PREPARED BY: MATT RODRIGUEZ DATE OF MEETING: 09/03/2024
SUBJECT:
TITLE
CONSIDER CITY COUNCIL AUTHORIZATION TO PROCEED WITH DEVELOPMENT OF A PROPOSED ORDINANCE AMENDING CHAPTER 2.40 OF THE SAN PABLO MUNICIPAL CODE TO INCREASE THE ANNUAL SALARIES OF ELECTED OFFICIALS FOR THE NEXT ELECTED TERM OF OFFICE IN DECEMBER 2024 (CITY COUNCIL), AND DECEMBER 2026 (ELECTED CITY CLERK AND ELECTED CITY TREASURER)
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Receive presentation; provide majority vote direction via minute order to the City Manager and City Attorney.
Body
Compliance statements
FY2023-25 CITY COUNCIL PRIORITY WORKPLAN
Under Major Policy Area: Build a Healthy Community, Policy Item No. 120: Increase via future adopted Ordinance City elected officials' salaries, (with no changes to other benefits), to take effect when there is a minimum of one (1) Council member who commences a new term after November 2024 election pursuant to all applicable State law requirements; and Policy Item No.121: Explore the operational feasibility of staff bringing forward for Council Consideration every two years beginning in the Fall of 2026 an ordinance to increase City elected officials' salaries, with no other changes to benefits, to be considered by future adopted Ordinance at least 60 days in advance of every subsequent municipal election held after the November 2024 election, and before the sitting of the next elected Council per all applicable state law requirements are adopted policy items in the adopted FY 2023-25 Council Priority Workplan, effective May 1, 2023.
BACKGROUND
On June 5, 2023, the City Council amended the FY 2023-25 Council Priority Workplan to consider a future salary adjustment for the City Council in accordance with all applicable State law requirements by adding the following adopted policy items via adopted Resolution 2023-092, as follows: (See Attachment).
• Policy Item No. 120: Increase via future adopted Ordinance City elected officials' salaries, (with no changes to other benefits), to take effect when there is a minimum of one (1) Council member who commences a new term after November 2024 election pursuant to all applicable State law requirements.
• Policy Item No.121: Explore the operational feasibility of staff bringing forward for Council Consideration every two years beginning in the Fall of 2026 an ordinance to increase City elected officials' salaries, with no other changes to benefits, to be considered by future adopted Ordinance at least 60 days in advance of every subsequent municipal election held after the November 2024 election, and before the sitting of the next elected Council per all applicable state law requirements.
Previous City Council Action on Salary Adjustments (2011 to Current)
All City Council members, as well as the elected City Clerk and elected City Treasurer, serve as part-time elected officials with limited powers and duties pursuant to the San Pablo Municipal Code. Previously, the City Council have adopted ordinances that limit compensation and benefits for all elected City officials in accordance with the Public Employees’ Medical and Hospital Care Act (PEMHCA) regulations as follows:
1) Ordinance No. 2011-002 (Adopted 07/05/11): Established limits on medical in-lieu compensation, retirement and welfare benefits for City Council members pursuant to San Pablo Municipal Code (SPMC) 2.40.020(B); State Government Code Section 36516 (d); 53208.5; 36516 (f); and PEMHCA regulations).
2) Ordinance No. 2014-11 (Adopted 10/06/14): Established salaries for City Council, City Clerk, and City Treasurer pursuant to California Government Code Sections 36516 and 36517; limited health and welfare benefits for retired members of the City Council first elected on or after January 1, 2013, including but not limited to any city-paid supplemental to PEMHCA medical coverage, life insurance, dental coverage, or any other health and welfare benefit during retirement; provided that City shall pay for the health and welfare coverage of each City Clerk and City Treasurer elected prior to November 2010, during their terms of office, to the same extent as provided for members of the City Council; no City Clerk or City Treasurer first elected on or after November 2010 shall be entitled to any city-paid health or welfare benefits during retirement, including but not limited to any city-paid supplemental to PEMHCA medical coverage, life insurance, dental coverage, or any other health and welfare benefit during retirement.
3). Ordinance No. 2014-014 (Adopted 10/20/14): Increased the City Clerk’s salary to four hundred ($400) dollars per month for the 2014-2018 term of office, and reduced the Clerk’s salary to two hundred ($200) dollars per month thereafter.
4) Ordinance No. 2018-004 (Adopted 09/17/18): Increased the salaries of members of the City Council to one thousand ninety-four dollars ($1,094) per month beginning in December 2018, and increased the salaries of the City Clerk and City Treasurer to two hundred and forty dollars ($240) per month.
New California Senate Bill 329 (Adopted June 29, 2023)
As of June 29, 2023, new State law makes changes to the existing limits on City Council salary increases. Pre-existing law authorized a City Council to increase Councilmember salaries by ordinance in an amount that does not exceed 5% for each calendar year since the last salary adjustment. Existing law provides for the procedures by which a city may enact such ordinances and restricts when salary increases for city council members may take effect.
The new State law authorizes a city council to increase the salary of council members in one of two ways, in an amount not exceeding the greater of either (1) 5% for each calendar year since the last salary adjustment, as provided before the new state law took effect, or (2) an amount equal to inflation since January 1, 2024, based upon the California Consumer Price Index, which shall not exceed 10% for each calendar year. During the Council’s deliberation on June 5, 2023, the City Council expressed their support for Option #1 under existing State law, deciding to proceed with a policy amendment for the FY 2023 25 Council Priority Workplan via adopted Resolution 2023-095.
Therefore, as previously directed, the City Manager has prepared a formal policy discussion for September 2024 for the City Council to consider providing formal policy direction to City staff on a potential salary adjustment via a proposed ordinance for potential adoption prior to the next municipal election cycle. Such an ordinance, if adopted, would approve a salary adjustment at the next elective term of office for the City Council beginning in December 2024, and at the next elective term of office for the City Clerk and City Treasurer beginning in December 2026 per existing State law requirements.
Proposed 2024 Salary Adjustment for City Elected Officials
Pursuant to adopted Resolution 2023-092 and to meet adopted Policy Items #120 and #121 requirements, the City Manager has prepared a policy discussion for City Council deliberation and review this evening. The policy discussion before the City Council would consider an annual salary adjustment of +5% per calendar year from the last annual salary adjustment in 2018 for all City Elected Officials as reflected in Table A (See Attachment).
Note: The City Council previously elected not to proceed with any modifications to non-salary, compensable benefits on a failed vote (2-3 vote) which occurred on September 5, 2023 (i.e. salary only).
County-wide City Elected Officials’ Survey (Salary Only)
On August 15, 2024, City HR staff completed an update to all City Elected Salaries only for all local cities within Contra Costa County for the City Council, Elected City Clerk and Elected City Treasurer. Results of this most recent County-wide salary survey are attached to this staff report for City Council review (See Attachment).
City Manager Recommended Procedure
This evening, following review of both the proposed 2024 salary adjustment information in Table A and review of State law requirements, the City Council must provide formal policy direction by majority vote (via minute action) to proceed with formal preparation and introduction of a proposed ordinance to amend SPMC Section 2.40. The proposed ordinance would increase the annual salaries of all City elected officials as noted above for the next elective term of office in December 2024 (City Council), and December 2026 (City Clerk and City Treasurer).
Following Council direction via majority vote, City staff would draft a proposed ordinance for first reading and introduction at the next regular City Council meeting on September 16, 2024, with a second reading and adoption to occur on October 7, 2024. The proposed ordinance, if adopted, would make the new salary adjustments effective at the next elective term of office for City Councilmembers in December 2024, and the next elective term of office for the City Clerk and City Treasurer in December 2026.
FISCAL IMPACT
Annual budgeted expenses (salaries only) for five (5) City Councilmembers for FY 2024-25 total $65,640 annually, and for the City Clerk and City Treasurer at $5,760 annually which are contained in the adopted FY 2025-26 Two-Year Biennial General Fund (GF) Operating Budget, effective July 1, 2024.
If the City Council proceeds with the +30% maximum salary adjustment allowed by State law from the last amendment in 2018 via future adopted ordinance, then a corresponding maximum +30% increase in annual salaries for all City Elected Officials (i.e., City Council, Elected City Clerk, Elected City Treasurer) would become effective during the next elective terms of office, and result in a corresponding net annual GF budget impact FY 2024-25 and FY 2025-26 periods, as follows:
Elected City Council (Salary Only): (Effective December 2024)
FY 2024-25 Annual Salaries Cost: $65,640 (Adopted)
Annual Salaries Cost: $85,332 (Amended +30% maximum)
Net Annual Budget Impact: ($19,692)
• Total FY 2024-25 GF Annual Budget Impact: ($19,692)
• Total FY 2024-25 GF Net Budget Impact: ($11,487) for Dec. - June 2025)
Elected City Clerk & City Treasurer (Salary Only): (Effective December 2026)
FY 2025-26 Annual Salaries Cost: $5,760 (Adopted)
Annual Salaries Cost: $7,488 (Amended +30% maximum)
Net Annual Budget Impact: ($1,728)
• Total FY 2025-26 GF Annual Budget Impact: ($1,728)
• Total FY 2025-26 GF Net Budget Impact: ($1,008) for Dec. - June 2026)
City Manager Operating Contingency Reserve (Fund: 190)
If the City Council elects to proceed with the proposed 2024 salary adjustment for all City Elected Officials via adopted Ordinance, then the corresponding total net GF budget increase to the FY 2024-25 period would be $11,487, and for FY 2025-26 would be $20,700, with both annual net GF budget (non-budgeted) expenses to be appropriated from the City Manager Operating Contingency Reserve (Fund: 190). A resolution would be prepared following Ordinance adoption to formally appropriate funds from Fund 190 to cover said net GF expenses for FY 2024-25 period.
ATTACHMENTS:
Att A - Table A - Proposed 2024 Salary Adjustment (All Elected Officials)
Att B - City Council Resolution No. 2023-092 (Adopted 06/05/2023)
Att C - Contra Costa County Cities’ Survey of Current Compensation and Benefits for Elected Officials (Updated August 15, 2024)