Agenda Item No. 7
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: May 23, 2022 FROM: Matthew Bronson, City Manager
PREPARED BY: Kristin Eriksson, Deputy City Manager
SUBJECT: Second Reading and Adoption of an Ordinance to Amend Chapter 2 (Compensation) of Article II (Administration) of the Grover Beach Municipal Code to Increase Council Salaries; and Report on Health Insurance Benefits for Council Members in San Luis Obispo County
RECOMMENDATION
1) Conduct a public hearing for the second reading and adoption of an Ordinance to amend Chapter 2 (Compensation) of Article II (Administration) of the Grover Beach Municipal Code (GBMC) to increase Council salaries; and
2) Receive a report about health insurance benefits provided to council members throughout the County and provide direction to staff on whether to add insurance benefits to the Council’s compensation in Grover Beach.
BACKGROUND:
At the April 11, 2022 Council meeting, Council Member Miller requested scheduling an agenda item to consider increasing the compensation received by the Council given increases in cost of living. The Council concurred with this request and provided direction to staff to schedule this item for an upcoming meeting. The current compensation of $600 per month for Council Members and $750 per month for the directly-elected Mayor was approved on December 4, 2017 and became effective in December 2018 following the November 2018 election. Previously, Council compensation had not been adjusted since 1986 and was the lowest level among the seven cities in San Luis Obispo County.
At the April 25, 2022 Council meeting, the Council received a report on Council compensation which provided the relevant legal requirements, as shown in Attachment 1, along with stipends, insurance benefits and equipment allowances for other city councils in the county. As shown in Attachment 2, the report indicated that the City’s Council stipends in Grover Beach are currently on the lower end compared to other cities in the county and that Grover Beach is the only city in the county that does not offer any health insurance benefits to Council Members. The Council directed staff to draft an ordinance to increase Council stipends by the maximum allowable amount of 20% under Government Code Section 36516(a)(4) (5% for each of four years since the last increase became effective) and to bring back an agenda item for further deliberation of providing health insurance benefits to the Council.
Ordinance to Increase Council Salaries
The attached Ordinance (Attachment 3) was introduced with a first reading at the May 9, 2022 Council meeting. The Ordinance amends the GBMC to increase Council member salaries by 20%, Staff Report: Second Reading and Adoption of an Ordinance to Increase Council Salaries and Page 2 Report on Health Insurance Benefits for Councilmembers in San Luis Obispo County May 23, 2022
effective December 2022 following the November 2022 election. Pending Council adoption, this will increase salaries to $720 per month for Council Members and to $900 per month for the directly-elected Mayor.
City Council Health Insurance Benefits
Following the Council’s direction to receive more information about health benefits, staff surveyed other cities within San Luis Obispo County about the level of benefits provided to Council Members. Each city varies as to the extent of coverage though Grover Beach is the only city that does not offer insurance coverage. The following shows the level of insurance benefits that are covered by the cities for Council Members:
City Health Insurance Contribution
Arroyo Grande Same contribution as provided to management employees (Medical costs between $735.45 and $1,783.46 depending on number of dependents) Atascadero Same contribution as provided to management employees for Council Member only; Dental/Vision – cover full cost for member only Grover Beach No coverage
Morro Bay Contribution equal to lowest cost CalPERS plan for Council Member only; Dental/Vision – cover full cost, plus family;
Paso Robles Contribution of PERS Choice PPO for Council Member and one dependent Pismo Beach Same contribution as provided to management employees for Council Member and dependents
San Luis Obispo Offer up to $1,607 per month for coverage for Council Member and 2 dependents
As shown above, most cities that provide insurance coverage to Council Members provide coverage for members equal to that of management employees. Grover Beach management employees receive a contribution between $637.54, or the cost of the PERS Gold PPO plan with Vision and Dental insurance for the employee only, per month and $1,648.74, or the cost of the PERS Gold PPO Plan with Vision and Dental insurance for the employee and all dependents.
Management employees must pay any additional costs for coverage. The current contributions and monthly medical rates for the City’s management and confidential employee group is attached as Attachment 4.
If the Council directs staff to return with an ordinance increasing compensation of Council Members and the Mayor to receive insurance benefits for members only equal to that of management employees receive for themselves only in line with the cities of Morro Bay and Atascadero, the estimated cost to the City would $38,252 per year. If the Council directs staff to return with an ordinance increasing compensation of Council Members and the Mayor to receive insurance benefits at this level for members and their dependents, in line with the cities of Arroyo Grande and Pismo Beach, the estimated cost to the City would be up to $98,400 per year. Council could also direct staff to use a different benchmark for providing health insurance benefits.
Staff is seeking the Council’s direction on whether to include health insurance benefits in members’ compensation and, if so, whether only the member or the member and dependents should be covered. If directed by the Council, staff would introduce an ordinance to make any changes in health insurance benefits at the June 13, 2022 regular meeting.
Staff Report: Second Reading and Adoption of an Ordinance to Increase Council Salaries and Page 2 Report on Health Insurance Benefits for Councilmembers in San Luis Obispo County May 23, 2022
FISCAL IMPACT
Adoption of the Ordinance amending the GBMC to increase Council compensation will result in an annual cost increase of $7,560 and a prorated cost in FY 2022-23 of $4,410 that will be absorbed in the operating budget. Should the Council direct staff to return with an ordinance to add insurance benefits to Council compensation, the estimated annual cost would be between $38,252 and $98,400 annually, assuming Council provides direction to match management employee benefits and all members elect to accept the insurance benefits. If Council chose to implement such benefits following the November 2022 election, the prorated cost for FY 2022-23 would be less than the projected annual amount.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Conduct a public hearing for the second reading and adoption of an Ordinance to amend Chapter 2 (Council Compensation) of Article II (Administration) of the GBMC to increase Council compensation; and
2. Receive a report about insurance benefits provided to council members throughout the County and provide direction to staff on whether to add insurance benefits to the Council’s compensation in Grover Beach; or
3. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Legal References (Grover Beach Municipal Code and Government Code)
2. San Luis Obispo County Council Compensation Comparisons
3. Ordinance Amending Chapter 2 of Article II (Administration) of the Grover Beach Municipal Code to Increase Council Compensation
4. 2022 Monthly Medical Rates for Management Employees
Compensation for Council Members
Grover Beach Municipal Code Sec. 2201. Compensation of Council Members. Each member of the Council shall receive, as salary, the sum of six hundred dollars ($600) per month and, pursuant to Government Code section 36516.1, as may be amended from time to time, the directly elected Mayor shall receive, as salary, seven hundred and fifty dollars ($750) per month. (Ord. No. 22; Am. Ord. 75-11; Ord. 86-2; Am. Ord. 17-08) Government Code Sec. 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 three hundred dollars ($300) per month.
(B) In cities over 35,000 up to and including 50,000 in population, up to and including four hundred dollars ($400) per month.
(C) In cities over 50,000 up to and including 75,000 in population, up to and including five hundred dollars ($500) per month.
(D) In cities over 75,000 up to and including 150,000 in population, up to and including six hundred dollars ($600) per month.
(E) In cities over 150,000 up to and including 250,000 in population, up to and including eight hundred dollars ($800) per month.
(F) In cities over 250,000 population, up to and including one thousand dollars ($1,000) 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 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. 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.
(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, Attachment 1
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. (Amended by Stats. 2009, Ch. 332, Sec. 68. Effective January 1, 2010.) Government Code Sec. 36516.1.
A mayor elected pursuant to Sections 34900 to 34904, inclusive, may be provided with compensation in addition to that which he or she receives as a council member. That additional compensation may be provided by an ordinance adopted by the city council or by a majority vote of the electors voting on the proposition at a municipal election.
Government Code Sec. 36516.5.
A change in compensation does not apply to a councilman during his term of office; however, the prohibition herein expressed shall not prevent the adjustment of the compensation of all members of a council serving staggered terms whenever one or more members of such council becomes eligible for a salary increase by virtue of his beginning a new term of office. (Added by Stats. 1966, 1st Ex. Sess., Ch. 12.)
City Council Compensation Comparisons
City Council Stipends
City Council Stipends
City Council Member Mayor
Arroyo Grande $648 $798
Atascadero $600 $750
Grover Beach $600 $750
Morro Bay $1,000* $1,400*
Paso Robles $600 $800
Pismo Beach $772 $1,072
San Luis Obispo $2,139 $2,696
City Council Insurance Benefits
City Council Insurance Benefits
City Medical Dental Vision Life
Arroyo Grande X X X 0
Atascadero X X X X
Grover Beach 0 0 0 0
Morro Bay X X X X
Paso Robles X X X 0
Pismo Beach X X X X
San Luis Obispo X X X X
0 – Not offered
X – Offered
City Council Equipment
City Council Equipment
City Tablet Cell Phone Internet Overall Stipend
Arroyo Grande 0 0 0 0
Atascadero 0 0 0 0
Grover Beach 0 0 0 0
Morro Bay 0 0 0 0
Paso Robles 0 0 0 0
Pismo Beach 0 S S S
San Luis Obispo 0 X S S
0 – no compensation
X – Device provided directly to elected official
S – Stipend or reimbursement provided to elected official Attachment 2
ORDINANCE 22-__
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GROVER
BEACH, CALIFORNIA AMENDING CHAPTER 2 (COUNCIL
COMPENSATION) OF ARTICLE II (ADMINISTRATION)
WHEREAS, Grover Beach Municipal Code Section 2201 provides that each Council Member shall receive $600 per month as a salary and the Mayor shall receive $750 per month as a salary; and
WHERAS, members of City Council of the City of Grover Beach (“City”) have not had an increase in salary since December 2018; and
WHEREAS, California Government Code section 36516 provides that the Council Members may increase their salaries by an ordinance in an amount not to exceed 5 percent for each calendar year from the operative date of the last increase; WHEREAS, Council Members are entitled under the Government Code to approved a salary increase consistent with Government Code Section 36516 without constituting a conflict of interest.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Grover Beach as follows:
PART 1: Chapter 2 (Compensation), Section 2201 of Article II (Administration) of the Grover Beach Municipal Code is hereby amended to read as follows:
Sec. 2201. Compensation of Counsel Members. Each member of the Council shall receive, as a salary, the sum of seven hundred twenty dollars ($720) per month and, pursuant to Government Code section 36516.1 , as may be amended from time to time, the directly elected Mayor shall receive, as a salary, nine hundred dollars ($900) per month.
PART 2: Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this Ordinance or any part thereof is for any reason held to be in violation of the law, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared in violation of the law.
PART 3: Effective Date. This Ordinance shall not become effective and in full force and effect until 12:01 a.m. on the thirty first day after its final passage. However, the increase in compensation shall become effective after the November 2022 General Municipal Election and when any member of Council commences their new term of office, and within fifteen (15) days after adoption by the City Council, the Ordinance shall be published once, together with the names of the Council Members voting thereon, in a newspaper of general circulation within the City.
Attachment 3
Ordinance No. 22-__ Page 2
INTRODUCED at a regular meeting of the City Council held ________ and PASSED, APPROVED, and ADOPTED by the City Council on __________, on the following roll call vote, to wit:
AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
APPROVED:
__________________________
JEFF LEE, MAYOR
Attest:
____________________________________
WENDI SIMS, CITY CLERK
Approved as to Form:
_____________________________________
DAVID P. HALE, CITY ATTORNEY
**DRAFT**
Attachment 4