RPVCCA_CC_SR_2014_01_21_06_Acting_City_Manager_CompensationCfTYOF RANCHO PALOS VERDES
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
HONORABLE MAYOR AND CITY COUNCIL MEMBERS
CAROL W. LYNCH, CITY ATTORNEY
JANUARY 21, 2014
COMPENSATION TO BE PAID TO THE DEPUTY CITY
MANAGER WHILE SHE PERFORMS ADDITIONAL DUTIES AS
THE ACTING CITY MANAGER
CAROLYN LEHR, CITY MANAGER®..fur CL.
RECOMMENDATION:
Approve compensation for the Deputy City Manager in the Amount of $1,000 per month, which
will be allocated between a temporary salary increase of $650 and an increase to her automobile
allowance in the amount of $350.
DISCUSSION
A brief review of other cities that recently have called upon an assistant or deputy city manager
to become the acting city manager demonstrates a salary increase of between 6% (in the City of
Sunnyvale) or 7% (in the City of Morro Bay) during the time when the additional duties are being
performed. Based upon this information, it is proposed that Ms. Petru's automobile allowance
be increased from the current level of $150 per month to $500 per month, which is the amount of
the current City Manager's auto allowance, and that her salary be increased by $650 per month.
These increases would become effective on February 1st and would continue until a new City
Manager is appointed by the City Council and that person assumes the duties of office. Once a
new City Manager is appointed and assumes the duties of office, Ms. Petru would return to her
duties as Deputy City Manager, and her salary and car allowance would be readjusted back to
the current amounts.
FISCAL IMPACT
For each month, or part thereof, that the Deputy City Manager serves as the Acting City
Manager, her compensation would be increased by $650 per month, and her car allowance
would be increased by $350 per month. The increase in compensation for performing the duties
of the Acting City Manager and for the additional car allowance would be prorated for any partial
month of performance of the Acting City Manager's duties.
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At the last City Council meeting, Council Member Campbell requested that the report include all
of Ms. Petru's current compensation and benefits. The Deputy Director of Finance prepared the
following table in response to that request:
Current Proposed Fiscal Fiscal
Monthly Monthly Impact Impact
Rates Rates Monthly Feb-Jun
Salary $14,608 $15,258 $650 $3,250
Pension (14.66%) $2, 141 $2,237 $95 $476
Medicare (1.45%) $212 $221 $9 $47
Auto Allowance $150 $500 $350 $1,750
City cost of Medical, life, AD&D, $1,049 $1,049 --
LTD (2013 actual)
Retiree Health Savings $119 $119 --
($54.81/pay period)
Total Compensation $18,279 $19,384 $1,105 $5,524
The increase of the automobile allowance clearly is not salary for PERS purposes. However, it is
unclear whether the temporary salary increase would be treated by PERS as additional
compensation that is subject to PERS retirement benefits. For purposes of the Council's
discussion, the table above assumes that the temporary salary increase would be treated as
additional compensation that is subject to PERS benefits.
However, neither the City Attorney's Office nor Special Labor Counsel believes that the
additional compensation would be subject to PERS retirement benefits. The key elements here
are that Council would not be amending the salary schedule, and the temporary increase is not
being granted pursuant to a City contract or labor policy, and it is not available to any other City
employees.
When another city had its police chief serve as the city manager, in addition to serving as the
police chief, PERS considered the additional compensation that was paid to the police chief to
be similar to a bonus, and PERS did not include it as part of the compensation that was used to
calculate the police chief's retirement benefits. The police chief challenged PERS' determination,
and PERS' determination was upheld. Although this situation is instructive, such determinations
are made by PERS based on the facts of each case.
Accordingly, it cannot be stated with certainty what the result would be in this instance. It also
should be pointed out that even if this additional amount were included in the PERS retirement
formula, if Ms. Petru were to receive future cost of living increases before her retirement, this
temporary salary increase could be subsumed within the COLA increases, depending upon the
amount of the increase(s).
CONCLUSION
Staff requests that the City Council approve the increase of the automobile allowance of $350
per month and a salary increase in the amount of $650 per month for the Deputy City Manager
during the period of time that the Deputy City Manager also serves as the Acting City Manager.
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