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HomeMy WebLinkAbout1992-06-24MINUTES ADJOURNED PALM DESERT CITY COUNCIL MEETING WEDNESDAY, JUNE 24, 1992 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * I. CALL TO ORDER Mayor Kelly convened the meeting at 9:00 a.m. II. ROLL CALL Present: Mayor Pro-Tempore Jean M. Benson Councilman Buford A. Crites Councilman Walter H. Snyder Mayor Pro-Tempore S. Roy Wilson Mayor Richard S. Kelly Also Present:, Bruce A. Altman, City Manager Sheila R. Gilligan, City Clerk Carlos L. Ortega, Redevelopment Agency Executive Director Ramon A. Diaz, ACM/Director of Community Development Richard 3. Folkers, ACM/Director of Public Works Paul Gibson, Finance Director/City Treasurer Frank Allen, Director of Code Compliance Pat Conlon, Director of Building and Safety Dave Millheim, Director of Human Resources Ken Weller, Emergency Services Coordinator John Wohlmuth, Environmental Conservation Manager Catherine Sass, Community Arts Manager Larry McAllister, General Services/Purchasing Officer III. NEW BUSINESS A. CONSIDERATION OF AMENDMENTS TO THE EMPLOYEE SALARY AND BENEFIT PACKAGE FOR FISCAL YEAR 1992/93 AS RECOMMENDED BY THE PERSONNEL COMMITTEE. EE. City Manager Bruce Altman stated that Human Resources Director Dave Millheim has assembled a chronology of salaries and fringe MINUTES ADJOURNED MEETING/PALM DESERT CITY COUNCIL JUNE 24, 1992 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * benefits for employees to date. Mr. Millheim distributed the chronology stating that in February and March salary surveys were conducted as required by the Memorandum of Understanding (MOU), and other issues, i.e., dental benefits, medical benefits for retirees, and general COLA information were studied and discussed at budget retreat. He added that the annual study ensures and maintains continuity with regard to salary and benefit setting structures and recommended the formula currently used be maintained using 12 survey benchmarks. Mr. Millheim stated that the Palm Desert Employees' Association (PDEO) submitted a list of requests for next year, which included an increase in annual dental benefits, orthodontia coverage, two-part sick leave cash out incentive program, and two additional floating holidays. The Personnel Committee, comprised of himself, Mr. Altman, Mr. Shillcock, and Mr. Diaz did not recommend this package for approval at the Committee level or in subsequent meet and confer sessions. Subsequent to the original request, the PDEO requested a COLA. Additionally, a 2% increase at 55, which is a new PERS benefit, was discussed but dropped from consideration, and an insurance task force was formed to address the retiree issue. Mr. Millheim stated that a recommended package was put together at budget retreat, including a 4.2% COLA (based on the March 1992 CPI) effective January, 1992. Other provisions included retiree medical insurance, dental benefit increase, partial orthodontia coverage, and a sick leave incentive cash out at termination. The change in office hours and automobile allowances were not considered in initial meetings between the Committee and the PDEO, but were in subsequent sessions. Staff concurred that some type of retiree medical benefit should be made available. Mr. Altman stated that approximately a quarter of a million dollars was cut from original departmental budget requests to provide an adequate funding base for these benefits. Mr. Millheim stated that six recommendations have been presented as a package with the 4.2% COLA effective July 1, 1992, except for Y rated employees; the effective date was changed from January 1, 1993, to July 1, 1992 due to the perception by employees that Council was removing benefits by increasing office hours and making changes to auto allowances. The retiree health care option began from a position of 100% premium payment by the City for employees meeting the eligibility criteria of age 50 and eight years of service but was changed 2 MINUTES ADJOURNED MEETING/PALM DESERT CITY COUNCIL JUNE 24, 1992 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * to provide a 50% premium pay by the City for retirement at a minimum age of 55 and ten years service. Councilman Wilson inquired and Mr. Millheim responded that, as presented, this benefit is in effect for life assuming eligibility criteria is met and does not cease at age 65; the plan currently reads that retirees are entitled to the same benefits as active employees, and any changes affect active and retired employees. He added that provisions of COBRA specify that employees honorably leaving employment are eligible to buy into the company's health plan for up to 18 months. Councilman Crites stated that as a starting point, employees should be allowed to buy into the plan beyond the requirements of COBRA and added that he and Mayor Pro-Tempore Benson may want to study this issue further. Mr. Millheim stated that two issues are being discussed. The recommendation in the resolution is that upon eligibility, the City will pay 50% of the premium plus an additional five per cent for each year of service above 10 years maxing out at 75%; if this option is not approved, Committee consensus is that employees should be permitted to buy in at their own expense. Mr. Altman suggested a study be conducted to further amplify other issues; this recommendation is what was presented to employees. Councilman Snyder supported the plan stating it is needed to attract the calibre of employee the City desires. Councilman Wilson inquired and Mr. Millheim responded that to be eligible, an employee must physically retire and draw PERS benefits. Mayor Pro-Tempore Benson added that retirees would be required to certify annually that they are not covered by other policies. Mr. Millheim stated that the third issue addresses the sick leave incentive. A four year minimum service requirement must be satisfied to be paid for unused sick leave beginning at 25 % and maxing at 65 % after 16 years of service. A base minimum of 192 hours was selected to discourage sick leave abuses. Mr. Millheim stated that it is being recommended that dental benefits be increased to $2,000.00 annually, with an orthodontia rider added which will pay a $1,000.00 life time benefit with a 50% co -payment. Councilman Wilson inquired and Mr. Millheim responded that the proposed increase will increase premiums approximately $4.00 per employee per month. Mr. Millheim stated that reduction of auto allowances is being structured in such a way that the endorsed ride share program will not be affected and creates a two-year phase out. Salary schedules were calculated with the COLA in place first, and auto allowances rolled into 3 MINUTES ADJOURNED MEETING/PALM DESERT CITY COUNCIL JUNE 24, 1992 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *_* * * salaries. Councilman Crites stated that auto allowances should not be rolled into salaries; it was created for employees who used their vehicle to conduct City business. With the purchase of City vehicles, employees are no longer required to use personal vehicles to conduct City business; maintaining this benefit appears to be a gift of public funds. Mr. Altman stated that this issue has not been studied since 1986; currently staff is responding to Council's request to address the issue. When the next salary survey is conducted, it will be done on a salary to salary basis as was done this year; the impact of auto allowances being included in salaries will be negated in the 1994 compensation study. Councilman Crites inquired and Mr. Millheim responded that before an employee becomes Y rated, they must be 10% over the mean in a specific classification. John Wohlmuth stated that two issues are being considered; the City is moving forward before environmental programs are mandated because the City believes in them. Secondly, to get incentive programs off the ground and ensure participation, employees will be encouraged to embark on a specific transportation program, i.e., biking or walking. Mr. Millheim stated that the change in office hours was the single biggest issue with employees; he could find no written document which specifies why a 37 1/2 hour work week was adopted. The proposed change was presented to employees as both a coverage and customer service issue. As a compromise, it is proposed that beginning August 1, 1992 office hours will be expanded to 8:00 a.m. to 5:00 p.m., with each department providing appropriate coverage. Shifts will be comprised of either 8:00 a.m. to 4:30 p.m. or 8:30 a.m. to 5:00 p.m. This program will be in force for a six month trial period; if the pilot program proves successful it may or may not continue. Mayor Kelly inquired and Mr. Altman responded that if the pilot program is unsuccessful then morning and afternoon breaks will be provided for all employees; as long as it remains in place the work day will remain as currently structured. He added that if Council accepts this plan, July will be spent blueprinting the plan for August implementation. Councilman Snyder complimented Council and staff members who drafted this proposal. He believes the document is complete, is pleased with the presentation and is prepared to move to approve it as presented. Councilman Wilson stated that he feels more discussion is needed regarding the issues of salary increases and retiree insurance and inquired why March's COLA was used to figure increases; May's figure was 3.8% Mr. Wohlmuth stated that March figures are used for a variety of purposes, i.e., the franchise 4 MINUTES ADJOURNED MEETING/PALM DESERT CITY COUNCIL JUNE 24, 1992 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * agreement for Waste Management. Councilman Crites proposed that auto allowances remain in their present form to require appropriate employees to use their vehicles for City business. Mayor Kelly responded that the proposal calls for elimination of all auto allowances in two years; Councilman Crites disagreed. Upon a motion by Councilman Snyder, second by Councilman Wilson, and unanimous vote of the Council, the office hour change and pilot program was approved as presented. Upon a motion by Councilman Snyder, second by Councilman Crites, and unanimous vote of the Council, dental benefits will be increased to $2,000.00 annually and orthodontia coverage will be provided with a $1,000.00 lifetime benefit at 50% co -payment. Upon a motion by Councilman Crites, second by Councilman Snyder, and unanimous vote of the Council, the sick leave buy back incentive program was approved as presented. Councilman Crites suggested that the issue of retiree medical benefits be revisited after further study. Mr. Altman stated that two proposals are being considered, and Councilman Crites responded that the alternate proposal did not receive approval of Council representatives at the Committee level. Councilman Snyder stated that he prefers the plan presented to employees and endorses it. Mayor Kelly agreed, since employees would be required to contribute at least 25% and would be able to buy supplemental insurance for less when Medicare becomes effective. Councilman Crites inquired if the plan could be adopted in principal and asked that a report be prepared for Council at a future date addressing specific concerns. Upon a motion by Councilman Snyder, second by Councilman Wilson, and unanimous vote of the Council, the concept of post retirement medical coverage is approved as submitted with amendments through further investigation to be obtained at the earliest possible date. Employees retiring after July 1, 1992, will be awarded appropriate benefits retroactively assuming appropriate criteria is met. Upon a motion by Councilman Snyder and second by Mayor Kelly, auto allowances are removed in support of a ride share program. Motion defeated with Mayor Kelly and Councilman Snyder voting yes, and Mayor Pro-Tempore Benson, and Councilmen Crites and Wilson voting no. Councilman Wilson stated that in normal economic times staff deserves a COLA but with constituents being laid off, 17 businesses on El Paseo being closed, and the State of California trying to negotiate with employees to take salary cuts, it is not appropriate to act oblivious to the recession. Mr. Altman stated that the City is meeting all its contractual obligations with the budget, which continues to be balanced 5 MINUTES ADJOURNED MEETING/PALM DESERT CITY COUNCIL JUNE 24, 1992 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * and this is a contractual obligation, since there is an MOU stating there will be annual survey with regard to salaries. Councilman Crites stated that employees who need the COLA do not benefit from auto allowances. Councilman Wilson stated that the COLA was designed in 1967 to establish a base point to assist those having a difficulty making ends meet. According to the federal government, an annual income under $20,000.00 constitutes the poverty level. Middle class income is $20,000.00 to $50,000.00 and above $50,000.00 is considered part of the elite or upper class. Councilman Crites stated that some of the criteria considering in figuring the Consumer Price Index (CPI) when figuring the COLA are not the financial burden of the employee; the CPI was not designed to be used as it is today. Mayor Pro- Tempore Benson suggested giving a 4.2% increase to employees not benefiting from the car allowance roll over and provide a car allowance roll over to those eligible. Mayor Kelly suggested offering 4.2% to employees not receiving a car allowance, and those who do be given the difference between the car allowance and 4.2% Mr. Altman suggested that a compromise might be to roll into salaries three quarters of the auto allowance and move the COLA to October. Mayor Pro-Tempore Benson stated that the COLA could be delayed to January, since employees didn't accept the offer made regarding extended office hours. Councilman Crites stated that he would accept a proposal calling for 50% of the auto allowances to be rolled into salaries; Mayor Kelly suggested that 50% of the auto allowance be rolled into the salaries and proceed with COLA for all employees. Upon a motion by Mayor Pro-Tempore Benson and second by Councilman Snyder, a 4.2% COLA will be awarded beginning July 1, 1992 to all employees, and 50% of existing auto allowances will be rolled into appropriate salaries. Motion passed with Mayor Kelly, Mayor Pro-Tempore Benson and Councilman Snyder voting yes, and Councilmen Wilson and Crites voting no. Upon a motion by Councilman Wilson, second by Councilman Crites, and unanimous vote of the Council, the Human Resources Director is directed to examine the concept specified in the MOU to grant COLA's based on the provisions of the CPI and revisit the entire issue during the next budget session. Mr. Millheim requested clarification from Council; Councilman Crites responded that using the CPI as it now defined is not valid criteria and directed Mr. Millheim to explore more appropriate criteria for figuring future salary increases. Upon a motion by Councilman Snyder and second by Mayor Pro-Tempore Benson, the resolution is adopted as amended. Motion passed with Mayor Kelly, Mayor Pro- Tempore Benson and Councilman Snyder voting yes, and Councilmen Wilson and Crites voting no. 6 MINUTES ADJOURNED MEETING/PALM DESERT CITY COUNCIL JUNE 24, 1992 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * IV. ORAL COMMUNICATIONS None V. ADJOURNMENT Upon a motion by Councilman Crites, second by Councilman Wilson, and unanimous vote of the Council, Mayor Kelly adjourned the meeting at 11:20 a.m. ATTEST: / SHEILA R. GILLIGAN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA ARD S. KELLY, MAYO 7