TITLE:
title
CITY COUNCIL FIRST READING OF ORDINANCE TO INCREASE CITY COUNCIL COMPENSATION
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DEPARTMENT: CITY MANAGER’S OFFICE- HUMAN RESOURCES DIVISION
PRESENTED BY: KASAMA LEE, HUMAN RESOURCES MANAGER
CONTACT INFORMATION: KASAMA LEE, HUMAN RESOURCES MANAGER (714) 754-5169
RECOMMENDATION:
recommendation
Staff recommends the City Council introduce for first reading, by title only, Ordinance No. 2024-XX increasing the City Council compensation effective after the general election, with the new City Council in December 2024.
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BACKGROUND:
In January 2021, the City Council and City leadership team participated in a Strategic Planning workshop and identified Three-Year Goals and Objectives and key priorities for the subsequent six months through July 2021. The City Council developed five goals, one of which is to “Recruit and Retain High Quality Staff.” On September 27, 2021, the City Council and City leadership team conducted a second workshop to revisit the Three-Year Goals and Objectives and identify the key priorities for the next six months through March 2022. The City Council Goal to “Recruit and Retain High Quality Staff” was re-affirmed and new six-month objectives were created to better achieve this goal. One of the new objectives was to “Perform a market analysis of City Council compensation for comparable agencies and special districts within the county and report results to the City Manager.”
The City Council’s current salary rate of $904.40 per month was last set by Ordinance No. 09-5 in May 2009. The City Council approved a reduction in its salary by 5% in 2009 due to the impacts of the State budget on local government and economic conditions at the time.
California Government Code section 36516 was recently amended to allow city councils to enact an ordinance providing that each member of the city council receive a salary based on the population of the city. In cities with over 75,000 up to and including 150,000 in population, the city council salary may be set at up to $1,900 per month. Prior to the amendment, this amount was set at $600 per month. California Government Code section 36516(a)(4) previously allowed for up to a 5% increase per year from the date of the last adjustment. The code was recently amended to state:
“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 the greater of either of the following:
(A) 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.
(B) An amount equal to inflation since January 1, 2024, based upon the California Consumer Price Index, which shall not exceed 10 percent for each calendar year.”
The code also states that “No ordinance shall be enacted or amended to provide automatic future increases in salary.”
In addition, staff conducted a market analysis of City Council compensations utilizing data from comparable agencies and special districts within the county.
ANALYSIS:
Below is a summary of salary and benefits for our five contiguous agencies:
Utilizing the 5% annual calculation and based on the last adjustment of salary in May of 2009, which took effect in December 2010, would equate to an increase of $45.22 per month ($20.88 per payroll period) for each calendar year since 2010 (5% per year for 13 years from 2011 through 2023). This would result in an increase of $587.86 per month for a new salary of $1,492.26 per month.
By increasing the City Council salary to $1,492.26 per month, the total compensation package would be closer in alignment with the Cities of Huntington Beach and Newport Beach, which are full service (Police and Fire) and more similar in structure to Costa Mesa.
In comparison, if an employee works 22 hours per week at the current minimum wage of $16.00 per week, they would receive an approximate monthly salary of $1,525 per month.
Staff has prepared the necessary documents for City Council consideration of an increase to its compensation to $1,492.26 per month. An ordinance increasing City Council compensation is attached for the first reading. If approved at this meeting, the second reading and adoption would be scheduled for the City Council meeting of September 17, 2024. California Government Code section 36156.5 states that: “A change in compensation does not apply to a council member during the council member’s term of office. This prohibition shall not prevent the adjustment of the compensation of all members of a council serving staggered terms whenever one or more members of the city council becomes eligible for a salary increase by virtue of the council member beginning a new term of office.” City Council compensation adjustments can only be made effective following the next general election. If approved, the new City Council salary would go into effect when the new City Council terms begin after the next general election in 2024.
ALTERNATIVES:
The City Council has the following alternatives:
1. Give first reading: The City Council may give first reading to the draft Ordinance setting City Council compensation at $1,492.26 per month.
2. Give first reading with modifications: The City Council may modify the draft Ordinance setting City Council compensation at $1,900 per month and give first reading.
3. Not adopt changes to City Council compensation: The City Council may choose to not adopt the proposed increase to Council Compensation.
4. Provide alternative direction to staff.
FISCAL REVIEW:
The proposed increase is estimated to be effective in December 2024, after the next general election in 2024. The pro-rated fiscal impact in FY 2024/25 is $3,527.16 for six months per member. There are sufficient salary savings citywide to cover the increase.
LEGAL REVIEW:
The City Attorney’s Office has reviewed the ordinance and the report and approved them as to form.
CITY COUNCIL GOALS AND PRIORITIES:
This item supports City Council Goal:
• Recruit and Retain High Quality Staff
CONCLUSION:
Staff recommends the City Council introduce for first reading, by title only, Ordinance No. 2024-XX increasing the City Council Compensation effective after the general election, with the new City Council in December 2024.