PURPOSE:

The purpose of this report is to request City Council consideration of the proposed resolution and ordinance approving the compensation packages for the Elected Officials including the City Clerk, City Treasurer and City Council. 

BACKGROUND:

In addition to addressing the Elected Officials compensation at the February 28, 2006 City Council meeting, the Council will also be acting upon the proposed compensation packages for the Unrepresented Mid-Managers and Executives including the Appointed Officials (City Manager and City Attorney).  That report includes a detailed description of the City�s negotiation process as well as the contracts that have been approved by the Council with the bargaining groups for the Fiscal Year 2005-06 process. 

The City Clerk and City Treasurer positions are both an integral part of the Executive Team. While it would be most appropriate to include their compensation package along with the Executives, as Elected Officials their salaries must be discussed and determined in public session.   Similar to the City Clerk and City Treasurer, Council compensation can also only be discussed and determined in public session. 

The issue of compensation for the Elected Officials was last brought before the Council on February 17, 2004.  At that time they approved a 2.5% increase for the City Clerk and City Treasurer as well as the City Council.

ANALYSIS AND CONCLUSION:

Following the completion of the labor negotiations with the Burbank Police Officers Association (BPOA), the Burbank Fire Fighters (BFF), the International Brotherhood of Electrical Workers (IBEW), and the Burbank City Employees Association (BCEA), (the Burbank Management Association negotiations are still in process), staff completed the surveys for the Elected Officials.  The surveys are based on a 12 city survey methodology.

City Council Salaries:

For historical perspective, it is worth briefly discussing the recent history of City Council compensation.  In December 2000, the City Council passed an ordinance that called for a special election which asked the electorate to vote on Council compensation.  The ordinance provided for a 5.0% increase in Fiscal Year (FY) 2000-01 and a 2.8% increase in FY 2001-02 based on the Consumer Price Index (CPI).  The voters approved both of these salary increases. 

Subsequent to this ballot initiative, in November 2002, staff was asked to present a compensation option that would provide for annual Council salary adjustments based on the CPI.  However, further research determined that this was not a possible option pursuant to California Government Code Section 36516 (c).  This Code, which was adopted by reference in Burbank Municipal Code Section 2-202, prohibits the City from enacting a salary ordinance which would provide for automatic future increases in salary.

According to the 12 city survey (Attachment 1), the City Council Members are behind the compensation levels provided in other cities by 45.24% (or $463.71).  All of the cities in the survey have part-time Council Members who work in a City Manager/City Council form of government.  Only Long Beach has a full-time Mayor.  In arriving at the survey average, only the Council Member salaries where included.  While Burbank�s Council Members are significantly behind the survey average, pursuant to California Government Code Section 36516 (c), the Council compensation can only be increased up to a maximum of 5.0% from the previous year. 

Based on the current Council monthly salary of $975, a 5.0% increase would raise the City Council salary to $1024 per month.  Historically, the City Council has been somewhat conservative on the Council raises they have approved and reluctant to increase the salaries by the 5.0% allowed by the Government Code.

For perspective purposes, below is a brief list of the Council�s potential salaries permitted by the California Government Code versus the actual salaries as a result of action taken by the Council since January 1994.

PERMITTED BY GOVT. CODE                            APPROVED BY COUNCIL

January 1, 1994        $929               5.00%                         $830                           3.30%

January 3, 1995        $975               5.00%                         $855                           3.00%

January 3, 1996        $1,024            5.00%                         $855                           0.00%

January 1, 1997        $1,074            5.00%                         $881                           3.00%

January 1, 1998        $1,127            5.00%                         $881                           0.00%

January 1, 1999        $1,183            5.00%                         $881                           0.00%

January 1, 2000        $1,242            5.00%                         $881                           0.00%

*May 1, 2001             $1,304            5.00%                         $925                           5.00%

*May 1, 2002             $1,369            5.00%                         $951                           2.80%

**Feb. 17, 2004         $1,437            5/00%                         $975                           2.50%

*Both increases in May 2001 and 2002 where pursuant to the ballot initiative      approved by the voters in 2001.

**Council salary consideration was not brought to them in 2003 so the amount increased in February 2004 was retroactive back to July 1, 2003.

For discussion purposes, the following is a sliding scale of potential increases that the City Council could consider for FY 2005-06.  It is important to note that the CPI from April 2004 to April 2005 was 4.9%.

            1.00% = $985                                                3.50% = $1009

            1.50% = $990                                                4.00% = $1014

2.00% = $995                                                4.50% = $1019

            2.50% = $999                                                5.00% = $1024

            3.00% = $1004

It is staff�s recommendation that effective July 1, 2006, the City Council approve a 5.0% increase to the current salary of $975 per month.  While the job of Council Member is part-time, the Council Members spend a tremendous amount of time researching issues, meeting with constituents, businesses, non-profit organizations, etc. to become more informed on the issues facing the community.  The job of an elected policy maker in Burbank is a challenge to ones personal and professional life and requires commitment and dedication so that they can be prepared to make decisions that will impact Burbank today and well into the future.  As such, the position should be given proper recognition as well as the credit it deserves.    

It is also important to note that for many years most cities have paid their Council Members a monthly car allowance.  While some are excessive, Burbank�s has been maintained at the following rate for a number of years: Mayor - $185 per month, Vice Mayor - $145 per month, and Council Member - $125 per month.  However, due to the recent passage of Assembly Bill 1234 (effective January 1, 2006) City Council monthly automobile allowances are no longer permitted by law.  Thus, in response to this new legislation the City Council, on January 24, 2006, adopted a new Expense Reimbursement Policy which removed their monthly car allowance and now requires all car related travel for City business to be reimbursed with appropriate receipts and records.  It is staff� belief that this recent reduction in the Council�s pay only further supports the need to increase the Council salaries by the legally permitted 5.0%. 

City Clerk and City Treasurer Salaries:

Staff has completed a survey for the full-time elected City Clerk and City Treasurer positions using the traditional 12 city survey (includes Anaheim, Garden Grove, Glendale, Huntington Beach, Inglewood, Long Beach, Pasadena, Riverside, Santa Ana, San Bernardino, Santa Monica, and Torrance). 

With respect to the City Clerk, as can be seen in the survey (Attachment 2), it is staff�s belief that all 12 cities have comparable positions to Burbank�s whether they are elected or appointed.  By looking through the job descriptions of the other cities (attached to the survey) it is clear that the scope of duties and responsibilities are similar and overall are representative of the job performed by Burbank�s elected Clerk.  In fact, seven of the 12 cities consolidate their elections with the County so their involvement is minimal.  While Burbank�s City Clerk is responsible for running all local elections.  Further, Burbank�s election process is somewhat unique because very few cities have both a primary and general election to manage.  According to the survey, the City Clerk position is behind the average market survey 20.78%.

Of the 12 cities in the City Treasurer survey (Attachment 3) only seven are similar to the duties and responsibilities of Burbank�s elected Treasurer as can be seen in the job specifications attached to the survey.  Some of the cities have part-time elected officials serve as their Treasurer while others have another department manager serve in this capacity.  According to the survey, the City Treasurer position is behind the average market survey 27.84%.

Regardless of whether the City Clerk or City Treasurer positions are appointed or elected, the comparable positions on the 12 city survey fulfill the same roles and responsibilities, and in each city these positions are considered a part of the Executive Team.  As such, it is staff�s recommendation that the City Clerk and City Treasurer receive the same salary consideration as that proposed for the Executives.  Traditionally, the City Clerk and City Treasurer positions have been maintained at the same salary level.  While there is no legal reason to keep the positions at the same salary, should the Council want to continue that practice, it is recommended that because the City Treasurer has fewer comparable positions in the 12 city survey, that the City Clerk survey be used for the salary consideration.

Thus, it is recommended that effective March 1, 2006, the City Clerk and City Treasurer positions be increased from $7,690 to $9,288.  This reflects an increase of 20.78% and would bring both of these positions to the average market survey.  Should the Council be concerned that this is too much movement in one year, the Council could consider making the increase over two years.  In this instance, the Council could approve a 10% increase effective March 1, 2006 and another 10.78% increase on March 1, 2007 for the Clerk and Treasurer.  Further, as is proposed in the Executive compensation package, it would be recommended that the Clerk and Treasurer�s salaries be increased July 1, 2007 pursuant to the survey to be conducted at that time.  The salaries for the Clerk and Treasurer would be prorated based on the FY 2007-08 survey with the total salary impact to the budget capped at 4.0% for all Executive positions.

Other Compensation Factors for the Elected Officials:

In addition to salary consideration for the Elected Officials, there are several other compensation items that need to be considered.

Cafeteria/Medical Premium Amounts:

In the report on tonight�s agenda for the Mid-Managers and Executives, staff has recommended increases in the cafeteria plan to address the on-going increased medical insurance premium costs.  The City Treasurer, City Clerk and City Council have always had the same cafeteria amount as the Executives.  The only caveat is that the City Council only receives the benefit if they use the City�s medical insurance program.  Thus, it is recommended that the cafeteria benefit for the Elected Officials be changed as follows:

The City will continue providing the City Clerk and City Treasurer with $775.05 per month in their cafeteria plan to be used for medical insurance premium costs only.  In addition to this amount, it is proposed that the City make contributions toward the cost of medical premiums for the City Clerk and City Treasurer as shown on the following charts.  Such contributions will be for medical premium costs only.

Year 1 - Effective March 1, 2006

Year 2 - Effective December 1, 2006

Year 3 - Effective December 1, 2007

With respect to the City Council Members, provided they use the City�s medical insurance program, they will continue to receive an allotment of up to $703.75 in their cafeteria plan. In addition to this amount, it is proposed that the City make contributions toward the cost of medical premiums only for the City Council as shown on the chart below.  Should additional increases in the cafeteria plan be necessary due to future medical premium cost increases, this item will be brought back to the Council for consideration in future years.   

Year 1 - Effective March 1, 2006

In addition to the aforementioned changes in the cafeteria plan, it is recommended that the Elected Officials also receive the following benefits (same as proposed for the Mid-Managers and Executives):

• Year 2: Effective July 1, 2006, the City will provide a vision plan at no cost to the employee.  The cost to the City will be capped at $6.50 per employee. If this amount will provide coverage for the employees dependents that will be acceptable; otherwise the employee will be responsible for any additional dollars to provide this coverage to their dependents.

• Year 3: Effective July 1, 2007, the City will supply a dental plan at no cost to the employee.  The cost to the City will be capped at $118.00 per employee per month.  If this amount will provide coverage for the employees dependents that will be acceptable; otherwise the employee will be responsible for any additional dollars to provide this coverage to their dependents.

Tuition Reimbursement:

The City�s tuition reimbursement program provides the City Treasurer and City Clerk with 75% reimbursement up to a cap of $1,500.  This amount has not been changed since 1989.  With departmental training budgets decreasing, educational requirements and schooling costs increasing, the tuition reimbursement amount needs to be increased to provide ample opportunity for employees to pursue training and educational advancement. The proposed reimbursement would be set at 75% up to a cap of $3,500 annually. 

Retiree Medical:

• Effective July 1, 2007, (same effective date as the IBEW) the City will contribute $44.00 per month to a retiree medical account (i.e. Retired Health Savings Plan) for each Elected Official.

• Effective April 1, 2006, each employee will increase their contribution from $40.00 to $52.50 per month to the Burbank Employee Retirement Medical Trust.  Effective that same date, the City will match the employee contribution of $52.50 per month to the Trust.  Effective April 1, 2007, employees will each contribute $65.00 per month to the Burbank Employees Retirement Medical Trust.  Effective that same date, the City will match the employee contribution of $65.00 per month to the Trust.  (The Trust was created by the IBEW, BCEA and BMA three years ago to address the cost of retiree medical for miscellaneous employees.)

Retirement Enhancement for Elected Officials:

Through the negotiation process, the Council agreed to provide an enhanced retirement to the Miscellaneous employees of which the Elected Officials are included.  The enhanced retirement was the most important issue to both the IBEW and BCEA.  More and more cities in the State have negotiated retirement enhancement provisions with their unions and this made it extremely difficult not to make this concession.

A detailed explanation of this benefit is provided in the report on tonight�s agenda regarding the compensation packages for the Unrepresented Mid- Managers and Executives.  The basic change is as follows: The City made a commitment to change the Public Employee Retirement System (PERS) retirement formula from 2.0% at 55 to 2.5% at 55 effective June 16, 2008.  Both the City and Elected Officials will begin sharing in the cost of the benefit by contributing 2.4% effective whenever their new salaries go into effect.

FISCAL IMPACT:

The total cost of the compensation package for the City Council which has benefits going into effect in FY�s 2005-06, 2006-07 and 2007-08 is $18,321 (salary consideration is only allowed for in FY 2005-06).  This cost includes the following: $2,940 for a 5.0% increase in salaries in FY 2005-06 ($975 to $1024 per month); $3,896 annually for medical premiums ($1,298 for FY 2005-06); $390 annually for the vision plan beginning in FY 2006-07; $7,080 annually for a dental plan beginning in FY 2007-08; 2.4% for the enhanced retirement ($1,375 for FY 2005-06); $2,640 annually for a $44 per month retiree medical contribution beginning in FY 2007-08; and, $4,688 for the increase in the BERMT payments (FY 2005-06 cost is $788 and the FY 2006-07 cost is $3,900).  The proposed cost of the Council compensation package for FY 2005-06 is $6,400.50.  Due to the fact that the City Council car allowance was removed effective February 1, 2006 (totaling $4,875) and there are salary savings in excess of $3,500 there will be no budgetary impact for FY 2005-06.   The benefit costs in the following years will be addressed through the normal budget process.

The total cost of the compensation package for the City Clerk and City Treasurer has already been accounted for in the Executives compensation package (also on tonight�s agenda) so no further budgetary authority is needed to implement the staff recommendations. 

RECOMMENDATION:

Staff recommends City Council adoption of the proposed resolution and ordinance.

Respectfully submitted,

Judie Sarquiz

Management Services Director