City Council
Staff Report
From: City Attorney
Report Type: CONSENT CALENDAR
Lead Department: City Attorney
Meeting Date: March 11, 2024
Report #:2402-2649
TITLE
Adopt an Ordinance Increasing Council Member Salary From $1,000/Month to $1,600/Month, Effective January 1, 2025, as authorized by State law
RECOMMENDATION
Adopt an ordinance to increase Council member salaries, effective January 1, 2025, from $1,000/month to $1,600/month, as authorized by State law.
BACKGROUND
Council members receive a salary of $1,000/month. This salary was set in 2017 and has not been increased since that time.1
On December 4, 2023, the City Council considered a Colleagues Memo regarding an adjustment to City Council compensation (attached as Attachment A).
The Council moved to increase Council member salary to the amount allowed by SB-329, $1,600/month, and allow Council members to participate in the City’s employee childcare assistance benefit. The Council also moved to direct staff to prepare future ordinances applying a cost-of-living adjustment to Council member compensation biannually.
Also on December 4, Council referred to the Policy and Services Committee consideration of a citizen advisory committee to discuss a possible City Charter amendment that would allow increases in Council member compensation above the amount provided in state law. At the Committee’s February 13, 2024 meeting, the Committee developed a recommendation on that issue, which is scheduled for Council consideration on March 11.
ANALYSIS
The City Charter provides that Council members may receive compensation in amounts not to exceed state law. (Charter, Art. III, Sec. 17).
1 https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/ordinances/ord-5304.pdf
In 2023, the state legislature adopted SB 329, which increased the maximum authorized salary levels of city council members and created a second optional methodology for local city councils to increase salaries over time. Under the updated statute, a city of Palo Alto’s size may provide council members a monthly salary of $1,600. Thereafter, annual increases may be made in amounts not to exceed the greater of: (a) 5% of the existing salary for each calendar year since the Council last set council member salaries (noncompounded, see (89 Ops Cal Atty Gen 159 (2006)); or (b) an amount equal to inflation since January 1, 2024 (CPI), but not to exceed 10 percent annually. (Gov Code 36516.) Each increase must be made by ordinance, with findings demonstrating the need for the increase. Automatic increases are not allowed.
Under state law, a salary increase may only come into effect at the beginning of at least one council member’s new term. (Gov. Code section 36516.5). In Palo Alto, new Council terms begin on January 1st of every odd-numbered year. (See Charter, Art. III, Sec. 2.) Compensation can be (and typically is) adjusted for all members of a council serving staggered terms whenever at least one member begins a new term of office.
State law also provides that council members may receive benefits from the city. Benefits are not counted towards the maximum allowable salary, provided that the same benefits are paid for and available to city employees. (Gov. Code section 36516 (d)).
The attached Ordinance amends Palo Alto Municipal Code section 2.04.360 to provide an increase in Council salaries to $1,600 per month effective January 1, 2025 (attached as Attachment B).
Council also moved to include Council members in the City’s childcare assistance pilot (attached as Attachment C). Staff is evaluating the childcare assistance pilot in light of Councilmembers‘ particular needs and circumstances and will report back in the future.
FISCAL/RESOURCE IMPACT
A change in council member compensation would be incorporated into the City’s General Fund budget as part of the FY 2025 Budget process. Annual salary costs for the Council are currently $84,000. This change would increase salaries by $25,200 in FY 2025, with the start date of January 1, 2025, and $50,400 annually in subsequent years for an annual total salary cost of $134,400 beginning in FY 2026. These salary costs do not include the cost of benefits which depend on the choices made by individual Council members.
ENVIRONMENTAL REVIEW
Adoption of this Ordinance is not a project under the California Environmental Quality Act (CEQA).
ATTACHMENTS
Attachment A: Colleague’s Memo - Adjustment to City Council Compensation Attachment B: Ordinance of the Council of the City of Palo Alto Amending Chapter 2.04 (Council Organization and Procedure) of the Palo Alto Municipal Code to Increase the Salary of Council Members Effective January 2025
Attachment C: City of Palo Alto Childcare Assistance Guidelines APPROVED BY:
Molly Stump, City Attorney