HomeMy WebLinkAboutStaff Report 13808
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City of Palo Alto Page 1
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Staff recommends that Council adopt a Revision to the Management and Professional
Compensation Plan (Management Comp Plan) for employee at the top of their salary range to
be eligible for additional leave hours.
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The Management and Professional Compensation Plan “Management Comp Plan” specifies the
terms and conditions of employment for unrepresented managers on a Citywide basis. The
Management Comp Plan was initially established and adopted under a Council resolution and is
amended from time-to-time by a vote by the Council. The Management Comp Plan is also
incorporated by reference in certain Employment Agreements with individual managers and
referenced in the agreement with represented Utilities Management. It is necessary to amend
the plan at this time to allow additional Management Leave hours for merit, recruitment or
retention purposes.
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The Management Compensation Plan specifies that Managers are to receive performance
evaluations and to be eligible for adjustments to base compensation (often referred to as merit
awards). Here is an excerpt of specific language from the Management Compensation Plan:
“…Management/professional employees who have received an overall
rating of "Meets", “Higher” or "Exceeds" expectations on their annual
review and who have not been on a performance improvement plan
during the preceding fiscal year will be eligible for an adjustment to base
compensation.”
This provision, unfortunately, does not provide a method for managers at the top of their salary
range to receive a merit adjustment. As a result, highly productive and experienced managers
at the top of the range are unable to receive a merit award in the same manner as their peers.
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City of Palo Alto Page 2
To correct this misalignment in the merit adjustment process, it is recommended that the
Management Comp Plan be revised to provide managers at the top of the range who are rated
as meeting meets expectations or higher, to receive the equivalent merit adjustment in the
form of a one-time allocation of additional management leave hours.
This change would allow appointing authorities to recognize productive and experienced
managers at the top of the range with a form of recognition based on performance and support
the City’s recruitment and retention goals.
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Awarding managers at the top of the range with an equivalent amount of leave hours will not
incur an additional cost if the manager is not backfilled when taking the additional leave.
However, in some instances, managers will require a backfill or may alternatively cash out the
leave if they are unable to take the time, such as when staffing does not permit the absence of
the manager.
For the 2021 merit cycle, managers are eligible for a 3% merit award for performance that
meets expectations or higher. Under this 3% scenario, it is anticipated that the general fund
impact will range from $370,000 to $435,000 above the adopted budget for FY 2021, of which
an estimated $50,000 would be related to the adoption of this revision. Staff are working to
absorb these costs within existing funds due to vacancy savings. Currently 23 vacancies in this
employee group exist, and the salary savings may serve as an offset.
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• ƚƚĂĐŚŵĞŶƚϭϰ͘Ă͗Attachment A: Management Comp Plan, Mgnt Annual Leave
Update
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Effective July 1, 2019 through June 30, 2022,
except where specifically noted.
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SECTION I. COMPENSATION ....................................................................................................... 1
A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY ........................................... 1
B. BASIC PLAN ELEMENTS ........................................................................................................ 1
C. MANAGEMENT AND PROFESSIONAL COMPENSATION ADJUSTMENT AUTHORIZATION ... 3
SECTION II. SPECIAL COMPENSATION ...................................................................................... 4
A. OVERTIME ............................................................................................................................ 4
B. IN LIEU HOLIDAY PAY ........................................................................................................... 4
C. WORKING ABOVE CLASSIFICATION PAY .............................................................................. 4
D. STAND-BY PAY .................................................................................................................. 5
E. CALL OUT PAY ...................................................................................................................... 5
F. NIGHT SHIFT PREMIUM ........................................................................................................ 5
G. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE
PERSONNEL ................................................................................................................................. 5
H. GROUP INSURANCE .......................................................................................................... 5
I. EMPLOYEE ASSISTANCE PLAN ............................................................................................ 10
J. SAFETY DIFFERENTIALS ...................................................................................................... 10
K. MANAGEMENT and PROFESSIONAL BENEFIT PROGRAM .................................................. 11
L. LEAVES................................................................................................................................ 13
M. RETIREMENT PENSION ................................................................................................... 17
N. COMMUTE INCENTIVES and PARKING ........................................................................... 19
O. AT-WILL STATUS ............................................................................................................. 20
P. ADDITIONAL COMPENSATION FOR MAYOR AND VICE MAYOR ........................................ 21
Q. REIMBURSEMENT FOR RELOCATION EXPENSE .............................................................. 21
R. MEAL ALLOWANCE ............................................................................................................ 22
S. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS .............................................. 22
T. MERIT RULES ...................................................................................................................... 22
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As used in this Plan, the term “Management and Professional” refers to all employees, including
Confidential employees, previously classified as “Management and Confidential” by the City. This
group will hereafter be identified as “Management and Professional” personnel.
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This section applies to all management and professional employees and does not include Council
Members or Council-appointed officers. Each Council-appointed officer shall be the responsible
decision-maker under this Plan for those employees in departments under his/her control.
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The City's policy for management and professional compensation is to establish and maintain a
general structure based on marketplace norms and internal job alignment with broad
compensation grades and ranges. Structures and ranges will be reviewed and updated as
necessary based on marketplace survey data, internal relationships, and City financial
conditions.
Individual compensation adjustments will be considered by the Council-appointed officer based
on (1) performance factors including achievement of predetermined objectives; (2) pay
structure adjustments; and (3) City financial conditions.
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1. Structure. The compensation plan includes separate multi-grade structures for both
management and professional employees. Each grade will have a salary range with a mid-point
which is 20% above the minimum, and 20% below the maximum of the range. All management
and professional positions will be assigned an appropriate pay grade based on salary survey data
and internal relationships. Actual salary within the range is determined by experience and
performance.
Competitive marketplace studies will be conducted as needed by surveying a maximum of 14
organizations similar to Palo Alto in number of employees, funding mechanisms, population
and services provided. These studies will focus on total compensation for management
positions such as first line supervisors, administrative, confidential, professional and top
management. Periodically, studies will include position-by-position comparisons using market
research and internal equity data. The results of these studies may indicate that the entire pay
grade structure be adjusted, that individual positions be reassigned to different pay grades, or
that no change
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takes place. Such adjustments will only affect the salary administration framework. No
individual salaries will be automatically changed because of structural adjustments.
A department director may request that HR reevaluate a job or jobs in his or her department
based on significant and permanent changes in job content. In doing so the director will supply
needed information and will provide a position description questionnaire as requested. The
Chief People Officer will respond to such requests within his or her discretion.
2. Compensation Adjustment Authorization. The City Manager may propose as part of the
budget process for Council approval of a compensation adjustment based on (1) competitive
market data, (2) changes in internal position relationships, (3) the City's ability to pay, and (4) a
recommendation received from the Chief People Officer. Effective the first pay period following
Council adoption of this plan all classifications will receive a three percent (3%) salary increase.
a)Base Compensation. Compensation for management and professional employees includes
bi-weekly base salary and is paid on a continuing basis. On a fiscal year basis, the bi-weekly
base salary must fall within pay grade limits of no less than 20% below the mid-point and no
more than 20% above the mid-point.
Base salary increases are earned and authorized in accordance with administrative
guidelines based upon growth within the position and performance, which must meet or
exceed position standards defined through the performance planning and appraisal process
described in subsection b below, the salary structure and the City’s ability to pay.
Management/professional employees who have received an overall rating of "Meets", “Higher”
or "Exceeds" expectations on their annual review and who have not been on a performance
improvement plan during the preceding fiscal year will be eligible for an adjustment to base
compensation. Nothing herein shall preclude an employee's manager from awarding a mid-point
adjustment increase to an employee on a performance plan at a later date should employee's
performance improve.
b)Performance Planning and Appraisal. Performance appraisals will be conducted at the end
of each fiscal year during the months of July through September 30 each year prior to
determining individual employee fixed compensation. This process includes both review of
previous performance plan and preparation of the performance plan for the next planning
period (usually the fiscal year). Performance plans are jointly prepared by the employee and
supervisor with the concurrence of the department head or Council-appointed officer. The
performance plans shall contain measurable objectives which place special emphasis on
position description duties or specific assignments. Progress toward meeting objectives
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shall be monitored periodically. The performance appraisals should be implemented in a
manner that will achieve the following objectives:
•Define the employee’s job duties and expected level of performance for the next
review period to ensure that both the employee and supervisor have a clear
understanding of the employee’s role and responsibilities;
•Evaluate and document past performance to serve as a basis for establishing and
obtaining future performance standards/objectives;
•Facilitate two-way communication and understanding between the employee and his
or her supervisor;
•Counsel and encourage employees to work toward a learning development plan and
realize their full potential;
•Establish future work plan objectives.
Work plans should include job related projects or special goals related to regular job duties
when applicable. At the conclusion of the fiscal year (or review period), supervisors shall
make a final determination of the overall performance rating.
Recommendations shall be forwarded to department heads and to the Chief People Officer
or appropriate Council appointed officer who will then determine individual fixed
adjustments according to the provisions of the compensation plan. Each department will
ensure that metrics tie to the performance appraisal. The performance planning and
appraisal process should be completed by September 30.
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1. Council-appointed officers are authorized to pay salaries in accordance with this plan to non-
Council-appointed management and professional employees in an amount not to exceed the
aggregate of approved management and professional positions in the Table of Organization
for the applicable fiscal year.
2. Individual management and professional compensation authorized by a Council-appointed
officer under the Management and Professional Compensation Plan may not be less than
20% below nor more than 20% above the mid-point for the individual position grades
authorized in Salary Schedule attached.
3. The Council-appointed officers are authorized to establish such administrative rules as are
necessary to implement the Management and Professional Salary Plan subject to the
limitations of the approved compensation adjustment authorization and the approved grade
and mid-point structure.
4. Notwithstanding any other provision of this Compensation Plan, in the event a downward
adjustment of a position grade assignment indicates a reduction in the established salary of
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an individual employee, the Council-appointed officer may, if circumstances warrant,
continue the salary for such employee in an amount in excess of the revised grade limit for
a reasonable period of time. Such interim salary rates shall be defined as "Y-rates."
Employees in “Y-rated” positions shall not be eligible for any increase to base salary unless
and until the amount of the “Y-rated” salary is equal to or less than the published pay rates.
Employees assigned to work above class duties shall not be eligible for “Y-rated” pay on
conclusion of a work above class assignment.
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This section applies to all eligible regular management and professional positions including Council
Appointed Officers as applicable and including Council Members where indicated. Eligibility shall be
in conformance with the Merit Rules and Regulations and Administrative Directives issued by the
City Manager for the purposes of clarification and interpretation.
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Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and
Policies and Procedures.
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Employees who work a schedule where a regular day off falls on a holiday will be paid for the hours
they would have normally worked on that day. If the holiday falls on a non-workday for an exempt
employee, the employee may, with supervisory approval, take another day off within the pay period
or the following pay period.
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Where management and professional employees, on a temporary basis, are assigned to perform all
significant duties of a higher classification for a period of one month or more, the City Manager may
authorize payment within the range of the higher classification for the specified time frame. Working
above classification will not exceed six months, unless renewed at the discretion of the City
Manager. On expiration of that timeframe, working above classification pay will cease and the
employee will return to his or her former pay level. Working above classification pay is not to exceed
10% more than the employee’s current salary and shall be documented on a Personnel Action Form,
with a description of the additional duties in the higher classification to be performed and an end
date.
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Employees eligible for overtime may be entitled to stand-by pay, approved by the City Manager on
a case by case basis, in extreme circumstances involving unavailability of non-management staff.
Compensation is as follows:
Monday through Friday $40 per day
Saturday, Sunday, Holidays $58 per day
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Effective pay period beginning February 26, 2011, Exempt management and professional
classifications will be compensated for Call Out as outlined below with Management approval (and
will not be eligible for overtime pay). Call Out applies when: (1) an employee previously left City
premises, (2) is called back to the work location outside of regularly scheduled working hours, and
(3) the Call Back is for an emergency arising out of situations involving real or potential loss of
service, property or personal danger. Employees called back will be expected to respond directly to
the location of the problem.
Compensation is per Call Out as reported on timecard and will be paid as follows:
Monday through Friday: $140 per day
Saturday and Sunday: $200 per day
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Night shift differential shall be paid at the rate of five percent (5%) to regular full-time employees
who are regularly assigned to shift work between 6:00 p.m. and 8:00 a.m., or to employees who are
temporarily assigned to work a full shift between 6:00 p.m. and 8:00 a.m.
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Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in
conformance with department policy.
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1. Effective Date of Coverage for New Employees
For newly-hired regular employees coverage begins on the first day of the month following
date of hire for the health plan, dental plan, vision care plan, long term disability and life
insurance plans if these benefits are elected.
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2. Dual coverage. When a City employee is married to or has a registered domestic partner with
the California Secretary of State with another City employee, each shall be covered only once
(as an individual or as a spouse of the other City employee, but not both) and dependent
children, if any, shall be covered by only one spouse.
3. Active Employee Health Plan
a) During the term of this compensation plan, the maximum City contribution towards medical
premiums for eligible full-time employees per category shall be up to a maximum of the
following for any plan:
Medical Premium Category (Coverage Level) Maximum City Contribution Effective January 1, 2020
Single (EE only) $840
2- Party (EE +1) $1680
Family (EE + 2 or more)
$2180
*The PEMHCA minimum changes per statutory determination. Any increases to the
PEMHCA minimum during the term of this plan will result in a corresponding decrease to
the amount of the additional City contribution, so that the total maximum City
contribution never exceeds the amount listed in the “Total Maximum City Contribution”
columns above.
The City’s total maximum contribution towards medical premiums for eligible part time
employees shall be prorated based on the number of hours per week the part-time employee is
assigned to work.
b) Coverage For Domestic Partners
1) Domestic Partnership Registered with the California Secretary of State: Employees
may add their domestic partner as a dependent to their elected health plan coverage
if the domestic partnership is registered with the Secretary of State and will be
eligible for the Alternative Medical Benefit Program in paragraph 3 below.
2) Domestic Partnership Not Registered with the California Secretary of State: Domestic
partners who meet the requirements of the City of Palo Alto Declaration of Domestic
Partnership, and are registered with the People Strategy and Operations
Department, will be eligible for a stipend of two hundred and eighty four dollars
($284.00) per month toward the cost of an individual health plan. Evidence of
premium payment will be required with request for reimbursement.
4. Alternative Medical Benefit Program
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If a regular employee and/or the employee’s dependent(s) are eligible for and elect to receive
medical insurance through another non-City of Palo Alto employer-sponsored or association
medical plan, the employee may choose to waive his/her right to the City of Palo Alto’s medical
insurance and receive cash payments in the amount of $284.00.
Examples of waivers eligible for this payment are:
• Employee waives all applicable City medical coverage; or
• Employee is eligible to enroll his or her spouse or register his or her domestic partner
with the California Secretary of State and waives medical coverage for the spouse or
domestic partner; or
• Employee has additional eligible dependents and waives family-level medical
coverage.
Participation must result in a health insurance cost savings to the City and payments per
employee shall not exceed a total of two hundred eighty four dollars ($284.00) per month. To
participate in the program the employee and dependents must be eligible for coverage under
PEMHCA medical plans, complete a waiver of medical coverage form, and provide proof of
eligible alternative medical coverage. When a City employee is married to or has a registered
domestic partner with the California Secretary of State with another City employee, each shall
only be eligible once (as an individual or as a spouse of the other City employee, but not both)
and not eligible for a waiver.
Payments will be made in the employee’s paycheck beginning the first month following the
employee’s completion of the waiver form. Payments are subject to state and federal taxes and
are not considered earnings under PERS law. Employees are responsible for notifying the City of
any change in status affecting eligibility for this program (for example, life changes affecting
dependent’s eligibility for medical coverage through the employee) and will be responsible for
repayment of amounts paid by the City contrary to the terms of this program due to the
employee’s failure to notify the City of a change in status.
5. Retiree Health Plan
a) Employees Hired Prior to January 1, 2004
Monthly City-paid premium contributions for a retiree-selected health plan through the
CalPERS Health Benefits Program will be made as provided under the Public Employees”
Medical and Hospital Care Act. The City’s monthly employer contribution for each
employee retiring on or after January 1, 2007 and prior to March 31, 2011 shall be the
amount necessary to pay for the cost of his or her enrollment in a health benefits plan
up to the monthly premium for the second most expensive plan offered to management
and professional personnel during the contract term (among the existing array of plans.)
The City’s contribution for an employee hired before January 1, 2004 who retires on or
after March 30, 2011 shall be the same contribution amount it makes from time to time
for active City employees.
b) Post – 1/1/04 Hires
For those Management and professional employees hired after January 1, 2004, the PERS
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law vesting schedule set forth in Government Code section 22893 will apply. Under that
law, an employee is eligible for 50% of the specified employer health premium
contribution after ten (10) years of service credit, provided at least five (5) of those years
were performed at the City of Palo Alto. After ten (10) years of service credit, each
additional service credit year increases the employer contribution percentage by 5%
until, at 20 years’ service credit, the employee will be eligible upon retirement for 100%
of the specified employer contribution and 90% of their dependent coverage. The City of
Palo Alto’s health premium contribution for eligible post – 1/1/04 hires shall be the
minimum contribution set by PERS under section 22893 based on a weighted average of
available health plan premiums.
c) Effective upon ratification and adoption of this compensation plan, the City shall provide
active Management employees who were hired before January 1, 2004 with a one-time
opportunity to opt-in to retiree health benefits provided under California Government
Code section 22893. Eligible employees who wish to exercise this option shall inform the
Human Resources department of their election in writing no later than 90 days following
the ratification and adoption of this compensation plan.
6. Dental Plan
a) The City shall pay covered plan charges on behalf of all eligible employees and
dependents. (Domestic partners who are either registered with the Secretary of State or
who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership,
and are registered with the Human Resources Department are considered dependents
under the plan.) Benefits for regular part-time employees hired or assigned to a part-
time schedule will be prorated in accordance with his/her percentage of a full- time work
schedule.
b) The City’s Dental Plan provides the following:
• Maximum Benefits per Calendar Year- $2,000 per person
• Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for
orthodontia coverage (not included in annual dental maximum)
• Major Dental Services 50% UCR*
• Orthodontics 50% UCR*
• Basic Benefits (All other covered services)
First Calendar Year of Eligibility 70% UCR*
Subsequent Calendar Years 70%-100%
*Usual, Customary, and Reasonable
• Composite (tooth covered) fillings for posterior teeth
For each dental plan member, the percentage of coverage for basic benefits will begin at
70% for the first calendar year of coverage and increase by 10% (up to a maximum of
100%) effective the first day of the next calendar year as long as the member utilizes the
plan at least once during the current year. Per the Delta Dental contract effective October
1, 2005, if the member does not utilize the plan during the current year, the percentage
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of coverage for the next calendar year shall remain unchanged from the current year.
If a dental plan member ever loses coverage under the plan, the applicable percentage
of coverage for basic benefits provided during any future period of coverage will
commence at 70% as if the dental plan member was a new enrollee. Examples of when
a member might lose coverage under the plan would include:
• Employee goes on an unpaid leave of absence and elects not to pay the required
dental premiums for his/her family’s coverage during the leave.
• Employee elects to drop one or more covered dependents from the plan during
an open enrollment period so that they might be covered on a spouse’s non- City
of Palo Alto dental plan.
7. Basic Life Insurance
The City shall provide a basic group term life insurance with Accidental Death and
Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay
(rounded to the next highest $1,000) at no-cost to the employee. AD&D pays an additional
amount equal to the employee’s annual basic pay (rounded to the next highest $1,000).
8. Supplemental Life And AD&D Insurance
An employee may, at his/her cost, purchase additional life insurance and additional AD&D
coverage equal to one- or two-times his or her annual salary. The maximum amount of life
insurance available to the employee is up to $325,000 and the maximum amount of AD&D
coverage available is up to $325,000.
9. Long Term Disability Insurance
a) The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly
salary, up to a maximum benefit of $10,000 per month. The City shall pay the premium
for the first $6,000 of base monthly salary. For employees whose base monthly salary
exceeds $6,000, the employee shall pay the cost of the required premium based upon
their monthly salary between $6,000 and $15,000.
b) For employees whose base monthly salary exceeds $6,000 and who have no eligible
dependents covered under the City’s medical, dental or vision plans, the City will pay up
to $17.50 per month towards the employee’s cost for LTD coverage.
10. Vision Care
a) The City shall provide vision care coverage for employee and dependents. Coverage is
administered by Vision Service Plan (VSP). The plan provides an exam every 12 months;
lenses every 24 months; frames every 24 months, all subject to a $20 co-payment as
defined in the Vision Services Benefits Plan A schedule. Benefits for regular part-time
employees will be prorated as follows:
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Employees hired after January 1, 2004, who will work less than full time, will receive
prorated premium costs for vision benefits in accordance with his/her percentage of a
full-time work schedule. Vision benefits for regular part-time employees hired or
assigned to a part-time schedule will be prorated in accordance with his/her percentage
of a full- time work schedule.
Effective July 1, 1996, dependents include eligible domestic partners who are either registered with
the Secretary of State.
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The Employee Assistance Plan (EAP) provides employees with confidential personal counseling,
work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide
a valuable tool for supervisors to refer troubled employees to professional outside help. This service
staffed by experienced clinicians is available to employees and their dependents by calling a toll-
free phone line 24 hours a day, seven days a week. Guidance is also available online.
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1. Police Department - Personnel Development Program
Pursuant to administrative rules governing eligibility and qualification, one of the following
differentials, whichever is higher, may be granted to sworn police personnel:
A. P.O.S.T. Intermediate Certificate: five percent (5%) above base salary
B. P.O.S.T. Advanced Certificate: seven and a half (7 ½%) above base salary
2. Fire Department - EMT Differential
Pursuant to administrative rules governing eligibility and qualification, the following
differential may be granted to sworn Fire personnel:
A. EMT Differential: three percent (3%) above base salary
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Management and professional employees are eligible for Sections 1, 2, and 3of the Management
Benefit Program below. City Council Members are not eligible for benefits under Section 1 and
2 below.
1. Professional Development - Reimbursement
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The purpose of this program is to provide employees with resources to improve and
supplement their job and professional skills. Reimbursement for authorized self-
improvement activities may be granted each management and professional employee up to
a maximum of five hundred dollars ($500) per fiscal year. A departmental training fund of
one thousand dollars per employee ($1,000) will be established for subject matter,
leadership or other training that the Department Director identifies as a need for employees
within that Department.
The following items are eligible for reimbursement:
a)Civic and professional association memberships
b)Conference participation and travel expenses, which must occur within the
compensation plan period.
c)Educational programs, books and videos, and tuition reimbursement designed to
maintain or improve the employee's skills in performing his or her job or future job
opportunities, should support the City’s mission or be necessary to meet the
educational requirements for qualification for employment. Permissible educational
expenses are refresher courses, courses dealing with current developments,
academic or vocational courses, as well as the travel expenses associated with the
courses as defined by the City’s travel expense report from the Policy & Procedures
Manual Section 1-02 ASD.
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d)Professional and trade journal subscriptions not to exceed 12 months.
e)Approval will be at discretion of department head and signature is required on
reimbursement form.
Amounts under this professional development program will be pro-rated in the first
year of employment or promotion into a position covered by this Compensation Plan
2. Excess Benefit
This benefit is designed to meet the requirements of Section 125 of the Internal Revenue
Code, with exception of Gym or Health Club Membership. Every calendar year, each
employee will be provided with $2,500 that they can designate among the following options,
subject to caps pursuant to IRS regulations:
a)Medical Flexible Spending Account (Medical FSA). Provides reimbursement for excess
medical/dental/vision, or expenses that are incurred by employees and their
dependents which are not covered or reimbursed by any other source, including
existing City-sponsored plans. This includes prescribed medications and copayments.
However, nonprescription dietary supplements (e.g. vitamins, etc.) toiletries (e.g.
toothpaste), cosmetics (e.g. face cream), and items used for cosmetic purposes (e.g.
Rogaine) are not acceptable.
b)Dependent Care Flexible Spending Account (Dependent Care FSA). Provides
reimbursement for qualified dependent care expenses under the City's Dependent
Care Assistance Program (DCAP), subject to the following limits: Dependent care
expenses will be reimbursed only to the extent that the amount of such expenses
reimbursed under this Management Benefit Program, when added to the amount (if
any) of annual dependent care expenses that the participant has elected under the
City's Flexible Benefits Plan, do not exceed the maximum permitted under the DCAP.
1)The annual amount submitted for reimbursement cannot exceed the income
of the lower-paid spouse.
2)The expenses must be employment-related expenses for the care of one or
more dependents who are under 13 years of age and entitled to a dependent
deduction under Internal Revenue Code section 151(e) or a dependent who
is physically or mentally incapable of caring for himself or herself.
3)The payments cannot be made to a child under 19 years of age or to a person
claimed as a dependent.
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4) If the services are provided by a dependent care center, the center must
comply with all state and local laws and must provide care for more than six
(6) individuals (other than a resident of the facility).
5) Dependent care expenses not submitted under this section are eligible under
the City Dependent Care Assistance Plan (DCAP). However, the maximum
amount reimbursed under DCAP will be reduced by any amount reimbursed
under the Excess Benefit Plan.
c) Non-taxable Professional Development Spending Account. Provides reimbursement
for Non-Taxable professional development expenses (e.g., job-related training and
education, seminars, training manuals, etc.) to the extent they are not paid or
reimbursed under any other plan of the City.
d) Gym or Health Club memberships. Provides reimbursement for annual or monthly
memberships, including personal trainers. Reimbursement of this expense is taxable
to the employee.
e) Deferred Compensation. Provides a one-time contribution to the employee’s City-
sponsored 457 Deferred Compensation plan with either ICMA-RC or Mass Mutual.
Amounts designated by employees to either the Medical FSA, Dependent Care FSA, or
Professional Development options are done so on a “use–it-or-lose-it” basis. This means that
any amounts designated and not used by the end of the calendar year (or end of the
extended grace period for the medical FSA) will be forfeited by the employee and returned
to the plan.
Specified amounts under this benefit will be applied on a pro-rated basis for employees who
are part-time or who are in a management or professional pay status for less than the full
fiscal year. Such benefits will be pro-rated in the first year of employment (based on hire
date) but will not be pro-rated upon separation of employment.
City will explore options including a deferred compensation match up to $4000 through a pre-tax
retirement savings account as a replacement for Professional Development in Section 1 and Excess
Benefit as provided under Section 2.
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1. Sick Leave
a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status
for 50% or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of
3.7 hours per bi-weekly pay period for those employees working a 40-hour duty
schedule. Those assigned work schedules which are greater or lesser than 40 hours
will accrue sick leave at the ratio of their work schedule to 40 hours.
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b)Employees may use up to 20 hours of sick leave per calendar year for personal
business. The scheduling of such leave is subject to the approval of the appropriate
level of Management.
c)Employees leaving the municipal service shall forfeit all accumulated sick leave,
except as otherwise provided by law and by Section 609 of the Merit Rules and
Regulations. In the event that notice of resignation is given, sick leave may be used
only through the day which was designated as the final day of work by such notice.
d)Employees that were hired before December 1, 1983 and who leave the municipal
service in good standing, or who die while employed in good standing by the city, and
who have 15 or more years of continuous service shall receive compensation for
unused sick leave hours in a sum equal to two and one-half percent (2½%) of their
unused sick leave hours multiplied by their years of continuous service and their basic
hourly rate of pay at termination. Full sick leave accrual will be paid in the event of
termination due to disability. See Merit System Rules and Regulations, Chapter 6,
Section 609.
e)Up to nine (9) days of sick leave per calendar year may be used for illness in the
immediate family, including a registered domestic partner.
f)Management and Professional employees eligible, as specified above if hired before
December 1, 1983, to be compensated for sick leave may annually convert sick leave
hours in excess of 600 to cash or deferred compensation, according to the formula
set forth above, up to a maximum of $2,000 per fiscal year.
g)In accordance with the City Merit Rules and Regulations, a new employee may, if
necessary, use up to 48 hours or shift equivalent of sick leave at any time during the
first six (6) months of employment.
2. Management Annual Leave
a)Exempt Employees
Regular management and professional employees will be credited with 80 hours of
annual leave. This leave is granted in recognition of the extra hours Management and
Professional employees work over their regular schedule. This leave may be taken as
paid time off, added to vacation accrual (subject to vacation accrual limitations),
taken as cash or taken as deferred compensation. When time off is taken under this
provision, 10-hour shift workers will receive one shift off for each 8 hours charged;
24-hour shift workers will receive one-half (½) shift off for each 8 hours charged.
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In 2012, the City transitioned this benefit from a fiscal to calendar year basis for
administrative purposes. Beginning in 2013 and each calendar year thereafter,
employees will be credited with 80 hours of management annual leave.
Entitlement under this provision will be reduced on a prorated basis for part-time
status, or according to the number of months in paid status during the year;
employees who have used more than the pro-rated share at the time they leave City
service shall be required to repay the balance or have it deducted from their final
check. Unused balances as of the end of the year will be paid in cash unless a different
option as indicated above is elected by the employee.
Council appointed Officers can, at their discretion, award additional management
annual leave to employees. Award of additional leave is intended to acknowledge
and recognize excellent performance and/or longevity in alignment with the annual
merit cycle.
b)Non-Exempt Employees
Based on an audit recommendation to eliminate payment of overtime as well as
management leave for non-exempt employees in the management group, the City is
transitioning away from providing management leave to non-exempt employees. As
part of the transition, and in order to minimize impacts to current employees, the
City will phase-out elimination of the 80 hours of management leave for all current
non-exempt Management and Professional employees (those eligible to earn
overtime). Beginning on July 1, 2014 all employees in non-exempt positions will
receive overtime pay for hours actually worked, but will no longer receive
management leave.
Employees hired into non-exempt management positions on or after February 26,
2011 will receive overtime only and will not be eligible for management leave.
3. Vacation
Vacation will be accrued when an employee is in pay status and will be credited on a bi-
weekly basis. Total vacation accrual at any one time may not exceed three (3) times the
annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for
continuous service performed in pay status:
a)Less than nine (9) years. For employees completing less than nine (9) years
continuous service: 120 hours vacation leave per year; provided that:
i.The City Manager is authorized to adjust department head annual vacation
accrual to provide for a maximum of 160 hours for those hired between July
1, 1996 and June 30, 2001; and
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ii. The City manager is authorized to adjust the annual vacation accrual of
employees hired on or after July 1, 2001, to provide up to 40 additional hours
(i.e., to a maximum annual accrual of 160 hours) for service with a prior
employer.
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b) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but
not more than fourteen (14) years continuous service; 160 hours vacation per year.
c) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen
(14), but not more than nineteen (19) years continuous service; 180 hours vacation
leave per year.
d) Nineteen (19) or more years. For employees completing nineteen (19) or more years
continuous service; 200 hours vacation leave per year.
e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours.
An employee may cash out a minimum of eight (8) hours to a maximum of 120 hours
of accrued vacation provided the employee has taken 80 vacation hours in the
previous 12 months and has followed the election procedures set forth in this section.
Employees must elect the number of vacation hours they will cash-out during the
next calendar year, up to the maximum of 120 hours. For the 2012 calendar vacation
year, employees will make their election for vacation hours to cash out no later than
November 1, 2012. The election will apply only to vacation hours that are accrued in
the next calendar year and that are eligible for cash-out.
The election to cash-out vacation hours in each designated year will be irrevocable.
This means that employees who elect to cash-out vacation hours must cash-out the
number of accrued hours pre-designates on the election form.
Employees who do not elect a cash-out amount by November 1 of the prior calendar
year will be deemed to have waived the right to cash out any leave in the following
tax year and will not be eligible to cash-out vacation hours in the next tax year
Employees who elect cash-out amounts may request a cash-out at any time in the
designated tax year by submitting a cash-out form to payroll. Payroll will complete
the cash-out upon request, provided the requested cash-out amount has accrued and
is consistent with the amount the employee pre-designated. If the full amount of
hours designated for cash-out is not available at the time of cash-out request, the
maximum available will be paid. For employees who have not requested cash-out of
the elected amount by November 1 of each year, Payroll will automatically cash-out
the elected amount in a paycheck issued on or after the payroll date including
November 1.
4. Bereavement
Leave of absence with pay of three (3) days may be granted an employee by the head of
his/her department in the event of death in the employee’s immediate family, which is
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defined for purposes of this section as wife, husband, son, son-in-law, step-son, daughter,
daughter-in-law, step-daughter, mother, mother-in-law, father, father-in-law, brother,
brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather,
grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or
a close relative residing in the household of employee. Such leave shall be at full pay and
shall not be charged against the employee’s accrued vacation or sick leave. Requests for
leave in excess of three days shall be subject to the approval of a Council-Appointed Officer
for employees under his/her control.
5. Use of accrued leave credits during leaves of absence.
During unpaid leaves of absence for disability or other reasons, the employee may elect
and the City may require the employee to use accrued paid vacation and sick leave in a
manner consistent with state and federal law. Requests for leaves without pay shall not be
unreasonably denied. In order to avoid misunderstandings, all leaves without pay must be
in writing to be effective.
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1. Miscellaneous Pension Formulas:
a. Miscellaneous Pension Group A: 2.7% at 55. The City provides retirement benefits under
the California Public Employees Retirement System at the level of 2.7% at age 55 for
employees hired before July 17, 2010, with a one year final compensation period.
b. Miscellaneous Pension Group B: 2% at 60:For miscellaneous employees hired on or after
July 17, 2010, and before January 1, 2013, and employees hired on or after January 1,
2013 who are not “new members” of CalPERS as defined in the Public Employees’
Pension Reform Act (often referred to as “Classic” CalPERS members)the City offers the
CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60), with a
one (1) year final compensation period.
c. Miscellaneous Pension Group C: 2% at 62. Employees hired on or after January 1, 2013
meeting the definition of “new member” under the Public Employees’ Pension Reform
Act (Gov’t. Code s. 7522 et seq.) shall be subject to all of the provisions of that law,
including but not limited to the two percent at age 62 (2%@62) retirement formula with
a three (3) year final compensation period.
2. Safety Pension Formulas:
a. Safety Pension Group A: 3% at 50. For Safety members, the City currently offers the
CalPERS "3% at 50" full formula (Section 21362.2) benefit, with a one (1) year final
compensation period.
b. Safety Pension Group B: 3% at 55. Local Fire Safety members newly hired after 6/08/12
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will be placed in the 3%@55 formula. As soon as administratively possible, the City
intends to modify the Local Police Safety formula for new hires to 3%@55 formula.
c. Safety Pension Group C: New employees hired on or after January 1, 2013 who are “new
members” as defined by the California Public Employees’ Pension Reform Act (PEPRA),
will be subject to the terms of that statute, with a three (3) year final compensation
period.
3. Employee PERS Share.
a. Miscellaneous Employee Shares:
Employees in Miscellaneous Pension Group A shall pay the full eight percent (8%)
employee contribution.
Employees in Miscellaneous Pension Group B shall pay the full seven percent (7%)
employee contribution.
Employees in Miscellaneous Pension Group C shall pay the employee contribution
required by the Public Employees Pension Reform Act, calculated at fifty percent (50%)
of the normal cost.
b. Safety Employee Shares. Employees in Safety Pension Group A shall pay the full nine
percent (9%) PERS employee contribution. Employees in Safety Pension Group B shall pay
the full eight percent (9%) PERS employee contribution. Employees in Safety Pension
Group C shall pay the employee contribution required by the Public Employees Pension
Reform Act, calculated at fifty percent (50%) of the normal cost.
Employees under the 2%@62 benefit shall pay at least 50 percent of the total normal
cost or the same contribution rate as “similarly situated” employees, whichever is higher.
4. Employer Share
a. Miscellaneous (Non-Safety) Management and Professional:
As soon as administratively possible, but no sooner than pay period including July 1, 2017
each Miscellaneous (non-Safety) Management and Professional employee shall pay one- half
percent (0.5%) of their salary toward the employer cost of retirement in accordance with
Section 20516 of the California Government Code.
Effective the first full pay period including July 1, 2018, each Miscellaneous (non-Safety)
Management and Professional employee shall pay an additional one-half percent (0.5%) of
their salary toward the employer cost of retirement in accordance with Section 20516 of the
California Government Code.
This will result in Miscellaneous (non-Safety) Management and Professional employees
paying a total of one (1) percent of the employer share in addition to their employee
contribution.
b. Safety Management:
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As soon as administratively possible, but no sooner than pay period including July 1, 2017
each Safety Management employee shall pay one and one-half percent (1.5%) of their salary
toward the employer cost of retirement in accordance with Section 20516 of the California
Government Code.
Effective the first full pay period including July 1, 2018, each Safety Management employee
shall pay an additional one and one-half percent (1.5%) of their salary toward the employer
cost of retirement in accordance with Section 20516 of the California Government Code.
This will result in Safety Management employees paying a total of three (3) percent of the
employer share in addition to their employee contribution.
5. Final Compensation.
Final compensation for purposes of retirement shall be as set forth in the City’s contract with
CalPERS, including, when applicable, the Government Code Section 20692: Optional Benefit,
except as may otherwise be required by PEPRA.
6. Employee PERS contributions shall be made on a tax deferred basis, in accordance with
Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject
to and conditioned upon compliance with IRS regulations.
7. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA,
including calculation based on the average of three highest consecutive years and a cap on
pensionable compensation based on IRS limits for employers that do not participate in social
security.
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1. Civic Center Parking. Employees assigned to Civic Center and adjacent work locations. The
City will provide a Civic Center Garage parking permit. Employees hired after June 30, 1994
may initially receive a parking permit for another downtown lot, subject to the availability of
space at the Civic Center Garage.
2. Alternative Commute Incentives: Employees who qualify may voluntarily elect one commute
incentives, including but not limited to the following options, for those using an eligible
commute alternative on 60% or more of their scheduled work days per month:
a) Public Transit and Vanpool. The City provides tax-free commute incentives up to the
current IRS limit, as may be amended from time to time, (currently $125/month) are
available through the Commuter Check Direct (CCD) website for employees using Bay
Area public transportation or riding in a registered vanpool at least 60% of their
scheduled work days. Administration of the Commuter Check benefit shall be subject
to the rules and regulations of the third- party administrator.
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b) Go Pass. The Go Pass program will offer civic center and other downtown-based
employees a Caltrans Go Pass that allows unlimited rides on Caltrain in all zones
seven days per week, to any City of Palo Alto employee.
c) Bicycle. The City will provide employees with a tax-free incentive of $20 per month
to eligible employees who ride a bicycle to work.
d) Carpool. The City will provide with a taxable incentive of $30 per month to each
eligible employee in a carpool with two or more licensed drivers.
e) Walk. The City will provide employees with a taxable incentive of $20 per month to
eligible employees who walk to work.
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Certain Management and Professional Positions are designated as having “at-will” employment
status. Employees hired into “at-will” positions shall have no constitutionally protected property or
other interest in their employment with the City. Notwithstanding any provision in the Merit System
Rules and Regulations or any other City rule, policy or procedure, at-will employees have no right to
continued employment or pre-or post-disciplinary due process and work at the will and pleasure of
the hiring authority (City Council, City Manager or Council-Appointed Officer). Work for an at-will
employee may be eliminated and/or the employee may be terminated, or asked to resign, at any
time, with or without cause, upon notice to that employee, and the employee may resign at any
time upon written notice to the hiring authority.
1. At-will Management & Professional positions.
Department heads hired after July 1, 2004 and prior to the date of adoption of this plan were
hired as at-will employees whose terms of employment are specified by an employment
contract that includes a severance package.
Effective on the date of adoption of this plan, new employees hired or promoted to
department head, assistant department director, and all other positions listed on
Attachment B shall be at-will employees.
At-will employees will be eligible for, and shall receive, all regular benefits (i.e., health
insurance, PERS contribution to the extent paid by City, etc.) and vacation, sick leave, and
management leave as are generally provided to management employees and described in
this compensation plan, as amended from time to time.
2. Provisional employees.
The City has created a program for Provisional employment when funding is available. The
program’s purpose is to create limited duration senior management level work for the City
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Manager’s Office or as designated by the City Manager. A Provisional Employee will be an
“at will” employee whose term of employment shall be no more than two (2) years. A
Provisional Employee shall be exempt and not eligible to earn overtime. A Provisional
Employee will receive limited benefits as specified in an Employment Agreement. Sections I
and II of this Compensation Plan shall not apply to Provisional Employees, except as specified
by the City Manager.
3. Management and Legal Fellows.
The City has created programs for Management Fellows and Legal Fellows when funding is
available. The programs’ purpose is to create limited duration entry level positions for
management graduates and lawyers. Fellows will be “at will” employees whose term of
employment shall be no more than two (2) years. Fellows shall be PERS exempt to the extent
allowed by law, but may receive vacation, sick leave, health care benefits and other limited
benefits, as determined by the City Manager or City Attorney. Sections I and II of this Plan
shall not apply to Management and Legal Fellows, except as specified by the City Manager
or City Attorney.
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The Mayor shall receive $150 monthly, and the Vice Mayor $100 monthly to defray additional
expenses of these offices.
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Policy Statement
The City of Palo Alto, in rare instances, may provide a Basic Relocation Benefits Package for new
management and professional employees, upon the approval of the City Manager or designated
subordinate. In addition, the provision of “Optional Benefits” or portions thereof, may be
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extended for exceptional circumstances and only the approval of the City Manager or designee, or
for Council-appointed officers, the City Council.
The details of the Relocation Expense program are specified in the City’s Relocation Expense policy
and all relocation reimbursements shall be subject to the provisions of that policy.
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Management and professional employees assigned to attend night meetings are eligible to receive
reimbursement for up to $20.00 per dinner. This provision covers only receipted meals actually
taken and submitted for reimbursement.
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Notwithstanding the grievance procedures provided in Chapter 11 of the City of Palo Alto’s Merit
System Rules and Regulations, any Management and Professional employee who is supervised by a
Council Appointed Officer and has a grievance against that Council Appointed Officer or regarding
the conduct of that Council Appointed Officer shall, following an attempt to resolve the grievance
pursuant to Step One (informal discussion), summarize the grievance regarding the Council
Appointed Officer in writing and submit it to the Director of Human Resources for review and
resolution using the methods he/she considers appropriate.
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The City will include members of the Management/Professional Compensation Committee in
discussions regarding revision of the Merit Rules and Regulations.
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The intent of this provision under the Management/Professional Compensation Plan is to
designate classifications at the department head, assistant director, deputy director, division
manager and senior professional levels as at-will. The applicable Council Appointed Officer may
designate newly created positions at those levels not included on this list as at-will. Existing
classifications that shall be at-will include but are not limited to:
Department Heads- All departments
Assistant Directors- All departments
Deputy Directors- All departments
Division Managers
Administrative Services
Director, Administrative Services/Chief Financial Officer
Director, Office of Management & Budget
Assistant Director, Administrative Services
Chief Budget Officer
Manager, Accounting
Chief Procurement Officer
Manager, Real Property
City Attorney
Senior Assistant City Attorney
Assistant City Attorney
Sr. Deputy City Attorney
Deputy City Attorney
Legal Fellow
City Auditor
Deputy City Auditor
Sr. Performance Auditor
City Clerk
Assistant City Clerk
Deputy City Clerk
City Manager
Assistant City Manager/Chief Operating Officer
Assistant to City Manager
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Chief Communications Officer
Chief Sustainability Officer
Communications Manager
Manager Economic Development
Management Fellow
Community Services
Director, Community Services
Assistant Director, Community Services
Manager, Community Services
Manager, Community Services Program Senior
Human Resources Director of Human Resources/Chief People Officer
Assistant Director, Human Resources
Human Resources Manager
Senior Administrator Human Resources
IT
Director, IT/Chief Information Officer
Manager, Information Technology
Library
Director, Libraries
Assistant Director, Library Services
Division Head, Collection & Technical Services
Manager, Library Services
Planning & Community Environment
Director, Planning & Community Environment
Assistant Director, Planning & Community Environment
Planning Manager Division Manager, Chief Planning Official
Division Manager, Chief Transportation Official
Development Services Department
Development Services Director
Chief Building Official
Assistant Building Official
Planning Manager
Public Safety
Chief of Police/Director of Public Safety
Fire Chief /Assistant Public Safety Director
Assistant Police Chief
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Emergency Services Director
Deputy Director – Technical Services Division (police department)
Deputy Fire Chief
Public Works
Director, Public Works/City Engineer
Assistant Director, Public Works – Environmental Services
Assistant Director, Public Works – Public Services
Assistant Director, Public Works – Engineering
Manager, Airport
Manager, Fleet
Water Quality Control Plant Manager
Utilities
Director, Utilities
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