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Home My WebLink About0538.091I. ~" .. " ..... '. > ' . , : ' November 27, 1991 THE H0NORABLE CITY COUNCIL PALO ALTO, CALIFORNIA Attention: Policy and Services Co~ittee -' ~----------. Reviaiona to Policy R.gardinq Raiabur~ .. ent Lor a.location IIp_p ••• --City Kanaq.r'8 Coma.nt. Members of the council: Attached is the revised policy for reimbursing new employees for relocation expenses including housinq costs. You ~ill note that, in order to make the proqrams available to a wide range of employees, a sUbstantial commitment of city funds will be required4 These funds would have to come from reserves, since no other source is readily available. I do not believe it to be prudent to commit reserv~e to this purpose at this time. Assistinq with employee housing costs is one of the high priority items included in my budget messages to you over the last few years4 However, given CUI-rent economic times, I see no opportunity to embark on a major effort in this regard. My strong suggestion is that Council adopt the program --it is a strong and effective one --but that we make only very restricted implementation at this time~ If, and when, conditions warrant, the policy will be in place; and we can then consider steps to put it into action for a qreater number of employees. In the meantime" the policy will serve as the controllinq document for housing/relocation decisions as they affect individual positions. Staff will continue to monitor this subject area and 'Will return to Council, if new opportunities arise that might require ~odification of the policy or permit implementation on a wider scale. Respectfully submitted, /~L wlitr~ ~~~--~~~--------- City Kan er <:MR: 538: 91 - ---..,--------" .. -.~.-' ~¥-.. --- - November 28, 1991 TIlE HONORABLE CITY COUNCIL Palo Alto, California Attention: Poli(.)' and Servk'es Committee -. Revisions to Polity Regarding-Reimhursement for Reiocatio.u r::.xp~~ Members of the Council: Report in Brier In respom;e to a Council assignment, this report proposes a revised relocation policy and benefits for new management employees as contained in Section L of the Compensation Plan for Management and Confidential Employees and Council-Appointed Officers. The report also proposes a new section providing relocation assistance mortgage loans and other assistance for new Councl1-appointed officers and newly appointed department heads or Assistant City Manager. Finally, this report provides additional inform2.tion on a pilot housing assistance pfOgram targeting employees subject to emergency call back.. Backgrouod In Feo:rJ::UY 1990, Coundl directed staff to research the issue of housing assistance programs for City employees and report back VI'ith sugge-stiom. for augmenting or modifying current City plJ!icies. In Nove!nber, 1990, staff prepared a report ~ith recommendations (C!\{R:564;O) which was re\"jel,l,'ed by Policy and Services Com.'1littee and then referred to full Councll. ]n April 1991, Council referred the matter back to the Policy and SeI"Vices CommitIee pending completion cf additional 5t2.ff assignrr..ents. Those assignments were as follows: 1. The Optional Re!ocr.tion Benefits package for nl!w management employees was to be updated ana re ... ised as appropriate. This policy has beer. in effect since 1983. The Disposal and Pun:ha..'\.e Costs, Bridge Loan, and Mortgage Interest Differential benefits were t{} be reviewed and updated to reflect current practkes and condition. ... ; and CMR:536:9! . .. ~ I I .. ~ i i • 1 ..... 2. A pcUcy regarding relocation ass.i:-·lance mortgage loans was to be e.s.tablished coveTlng Council·appointed officers and possLbly Assistant City M~nager/department heads., sucb loans 10 be in the form of shared appreciation mortgages and giving consideration to the follov.ri.ng issues: Source of funding. evaluation of risk. return on City'S :nvestment.., rrinimum dOWTI payment, term of lo~n and locatic.n of property; and 3. Direct staff to work Y,iith the Palo Alto Housing Corporation to establish a pi10i prcgram to provide for City employee preference in specified affordable rental hO'Jsing units, with such a pfogram being targeted at employees subject to emergency call back. This report outlines staffs response to these three as~jgnmenl'. Attachment 1 indicates by shading and strikeDut the proposed revisions to the Reimbur.s.ement for Relocation Expense Policy. Following are explanations of the substantive changes: Qualifications, Section 2. The length of time for relocation or contracts desig11ed to establish ::l fixed domiciic has been extended to one year. Experience has shown that, in some cases, more than six months bas been required to negotiate the detai15 of an assistance program.. This is due in part to the length of time it takes tlH:: new employee to sell the former residence. Qualifications, Section 5. The length of employment clause has been extended trom one year to a mir..imum of two years for Optional Benefits and five years for Additional Relo<ation Benefits for CAOs and Assistant City Manager/Department Heads. This extension is btended to have a favorable impact on retention. Ii the new employee chO()s.es not to remalfl for the minimum term,. this extension v.'ilI a1. .. o allow the City to re.coup some of these expenses. Basic Package, ~tion 1. Reimbursement for costs relating to employment interview trips has been deleted from the policy. These are legitimate business expenses for the City and are provided for in appropriate operating budget accounts. Optional Benefit5 J Section I. All of the changes. under this section are minor modifications in language and further clarification of existing policy (Optiona! Benefits. section 1,a, "costs to break an existing lease" was moved to Section 5.) CMR:536:9! 2 • • Optional .Bcndils,. Seenon 2. Bridge J....o<1ns have: bU:1 elimi;oated. This option has been only rarely request'.!d. Tnese loam. 3re very c:Jrnbersome to J.dmir.i~ter and represent a substantia! risk to the City, e50peciJlly in a declini!lg real es.late market. Optional BeoefifS, Section 3. ~'tortgage Interest Differential Paymenrs have been eliminated from the Optional Benefits section, and a vari~lior. of the same concept is included in the n:;:\\i policy regardlng Counci!-appointcd office~ and Assistant City Manager/department heads {s.ee Shon Term Intere.'iot B"J'y~Down). This option was utilized lIerj fell.' times and is beneficial onry during periods of vel)' high mortgage rates.. Opiionsl Bendits, ne"..-Sect jon 2. Reimbursement for Miscellaneous Expenses bas been increased from $1,000 10 $2,000 to reflect changes in the co~t of living since the policy was originally Lrnplemented. Optional BeneOts, Section 5. A new section for renters ha~ been added. This section includes the exi.'i-ting clause regarding (osts aS50cia!ed with breaking a lease, and a new provision for first and last momh's rent to a maximum of 53,.500. Additional assistance for renters is an element thm has been lacking in the existing policy and would aiJaw staff the flexibility to meel the needs of new employees that choose to rent rather than purchase housing. Relocation Assislance M"rtgagE" Loans (or New COlJ..!l~jl·_.A."pJLQilll~_d Officers and Ne",,' ~tlt City Manager/Qt:partmenl Hearu Staff proposes a new section., "Additional Relocation Benefits~. to provide specifLc bc.nefits including mortgage loans for new COl.;ncil~appo:·"1ted officers and new As5i~tant City Manager or department heads. This section is intended to give the appointing authonty-me City Coundl for Council-appointed officers. ilnd the City Manager for Assistant City Manager or cepartrr;ent heads·-a comprehen~i-\.'e offering of benefits from wbich to choose when structuring a housing assistance program for newly app0intcd offici.::h. New Assistant City Manager and department heads are included because it is dift1cu1t to recruit f{)r the~e pos'itlOJ15. as it is for a Council-appointed officer. Unless internal promotions are made, it is frequently necessary to condu(.i a 5t3le-or narion'Nide search for qualified candidates. Since the cost of real estate in the Palo AJto area £s among tbe highest in Lie nation, it foilO\~'s that many candidales. from le~.s. expensive areas will require s.omc s-ubs.tantive reloca.tion a:>'~i~tance. This. new section begins on page 4 of Attachment 1. Prior to an offer of employment, the City may send the candidate to an agency designated by the City for a Pre· __ Hir~ Anai .... sls.. The purpose of tr,is. analysts 15 10 a~:,e7.'5 the >,;'ah.lc of the residence in thc fonner location and make an objective e~limate of the proceeds that the new City offic1al will realize from the sale of the former residence. The analysis also extends to the CMR:536:91 3 - con~itions governing :3 De~' home purchase. the lOJn and assi~;anc'! options and their costs to the City. Within the context of the specific recommenci:ations from the pie-hire analysis and 'With consideration for the individll.tl's 'leeds 3nd available City finances., the Ci!y Council fa! CAO'. and the City Ma!1ager for A<isistant City Manager or department heads. v.ill structure a relocation assistance package. This package may consist of an)' combir.atlo!l of eTemenl'" contaif!ed in the Basic Puckag~, the OptIonal Benefits and the Additional Relocation Benefits for Council-Appointed Officers, Assistant City Manager and Department Heads. The M(l:rketing Manaiement Pro~ram p1aces emph 3.sis on the sale of the former residence so the new employee .:an focus on the new home purchase. This program e.ncourages realistic pricing of the former residence {v.·ithin 5 percenr to 10 pacent of appraj~d value). and aggressive marketing of the property wil.b the intent to seU within a 90 to 120 day period. The program is administered by the City's relocation consu!tant. Of tbe two Direct ON Loans outlined in thi!! new poliey the first, the ,-o\.Qi~UiJ3hJe Rate Mortflai'c i...~ the most straightforward. This type of loan is slmiiar to those a!ready in existence or currently being offered to Couo<:il-appointed officers. T~e lean (an take the form of a first or second mor-gage. depending on the individual's circumstances and the commercial loan market conditions. Currently, cDnforming firs:: mortgages (less than $191,250) are available in the range of 8 to 9 percent That is a .... ery competitive rate and would influence the decision whether to extend a first or second mortgage to a new employee. With low Iates such as those available now, it would lIkely be recommended that the employee acquire a commercial loan and anow the City to take advantage of the lending iru;titution~.s underwriting capabilities. The City may, in this case, extend a second mortgage for the remainder of the amoum needed to complete the purchase. Conversely, if interest rates on first mortgages rise. the Cry rna)' extend a first mortgage to the new CAO. In either case. the mortgage interest rate would be established to ensure a return on iTivestment that would be 1/4 p~rcent above the earning rate on the City's inve.'ilr!1ent portfolio. The term of the loan is set by the City Council fOI a period Dot to exceed 15 years and subject to becoming du~ and jJayable witrlin siA months of termination of employment for whatever reason. The IO:ln may be:: fully Ju-wrtized or payments may be for interest only. The second Direct City Loan option is 2. Share_~L~ppreciatiQn Loan. Under this option the City would offer a low interest loan in exchange for a pf{lponional share of future appreciation. The proposed rate is 5 percent. This ]DJ.n can take the form of a fina or second mongage. In addition to the reg'.Jlar lmm payments the newly appointed official is required to pay deferred interest equaJ to a ponion of the future appreciation. That portion is determined by the proportion of ~he originGl City loan to the origina.l house price. For example, if the City provided a lO;Jn amounting !O 40 percent of !he sales price of the home purchased, the elnployee v,:ould be required to p~y 40 percent of net appreciation, if any, as deferred interest on the loan. (~'et appreciation means appreciation after selling costs are deducted from the saies price.) A loan of th:s type is CMR:536:91 4 , -"."-., ~,.' r-:'.f' • - :". - , designed to offer the employee a g:-catei d<!gree of affurd;;tbility by extending a Jow interest rate tn exchange for a s.hare of the appreciation. If the intere;;t rate :s dose to Lh~ market rate, there is DC incentive for th~ employee to forego a portion of futur~ appreciation. The City can offset the loss of current revenue with the gain realized later when the property is sold. This loan can be fully amortized, or payments can be for interest only. The term of the loJ.o is set by the City Council for a period not to exceed 15 years and will be due and payable within six months of termination of employment for whatever re;;.son. The Location of Property must be within a r ... 'cnll-mile radius of the Civic Center. This requlrement will provide a reasonable area from which 10 find housing while maiIltail"!ing a manageable commute. Tne Loan limits give consideration to the cost of real estate in Palo .Alto and the employee's indh-idual qualifying factor5. The Shan Term InterestJ!.~v-~ option is similar to the mortgage interest differentia! payments, except in this case the City would pa)' a portion of future interest directl), to the Jending tnstitution. The City could buy down 2 percent of the interest rate the first year~ 1 percent in the second year and t/2 percent in the third year until year four ...... hen the employee is paying the fun rate. The arnmmt of buy down and the 1erm of the benefit could be if.:creaseJ or decreased with Council approval. This option would allow the new official to qualify for a large. loan inilial!y with the expectation th"t future salary increases would offset (he interen rate increases.. The Additional Purchase Costs option allows for the inclusion into the benefit package of "points" on the purchase of the new home. This expen5·e is not allowed under the Optional Benefits program, but would afford the Appointing Authority a greater degree of flexibility in structuring an assistance package. Rental Subsidies may be provided for the new CouncLl~arpointed offlcersl Assistant City Manager or department heads who choo~ to rent. In addition to the enha ... ced benefits for renters recommended in the Optional Benefits section, rental subsidles of up to a maximum of $500 per month for 36 months may be ava:lable, Agai<1. this op1:ion provides the 3ppointing authorit), ,",;th the flaibility 1:0 meet the needs of n.!wly appoir.ted officials wbo are renters faced 'With the high cos.t of h0using in this .uea. All loans and some 'i1:-si~tance programs described above. may be administerec by a third party housing relocation coruulting firm and be subject to associated administrative costs. Council directed staff to investigate pOlemial funding sources. for the proposed loan program. The Finance Department has identified three funding so:.rrces: Ta'(able bonds., City reserves, or tax exempt bonds. Follm~ing is a summary of each source. CMR:536:91 5 ___ ~F.?, __ •• , J ! - Taxable Bonds -Intt'rest [<ltes. O~ t<L'(able bonds have been only slightIy lower than mortgage rates over the past SoLI( years. There is not enough intere~t rate differential 10 make thts an .a!~ra('tj\le alternative. Cit)' Resen"es (Capital Projecl Contingency and General Fund Contingency) • [f City reseniCS are to be used as a source of funding employee loans, prudent !imitations. must be placed. on the tot<l.\ amount of re~rvc~ to bt ccmnlitled. Tax Exempt Bonds -This alternative would not be practical under the circumstances. There are stri(t incorP.: limitations which would disqualify the employees being considered in tbis repon. Additionally. the City"s outside legal counsel advi.oe;ed that the only practical way to oper3.te a program with tax exempt bonds would be for lhe City to oown the property. This v."ol.lld create all administrative problem ~d may not be acceptable to the new CAO/Department Head. While City reserves is the only .. iable potentia! source of funds for direct housiIlg assistance loans? current financiai conditions severely limit the use of reserve-s for this pwpose. A separate memo addresses this issue. Pilot Program ~ifb Palo All!2.J::JQPsing CQrooaHion Staff was directed to work with the Palo Alto Hous.ing Corporation to devdop a pilot pro8Iam to provide for City employee preference in specified affordat-k rental housing units,. with such a program being targeted at employees subject to emergency can back.. The Oak Manor Apartment CompleJi was identified as the potential site f0;," the pilot program. Located at 630 Los Robles Avenue, it consists of 33 two and three bedroom apartments of tovmhouse design. The Palo Alto Housing Corporation re-centIj completed the purchase of Oak Manor and plans to gradually convert it to below-market housing y..;thin approximately ten years. MallY 'Jf the terants are visitiZlg students and professors from Stanford University who stay in the area for only one to t'-Vo years. This high turnover create:; the oppcr:unity for the e .... tab!ishment of a pilot prcgram there. As illustrated in the previous report on this matter (CMR:564:0), a larger number of emergency service employees (Target Group B) n ..... e greatt:"r distances from the City than any other CJ.tegory of employee, These employees "oII'ouTd be called upon to respond during the first few hDurs foIlov.-ing a disaster, The intent of this pilot program is to provide rental preference to a s.mall group of employees from the Public \'larks, Utilities, Fire and Police Departments who would serve as a first responder group. This group may be cros.~·trained in a variety of skills and may be called back follo\\,lng a disaster to assist on-duty pers.onnel with the most criticai emergencies :Jrail additional help could arrive. It must be assumed that in the event of a major earthquake, many o( CMR:536:91 6 p ~-- --------- these employees, some of whom currently H:.,>ide more t~al1 an hour from Palo AliO, may be prevented from responding to work by downed bridge:, and c10sed freeways. The current rents at o.ak Manor 3re cons!stent ',I.';th market rates in the area. Follcv.'in,g are the rents for the ty.'o options in the complex: 2 Bedrooms, 1/2 Baths, 1170 square [e" -$975 (18 units) 3 Bedroom" 2 Baths, 1350 square feet, $1200 OS units) A survey was conducted to ascertain employee interest in this type of program. Given LJ:Je above description of the property and outline of the progralT'.., 5 employees out of the SO that respond~d to the sun,;ey indicated they would give comider::nion to panicipation in the program. Unkss directed otherwise, staff will pursue this matter further by establishing program guidelines and participation criteria. Housing Survey of Employees A~ stared above, a survey was conducted to determIne employees' needs and inten;s:llii relative to hOlJSing. Of the approximately 930 surveys sent to alJ employees, 140 were returned. Ninety-three indicated they would be interested ifi owning doser to Palo .AJto, and 28 indicated they would be in!erested in renting closer to Palo Alto. Seventy-six ot the respondents currently ov.'I1, while 60 are renters.. Thirty-eigr:t of the employees stated that they wou!d be willing to ~trade·down;' in order to live closer to Palo Alto, while 44 stated they would not be v.illing to live in a smaller dwelling in order tn live closei to Palo Alto. While reviewing a sampling of the surveys with Sylvia Seman, Executive Du-ector of the Palo Alto Housing Corporation. it was noted that some of the employees. qualify for below·market programs. Qualifying employees who expre.ssed an interest in Hving closer to Paio Alto will be put in contact 'o\1lh the PAHC. Recor.r:mcndaticn Staff recommends changes to the Reimburs.eml~nt for Relocatinn Expense: Pnlicv as indicated in Attachment 1. Staff also recommends Additional Relocation BenefitsnJcr .counql-AwoiDted Offker&. Assistant City Manager and Department Heads as indicated in Attachment 1. These changes win update and impro .... e the relc-cation assistance policy for new management employees and provide a flexible policy frar.1ewo!"lr for structuring relocation assistance benefits for new relocating Cou.ncil-appDinted officers and department heads. With regard to the 3UTvey, staff \lr,111 continue to pursue est-ahlis.nl1lem of the Oak ~Janor pDot program and refer qualify~ng employees idenl;fied in the sUr\'ey to existing Housing CMR:536:91 7 , Corporation programs. Given current funding limitations, staff cannot recorr-.meiid pli15uit of additional employee"assisted housing programs. at tbis time. Re.;pectfuHy submitted, JAY C ROUNDS Director of Human Resources. CMR:536:91 s . .::. - .I L Reimbyrsement for Relocation Expense The City of Palo Alto will pro\~de a Basic Relocation Benefits Package for all new management employees. In addition, upon the approval of the City Mar..ager or designated subordinate, Relocation Benefit.s 'Will be available to no[] management positions. Pro .... i5ions or ~Optional Bent:!Its" or portioTlS thereof. are intended only fOT r.are instances and require the approval nf the City Manager or designee. or, forcol1ncil-appointed officers. tbe City Council. ]>rocedure Oualifications In order to qualify for relocation benefits, the following conditions must be met: 1. The employee mus.t qualify for Moving Expens~ Deducticns as contained in the Federal Tax Regulations. for the year in which the move occurred. 2. Actual relocation, or contracts designed to establish a fixed domicile, shall occur within siN: ft'laftt8s one :year of the initial date of employment 3. Existing employees promoted [0 a covered posi~jon are not eligible. 4. Record keeping rcquiremenl..s. will parallel those required for expense reimbursement for travel, conferences and meetings. 5. Provision of Optional Benefits is com:ngent upon completion of a m.irri1Il~~.of Effie two years.' City emplo~,'ment ,,-ita t1ge Cil':.' unless a longer ~rm is spe~ifled. Provision of Aru1i_tional RelQcation Benefits for Cguncil AliPninted OfrICel'S As,j'ta.n1 City Manager and Departm?n! Heads is \1'P!!~gentpp(lncompletion of a minimum of L'Ve years' City employment. Failure to complete the minimum fuH.-~ term will require repayment of those benefits on a pro-rate ba.s.ls computed on the actual time of C_ity service. Acceptance of rey.. ... " .. • .. ation benefits by an employee does not constitute a cummiUl!ent by the City to any minImum term of ~mployment. -.c~t~j" .... '. <,. • __ ~, , ___ .~-w<A_, .. X ;lla b". I. reifl'ltHfJea ~. the Cip. fer II Ii el eost:;, F.1eals BP.e:! lesidAg fer etlflElielates ~..I.fle--te~tll area, ~ll>,e 1sel;l] aF€El: is defiiled ELi Bl+-"'ci~te-:r--er--~ftS 1eeti+et!--4'I ithiH a 100 Fflile fHail:'l'; of tRe Or) sf Psis A:w;---n-TfB:.el t8StS reifHfH:h.iefflI!Rt is re .. lrie1:ee t8 tl=le ~---of---eommn_"l eaFFier n:e:; BF the estal:!l::sfled Cif:) Tdice---ffif-fttitOfflobile !;!5C, Cos{-s---fer m ... els ere re5t:r:etea t8 !:he estal=llis:-.ed City--pcr diem Fales. 1. ProfeS5jonal Relocation Cnunse1l1n~ -An agency des~gnaled by the City '~'m provide-retoc,.aLion information and counselling to the employee. Information !.o be pro·,..ided tncludes items such as a personalizco oost-of Iivi.Dg anaiys.is. home and rental locations, transportation. weather patterp.s, schools, recrc:ation, etc. 2. En Rgyte Expenx;s -Direct common carrier transporta[ion will be provided in full for all family members. Automobile expenses are limited to two vehides at the established City rate with a minimum of 350 Irolles per day to be traveled. Per diem 1.-:, allowed at established Cirj rates for employee and spouse/rr.arc and at 50 percent of the employee rate for dependents. Travel days allowed are limited to the actual mileage divided by 350 miles per day. Lodging is reimbursed in full on an actual and reasonable basis for all ramOy members. 3. Household Goo4s...s.DJ.p,ment -Full CllitS \I."ill be paid for the shipment of all personal items normally considered "Household Goods," Item.<;. excluded include reoCreational vehicles, firewood, building malerials, sand, boatlii, airplanes, and perishable iteITl5 such as food or p!a~!5;. Shipment of up to two automobiles is permitted. Storage of household goods will be provided for 30 days. Optional Benefit.s 1. ~Dis~esBl anC: FurcbJ!K-CQ5.ts: -The City will reimbur5e eeYef costs that arise in the ~e ~ and/or purchase of residences including: e. Cssts Is 'tIFeeli &fl eliisting lease ·"ill Be E8;efet!.~ir--to{al flH/ffi:eRt Bf ~hfee ltftles the el:lf. elit f'floolhiy . efltB:! ra-te-: a. Re:ll estate commissions on tbe sale of the former residence up to 6 percent of the sales price. b. The employee's portion of non-recurring closing costs on both sale and purchase of residences limited to the following: 2 ", f • Title [nsurance Policy and Escrow Fees . Loaf', and Ao;sumption Fees Private Mortgage Insurance City and County Trar.sfer Taxes Tax Sen'ke, Norary and Recording Fees Credit and Appraisal Re:porl'i Property Sarvey Fees Inspection Fees BFi~;~_J2f,--lJ:n The Cit) will ftff8:Rge fer !l 9g..effy-ffik..~esi-fr-~'~-ffifU1 l:l}'l tf3i 90 pefeeRt sf hfl emfJ1B)ee's efil:lit .. ia t19eif el:lJfern-~'"'e--e5r-dete!'fl1:iReEl b) tiiree iflsefleEaeRt BfJJ3FBisals. 1l=ie--~med---Fa+r----M-iH-ket Val tie ."iJ!be tile 8.erage ef ll:e 1:' .. 8 hi~est 6f'~ilJS;--fh~-lhe5£ S:pj3fei.ials 8; e \II'iiflL. 5 pereem ef eBffl etfter. 3;---MBFtga~e ]r:teRSt-lJiff:efefltj8JJ?_!l~ The Cit;, ..... ill pre -iele InH!!Fe.;t Rete---I)~tifll P9jffieRts t1f'1aer the gHifLlifleJ of t!:1e reclettt!--tr.mfofm -ReeJ-.P.r8~e~ AequlsitieR Bf'lB Relf:'leatiofl: Pelieies :\wt 1J17--tu--ft--ifl~'---of S3Gg{ffiSmfl for 36 ffl:8fltfl5. 2. Miscellaneous E~ • The City will reimburse miscellaneous expenses associated "With the relocation. The amount shaT! not exceed ~ $2"UOO. 3. Temporary Livin~ Expense. L"p to thirty (3D) days' temporary Living expenses. will be available under the following guidelines: ~ . 100 percent of actual and reasonable costs far all family members. Per Diem· 100 percent of the e~tabli5hed City rates for employee and spouse/mate. and 50 pen:ent of the establi;hed City rate for dependents for the flrs-t 15 day"); 50 percent of the establlshcd City rale for employee and spome/male, and 25 percent of the establis.hed City rate for dependents over the last 15 cia21'S. Car Rental -Up to 30 day,> for a single vehicle is available until such time as the employee's perso~.:] vehicle becomes available. 4. Home Huntins Expen~ -The City wlll reimburse e;!(pen~es for one house hunting trip for both employee and spouse/mate. The trip shall be limited to a maximum of seven days. Travel expen.<;.es are llrrjled 10 the lesser of common carrier rates or the estJblished City rale for automobile use. Lodgil1g is provided on an actual and reasonable basis. Per Diem expenses 3 - ,""~. ' s. are allowed 3CC'ol'ding to the established City r3tes. Expen."es for children are Dot covered. &pen.-o;cs for Renters· The City may reimburse the following expcns-es for employees moviog from or into relltal housing: Costs arising from the need to break an .Kisling lease ul' 10.a total paymeDt of three tirr:es t.1]e current monthly rental rate. The first ar.o last month's rent to a. maximum of $3,500 on a Palo Alto area renw.l acoommodatioI'~ AdrlitiOuafReloCatiQD ~(jt.SJQr CouDql-Aplh,jnled Officer\: Assistant City M~ 2I!d Department Heod< ~'PaI1,:¢i~ /!rnploymect -offer, additional re1oca!ion benefits may be authorized by the Cily,~ (jr counnl·appointed office", or the City Manager for Assistant City M~fi j)nlel'artment heads. If ",n>ideration for additional benefits is requested by a fiil!iltaridi)l~f~" the City "ill pro";<le Ill. candidate through an agency designated by the ~;:",p~'thlr~)eIQCation assistan<e analysis. ThJs analysis v.ill include: An assessment Pl".tl1eHiillIUet(lf the lIDm. inthe existing location and an estimate of the proceeds tbat tile ca.c~~~~reiIlitef!~ the sill., an analysis and recommendations of the new home j:IIfu:!ias#·<fr·remaJ, .!oan assistance options and tbeir cost to Ille City. aCId area counseling ~~~I,'l;!.for in 1Iem 4. of the Basic Package. Once this analysis is complete. the ~.a~fi<ftj!y will design. relocation assistance package based upon the iJldiYi~;:~dS' ~d' (:irc~IIlslance5. and the recomme ndatioru from the Pre~Hlre liIi~fu.i$";rrn. 'ptogra!J:i waY. cOnsist of any of tbe elements from the Basic Package imd,orih<iOptionaJ Bem,fits .. , weE as those descnbed below. All direct City Io.lnsare Silbjeq lo .. City Council aulllorizatlon, t· . Markeljn& Management PrOeRrn· If mutually agreed upon by both parties. Lie neW CAO/Assctian! City Manager/Department Head may wmk VIl'ith 2n agency designated by the City to market hisjher nome in the old location through " "Marketing Management PrDgr am'. The pu rpose of this program is to provide the City and the new official wlth a reaHstlc projection of the fund'S thatwiil be available for housing in the new location and to e'l'Odite tbe sate of the house in the old location. 2. Direct City Loans ~ The, City £T'lay extend mortgage loa:1s to new CAO/Assistant City Manager/Department Heads as part of. relocation assT.stance Packag~. The tv.'v 103..1"1 options are: 4 j I ,-! .::::-> • I i l .--~ '- Adjustabre RBle Mortgage -This loan may be secured by a first or seccnd deed' of l.rti~t and rna)' be fully amortized or for interest onl)<. The interest rate will be set at 1/4 percent above the Otis earning late on :lS investment portfolio and ..... i11 be adju'Stcd annually. The term of the loan wilt be set by the Cin Council for a period not to exceed 15 years.+ but will be due and payable v-.ithin six months of te.minatLon of employment f0r whaltller reason. Sltared Appreciation Loan -TI-Js loan may be seCllred by a first or 5econd deW {If trust and may be fuHy amortized or for interest only. The interest rate is set at 5 percent. Additionally, the 0\0/ A.5~ist3.!1L City Manager/Department Head is required to pay deferred interest equal to ii! portioL of the future appreciation. That portion is determined by the proportion of the original City loan to the original house price. For example, if the City provided a loan amounting to 40 percent cf the value of the borne purcbased, the employee. would be required to pay 40 per{:ent of net appreciation. if any, as deferred L.'lterest On ,the Joan (Det appreciation means appreciation after $eDing ~.,e deduct<d from sales price). The term of the loan ",ill be 5et by the City Council for a period not to exceed 15 years, but 'Will be'due and payable y,.ithln six months of terntinatLon of employnlent for whatever reasor •. Location of Property· To quality for a Dfreo! City lnan. the home being purcbased must be located '.\1thin a twenty-mile radius of tile CiVlc Center. LoaD Limits -Direct City Loans cannot e~ceed four times the annual salary of the londeejemployee. 3: Short Term Im.reSt BlIY-lrown -The City may pay a portion of the interest for the first t ... ...ree year! on a joan oh~aLned by tbe CAO/.o\..,s:stant City Manager/Department Head (ram a comrne:dal lender. The City'S portion of this ocy-down" :,;' greatest in the firs! year and declines by 50 percent tbe second and third )"ear ""iIb the Iendee p3)ing t.~e fu!) interest rare on the Joan beginning with the founn year. The 'buy-dow"" for the iirst year will be 2 ~rceIlt, unless 'otbeJ'\.Vb;e detamined by City Council. 4., Additional Purchase Co:;.ts -For CA.O/ A.s .... istaIlt City Manager/Department ~eads only, ·points' OD the purchase of a new re;;idene< are eligible [or inclusion in tbi5 program. $.", RerltaJ Subs~ -If it is determined that by cboice, or for wbatever reason., the new CAO{A:<.istant City Man,ger/Department Head .. ,11 be a long-term 5 1 -, ... ~ • i 1 • ~':'"~ I < \~:~J~;:~. i.~:· :';17:::..-~_, __ , ~i'.~e~tyfilay provjderentHl subsidies up to a paximum of $5()()Jrnonlh flff 48 ;months. Regulations and Guidelines 1. The City Man:lger. or designated subordinate, will institute anG revise internal procedures to assure the efficient delivery of services to the ne ..... employee and minimize costs to the City. This v.~ll include the determination of whether direct City payments" advance of funds or employee reimbursement is most appropriate for a given program element or employee. 2. The City Manager, or designated subordinate, will determine the appropriatene!is of inclusion of specific items for reimbursement under this program. 3. Expenses incurred by the employee during relocatIon ~"hich are not covered are: a. Payments to friends for b.\istance. b. Automobile repairs. C. COSl~ incurred during [he reloca(;o]1 but not directly related to personal tramportation or forv.;arding of household belongings, i.e. uninsured losses during transit, entertainment expenses, e-tc. 4. Budgeting of all Relocation Expenses \.rill occur in the Human Resources and Utflities Departments. 5. Upon approval of the City Manager, provision of bene:fits under the secnon House Hunting Expenses and Professional Relocation Coun..~lling may be provided before an employee formally accepts an offer of employment with the City. 6 , .. \