HomeMy WebLinkAboutStaff Report 2506-4841CITY OF PALO ALTO
CITY COUNCIL
Monday, June 16, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
8.Adoption of Memoranda of Agreement with International Association of Fire Fighters (IAFF) Local
1319, Fire Chiefs Association (FCA), and Utilities Managers and Professionals Association of Palo
Alto (UMPAPA) for Terms Ending June 30, 2028, and Adoption of the Updated Management and
Professional Compensation Plan and Corresponding Salary Schedules; CEQA Status – Not a
Project Supplemental Report added
Item No. 8. Page 1 of 1
City Council
Supplemental Report
From: Sandra Blanch, Human Resources Director
Meeting Date: June 16, 2025
Item Number: 8
Report #:2506-4841
TITLE
Adoption of Memoranda of Agreement with International Association of Fire Fighters (IAFF)
Local 1319, Fire Chiefs Association (FCA), and Utilities Managers and Professionals Association
of Palo Alto (UMPAPA) for Terms Ending June 30, 2028, and Adoption of the Updated
Management and Professional Compensation Plan and Corresponding Salary Schedules; CEQA
Status – Not a Project
RECOMMENDATION
This report provides supplemental information regarding a corrected attachment D. No Change
to staff recommendation.
BACKGROUND
Attachment D the revised and updated Management and Professional Employees
compensation plan had track changes errors resulting from a re-organization of the document
to better streamline information. Certain paragraphs appeared as though they were
deleted when they were just moved to more appropriate sections. This updated clean version
of the agreement is the corrected and official version of the Management and Professional
Employees compensation plan for adoption by Council.
This action does not change staff’s recommendation or the overall compensation or economic
impact of adoption of this compensation plan.
ATTACHMENTS
Supplemental Attachment A: Staff Report Attachment D: Revised Management Compensation
Plan 2025 (Clean)
APPROVED BY:
Sandra Blanch, Human Resources Director
COMPENSATION PLAN
FOR
Management and Professional Personnel
And Council Appointees
Effective July 1, 2025, except where
specifically noted.
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SECTION I. COMPENSATION ................................................................................................................ 4
A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY .............................................. 4
B. BASIC PLAN ELEMENTS ............................................................................................................ 4
C. GENERAL SALARY INCREASES .................................................................................................. 5
D. ANNUAL PERFORMANCE REVIEW AND MERIT INCREASES ..................................................... 5
E. CLASSIFICATION COMPENSATION REVIEW ............................................................................. 6
SECTION II. SPECIAL COMPENSATION ............................................................................................. 6
A. OVERTIME ................................................................................................................................ 6
F. WORKING ABOVE CLASSIFICATION PAY .................................................................................. 6
G. STAND-BY PAY ......................................................................................................................... 7
H. CALL OUT PAY .......................................................................................................................... 7
I. NIGHT SHIFT PREMIUM ........................................................................................................... 7
J. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE
PERSONNEL ...................................................................................................................................... 7
K. SAFETY DIFFERENTIALS ............................................................................................................ 8
SECTION III. BENEFIT PROGRAMS ..................................................................................................... 8
A. MEDICAL .................................................................................................................................. 8
B. RETIREE HEALTH PLAN ........................................................................................................... 10
C. DENTAL .................................................................................................................................. 11
D. LIFE INSURANCE ..................................................................................................................... 11
E. DEPENDENT CARE ASSISTANCE PROGRAM (DCAP) AND HEALTHCARE FLEXIBLE SPENDING
ACCOUNT (HCFSA) ......................................................................................................................... 12
F. VISION .................................................................................................................................... 12
G. DEFERRED COMPENSATION .................................................................................................. 13
H. EMPLOYEE ASSISTANCE PROGRAM ....................................................................................... 13
I. COMMUTE INCENTIVES and PARKING ................................................................................... 13
J. LONG TERM DISABILITY INSURANCE ..................................................................................... 14
K. EXCESS BENEFIT ..................................................................................................................... 14
L. PROFESSIONAL DEVELOPMENT ............................................................................................. 15
M. MEAL ALLOWANCE ................................................................................................................ 15
IV. LEAVES .......................................................................................................................................... 16
A. SICK LEAVE ............................................................................................................................. 16
B. HOLIDAY ................................................................................................................................. 16
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C. IN LIEU HOLIDAY PAY ............................................................................................................. 17
D. MANAGEMENT ANNUAL LEAVE ............................................................................................ 17
E. VACATION .............................................................................................................................. 18
F. BEREAVEMENT....................................................................................................................... 19
V. RETIREMENT .................................................................................................................................. 19
A. MISCELLANEOUS PENSION FORMULAS: ................................................................................ 19
B. SAFETY PENSION FORMULAS: ............................................................................................... 20
C. EMPLOYEE PERS SHARE. ........................................................................................................ 20
D. EMPLOYER SHARE .................................................................................................................. 21
E. AT-WILL STATUS .................................................................................................................... 21
F. HIRING PROVISIONS .............................................................................................................. 23
G. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS .................................................. 23
Attachment B .................................................................................................................................................. 24
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COMPENSATION PLAN FOR THE CITY OF PALO ALTO
Management and Professional Personnel
As used in this Plan, the term “Management and Professional” refers to employees within
classifications listed in the Management and Professional Salary Schedule.
SECTION I. COMPENSATION
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 their control.
A. MANAGEMENT AND PROFESSIONAL COMPENSATION POLICY
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 are 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.
B. BASIC PLAN ELEMENTS
1. Structure.
All management and professional classifications are assigned an appropriate pay range based on
salary survey data and internal relationships. Actual salary within the range for individual
employees is determined by experience and performance.
2. Compensation Adjustment Authorization.
Council-appointed officers are authorized to pay salaries in accordance with this plan to non-
Council-appointed management and professional employees within the City Council authorized
salary schedule.
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 salary schedule.
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C. GENERAL SALARY INCREASES
As part of the budget process and subject to Council approval, the City Manager may propose 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 Human
Resources Director.
Effective the first full pay period following July 1, 2025, salary ranges and salaries of all
classifications will be increased by three percent (3.0%).
Effective the first full pay period following July 1, 2026, salary ranges and salaries of all
classifications will be increased by three percent (3.0%).
Effective the first full pay period following July 1, 2027, salary ranges and salaries of all
classifications will be increased by three percent (3.0%).
Effective the first pay period of January 2024, all classifications received two hundred dollars
($200) monthly flexible compensation payment built into base hourly rate of pay.
D. ANNUAL PERFORMANCE REVIEW AND MERIT INCREASES
Individual base salary merit increases are earned and authorized in accordance with
administrative practices based upon growth within the position, performance, and the City’s
financial conditions. Merit pay adjustments are at the discretion of the Council-Appointed
Officers and at amounts set on an annual basis during the fiscal year budget process.
Annually, performance appraisals will be conducted after the conclusion of the fiscal year for all
employees who have been with the City for over one year. Employees in their first year as a
Management and Professional employee with the City will receive their performance appraisal
after 12 months.
These appraisals review performance over the prior fiscal year and provide goals and
expectations for the new fiscal year. Performance plans are jointly prepared by the employee
and supervisor with the concurrence of the department head or Council-appointed officer.
Progress toward meeting objectives shall be monitored periodically.
Management/professional employees who have received an overall rating of “meets
expectations” or above on their annual review and who have not been on a performance
improvement plan during the preceding fiscal year will be eligible for a Merit increase to base
compensation, if applicable for that year. Recommended ratings will be provided to Department
Heads, the Human Resources Department, and the appropriate Council-Appointed Officer for
final review.
Nothing herein shall preclude an employee's manager from recommending a mid-point
adjustment increase to an employee on a performance plan at a later date should employee's
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performance improve.
E. CLASSIFICATION COMPENSATION REVIEW
The City will periodically survey classifications to determine their competitive market placement.
The results of a total compensation study may indicate that a pay range be adjusted, or that no
change takes place. Such adjustments may only affect the salary administration framework. No
individual salaries will be automatically changed because of structural adjustments.
A department director may request that Human Resources reevaluate a classification(s) in their
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 Human Resources director or designee will respond to such requests within their
discretion. Individual employees are not eligible to request a classification compensation review.
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 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.
SECTION II. SPECIAL COMPENSATION
This section applies to all eligible regular management and professional positions including Council-
Appointed Officers as applicable. Eligibility shall be in conformance with the Merit Rules and
Regulations, Personnel Policies and Administrative guidance issued by the City Manager for the
purposes of clarification and interpretation.
A. OVERTIME
Compensation for overtime work shall be in conformance with the Merit Rules and Regulations and
Policies and Procedures.
F. WORKING ABOVE CLASSIFICATION PAY
Where 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. All qualified and interested
employees within a work group should be considered for the working above classification
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opportunity whenever feasible. 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 their 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.
G. STAND-BY PAY
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
H. CALL OUT PAY
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
I. NIGHT SHIFT PREMIUM
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.
J. UNIFORM PURCHASE PLAN - SWORN POLICE, FIRE PERSONNEL, and OPEN SPACE
PERSONNEL
Uniforms, including cleaning, will be provided with replacement provisions on an as-needed basis in
conformance with department policy.
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K. SAFETY DIFFERENTIALS
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 (7.5%) 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
SECTION III. BENEFIT PROGRAMS
This section applies to all eligible regular management and professional positions including Council-
Appointed Officers as applicable and including Council Members for Section III A – I as applicable.
Eligibility shall be in conformance with the Merit Rules and Regulations, Personnel Policies and
Administrative guidance issued by the City Manager for the purposes of clarification and
interpretation.
A. MEDICAL
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.
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.
2. 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
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following for any plan:
Medical Premium Category
(Coverage Level)
Maximum City Contribution Effective
July 1, 2025 Single (EE only) $943
2- Party (EE +1) $1,885
Family (EE + 2 or more) $2,444
Effective January 1, 2027, the City will increase its maximum contribution to medical premiums by the
following percentages:
• Employee only: 2%
• Employee plus one: 3%
• Employee family: 5%
Medical Premium Category Total Maximum City Contribution
(inclusive of PEMHCA contribution*)
effective January 1, 2027
Employee only
Employee plus one
Employee family
$962
$1,942
$2,566
*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 “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
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Partnership, and are registered with the Human Resources Department, will be
eligible for a stipend of up to 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.
c) Alternative Medical Benefit Program
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 their right to the City of Palo Alto’s medical
insurance and receive cash payments in the amount of $284.00. Council Members are not
eligible for the Alternative Medical Benefit Program.
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. Employees are required to annually
submit waiver forms in order to continue to receive these payments. Failure to submit annual
waiver may result in loss of this alternative medical benefit.
B. 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”
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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) Employees Hired after January 1, 2004
For employees hired after January 1, 2004, the PERS 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 employees shall be the minimum contribution set by
PERS under section 22893 based on a weighted average of available health plan
premiums.
c) On July 6, 2016 the City provided active 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.
C. DENTAL
a) The City will maintain the present level of benefits on the City-sponsored dental
program. The City provides a base dental plan for all eligible employees and
dependents. Additionally, eligible employees will have the option to enroll in a dental
“buy-up” plan.
b) The City shall pay all premium payments on behalf of employees and dependents who
are eligible and enrolled for coverage under the base dental plan. Dependents will
include domestic partners. Employees will be responsible for premium payments
required to enroll in the “buy up” dental plan.
D. LIFE INSURANCE
a) 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).
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b) Supplemental Life And AD&D Insurance
An employee may, at their cost, purchase voluntary life insurance and voluntary AD&D
coverage equal to one- or two-times their annual salary. The maximum amount of life
insurance available to the employee is up to $500,000 and the maximum amount of AD&D
coverage available is up to $500,000. Employee may, at their cost, purchase voluntary
spousal and child life insurance.
E. DEPENDENT CARE ASSISTANCE PROGRAM (DCAP) AND HEALTHCARE FLEXIBLE
SPENDING ACCOUNT (HCFSA)
The City shall continue to provide a Dependent Care Assistance Program (DCAP) and
Medical Flexible Spending Accounts (FSA) for employees as permissible under Section
125 of the Internal Revenue Code. Calendar year limits are set by the IRS.
a) DCAP: The City will provide a dependent care assistance program for employees subject
to the provisions of applicable law. Disputes regarding the administration of the plan
shall be subject to the dispute resolution procedure provided by the plan document.
b) HCFSA: The City will provide healthcare flexible spending program for employees subject
to the provision of applicable law. Disputes regarding the administration of the plan shall
be subject to the dispute resolution procedure provided by the plan document.
F. VISION
a) The City provides a base vision plan for all eligible employees and dependents.
Additionally, eligible employees will have the option to enroll in a vision “buy-up”
plan. The City shall pay all premium payments on behalf of employees and
dependents who are eligible and enrolled in coverage under the base vision plan.
Employees will be responsible for premium payments required to enroll in the “buy
up” vision plan. Dependents include domestic partners.
b) Benefits for regular part-time employees will be prorated as follows:
Employees hired after January 1, 2004, who will work less than full time, will receive
prorated premium costs for vision benefits in accordance with their 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 their percentage
of a full- time work schedule.
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G. DEFERRED COMPENSATION
The City will continue to provide a 457 Deferred Compensation Plan for employees to make
pre or post tax contributions.
H. EMPLOYEE ASSISTANCE PROGRAM
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.
I. COMMUTE INCENTIVES and PARKING
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 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, Parking and Vanpool. The City provides tax-free commute incentives
up to the current IRS limit, as may be amended from time to time. Administration of
this benefit shall be subject to the rules and regulations of the third- party
administrator.
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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J. LONG TERM DISABILITY INSURANCE
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.
K. 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. Effective January 1, 2026, every
calendar year, each employee will be provided with $3,000 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, subject to the provision of applicable law.
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 provision of applicable law.
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.
Amounts designated by employees to either the Medical FSA, Dependent Care FSA, Gym or
Health Club Membership 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
calendar 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.
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L. PROFESSIONAL DEVELOPMENT
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 their 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.
d) Professional and trade journal subscriptions not to exceed 12 months.
Approval is at the 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
M. MEAL ALLOWANCE
Management and professional employees assigned to attend night meetings are eligible to
receive reimbursement for up to $38.00 per dinner, or as otherwise defined in Policy 1-66/ASD.
This provision covers only receipted meals actually taken and submitted for reimbursement.
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IV. LEAVES
This section applies to all management and professional employees and does not include Council
Members or Council-appointed officers.
A. 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.
b) Employees may use up to thirty (30) 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 or 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) Sick leave may be used for illness in the immediate family, including a registered
domestic partner or other individuals required by applicable law.
e) 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.
B. HOLIDAY
The following holidays are recognized as municipal holidays for pay purposes, and regular,
employees shall have these days off with pay, except as otherwise provided in these rules:
January 1 Veterans' Day, November 11
Third Monday in January Thanksgiving Day
Third Monday in February Day after Thanksgiving Day
Last Monday in May December 25
July 4th
First Monday in September
Second Monday in October
In the event that any of the aforementioned days fall on a Sunday, the following Monday shall
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be considered a holiday. In the event that any of the aforementioned days falls on a Saturday,
the preceding Friday shall be considered a holiday for pay purposes.
Winter Floater (formerly Either December24, or December 31). Employees shall be excused
with pay for a full work shift on a day mutually agreed to by the employee and their supervisor
during the month of December. If employees are not excused pursuant to this provision, one
shift of vacation credit will be added to their vacation accrual.
Floating Holiday – Days of historical significance. Employees will be provided one floating
holiday each calendar year in acknowledgement of days of historical significance. The
employee with prior approval from their supervisor can use this floating holiday at any time
during the year. This holiday has no cash value and will expire if unused.
C. IN LIEU HOLIDAY PAY
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.
D. MANAGEMENT ANNUAL LEAVE
a) Exempt Employees
Regular management and professional exempt 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.
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.
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E. VACATION
Vacation is accrued when an employee is in pay status and is credited on a bi- weekly basis.
Total vacation accrual 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
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.
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 eighty (80)
hours. An employee may cash out a minimum of eight (8) hours to a maximum of one
hundred twenty (120) hours of accrued vacation provided the employee has taken
eighty (80) vacation hours in the previous twelve (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 one hundred twenty (120) hours. For the
following calendar year, employees will make their election for vacation hours to cash
out during the annual Benefit Open Enrollment period. The election will apply only
to vacation hours 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.
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Employees who do not elect a cash-out amount during the annual Benefit Open
Enrollment period of the prior calendar year waive the right to cash out any leave in
the following 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.
F. BEREAVEMENT
Leave of absence with pay of three (3) days may be granted an employee by the head of
their department in the event of death in the employee’s family, which is 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. Employees may supplement
paid bereavement leave with accrued leave (including vacation or sick leave) or unpaid leave
to reach a total of five (5) workdays of time off per incident of bereavement. Requests for
leave in excess of five (5) days shall be subject to the approval of a Council-Appointed
Officer for employees under their control.
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.
V. RETIREMENT
A. 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
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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.
B. 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 June 8,
2012 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.
C. 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:
a. Employees in Safety Pension Group A shall pay the full nine percent (9%) PERS
employee contribution.
b. Employees in Safety Pension Group B shall pay the full eight percent (9%) PERS
employee contribution.
c. Employees in Safety Pension Group C shall pay the employee contribution
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required by the Public Employees Pension Reform Act, calculated at fifty
percent (50%) of the normal cost.
D. 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:
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.
E. AT-WILL STATUS
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
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time upon written notice to the hiring authority.
a) 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 July 1, 2012, 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 who are terminated or asked to resign shall, upon execution of a release
of all claims against the City, be eligible for a severance payment equivalent to four (4) weeks
of salary and benefits, increasing after completion of the first full year of service by one (1)
week for every completed year of service, up to a maximum of 12 weeks. For example, an
at-will employee who has completed six (6) years of service would be eligible to receive ten
(10) weeks of severance (4 weeks plus 1 week for each year of service). No severance shall
be paid if the employee is terminated for serious misconduct involving abuse of their office
or position, including but not limited to waste, fraud, violation of the law under color of
authority, misappropriation of public resources, violence, harassment or discrimination. If
the employee is later convicted of a crime involving such abuse of their position the
employee shall fully reimburse the City as set forth in Government Code section 53243.3.
b) 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
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.
c) 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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F. HIRING PROVISIONS
a) Reimbursement For Relocation Expense
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 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.
b) Hiring Incentive
Council Appointed Officers may authorize a hiring incentive for critical Management and
Professional personnel vacancies. Hiring incentives must be funded through department salary
savings.
G. GRIEVANCES REGARDING COUNCIL APPOINTED OFFICERS
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 they consider appropriate.
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Attachment B
At-Will Positions Management and Professional Unit
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 - All departments
Administrative Services
Director, Administrative Services/Chief Financial Officer
Director, Office of Management & Budget
Assistant Director, Administrative Services
Division Managers such as:
Budget Manager; Finance Manager; Chief
Procurement Officer; Manager, Real
Property; Treasury Manager; Principal
Analyst; Revenue Collections Manager
City Attorney
Chief Assistant City Attorney
Assistant City Attorney
Deputy City Attorney
Legal Fellow
City Clerk
Assistant City Clerk
Deputy City Clerk
City Manager
Assistant City Manager
Chief Operating Officer
Deputy City Manager
Assistant to the City Manager
Assistant to City Manager
Chief Communications Officer
Communications Manager
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Chief Transportation Official
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 & Development Services
Director, Planning & Development Services
Assistant Director, Planning & Development Services
Planning Manager Division Manager,
Chief Planning Official
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
Chief Operating Officer