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HomeMy WebLinkAboutD-2 Staff Report - Discussion of Elected, Board, and Commissioner CompensationSCHEDULED ITEM D-2 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES DATE: FEBRUARY 5, 2024 SUBJECT: DISCUSSION ON COMPENSATION AND BENEFITS FOR ELECTED AND APPOINTED OFFICIALS BACKGROUND: Existing law authorizes a city council to enact an ordinance to provide each member of the city council a salary based upon the population of the city, as specified. Further the law authorizes that amount to be increased by the city council by an amount that does not exceed 5% for each calendar year from the operative date of the last adjustment of the salary that is in effect when the increase is enacted. Recent changes in the law, increased the maximum amount of salary, based upon the population of the city, that may be approved by an ordinance passed by the city council, as specified. The law authorizes the salary of council members to be increased beyond the specified maximums to an amount not exceeding the greater of either 5% for each calendar year from the operative date of the last adjustment of the salary in effect when the ordinance or amendment is enacted, or an amount equal to inflation since January 1, 2024, based upon the California Consumer Price Index, which shall not exceed 10% for each calendar year. The law requires the city council to consider the adoption of an ordinance to increase council member compensation in open session during at least 2 regular meetings of the city council. In addition to the City Council, the City has an elected City Clerk and City Treasurer who receive salary and benefits for their service to the City, and several Boards and Commissions who’s appointed members receive a per meeting stipend. Given recent changes to the law governing city council compensation, Staff is seeking Council’s direction on desired modifications to pay and benefits for elected and appointed officials. RECOMMENDATION: Staff recommends the City Council take the following action: 1) Provide staff direction on elected and appointed officials pay and benefits. Approved City Council February 5, 2024 Compensation and Benefits for Elected and Appointed Officials February 5, 2024 Page 2 ANALYSIS: City Council Compensation The compensation schedule for general law cities has not been adjusted since 1984, meaning that city council compensation has not kept pace with inflation. Allowing cities to adjust their compensation for inflation since 1984 may help city councils become more diverse because increased compensation can help individuals from across different income levels receive sufficient income from their service to help ensure they can continue to serve the public and support their families. California Government Code section 36516 (“Section 36516”) sets a maximum amount of salary for a Council Member, with specific exceptions. If compensation does not fall within one of these specific exceptions or is not governed by an independent statute, then the compensation received is subject to the maximum amount in Section 36516. Salaries in accordance with Section 36516 were amended January 1, 2024 as follows: A. In cities up to and including 35,000 in population, up to and including nine hundred fifty dollars ($950) per month. B. In cities over 35,000 up to and including 50,000 in population, up to and including one thousand two hundred seventy-five dollars ($1,275) per month. C. In cities over 50,000 up to and including 75,000 in population, up to and including one thousand six hundred dollars ($1,600) per month. D. In cities over 75,000 up to and including 150,000 in population, up to and including one thousand nine hundred dollars ($1,900) per month. E. In cities over 150,000 up to and including 250,000 in population, up to and including two thousand five hundred fifty dollars ($2,550) per month. F. In cities over 250,000 population, up to and including three thousand two hundred dollars ($3,200) per month. Further, Section 36516 requires the population of a city be determined by the last preceding federal census, or a subsequent census, or estimate validated by the Department of Finance. Azusa’s population per the Federal Census Bureau was 50,000 as of April 1, 2020 and estimated at 48,824 as of July 1, 2022. The Government Code allows council salaries to be increased beyond the amounts provided for the above population counts, but the amount of the increase shall not exceed the greater of either of the following: 1. An amount equal to 5 percent for each calendar year from the operative date of the last adjustment of the salary in effect when the ordinance or amendment is enacted; or 2. An amount equal to inflation since January 1, 2024, based upon the California Consumer Price Index, which shall not exceed 10 percent for each calendar year. Currently, the City Council (including the Mayor) receives a $400 monthly salary since July 1, 1999 (or earlier), which was the maximum allowed using Azusa’s population prior to Section 36516 revisions, and the following benefits/allowances which do not count as salary under Section 36516: Compensation and Benefits for Elected and Appointed Officials February 5, 2024 Page 3 • Auto Allowance – $350.00 per month; • Flexible Benefit Contribution for Medical – $1,500.00 per month; • Medicare Tax – $10.88 per month; • PERS Employer Contributions – $30.00 per month; • Life Insurance – $1.80 per month; and • Worker’s Compensation – $16 per month. Under the January 1, 2024 Section 36516 revisions, the simplest methods of adopting a new salary would be to continue using the set population amount. Staff is consulting with legal counsel to determine which census time period is most appropriate for determining the allowable salary using population data. The Table 1 provides a comparison of the estimated fiscal impact given the following scenarios: 1) the current cost of Council’s pay and benefits should the Council elect not to change them; 2) the cost should the Council elect to increase the salary using Azusa’s July 1, 2022 population estimate of 48,824 under the new law; and 3) an estimate of the salary if the Council would have applied the 5 percent annual adjust method since the current $400 salary was reaffirmed July 1, 1999. TABLE 1 Scenario 1 Scenario 2 Scenario 3 Current Population 5% Method Salary 400.00$ 1,275.00$ 1,290.04$ Automobile Allowance 350.00 350.00 350.00 Flexible Benefit Plan 1,500.00 1,500.00 1,500.00 PERS (Retirement) Contribution 30.00 95.63 96.75 Medicare Tax 10.88 23.56 23.78 Life Insurance 1.80 3.90 3.94 Worker's Compensation 16.00 51.00 51.60 2,308.68$ 3,299.09$ 3,316.11$ Staff is seeking Council direction on any desired changes the City Council wishes to make to pay and benefits for Councilmembers. It is important to note that any change the current City Council elects to make to any salary and benefits for the City Council would not take effect until after the results are certified for the next City Council election, which is November 2024, pursuant to California Government Code section 35616.5. Other Elected Official Compensation In addition to the City Council, the City has an elected City Clerk and City Treasurer. Since July 1, 1999, monthly salaries for these positions have been $3,090.26 and $2,626.91, respectively. Current monthly salaries and benefits are as follows: Compensation and Benefits for Elected and Appointed Officials February 5, 2024 Page 4 TABLE 2 City Clerk City Treasurer Salary 3,090.26$ 2,626.91$ Flexible Benefit Plan 1,500.00 1,500.00 PERS (Retirement) Contribution 231.77 197.02 Medicare Tax 55.48 29.66 Life Insurance 4.85 6.33 Worker's Compensation 123.61 105.08 5,005.97$ 4,465.00$ In total, the City’s annual compensation for these two elected positions is $113,651.59. Staff is seeking Council direction on whether to maintain the existing salaries for these positions or to modify them via resolution at a future meeting. Board Member and Commissioner Stipends Monthly stipends for Azusa’s various Boards and Commissions have not been updated since the 1980’s. Periodically, the City Council may review stipends and modify them by adopting a Resolution. Following are the stipends per member for existing Boards and Commissions: TABLE 3 Board or Commission Stipend per Meeting Meetings per Month Maximum per Month Cultural & Historic Preservation Commission 25.00$ 1 25.00$ Library Commission 25.00 1 25.00 Parks & Recreation 25.00 2 50.00 Personnel Board 25.00 2 50.00 Planning Commission 25.00 2 50.00 In total, the City’s annual commission stipends expense is up to $12,000. Staff is seeking Council direction on whether to maintain or to modify them via resolution at a future meeting. FISCAL IMPACT: Over the past 25 years, the City Council has saved the City over $545,000 by maintaining its current $400.00 monthly salary. Due to inflation, and recognizing the importance of incentivizing individuals to serve their communities, the State has increased salary limits for city council members. Any modifications to Azusa City Council compensation will not take effect until November 2024, and therefore would be budgeted in future years accordingly. Prepared by: Reviewed and Approved: Talika M. Johnson Sergio Gonzalez Director of Administrative Services City Manager Attachment: 1. Excerpt California Government Code 36516 State of California GOVERNMENT CODE Section 36516 36516. (a)  (1)  A city council may enact an ordinance providing that each member of the city council shall receive a salary based on the population of the city as set forth in paragraph (2). (2)The salaries approved by ordinance under paragraph (1) shall be as follows: (A)In cities up to and including 35,000 in population, up to and including nine hundred fifty dollars ($950) per month. (B)In cities over 35,000 up to and including 50,000 in population, up to and including one thousand two hundred seventy-five dollars ($1,275) per month. (C)In cities over 50,000 up to and including 75,000 in population, up to and including one thousand six hundred dollars ($1,600) per month. (D)In cities over 75,000 up to and including 150,000 in population, up to and including one thousand nine hundred dollars ($1,900) per month. (E)In cities over 150,000 up to and including 250,000 in population, up to and including two thousand five hundred fifty dollars ($2,550) per month. (F)In cities over 250,000 population, up to and including three thousand two hundred dollars ($3,200) per month. (3)For the purposes of this subdivision, the population of a city shall be determined by the last preceding federal census, or a subsequent census, or estimate validated by the Department of Finance. (4)The salary of council members may be increased beyond the amount provided in this subdivision by an ordinance or by an amendment to an ordinance, but the amount of the increase shall not exceed the greater of either of the following: (A)An amount equal to 5 percent for each calendar year from the operative date of the last adjustment of the salary in effect when the ordinance or amendment is enacted. (B)An amount equal to inflation since January 1, 2024, based upon the California Consumer Price Index, which shall not exceed 10 percent for each calendar year. (5)No ordinance shall be enacted or amended to provide automatic future increases in salary. (b)Notwithstanding subdivision (a), at any municipal election, the question of whether city council members shall receive a salary for services, and the amount of that salary, may be submitted to the electors. If a majority of the electors voting at the election favor it, all of the council members shall receive the salary specified in the election call. The salary of council members may be increased beyond the amount provided in this section or decreased below the amount in the same manner. STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL Attachment 1 (c)  Unless specifically authorized by another statute, a city council may not enact an ordinance providing for compensation to city council members in excess of that authorized by the procedures described in subdivisions (a) and (b). For the purposes of this section, compensation includes payment for service by a city council member on a commission, committee, board, authority, or similar body on which the city council member serves. If the other statute that authorizes the compensation does not specify the amount of compensation, the maximum amount shall be one hundred fifty dollars ($150) per month for each commission, committee, board, authority, or similar body. (d)  Any amounts paid by a city for retirement, health and welfare, and federal social security benefits shall not be included for purposes of determining salary under this section, provided that the same benefits are available and paid by the city for its employees. (e)  Any amounts paid by a city to reimburse a council member for actual and necessary expenses pursuant to Section 36514.5 shall not be included for purposes of determining salary pursuant to this section. (f)  A city council member may waive any or all of the compensation permitted by this section. (g)  (1)  For the purposes of this section, a city council shall consider the adoption of an ordinance to increase compensation in open session during at least two regular meetings of the city council. (2)  At the first meeting, the city council shall present the proposed ordinance, which shall include findings demonstrating the need for the increased compensation. The ordinance shall not be adopted at the first meeting. (3)  At least seven days after the first meeting, the city council shall hold a second meeting to consider whether to adopt the ordinance. (Amended by Stats. 2023, Ch. 27, Sec. 2. (SB 329) Effective January 1, 2024.)