HomeMy WebLinkAboutStaff ReportCITY OF NATIONAL CITY
MEMORANDUM
DATE: January 25, 2011
TO: Honorable Mayor and City Council
FROM: Stacey Stevenson, Director of Human Resources
SUBJECT: Staff Report: Resolution Of The City Of National City Authorizing A One -Time
Performance And Retention Incentive Payment Of Three Percent To Eligible
Employees In The Executive And Management Groups In Lieu Of Increases In
Base Salary, And Approving A Transfer Of Funds Not To Exceed $100,000 From
The General Fund Contingency Reserve To The Personnel Compensation
Account To Fund Said Payment.
In recognition and support of the City's efforts to control on -going expenses related to employee
salaries and benefits, employees serving in the Executive and Management groups agreed to
make employee contributions to the Public Employees Retirement System (PERS) and to forego
salary increases, with one salary increase granted over a ten (10) year period.
The 34 employees comprising the Executive and Management groups contribute six percent
(6%) and five percent (5%), respectively of the employee contribution to PERS. On July 1, 2011,
the percentage will increase to eight percent (8%), which is the full employee contribution as
allowed under PERS. As such, these will be the first two groups, along with the elected officials
to reach the full employee contribution. In total, the Executive and Manager contributions to
PERS will result in on -going savings of more than $260,000 ($178,500 in fiscal year 2010/2011
and an additional $80,500 in fiscal year 2011/2012). In addition, on January 11, 2011, the City
Council took action to create a second tier retirement formula for miscellaneous employees,
including Executives and Managers. Under the second tier, employee hired into the City on or
after the change is effected will receive a retirement benefit of 2% @ 60, instead of the current
3% @ 60. With that, new Executives and Managers will pay the full eight percent (8%)
retirement contribution and receive a lesser retirement benefit.
Given the City's fiscal constraints, staffing levels have been reduced, and programs and
departments have been consolidated. Throughout, executives and managers have continued to
provide a high level of service to the residents of National City while striving to create
efficiencies, achieve cost savings and generate new sources of revenue. In keeping with these
principles and practices, salaries for these twogroups have held relatively constant_ Since
Honorable Mayor and City Council
Staff Report: Resolution to Authorize a One -Time Stipend for Executives and Managers
January 25, 2011
Page 2
calendar year 2002, employees of these two groups have received one cost of living adjustment,
with a commitment to no additional salary increases over a ten year period.
The request for a three percent (3%) one-time stipend is in recognition of the efforts of the
employees represented by the Executive and Management groups. Stipends have been used by
the City of National City as an effective means of recognizing and retaining personnel without
creating on -going fiscal obligations for the City. Said stipend would serve as a one-time payment
for performance over an 18 month period (January, 2011 through June, 2012).