the Limited Hourly Compensation Plan generally provides the
mechanism for making temporary assignments. However, the current provisions in the Plan only
allow employees in such assignments to work less than 1,000 hours in a given fiscal year (about
6 months offull time employment). Given the current economic uncertainties and organizational
restructuring, staff had identified a need to expand this provision of the Limited Hourly
Compensation Plans in such a way that would allow certain management assignments to be filled
temporarily on a full-time basis for longer than the approximate six month period imposed by the
current provisions. Additionally, it sometimes takes longer than 6 months to recruit for
positions. Staff recommends amending the provisions of Sections I and V to allow for the
extension of limited hourly employment terms beyond 1,000 hours. This provision would only
CMR:459:09 Page 1 of 3
allow an extension with the approval of the City Manager. Staff anticipates that extensions
would only be granted on a limited basis, and the new language would require staff to review any
extension every six months.
Typically, the Limited Hourly Compensation Plan would be amended concurrently with the
SEIU hourly contract and brought forward to Council at the conclusion of those negotiations.
However, SEIU hourly negotiations are just beginning and this limited scope amendment to the
Plan is necessary now given current organizational needs. This change is part of an ongoing
process by Human Resources and Administrative Services staff to evaluate opportunities that
will allow for organizational restructuring and flexibility. Staff anticipates returning to Council
in the near future with updated plans, and as necessary with amendments to accommodate City
needs.
RESOURCE IMPACT
As mentioned above, limited hourly employees are not eligible for the City's full benefit
package. They can receive holiday and/or overtime pay depending on hours worked, but they do
not receive paid leave or health or retirement benefits. Limited Hourly personnel also contribute
7.5% of their salary to the alternative PTS retirement plan (instead of contributions toward Social
Security) if they work less than 1,000 hours in a fiscal year.
By allowing limited hourly employees to work in excess of 1,000 hours in a fiscal year, the City
would be required to enroll these limited hourly employees in CalPERS (California Public
Employee Retirement System). This enrollment would create an added cost to the City, where
the City would contribute 18% of salary for each limited hourly employee working over 1,000
hours. The average hourly rate for the Management Specialist classification is $54.87. If this
individual worked 1,500 hours, the City would pay $82,305 in salary costs and $14,815 in PERS
costs. However, if the employee is temporarily filling a permanent position that is vacant, there
will likely be net savings to the City due to the reduced benefit costs. For comparison purposes,
a regular permanent position has a benefit expense of approximately 50 percent of salary.
POLICY IMPLICATIONS
The 1,000 hour limit on hourly employment has been a longstanding proVISIOn in City
compensation plans; however, this change will enhance management's ability to be flexible and
responsive to changing needs as the City works to address and correct its fiscal restraints.
ENVIRONMENTAL REVIEW
This report is not a project requiring review under the California Environmental Quality Act
(CEQA).
CMR:459:09 Page 2 of3
Attachment A: Resolution of the Council of the City of Palo Alto Amending the FY2007-
FY2009 Compensation Plan for Limited Hourly Personnel Adopted by
Resolution No. 8759 to Revise the Provisions Related to Term of
Employment
PREPARED BY: SANDRA T. R. BLANCH
Assistant Human Resources Director
DEPARTMENT APPROVAL:
RUSS CARLSEN
Human Resources Director
CITY MANAGER APPROVAL:
CMR:459:09 Page 3 of3
Attachment A
* * * NOT YET APPROVED * * *
Resolution No.
Resolution of the Council of the City of Palo Alto
Amending the 2007-2009 Compensation Plan for Limited
Hourly Personnel Adopted by' Resolution· No. 8759 to
Revise the Provisions Related to Employment
WHEREAS, on October 1, 2007 the Council Adopted Resolution No. 8759,
approving the 2007~2009 Compensation Plan for Limited Hourly personnel (the "Compensation
Plan"); and
WHEREAS, Sections I and V of the Compensation Plan provide provisions for
terms of limited hourly employment; and
WHEREAS, the Compensation plan currently limits hourly employment to a
maximum of 1000 hours per fiscal year; and
WHEREAS, working within the currently constrained fiscal environment, City staff
has identified a need to give the City additional flexibility in meeting organizational staffmg
needs at the management level while it reviews organizational structures; and
.. ..." ".
WHEREAS, allowing extension of limited hourly employment beyond 1,000 hours
in a fiscal year, on a limited basis and subject to the approval of ·the City Manager, will give the
City the additional flexibility it needs to make permanent staffmg decisions.
NOW, TIIEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows: '.
SECTION 1. Pursuant to the provisions of Section 12 of Article ITI of the
Charter of the City of Palo Alto, the Compensation Plan for Management and Professional
Personnel and Council Appointees adopted by Resolution No. 8759, is hereby amended to revise
Section I as follows (new language shown in underline):
"SECTION 1. DEFINITIONS
At-Will Employment: Employee or Employermay terminate employment at any
time with or without notice or cause.
Limited Hourly Employee: An "At-Will" employee working full time or part time
on a temporary basis (Intermittent), employees who work on an on-call basis or an
employee working hours up to six consecutive months in support of a. specified
seasonal program such as summer camps or Internships (Seasonal). Limited Hourly
Employees work less than 1000 hours per fiscal year, unless otherwise authorized
as provided in Section V of this Plan.
091209 sh 8261214 1
* * * NOT YET APPROVED * * *
PERS-Retiree: An individual that has retired from the Public Service System and
returns to work on an intermittent or seasonal basis in a Limited Hourly
classification notto exceed 960 hours within a calendar year.
Intern: An individual who has earned or completed course work toward an
Associate Bachelor's or Master's Degree and offers his or her services for a limited
and specific period of tim~ in exchange for gaining actual work experience.
Internships may be paid or unpaid depending on the assignment and budget of the
requesting department. Summer internships typically consist of 6-12 week
assignments between.June and September. Assignments for interns working during
the school year may be for the entire duration of a course or semester."
SECTION 2. Pursuant to the provisions of Section 12 of Article III of the
Charter of the City of Palo Alto, the Compensation Plan for Limited Hourly Personnel adopted
by Resolut.ion No. 8759 is hereby amended to revise Section V as follows (new language shown
in underline): .
II
II
II
II
II
"A. Limited Hourly Classifications.
The maximum employment terms for limited hourly employees shall be less than
1000 hours during any fiscal year,. unless otherwise approved as provided in
section V(B). The maximum hours for a retired PERS employee is 960 hours in a
calen.4ar year. Limited hourly employees' are "At-Will" employees and may be
terminated at any time without right of appeal.
Limited Hourly employment will not affect the pr(>bationary period or the service
hire date of regular classified employment.
B. Extension of Limited Hourly Employment.
The City Manager may authorize a Limited Hourly Employee to work more than
1000 hours per fiscal year; subject to all applicable rules and regulations. Such
authorization. along with a statement of the anticipated duration shall be provided
in writing to Human Resources in advance of the extension of limited hourly
employment. The duration of the employment assignment shall be reviewed
every six months to ensure appropriateness of extension and ability to fund the
extension within a department's allocated hourly bUdget.n .
091209 sb 8261214 2
* * * NOT YET APPROVED * * *
SECT10N 3. The Council finds that this is not a project under the California
Environmental Quality Act and, therefore, no environtllental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
'ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Sf. Deputy City Attorney
091209 sh 8261214
December ---' 2009
Mayor
APPROVED:
City Manager
Director of Administrative Services
Director of Human Resources
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