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RECOMMENDATIONS OF THE CITY COUNCIL SALARY SETTING COMMISSION TO ADOPT ORDINANCES AMENDING TITLE 2, CHAPTER 2.08 OF THE STOCKTON MUNICIPAL CODE TO SET THE SALARIES AND BENEFITS FOR THE MAYOR AND CITY COUNCIL OF THE CITY OF STOCKTON FOR THE PERIOD BEGINNING JULY 1, 2015, IN ACCORDANCE WITH ARTICLE IV, SECTION 410 OF THE CITY CHARTER
recommended action
RECOMENDATION
In accordance with City Charter Article IV, section 410, the City Council shall approve the recommendations of the City Council Salary Setting Commission and adopt two ordinances (1) setting the salary and benefits for the Mayor of the City of Stockton for the period beginning July 1, 2015; and (2) setting the benefits for members of the City Council for the period beginning July 1, 2015.
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Summary
Between the months of January and April of each odd-numbered year, the Salary Setting Commission meets in open session to consider the appropriate salary and benefits for the Mayor and Council. This task is governed by the City Charter section 410. Section 410 requires the Commission to adopt a biennial recommendation for the salary and benefits after having held at least one Public Hearing, and to submit the recommendation to the City Council for final action. Finally, section 410 states that the City Council shall approve this recommendation and adopt, by ordinance, the recommended salary, or some lesser amount, and benefits for the Mayor and Councilmembers.
On January 29, 2015, the Salary Setting Commission convened for its first meeting of 2015. Following that meeting, the Commission met on February 10, 2015, and then held two subsequent Public Hearings on February 18th and March 5th. The Commission made their final recommendation to be forwarded to the City Council with respect to the salary and benefits to be provided to the Mayor and Councilmembers at the Public Hearing held March 5, 2015.
This item first came before the City Council on April 7, 2015. At that time, rather than adopt the recommendation, the Council voted to send this item back to the Salary Setting Commission for further review of any possible errors or inconsistencies. The Council was aware the Salary Setting Commission was not obligated to meet again. Following the Council's direction legal counsel for the Salary Setting Commission provided the Commission with direction on how to call a meeting. The Commissioners were given over a week to consider whether to call a meeting. None of the Commissioners requested to call a meeting to further review their recommendation (see Attachment D - Counsel's Confirmation of Non-Meeting). Therefore, the Salary Setting Commission's recommendation is hereby attached unchanged from its original recommendation submitted to the Council originally on April 7, 2015.
DISCUSSION
Background
City Charter Article IV, section 410 authorizes the City Council Salary Setting Commission to recommend to the City Council the amount of monthly salary and benefits which it deems appropriate for the members of the City Council and the Mayor, commencing July 1st of that odd-numbered year in which it meets. The section provides that each Councilmember's salary and benefits shall be the same; however the amount recommended for the Mayor can exceed that of the councilmembers. Further, each biennial recommendation, together with the reasons therefore shall be in writing (Attachment A); and the Council shall, by ordinance, adopt the salaries and benefits as recommended by the Commission, or in some lesser amount, but in no event may it increase the amount.
The Charter also requires the Salary Setting Commission to take into account the time devoted to the office of Councilmembers, the full-time nature of the Mayor's position, and the level of salaries and benefits being paid for other public or private positions with similar part-time or full-time duties, responsibilities, and obligations.
Previously section 410 of the Charter provided that the Mayor's salary could not be less than the amount paid to the Chairman of the Board of Supervisors for San Joaquin County. However, at the Salary Setting Commission's last regularly scheduled bi-annual meeting the Commission made an advisory recommendation to the City Council on April 16, 2013, that the Council seek an amendment to the City Charter deleting the language that tied the Mayor's salary to the Chairman of the Board. That advisory recommendation was submitted to the City's Charter Review Committee, and Council subsequently put that Charter amendment before a vote of the people in November 2014 as "Measure C." Measure C included additional amendments recommended by the Charter Review Committee to section 410 to read that "[s]alaries of the Councilmembers and Mayor may be reduced at any time by a two-thirds (2/3) vote of the Council." These amendments to Measure C passed the required vote of the people in the November 2014 election and became effective January 2015.
Present Situation
On January 29, 2015, the Salary Setting Commission convened for its first meeting of 2015. Following that meeting, the Commission met on February 10, 2015, and then held two subsequent Public Hearings on February 18th and March 5th. During those meetings the Commission requested multiple items of information from Human Resources Staff and reviewed that information during and in subsequent meetings - including salary and survey data, CPI historical data, performance and duty descriptions relevant to the Mayor and Council, and performance duty descriptions from other agencies included in their survey. Commissioners individually prepared and provided their own information, the Commission heard comments from members of the community who came and spoke during the meetings, and the Mayor provided survey and compensation data relevant to the Mayor's salary at the February 10th and 18th meetings.
On March 5, 2015, the Commission felt it had adequately evaluated multiple variations of compensation and benefits data and had enough information to make a recommendation to the City Council with respect to the Mayor's salary. The Commission took into account, the full-time nature of the Mayor's position, and the level of salaries and benefits being paid for other public or private positions with similar full-time duties, responsibilities, and obligations. The Commissioners finalized and voted on its recommendations at this Public Hearing. Specifically, the Commission voted 3-2 in favor of setting the Mayor's monthly salary to be $6,032 (annual $72,384). Next, it voted unanimously to add life insurance to the Mayor's compensation under Municipal Code section 2.08.020. It also voted unanimously to strike the language from Municipal Code section 2.08.020 that allows the Mayor to take a cash equivalent of the cost of such benefits should the Mayor elect to "opt out" of the City's medical benefits.
In addition, on March 5, 2015, the Commission felt it had adequately evaluated multiple variations of compensation and benefits data and had enough information to make a recommendation to the City Council with respect to the Councilmembers' salary. The Commission took into account: the time devoted to the office of Councilmembers; the level of salaries and benefits being paid for other public or private positions with similar part-time or full-time responsibilities and obligations; and comparable wages paid to City employees. The Commissioners finalized and voted on their recommendations at this Public Hearing. Specifically, the Commission voted unanimously to keep the Councilmembers annual compensation as unchanged from its current amount of $23,927.40 annually. In addition, the Commission voted unanimously to amend section 2.08.050 to provide health, dental, life and vision care insurance to Councilmembers under the same terms and conditions as the Mayor receives them. The Commission did note that section 2.08.050 previously prohibited Councilmembers from receiving medical benefits, but that City Charter section 410 expressly authorizes it to consider and provide for benefits if it felt appropriate. Thus, it proposed amending this municipal code section to provide for appropriate benefits to Councilmembers starting July 1, 2015.
It should be noted that City Charter Article XXVI, section 2602, prohibits providing any retirement and death benefit plans to elected officials. While no retirement benefits were considered, the recommendation to provide "life insurance" to the Mayor and Councilmembers was reviewed in more detail as a possible "death benefit" and thereby prohibited under section 2602. The City Attorney's Office has advised that a Life Insurance Policy, as was recommended by the Commission to be the same as what the City currently maintains for all full-time city employees, is not the same as a death benefit plan as contemplated under Charter section 2602. The distinguishing difference is that retirement and death benefit plans referenced are those plans offered by, for example, the California Public Employees Retirement System (CalPERS), as a combined defined benefit "plan." These plans provide for a retirement benefit, and in the event of death before retirement eligibility, there is a death benefit provided. This type of defined benefit plan is provided for all eligible full-time employees through CalPERS, in addition to a Life Insurance Policy for all full-time employees. The Commission, in their deliberations and discussions, specifically asked about the $50,000 Life Insurance Policy maintained on all full time employees, and recommended this same benefit be provided to the Mayor and Council. The City Attorney's Office opined that this insurance policy is not the same as the CalPERS death benefit plan afforded to other eligible full-time employees, and thereby distinguishable and not prohibited by Charter section 2602.
Now therefore, in accordance with Charter section 410 the Council shall, by ordinance, adopt the salaries and benefits recommended by the Commission, or in some lesser amount, as presented herein but in no event may it increase the amount.
FINANCIAL SUMMARY
After adoption of the ordinance changes to the relevant Municipal Code sections of 2.08, the Mayor's annual compensation will decrease from $8,733 monthly ($104,790 annually), to $6,032 monthly ($72,384 annually) with a corresponding reduction of $4,615 in payroll based benefit costs for a total of $37,021 in cost reduction. The Mayor and Council will receive life insurance at an annual cost of $99 each or $693. The Councilmembers will receive medical benefits consistent with the terms provided to the Mayor, at a cost of $12,456 each or $74,737. All changes will be effective July 1, 2015 through June 30, 2017. In total, these recommended changes will result in a net budget increase to the City's General Fund of $38,409. The additional cost associated with adopted changes to salary and benefits will be incorporated into the Proposed FY 2015-16 Annual Budget.
Attachment A - Salary Setting Commission Recommendation Memo
Attachment B - Redline Stockton Municipal Code Changes, Salary and Benefits
Changes for the Mayor
Attachment C - Redline Stockton Municipal Code Changes, Benefit Changes for the
Council
Attachment D - Counsel's Confirmation of Non-Meeting