EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: June 7, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Patrick Heisinger, Interim City Manager
SUBJECT: One-Time Vacation Pay Out Program
Recommendation
Adopt a Resolution authorizing the Interim City Manager implement a onetime vacation cash out, up to a combined maximum of 40 hours of vacation for eligible employees for a maximum estimated cost of $45,000.
Background
The current Memorandum of Understanding for each bargaining unit represented in the City of East Palo Alto - the Service Employees International Union (SEIU), Management Employees Association (MEA), and the Police Officers Association (POA) - provides the following language regarding vacation benefit accruals:
Minimum Continuous City Service Amount of Vacation Earned Annually 0 to 4.99 years 80 hours (3.08 hours bi-weekly)
5 to 9.99 years 120 hours (4.62 hours bi-weekly)
10 to 14.99 years 160 hours (6.15 hours bi-weekly)
15+ years 200 hours (7.69 hours bi-weekly)
Employees with fewer than 10 years of continuous public service in East Palo Alto shall not accumulate more than 288 hours of vacation.
Employees with more than 10 years of continuous public service in East Palo Alto shall not accumulate more than 320 hours of vacation.
Once the accrual cap is reached, an employee will not accrue any additional vacation until they reduce the accumulated hours below the accrual cap, either through usage or cash-out. An employee shall receive reasonable notice of the amount of accumulated vacation leave in advance of each anniversary date. Employees are notified of accrued leave balances on each bi-weekly paycheck stub.
The City allows employees to cash-out up to 40 hours of vacation time in December of each year.
On March 2, 2021, in response to the COVID-19 Pandemic, the City Council adopted a Resolution authorizing the City Manager to implement a Limited Leave Program (LLP) allowing the option of cashing out up to a combined maximum of 60 hours of vacation and/or management leave benefits to employees with expired or exceeded benefits lost between March 1, 2020 and March 31, 2021 due to unusual staff demands under COVID-19 essential work requirements. The cost to implement the LLP was approximately $90,000.
When the City Council took action in March 2021, more than 50% of the City’s workforce was either actively losing vacation time or were within 2-3 pay-periods from doing so. The City Council expressed concern that staff were not taking vacations and urged City leadership to better enforce employees’ vacation benefits.
Analysis
Although management of staff vacation balances has improved, and a majority of COVID-19 Pandemic restrictions have been lifted, an estimated 25% of staff are currently at or approaching the maximum vacation accrual. At this time, due to current staffing levels, police officers are unable to take vacation.
The Interim City Manager requests that the City Council consider a one-time pay-out of vacation leave for any full-time employee who is at or within 10% of their maximum vacation accrual, at the end of the second pay period in June 2022, per the applicable bargaining agreement. This action reflected in the resolution (Attachment 1) would provide additional acknowledgement of the commitment and extra effort of staff, particularly as the Administration works to improve staffing levels and fill vacancies throughout the organization.
The Administration also commits to ensuring that more employees take much-needed vacation time, especially in August, during the City Council break. Although past pay-out programs have allowed staff to be paid out for either vacation or management leave hours, this recommendation does not include management leave hours because staff will have until the end of the calendar year to utilize these hours,
Estimated Costs
Staff estimates a one-time cost of $45,000 to implement the pay-out program as described in this report.
Fiscal Impact
Funds to pay for the vacation pay-out program would come from the City’s General Fund Reserve.
Attachments
1. Resolution