HomeMy WebLinkAbout0536.0911
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November 28, 1991
lHE HONORABLE CITY COUNCIL
Palo Alto, California
Attention: Policy and Services Com.rni nee
RevisiQru~.fu'y Re~ardine Rel~ment for Relocation Expen .. es
Members of the Council:
Report in Brief
In response to a Counell assignment, this report proposes a re .. ised rclo...."ation poli.:y and
benefits for new management employees as contained in Section L of the Compensation
Plan for Management and Confidential Employees and Council-Appofnted Officers. The
reJX.lrt also proposes a new section providing relocation assistance mortgage 103115-and
other assistance for new Council-appointed officers and newly appointed department
heads or Assistant City },1anager. Finany, this report provides additional information on
a pilot housing assistance program targeting employees subject to emergency call back.
In February 1990. Coundl directed' staff to research the issue of housing assistance
progra;ns for City empto;rees and ieport back v.ith suggestions for augmenting or
modifying curTent City polide"". In Novem;'er, 1990, staff prepared a report v.ith
recomme!ldations (C!\.fR:564:0) wbich was re'~iev.,"ed by Policy and Services Committee
and then referred to full C-OuncO. In April 1991, Councii referred the matter back to the
Policy and Sern.ccs Committee pending completion of additional staff assignments.
Those asc;,ignments were as follows:
1. The Optional Relocation Benefits padage for new management employees
was to be updated and revised as appropriate. This policy has been En
effect since 1983. The Disposal and Purchase CostS, Bridge Loan, and
Mortgage Interest Differential benefits were to be re .. iewed and updated to
ref1e:ct current practices and conditions; and
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2, A policy regarding relo<ation ac;.s!sran-:e mortgage loans was 10 be
established covering Council-appointed ofncers and possi~!y Assis!.ant City
Manager/department heads, such loans to /:'Ie in the form of shared
appreda!ion mortgages and gi,,1:ng ccn.c;.iderat[on to t.he foUowing is.sues:
Source of funding, (!'Vatcation of ftsk. return on Clt)"S investment,. minimum
dolND. payment,. term of loan and locatio.G of property; and
3. Direct staff to work with the Palo Alto Housing Corporation to establi5h a
pilot program to provide for City employee preference in specified
affordable rental hOLls,ing units, with such a program being targeted at
employees subject to emergency call back,
This repon outlines staffs response to these three assignmen"-S.
Relocation fknefits Package Rc\isions
Attachment 1 indicates by shading and strikeout the proposed re\oisions to the
Reimburremcnt for Relocation Expen5e Poii.:y. FtJllowing are explanations of L:'e
5ubstanti\'e changes:
QuaHfications, Section 2. The length of time for relocation or contrar.s de~igned
to e5tablish a fIxed domicile has been extended to one year. Experience has shown
that, in some cases.. more than six months has been required to negotiate the
detalls of an assistance program, ThlS is due in part to the length or time it takes
the new employee to sell the fenner residence.
Qualifications., Seclion 5. The length of employment clause has been extended
from one year to a rrtinimum of rNO years for Optional Benefits and five years for
Additional Reloeation Benefits for CAOs and Assistaot City
Manager/Department Heads. This extension Lc; intendec to have a favorable
impact on retention. If the new employee chooses not to remain for t.lJ.e
minimum term. this extension Voill als.:> allow the City to recoup wme of the~
expe~es.
Basic Packa~, ~tion 1. Reimbursement for cost..s relating to employment
interview trips has been deleted from the policy. These are legitimate busines.s
expenses fOf the City and are pro\~ded for in appropriate operating budget
accounts.
Optional Benefits, Section 1. AJl of the changes under this section are minor
modifications in language and further clarifka~ion of existing policy (Optional
Benefits, section 1,a, ·cosu; to break an existing 1ea5.e" was moved. 10 ~ction 5.)
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Option.al Benefits, Section 2, Bridge loans have been ehmini.ued. Tbis option has
been Qf'ly rarely requ.ested, The5e loans are \'..::ry cLlmber50om~ to administer and
represel1t a substantial risk to the City, especialiy in a declining real estate
market.
OplioDal Benefits, Seclion 3. Mor1go.ge lntere'lt Differentia! Payments have been
eliminated from the Optional Benefits 5et'tion, and a .... ariation of the same
concept is included in the new policy reg~rding Council-appointe,j officers and
Ass.ista~t City ManagerjJep:utment head~ (see Short Term lnlerest Buy-Do~''I).
This option was utllized very few times ar!J is beneficial onJy during periods of
very high mortgage rates.
Orlional Be!lents, Dew S«tiOD 2. Reimbursement for Mlsc~llaneous Expenses
bas been increased from $1,000 10 $2,000 to reflect changes in the cost of HYing
since tbe policy was originally implemented.
Optional Benefits, Section 5. A new section for renters has been added. This
section includes the existing clause regarding costs aswciated vvith breaking a
lease, and a Dew prm'islon for flr~t and la!it month's rent to a maximum of S3,..'XXl.
Additional assistance for renters is an element that has been lacking in the
existing policy and would anow staff the fleXJoility to meet the needs of new
employees tlIat choose to reN rather than purchase housing.
Re~tiQn Assistance Mortgage LQans for Ne~' Coy_ncil·A~90inted Qrns;ers and New
Msisrant City Mangger/Department Heads
Staff proposes a new section, "Additional Relocation Benefit5~, to prov1::Jc specific
benefits including mortgage loans for new Council-appointed officers and new Assistant
City Manager or department bends. This section is intended to give the appointing
authority--the City Council for CoL!ndl-appointed officers and the City Manager for
Assistant City Manager or depru-tment beads-a compreh(;nsive offering of benefits from
which to choose when structuring a housing assi:;tance program for newly appointed
officials. Nc-w Assis!ant City Manager aild departmeN beads are included because it is
difficult to recruit for these positions &! it is for a Counci!-apyoin!ed officer. Unless
internal promotions are made, it is frequently nece~ary to conduct a state-or naticn",,-'!de
searcb for qualified candidates. Since the cost of real estate in the Palo AllO area \s
among the highest in the nation. it f'JUoWS that many candidates from Je\o..s expe.nsive
areas 'oloitl require :ome substantive relocation assistance,
This new section begins on page 4 of Attachment 1. Prior to an offer of employment.
the Otj may send the candidate to an agency dt:signated by the City for a pre-Hi.~
Analysis. The purpose of this analysis is to as~ess the value of the residence in the
former location and make an objective estimate of the proceeds that the new City official
will reallze from the sale of the former res.idence. The anaI~ .. !)ts also extends. to the
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conditions governing a new home purc-ha~, th~ loan and J..S~i~tJr.ce options and their
costs to the City. \Vithin the contc;(t of the specific rf'com.nendorions. from the pre-hire
analysis and with consideration for the indi .. ridual's needs .. nd avaik.b!e Ciry finar.:cc5,. the
City Council for CADs, and the City Manager for A<;..,>bt:.lnt City .\lanJ:&er 0; departmenr
beads., 'aA.111 structure a relocation a:ssl~lance pllckage. "I1lis. package rna: consist of any
combination of elements contained in the Basic Package, t~e Optir:na! &ncf:ts and the
Additional Relocation Benefit'l. for Council-Appointed Office~ .A_,,-s.i:;.tant City Manager
and Department Head,.
The Market;ni' Marm~ement Pr~gram places emphasis on the sJ.le of the former
residence so the new employee can focus on the new nome purc-has.e. Tni~ program
encourages realistic pridrlg or the former residence ("o,I,1thin 5 perCe:11 to 10 percent of
appraised \lalue), 2.lld aggres...<;ive marketing of the property with the illterll to sell \Ii.'ilhin a
90 to 120 day period. The program is administtred by trle City's reloc:Jtion cOn5llh:lnl
Of the two Direct City ~~ ollttined in this new policy the fint. the Adiu"lah!e Rate
MQopge, is the most straightforv.:ard. This type of l\)2.n is similar to those already in
existence or currently being offered 10 Council-appointed officers. The loan can take the
form of a first or seron.j mortgage, depending on tile indi,,'idua['s clrcum.~t.1nces a.nd the
commercial loan market condit~ID. Currently, conforming first mortgages (le~ than
$191,250) are available in the range of 8 to 9 percent That is 2. vel) cO£TIpetitive ra{e
and would influence the decision whether to extend a first or s.ecund mong.age to ill new
employee. With low rates such as those a\'aLlable now, it would likel.)" be: rC1:ommended
that the employee acquire a commercial loar! and allow the City to take advantage or the
lending institution's 1,jnderwTiting capabilities. The City may, in this Cd.."i-e, extend a
second mOTi:gage for the remainder of the amount needed to complete the purchase.
Conversety~ if interest rates on first mortgages rise, the City may extend a first mortgage
to the new CAO. In either case, the mortgage interest rale. would he es'dblished \0
e!lSure a return on investment that would be 1/4 percent above the earning rate on the
City'S investment p<Jrtfolio. The te.rm of the lean is set by the Cit)' Council for a period
not to exceed 1; years and subject to becoming due .and payable within sL"t months of
termination of employment for whatever reason. The loan may be fully amonized or
payment!; may be for interes.t only.
The setond Direct City Loa!] option f.s a Sh~AwreciatiQn [flan. Under this option
the City would offer a low interest loan in exchange for a propurtional share of future
appreciation. The proposed rate is 5 percenl This joan can take the form of a first or
"-et:"ond mortgage. In addition to the regular loan payments the newly appointed official
is required to pay dderred interest equal to a portion of the future appreci;;;.tion. That
portion is determined by the proportion of the original City loan to the original hou')e
prite. For example, if the City pro ... ided a loao a!11ountirlg to 40 percent of the sales
price of the :home purchased, the employee would be required 10 pay 40 percent of net
appreciation. if any, a~ deferred interest on the loan. (~et appreciation meall .. "i
a.pprecia.tion after selling C05ts are deducted from the saies price.) A ioan of this type is.
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der-;igned to otfer the employee a greater degree of afiordability by extending a 10 .....
interest rate in exchange for a &!'lare or the appreciation. If the inlerl.!st rate is. close to
the market I&te, there is no incentive for the employee to forego a porticm of future
appreciation. The City can offset the loss of current revenue \I,.'ith the gain realized later
when the property is sold. This loan can be fully amortiz.ed. or payments can be for
interest only. The term of the loan is. set by the City Council for a pE.:!riod not to exceed
15 years and will be due and payable within six months of termination of employment for
whstever reason.
The lli'Ation of Pr~rb:' must be y,ilhia a twenly~mik !<ldius of the Civlc Center. This
requirement will provide a rea'Sonable area from 'o\'hich to find housing while maintaining
a manageable commute. The Loan Limil~ give consfderation to the cmt of real es!ate in
Palo Alto and the employee's Individual qualifying factors.
The Short Teon Jnttrrest Bu~ option is similar to the mortg3ge interest differential
paymenLS. ex.<:ept ir! this case the City wouid pay a portion of future inlerest directly to
the lending institution. lne City could buy down 2 percent of the interest rate the first
year, 1 percellt in the second YC:<l.r and 1/2 percent in the third year until year four when
the employee is paying the full rate. The amount of buy dc .... 'U and the term of the
benefit eouid be increased aT decreased with Council approval. Tnis option would allow
the new official to qualify for a larger loan initially ....nth the expe-::tation !h[lt fL..lture
salary increas.es would offset the in~er.est rate increas.cs.
The Additional Purchase C~ option allows for the inclusion into t.he benefit package
of "points" on the purchase of the new home. This expense is not allowed under the
Optional Benefits program, but would afford the Appointing Authority a greater degree
of fleXlbility in structuring an assistance package.
Rental Subsidies may be provided for the new Council-appointed ufficer!'./ Assistant City
Manager or department heads who choose to rent. In addition to the enhanced benefits
for renters recommended in the Optional Benefits se.;:tic-n, rental 5ub~idies of up to a
maximum of $500 per month fer 36 months rna] be available. Ag~in, tills option
provides the appointlng &ut"hority with the flexibility to meet toe needs of newly
appointed officials-who are renters faced with the high co~t of hOlJsing in this area.
All ]oan'i and some as.sistance programs described above, may be administered by a third
party housing relocallon consulting. firm and be subject to associated adminlstratrve costs.
Funding Sources
Council directed s.taff to investigate potentia! funding suurceS for L~,e proposed loan
program. The Fi.lance Department has identified three funding wurces: Ta'(able bonds,
City reser .... es, or tax exempt bonds. Fo!1owing is a summary of each source.
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Taxable Bonds· fnterest rates o;"} ta"(able bends have been only 5.1ightly lower
than mortgage-rates over th! P3S! SL,( year'>. There is not enough interest rate
differential to make this an a:tractive alternative.
City Resenres (Capital Project ConringenC)' and General fund Conttngrnc}') • If
City resenres are to be !!~d as a source of funding employee loans, prudent
limitations must be placed on the total amount of reserves to be committed.
Tax Exemp! Bonds -This alternative would not ~e pl3ctical under the
circui!lStan~.'i. Tbe-re are strict income limttat[or.s which would di5.qlJalify the
employees being considered in this report. Additionally, the City's oUL'ioide legal
counsel advised that the only practical way to operate a program with tax exempt
bonds would be for the City to own the property. This would create an
administrative prob!em and may nct be act:eptable to the new CAOjDcpartment
Head.
WbLle City resenres is the onIy viable potential source of funds for direct housing
assistan~ loans, current fiilancial conditions sr:verely limit the use of reser.re5 for this
purpose. A separate m.erno addresses this issue.
PRot Program wilh Palo AUo Housing CorporatioD
St2ff was directed to work with the Palo Alto Housing Corporation to develop a pilot
program to provide for City employee preference in specified affordable rentai housing
units. '"~th such a program being targeted at employees subject to emergency call back.
The Oak Manor Apartment Complex was identified as the potential site for the pilot
prograr.1. Located at 630 Los Robles Avenue, it comists of 33 two and three bedroom
apartments of townhouse. design. Tbe Palo AJto Housing Corporation recently
completed the purchase of Oak Manor and plans to gradual1y convert it to below-market
housing within approximately ten years. Many of tjle 1enan!s are .. islting st'Jdents and
professors from Stanford University who stay in the area for only one to tv,.·o years. This
higb turnover c:eates !he opportunity for the eitablishment of a pilot program there.
As illustrated in the previous report on this matter (CMR;564:G), a larger numbe~ of
emergency ser .... ice employees (Target Group B) i.ive greater distances from the City than
any other category of employee. These empruyee) would be called upon to respond
during the first few hours following a di~aster. The intent of this pilot program is to
provide rental preference to a small group of employees from the Public \Vorks,
Utilities, Fire and Police Departments who wuuld serve as a first responder group. This
group may be cross-trained In a variety of skf!ls and may be called ba;:;k following a
disaster to assist on-duty personnel with the most critical emergencies until additional
help COuld arrive. It must be as5umed that in t!le event of 2'_ major earthquake, many of
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these employees, some of whom ... "'1.Jfren!ly re~ide more thaI"' an hour from Palo Alto, may
be prevented from respondi~g to work by dVI'.T:ed bridges and dosed freeways,
The current rents. a1 Oak Manm are consistent with 'narket rates in the area. FoilDwlng
are the rents for the two options in the complex:
2 Bedrooms, 1/2 Bath,. 1170 square feet -5975 (18 units)
3 Bedrooms, 2 Baths. 1350 square fee: . $1200 (15 units)
A survey was conducted to ascertain empioyee in!erest III this type of pwgram. Given
the above description of t.~e property and outline of the program, 5 empioyee; out of the
50 that responded to the survey i.'1dkated they \I."QuId give consideration 10 participation
[n the program. Unless directt!d othelVlise, staff \l,"ill purs.ue this maHer funher by
establishing program guideHnes and participation criteria.
Housing Sunes or EmploYffl
As stated above, a survey was cunducted to determine emplo}ees~ needs and interest5
relative to housing. Of the approximately 930 surveys sent to an employees, 140 were
returned. Ninety-three indicated they would be interested in owning closer to Palo Alto,
and 28 indicated they would be interested in renting cl'Jscr to Paro Allo. Seventy-six of
the;; respondents cUirently own., while 60 are rer!ters. Thirty·eight of the employees stated
that the} would be willing to "trade-doovn" in order to live closer to Palo AllO, while 44
stated they would not be ..... illing to live in a S:TI3I1er dwellir,g: in order to live closer to
Palo Alto.
While reviewing a sampling of the surveys with Sylvia Seman, Executive Dfrector of t.lte
Palo Alto Housing Corpcration, it was noted that some of the employees qualify for
below-market programs. Qualifying employees who expressed an interest in living closer
to Palo Alto win be put in contact v.ith the PAHC.
R~_9mmend;ation
Staff recommends changes to the E~imh.!JL~_emcni for Rel()<.~~tiojl EXiJ~n~~ as
indicated in Attachment L Staff also recommends Additional Relocation Benefits for
Councl1·Appointed Officers. As~i~ta!1t.c.L1Y Mana~er and Department Heads as indicated
in Attachment 1. These changes will update and improve the relocation assistance policy
fo~ new ma.nagement employees and provide a flexible policy frame'ol.'ork for structllring
relocation assistan(e benefits for new relocating Council-appointed officers and
department heads.
Vlith regard to the survey, staff will continue to pursue estahlishmenl of the Oak !\.fanor
pilot program and refer quz.lifying emplo)'ee~ identified in 1he survey to existing Housing
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Corporati(\n programs. Given currem funding limilations. staff cannOl re('ommend
pursuit of addiTional emplr'/ee~as$isted housing programs at tllis time.
Respectfully subrnitte~,
JAY C. ROUNDS
Director of Human Resources
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Attachmo'nts
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ATI"CH:'IElSIJ
L Reimbursement for Relocation Ex~~
POliCY Statement
The City of Palo AJt.o v.ill provide a Ba,>ic Relocation Benefits Package for all
new management employees. In addition, upon the approval of the City Manager
or designated subordinate, Relocation Benefits will be availabJe to nOfl
management pc~ition.l;,. Provision5 of "Option.al Benefits." or portions th-ereof. are
intende,d only for rare instances and require the approval of the City Mar::ager Or
~gD/'~, or, for Cl1u~,.,:J-appoinled officers, the City Council.
Procedure
Ou alificatiui1S
In order to qualify for relocation benefits. the following conditior..s must be met;
1. The employee must qU2.lify for-Moving Expense Dedu<:tiom. as contained in
the Federal Tax Regula!ions for "the year in which the move occurred.
2. Actual relocation, or contracts designed to. establish a fLxed domil~ile. shall
occur 'Within ~-moet:Jts. one'year of the initiai date of employment
3. Existing employees promoted to a covered position are not eligible.
4. Re<:ord keeping requirements v.l11 parallel those required for expense
!'eimcr:,.!rsement for travel, conferences and meetings.
5. Provision of Option?! Beneflts b cDntinger:t upon completion of a
minjrnumof 6fte two ;ears' City employmcm ,oitil tl=le Cit) uflJess a longer
ter:m' is .Specified. Provision {If Additional RelQC~1iQD Benefits for Couocil:
I'!,llwiqted Otii<i<:Ili Assislant City Man'Eo;]: and D~parlID.nI Heads is
<;<m1ingent npo,t:',<ompletion of a minimum of five years' City employmen~
FaIlure to complete the minimum !tilt aBe )ear term y,;ll require
repayment of these benefits. on a pro·rate ba\ls computed on the actual
time of City service. Acceptance of relocation benefits by an employee:
does: Dot constitute a commitrneot by the City 10 ap.y minimum term of
...-mployment.
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+.-Effi~le)fI"!eRt Trip Aettlel BRe fea~ nAaeJe E)(1~55--'Wit!---~~
f'eimi'H:l:fSea '13, tl=!e Cit) fur tfl:t. el-ees5;---fflettty'6P.4---loo!:iflg fSf eaneiclates
Cltl:t sf the laeal areB. THe 18eal-itfeii-~ eeHRes fi!> 'iH eitie5: af ts''0''F.6
Ieeatee ",itAifl a 100 miJe--:ftt<J.i.u..s--ef--tftE Cit) ef Fale Alta. Tra ei etJ5i'j
retml:H:l:fSeffieRt is r-est:rk-tf:4-te---t-he Jesser sf eeFftR1(lR Ea"-fief Fates~
~heel Cit) rate fer--ftt!"t6mobi!e tLe. CS.it.; f6. meals are Fe" trieted--te
,he e5\8fA~5fleel Cil)' pel diem iB~
1. Professioqal RelogHipn Coqnselljng -An agency designated by the City
will provide relocation information and counselling 10 the employee.
Information to be provided tncludes items such as a personalized Cost-o!~
I~vlng analysis, home and rental locations, tran.c;;portation. weather patterns,
schools, recreation, etc.
2. En Route Expenses -Direct common carrier transportation will be
pro\dded in fun for all family members. Automobile expenses are limited
to two vehicles at the established City rate v,:ith a minjnt~m of J50 miles
per day to be traveled. Per diem is allmved ~t established City rates for
employee and spouse/mate and at 50 percent of the employee rate for
dependents. Travel day:, allowed are limited to the actual mileage divided
by 350 mlles per day. l.odging is reim~ursed in full on an actual and
reasonable basts for aU family members.
3. Household Goods ShipJJI...mI -Full costs will be paid for the shipment of all
personal items normally considered "Houseb.old Goods." Items excluded
include re.creational vehides.. firew()()d, building materials, sand, boats.,
airplanes, and perishable items such as food or plants, Shipment of up to
two automobiles is permitted. Storage of household goods "111111 be provided
for 30 days.
Qp_tional Benefits
1. Sale Di~5&~ and BlJ:~.b.i!_~_~....Qli1.s -The City will reimburse eeYef costs that
ariSe in the sale, aispesal and/or purchase of residences including:
a. Cests t8 brea}( Sf! enisting leas-e-wH-l-nbe ee', ereEl lip te B tetal
pa,'ffteflt sf three times Hle-etHreflt m6Rtfl'b refllal fEtte.
a. Real es.tate commissions on the 5ale of the former residence up to 6
percent of the sale) price.
b. The employee's portion of non-recurring closing costs on both ~a!e
and purchase of residences limited to the following:
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Title rnsoran~ Policy and Escrow Fees.
LOan and Assumption Fees
Private Mortgage Insurance
Citj and County Transfer Ta:.:es
Tax Service, Notary and Recordi"& Fees
ereru! and Appraisal Reports
Property Survey Fees
Inspection Fees
BFii:Jge Leen--~-CH) .. ill BfFB:!f1ge fer a 99 c:la) ifl:terest-free--!eftn-n t:p-te--9G
~---ef---ftn--e!'Rple)ee's .... tJ:t1iL) if!. ttleir etlrreflt re:iiEfeflee--~-by
WeeniFldepeSSeR! &fflreiss:ls. The aSSl;!metl fair H'H-k-e-t-V~ wlll 13e ~e
&Yef-sge €If tile l' ie higflest appf8.ise:ls. flH. .i~iFg "f05-€;---~i5a!S erIe ,,:tf'Jif.
5-pereefll ef eae~ ether.
3. ~~ IRtere!it gi~ferenfti!!::E~ The Cit ... ill f,3Fa lee IRteres[
r-the gI:lie~lides ef lAe Federal URifsf'!fl
Real Prep8rt) AeflHisitiOfi-ftfid-R:-IseatisF. Pelietes AE't etp t8 a ft16.q:j~
S300/fflafllB fer 36--mettHts-:
2. MiscellaneQus Expen~ -The City .... rill reimburse miscellaneous expenses
associated with the relocation. The 3nlOunt shall not exceed S+-,-O<XJ S400Q.
3, Tempor.!)! Uving 8.:p~= ' Up to thin)' (}()) days' temporary living
experu.es wiD be avaii.able under the following guidelines:
Lc.tQgLTJi -100 pen-:ent of actual aod rea~onable costs for all farn£ly
members.
Per Diem -100 perceI!t of the established City rates for employee
anG s.pouse/mate. and 50 percent of the e~t2bE5hed Ciry rate for
depencents for the first 15 days; 50 percent of the established City
rate for employee ar:d spouse/mate, and 25 percent of the
establis.hed City rate for dependents over the last 15 days.
Car Rental -Up to 30 days for a single vehicle is available until
~lJch time as tile employee's perwnal .. ;ehicle becomes available.
4. B.QlJse Huntjn~ Expense -The City will reimburse expenses for one house
hunting trip for both employee and 'pouse/mate, The trip shall be limited
to a maximum of seven days. Travel expenses are lirnjted to the less.er of
common carrier rates or the establis.ned City rate for autDmobile use.
Lodging is provlded on an actual and reasonable basis. Per Dlem expenses
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are allowed according to the e.s.tablbhed Cit.", rates. Expenses for cili1dren
are not covered.
~Tl$es fQr Renteo " The City may rdmbur!.e the bllow::ng expemes for
employees moving from or into rental housing:
Costs arising from the Deed to break an existir'.g lease up to a
total payment of ;:hree times the current monthly rental rate.
The first and iast month's rent to .a tna'tirnum of $3.500 on a
paro Alto area rental accommodation.
jMkfido@J>ReJprarion BeiJefits,fo[ Co\locs1-A,ppgioted Officers, As5istant at) Manager
Md~mnent Headl
~:P~, CJf', iUi.: employment offer, additional relocation benefits may be authorized by tbe
Cjly C<JtmclJ. for council-appointed (JUkers or the City MaEago, for As5istant City
Marulger ,at 4~:v:artrnt:ilt heads. IT consideration far additional benefits is requested by a
fin~«IIldidate. the Cil)l will provide the candidate through an agency designated by the
~~",,~'~~hire ;~I~atjo1?-a5...%tance analysis. This. analysis williDdude: An assessme£i!
!iI' .tIJ~jijiliie of. the bil±ne in the existing location and an estimate of the prcx:eeds tha! tile
Cl\nlfi~te willffiili2e fwm tbe sale, an analysis .nd recommendations of the neW borne
w!'i:ll8S<i·OtieritaJ, .loan asSistance options and their cost to tile City, and area counseling
~ I'i'9)ii~~~:foJ: in Item. 4.'1f tlle B",k Package. Onee this analy.;is is complete, the
&PP9inting·aulhority will d .. igll a relocation assistance p.1Ckage based upon the
iri'CliYi4~X~:Il~ 'aild'cin::umstam::es. and the recommendations from the Pre-H'tre
Ari~I~:<T)lepiogram mayconsiSl of any of tbe elements [rom tile Basic Package
and/flr \h~()ptionallk.nefits as well as those descTibed below. All direct City loans are
~l1i«tlo ChyCouncil auihmizatior_
1. Marketin~'ManaremeI1f PrQ1!].l!1.]f I!lu!uany agreed upon by both parties.
the new CAOjAssistam City Man,ger/Deparunent Head may worle with an
agency designated by the City to market his/her home i.r. the -old k)Qitioo
through a "Marketing Management PrGgram'. The purpose of this program is
to ,provide the City and the new official with Q realistic projection of the funds
that will be avaitaole for housing in the (jew location and to expedite the sale
of tht bouse in the old l-ocali<Jn.
2.. Direct Ci\.Y Inans ~ lhe City way extend mortgage loar:.$ to new
CAO/Assistant City Manager/Department Heads as part of a relocation
assistan~e package. The CWo loan opt!ons are:
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4.
Adju.1ab!e Rate Mortgage -Tllis loan may be secured by a lim or
sccGnd dei!d or tru~! and may be [uU.)' amortized or for interest only_
The interest fate .. ,rill be set at 1/4 percent above the City's earning
rate on its im."estment portfolio and v.il! be adju.~ted annually. The
term of tbe lean will be set by the City CounciJ for a period not to
exceed 15 years, but will be due and pa)abte Vl-ithin sUI: months of
termination of employment for YJh3~eVCr rt35-0U.
ShaI"e1! Apprecialion Loan ~ This loan may be. secured by a flrst or
second deed of tru.l>1 and may be fu:l!' amoni1.ed or for interest oniy.
The interest rate is set at 5 percent Additionally. the CAO/Assistam
City ManagerjDepartment Head is required to pay deferred interest
equal to a portioG of the future apprecialion. That portion is
determined by the proportion of the original Cit)' loan to the original
house price. For example. jf the City provided a loan amounting to
4() percent of the value of lhe borne purchased, the emp!oyee would
be required IO pay 40 percent of net appreciation. 1f any, as deferred
interest on t..1e loan (net appreciation means ilppreciation after
serung costs are deducted from .al .. price). The term of the loan ..,11
be set by the City Coundl for a period TIot tG exceed 15 year:s, but
",ill be due and payable within six months of terminatlon of
employment for whatever reason.
~'a'~iOD of Property· To qualify for a Dire .. i City Loan.. the home being
purdlased must be located \'.itbin a twenty-mile radius of the Civic Center.
Loan Limits -Direct City Loans cannot exceed four times the annual salary
of the lendee!employ.e.
"SbriifTe'rm IntereSt Buy~ -The City may pay a ponion ~f the interest
(or tbe firs! three years.on a loan ob!ai.'1ec 'by tbe CAO/A.ssistant City
Manager/Depan-ment Head [rum 3; commercial lender. Th~ Cit)/s pDrtion of
this "buy-do· .... rn .. is greatest in the first year and declines. by 50 percent the
sec.ond and third year with the Icndet' paying t.'e full imeresr. rate on the loan
beginning with the fourth year. The ~buy-down" for the firs! year will be 2
percent. unless otherwise determined by City Council.
Additional Purcnase Costs· For Cl\O/ Assistant City Manager/Department
Heads only, "points~ OD the purchase of a new re,~idencr;: aTC eligible for
inclusion in thts program.
~LS~ -If it is deterrruned that by choke, or for whakver reason,.
the new CAO/Assistant City Manager/Department Head will be a long-term
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rliQIMt the .Cilymay provide rental subsidies up to a maximum of SSOO/monu.
ror48 moniM:
~Iatiom; and Gl!idelines
1. The City Manager, or designated subordinate, will institute and
revise internal procedures. to assure the efflcient delivery of services
to the new employee and minimize COSts to the City. This v.~ll
include the dete1111l"nation of wlJether direct City payments., advance
of f.mds or employee reimbursement is most appropriate for a given
program element or employee.
2. The City Manager. or designated subcrdinate, will determine the
appropriateness of inclusion of specific items for reimbursement
under this program.
3. Expenses incurred by the employee during relocation which are not
covered are:
a. Payments to friends for assistance.
b. Automobile repairs.
c. Costs incurred during the relocation b:Jt not directly related to
persona! tnmspm1ation or forwarding of household
belongings, i.e. uninsured losses during transit. ent(rtainment
expe nse." e te.
4. Budgeting of an Relocation Expenses will o.;cur in the Human
Resources and Utilities Departments.
S. Upon approval of the City Manager, provision of benefits under the
section House Hunting Expenses. and Professional Relocat!on
Counselling may be pro"';ded before an employee formally accepts
an offer of employrnent with the City.
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