STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of June 13, 2023
TO: Members of the City Council
SUBMITTED BY: Dante Hall, City Manager
Patrick Tang, City Attorney
Edwin Gato, Director of Finance
SUBJECT: Adopt a Resolution authorizing Council Members not currently enrolled in the ICMA deferred compensation plan to participate in the plan to provide parity among Council Members.
RECOMMENDED ACTION:
Staff recommends the following:
Adopt a Resolution authorizing Council Members not currently enrolled in the ICMA deferred compensation plan to participate in the plan to provide parity among Council Members.
Discuss and provide directions to staff for a possible salary increase.
BACKGROUND:
The City Council consists of five members, elected at-large on a non-partisan basis, who serve staggered four-year terms. They are paid a monthly stipend of $831.60. In addition to such compensation, members of the City Council shall receive their actual and necessary expenses incurred in the discharge of their official duties. Such salary and expense reimbursement shall be paid with the first payroll distribution of each month and shall include salary and expense reimbursement payable for the immediately preceding month. (Municipal Code, section 2-103 Salary of Council Members) On September 27, 2011, the City Council, under Resolution No. 11-119 authorizes Council members not currently enrolled in the CalPERS program to participate in ICMA deferred compensation plan as a stop-gap measure to provide parity among Council members who were enrolled in the CalPERS program until such time that the CalPERS enrollees are no longer on the City Council and this benefit can be eliminated. Three Council members received this benefit before its elimination.
On July 11, 2017, the City Council adopted a resolution (17-054) reinstating the limited healthcare benefits for the members of the City Council to provide healthcare coverage at the Kaiser single level, and with an option for a Councilmember to waive health benefits and waive the opt-out provision of 50%. Currently, there is one Councilmember enrolled in this program.
DISCUSSION:
At the regular meeting on March 14, 2023, the Council directed staff to return with information on compensation equity among Council Members, including City contributions towards the deferred compensation plan and possible salary increase. Also, the Council requested that Staff research how other Council Members in the surrounding cities are compensated. Attachment 2 summarizes the compensation received by Council Members in Pinole, San Pablo, El Cerrito, and Richmond compared to Hercules.
Salary Increase
The California Government Code Section 36516 states that salaries of council members have to be approved by ordinance and section (a) (4) states that 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.
Other Compensation
The California Government Code Section 36516 (d) states that, 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.
According to Resolution 17-054, healthcare benefits are still available if Council Members want to opt-in. The City’s contribution towards the Council’s health premium is equal to the Kaiser single level of coverage. If there’s a premium increase from the prior year, the Council shall contribute a maximum of up to 3% of the rate increase, and the City will be responsible for rate increases above 6%. Currently, the City’s contribution towards the premium is $891.02.
To provide parity among Council Members, it is recommended that Council Members not currently enrolled in the plan be allowed to participate. The current City paid contributions are $154.79 per Council Member a month.
FISCAL IMPACT:
The fiscal impact associated with enrolling two Council Members into the deferred compensation plan is an additional cost to the General Fund of $3,715 annually. There is a sufficient available fund balance in the General Fund to absorb the additional cost.
ATTACHMENTS:
Resolution
City Council compensation comparison with surrounding cities Mayor and City Council Monthly Compensation Report
Resolution No.11-119, Amending Resolution 11-094, Rescinding all health and welfare benefits for Members of the City Council, clarifying the termination of State of California Public Employees Retirement System (“CalPERS”) for members of the City Council.
Resolution No.17-054, A resolution of the City Council of the City of Hercules reinstating limited health care benefits for City Council Members, resulting in a not to initially exceed approximately $45,000 in annual costs on forward going basis.