Loading...
HomeMy WebLinkAbout2013-10 - AMENDED SEE 2015-65; Adopt the Key & Management Compensation PlanRESOLUTION NO. 2013 -10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING THE KEY & MANAGEMENT COMPENSATION PLAN WHEREAS, the City of Newport Beach has employees that are not represented by an exclusively recognized collective bargaining unit and therefore are not covered by a collective bargaining agreement; and WHEREAS, the City Council of the City of Newport Beach has previously established and recognized the unrepresented Key & Management Group, consisting of certain management, professional and confidential classifications; and WHEREAS, the City Council of the City of Newport Beach adopted the Key & Management Compensation Plan ( "Plan ") to provide for salary and benefits for employees in the Key & Management Group for the period July 1, 2010 through June 30, 2012; and WHEREAS, the City Council of the City of Newport Beach desires to modify and adopt a new Plan consistent with terms and conditions of employment of similarly situated employees in other recognized Miscellaneous bargaining units. NOW, THEREFORE, the City Council of the City of Newport Beach does RESOLVE as follows: Section 1. Wages, hours, fringe benefits and other terms of employment of employees included in the Key & Management Group shall be provided in accordance with the provisions of the attached Key & Management Compensation Plan (Attachment A). Section 2. The term of the Plan will be for thirty -six (36) months, effective retroactively to July 1, 2012, through June 30, 2015. Adopted this 22 °d day of January, 2013. Mayor of the City of Newport Beach Attachment A City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 INTRODUCTION Consistent with applicable laws, the following represents the salary and benefit program established by the City Council for Key and Management. The Key and Management Compensation Plan shall in no manner be interpreted as a guaranteed or implied contract between the City and any employee or group of employees. The Key and Management Group are divided into five categories: • Executive Management • Administrative Management • Administrative Management- Safety • Division Head • Confidential Appendix A lists all classifications in each category. All Key and Management employees (excluding City Manager, City Attorney, and City Clerk) will receive the following cost of living increases: Effective the pay period including January 1, 2013 salaries will be increased by an amount equal to the increase in the Consumer Price Index (CPI) Los Angeles/Orange County Urban Wage Earners Index for the 12 month period ending October 31, 2012 with a minimum 1.5% increase and a maximum 2.5% increase. Effective the pay period including January 1, 2014 salaries will be increased by an amount equal to the increase in the Consumer Price Index (CPI) Los Angeles/Orange County Urban Wage Earners Index for the 12 month period ending on October 31, 2013 with a minimum 1.5% increase and a maximum 2.25% increase, Effective the pay period including January 1, 2015 salaries will be increased by an amount equal to the increase in the Consumer Price Index (CPI) Los Angeles/Orange County Urban Wage Earners Index for the 12 month period ending on October 31, 2014 with a minimum 1,5% increase and a maximum 2,01 increase, 1 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 *Executive Management salary ranges were recently adopted as part of the Fox Lawson & Associates citywide Classification and Compensation Study. In order to preserve ranges until Study conclusion, Executive Management will advance equivalent to the COLA within the existing range. & Range Advancement Advancement through the salary range varies depending on the Group to which the employee is assigned: Executive Management - No steps; movement at the discretion of the City Manager. Administrative Management - Five -step range with eligibility for merit step increases on an annual basis, Administrative Management - Safety- Five -step range with eligibility for merit step increases on an annual basis. Division Head - Five -step range with eligibility for merit step increases on an annual basis. Confidential - Eight -step range with eligibility for merit step increases on an annual basis. Salary steps are placed in five percent (5 %) increments within the range for Administrative Management, Administrative Management - Safety, Division Head, and Confidential groups. The manner in which employees advance through the range may be modified at a later date, subject to changes in the City's compensation structure as a result of the Fox Lawson & Associates Classification and Compensation Study. C. Performance Reviews and Anniversary Dates All Key and Management employees hired prior to 12/31101 will have a December 1, or first full pay period in December, anniversary date. Key and Management employees hired after December 2001 will have an anniversary date based upon hire date and hours of service. All Executive Management performance evaluations will be reviewed by the City Manager prior to implementation of any range advancement. F In [9 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 Upon determination of the Department Director that an employee's ability to speak, read and /or write in Spanish or other language as approved, contributes to the Department, the employee shall be eligible to receive $150 per month in bilingual pay. A certification process will be conducted which will confirm that the employee is fluent at the street conversational level in speaking, reading and /or writing Spanish or other approved language. Non - Exempt Overtime and Compensatory Time Off Employees in non - exempt positions are eligible to receive overtime or compensatory time off. Overtime for non - exempt positions shall be paid at one - and -one -half (1'h) times the employee's regular rate of pay. Overtime work must be approved by the employee's supervisor. Compensatory time off for non- exempt positions shall accrue at the rate of one - and - one -half (11/2) times for every overtime hour worked. Employees may accumulate up to eighty (80) hours of Compensatory Time. Any hours in excess of eighty (80) will be paid off. Accumulation in excess of the eighty (80) hours may be approved at the discretion of the Department Director. Jury Duty An Employee called to serve as a juror shall notify his /her Supervisor on the first Workday following receipt of the summons. Any Employee of the City legally required to serve as a juror shall be entitled to leave with pay and all benefits for a period of up to sixty (60) days so long as his /her presence is legally required. LEAVES A. Holidays Independence Day Labor Day Veteran's Day Thanksgiving Day Day After Thanksgiving Christmas Eve Christmas Day New Year's Eve Observed July 4 First Monday in September November 11 Fourth Thursday in November Friday following Thanksgiving December 24 - last half of working day December 25 December 31- last half of working day 3 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 New Year's Day Martin Luther King Birthday Washington's Birthday Memorial Day Floating Holiday January 1 Third Monday in January Third Monday in February Last Monday in May (1) July 1$` For 2012 only, the % day Christmas Eve and ! day New Year's Eve holidays will be considered full day holidays. Effective the pay period including January 1, 2013, holidays will be paid based on the employee's regular work day schedule. For example, if an employee is on a 9180 schedule and the holiday is observed on a day that the employee is regularly scheduled to work 9 hours, the employee is entitled to receive 9 hours of holiday pay. However, if an employee is on a 9180 schedule and the holiday is observed on a day that the employee is regularly scheduled to work 8 hours, the employee is entitled to receive 8 hours of holiday pay. Employees will receive 8 hours of holiday pay annually for the Floating Holiday, Holidays listed above (except the floating holiday) occurring on a Saturday shall be observed the preceding Friday. Holidays occurring on a Sunday shall be observed on the following Monday. (Half day holidays shall be observed prior to the observed holiday). B. Flex Leave Regular full -time employees in the Administrative Management, Administrative Management - Safety, Division Head and Confidential categories enrolled in the flex leave program will earn leave according to the following schedule: Years of Continuous Hrs Accrued Annual Maximum Service per Pay Period Cos Allowable Balance (hours) 1 but less than 5 5.54 18 432.12 5 but less than 9 6.15 20 479.70 9 but less than 12 6.77 22 528.06 12 but less than 16 7.69 25 599.82 16 but less than 20 8.31 27 648.18 20 but less than 25 8.92 29 695.76 25 and over 9.54 31 744.12 Effective the pay period including January 1, 2013, employees shall accrue Flex leave at the following rates (superseding the rates listed above): C! City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 Maximum Years of Continuous Hrs Accrued Annual Maximum Years of Continuous Hrs Accrued Annual Allowable Service per Pay Period hours Balance (hours) 1 but less than 5 6.00 156.00 468.00 5 but less than 9 6.61 171.86 515.58 9 but less than 12 723 189.98 563.94 12 but less than 16 8.15 211.90 635.70 16 but less than 20 8.77 228.02 684.06 20 but less than 25 9.38 243.88 731.64 25 and over 10.00 260.00 780.00 Spillover: Employees hired prior to July 1, 1996 shall be paid for earned flex leave in excess of the employee's maximum accrual rate (spillover) provided that they utilized at least 80 hours flex leave the previous calendar year. Employees with 16 or more years of continuous service are required to use 120 hours of flex leave the previous calendar year. Regular full -time employees in the Executive Management category will earn flex leave according to the following schedule: Effective the pay period including January 1, 2013, employees shall accrue Flex leave at the following rates (superseding the rates listed above): Maximum Years of Continuous Hrs Accrued Annual Allowable Service per Pay Period hours Balance (hours) 1 but less than 15 8.31 216.06 648 15 and over 9.23 239.98 720 Effective the pay period including January 1, 2013, employees shall accrue Flex leave at the following rates (superseding the rates listed above): During the first six months of full -time employment, new regular employees shall not accrue paid leave. At the completion of six months of employment six months of accrued leave will be placed in the employee's account. Note: If an employee becomes sick in the first six months of employment, the City will advance up to six (6) months of accrued flex leave time to be used for the illness only. if the employee terminates employment prior to six (6) months, 5 Maximum Years of Continuous Hrs Accrued Annual Allowable Service per Pay Period hours Balance (hours) 1 but less than 15 8.77 228 684.06 15 and over 9.69 252 755.82 During the first six months of full -time employment, new regular employees shall not accrue paid leave. At the completion of six months of employment six months of accrued leave will be placed in the employee's account. Note: If an employee becomes sick in the first six months of employment, the City will advance up to six (6) months of accrued flex leave time to be used for the illness only. if the employee terminates employment prior to six (6) months, 5 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 the employee will repay the equivalent to the number of Flex leave days that were advanced to the employee. Any Flex leave time advanced during the first six (6) months of employment will be subtracted from the six (6) months of accrual placed in the employees account upon completion of six months employment. 1. Limit on Accumulation Employees first hired, or rehired by the City subsequent to July 1, 1996, shall not be eligible for flex leave spillover pay and shall not be entitled to accrue flex leave in excess of the flex leave accrual threshold. 2. Method of Use Flex leave may not be taken in excess of that actually accrued, and in no case, except for illness, may it be taken prior to the completion of an employee's initial probationary period. The Department Director shall approve all requests for flex leave, taking into consideration the needs of the Department, and whenever possible, the seniority and wishes of the employee. C. Sick Leave Key and Management employees employed by the City prior to initiation of the flex leave program had separate sick and vacation leave banks. With the initiation of the flex leave program, vacation leave was converted to flex leave on an hour for hour basis and any sick leave hours remained in a bank to be used as provided in Section 11.2 (Sick Leave) of the Employee Policy Manual, D. Dependent Care Employees may use up to % of Flex Leave accrued per year to provide care for any member of the employee's immediate family in need of care due to illness or injury. E. Bereavement Leave Bereavement leave shall be defined as "the necessary absence from duty by an employee having a regular or probationary appointment because of a death or terminal illness in his /her immediate family." For the purposes of this section, immediate family shall mean father, mother (including step), brother, sister, spouse /domestic partner, child, and grandparents, or the employee's H City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 spousesldomestic partner's father, mother, brother, sister, child and grandparents. Employees shall be entitled to 40 hours of bereavement leave per incident per year. Administrative Leave All overtime, either paid or compensatory time off, will be eliminated for FLSA exempt Management personnel. In its place, Administrative Leave will be granted, for a minimum of 8 hours and a maximum of 80 hours, to be determined by the Department Director with the concurrence of the City Manager, based upon the number of overtime hours normally worked by the individual exempt employee. G. Leave Sellback Twice annually, employees shall have the option of selling back, on an hour for hour basis, accrued flex or vacation leave. In no event shall the flex or vacation leave balance be reduced below one hundred and sixty {180} hours. Hours sold back will be subject to the Retiree Health Savings Plan Part C contributions, per Section 2 (a), Retiree Medical Benefits. For the term of this Compensation Plan the Part C contributions for Flex/Vacation will be at 30 %. BENEFITS A. Insurance 1. Medical and Dental Insurance The City has implemented an IRS qualified Cafeteria Plan. In addition to the contribution amounts listed below, the City shall contribute the minimum CaIPERS participating employer's contribution towards medical insurance for employees enrolled in a CaIPERS medical plan, per Government Code Section 22892. Effective the first pay issue in January 2013, the City's contribution towards the Cafeteria Plan will increase to $1,349 (plus the minimum CaIPERS participating employer's contribution). Effective the first pay issue in January 2014, the City's contribution towards the Cafeteria Plan will increase to $1,449 (plus the minimum CaIPERS participating employer's contribution). 7 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 Effective the first pay issue in January 2015, the City's contribution towards the Cafeteria Plan will increase to $1,549 (plus the minimum CaIPERS participating employer's contribution). Employees shall have the option of allocating Cafeteria Plan contributions towards the City's existing medical, dental and vision insurancetprograms. Unused Cafeteria Plan funds shall be payable to the employee as taxable cash back. Employees shall be allowed to change coverages in accordance with plan rules and during regular open enrollment periods. Key and Management employees who do not want to enroll in any medical plan offered by the City must provide evidence of group medical insurance coverage, and execute an opt -out agreement releasing the City from any responsibility or liability to provide medical insurance coverage, on an annual basis. The maximum cafeteria allowance provided to employees who execute an opt -out agreement is $1,249 per month effective January 2013. Employees hired after adoption of this 2012 -2015 Compensation Plan, and who execute an opt -out agreement, will receive a maximum cafeteria allowance of $600 per month. 2. Vision Insurance Employees may purchase vision insurance upon hire and during benefits open enrollment. 3. Healthcare Reform Certain State and Federal laws, programs and regulations, including the Affordable Care Act, may impact future medical plan offerings. In the event reform measures alter healthcare coverage options, cost, or other elements of healthcare services with the City's Miscellaneous bargaining units, cafeteria and /or healthcare benefits for employees in the Key and Management Group will be similarly provided. 4, Disability Insurance The City shall provide disability insurance with the following provisions: 91 N City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 Weekly Benefit Maximum Monthly Benefit Minimum Benefit Waiting Period 66.67% gross weekly wages $10,000 $15 (STD) /$100 (LTD) 30 Calendar Days (STD) 180 Calendar Days (LTD) Employees shall not be required to exhaust accrued paid leaves prior to receiving benefits under the disability insurance program. Employees may not supplement the disability benefit with paid leave once the waiting period has been exhausted. Employees are responsible for the payment of the disability insurance cost in the amount of one (1 %) percent of base salary. Additional Benefits 1. IRS Section 125 Flexible Spending Account The City provides a qualified Section 125 Flexible Spending Account which authorizes an employee to reduce taxable income for payment of allowable expenses such as child care and medical expenses. 2. Life Insurance The City shall provide life insurance for all regular full -time employees in $1,000 increments based on annual salary up to $50,000. 3. EmploVee Assistance Program Employees are eligible to receive EAP benefits, which provide confidential counseling and education on work and life issues, subject to provider guidelines. Retirement Benefits 1. PERS Retirement Formula The City contracts with California Public Employees Retirement System (PERS) to provide retirement benefits for its employees. Pursuant to prior agreements and state mandated reform, the City has implemented first, second and third tier retirement benefits. 9 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 Tier 1: For employees hired by the City on or before November 23, 2012, the retirement formula shall be 2.5% @ 55 calculated on the basis of the best/single highest year. Tier 2: For employees first hired by the City between November 24, 2012 and December 31, 2012, or hired on or after January 1, 2013 and are current members of the retirement system, as defined in Public Employees Pension Reform Act, the retirement formula shall be 2% @ 60 calculated on the average 36 highest month's salary. Tier 3: For employees first hired by the City on or after January 1, 2013, and who do not meet the Tier 2 criteria, the retirement formula shall be 2% @ 62 calculated on the average 36 highest month's salary. The City's contract with PERS also provides the 4th Level 1959 Survivor Insurance Benefit, $500 Lump Sum Death Benefit, Sick Leave Credit, Military Service Credit, 2% Cost of Living Adjustment and the pre - retirement option settlement 2 death benefit (Section 21548). 2. Employee Contributions Key and Management employees will contribute additional amounts toward the PERS retirement benefit, to the extent permissible by law. By June 2015 Key and Management employees in each Tier will contribute 12.35% of pensionable pay toward the retirement benefit, representing a nearly 50% share in the total cost. Employee retirement contributions that are in addition to the normal PERS Member Contribution shall be calculated on base pay, special pays, and other pays normally reported as TERSable" compensation, and will be made on a pre -tax basis through payroll deduction, to the extent allowable by the government tax code. It is recognized that these payments will not be reported to PERS as contributions toward either the member or employer rate and fall outside the scope of "cost- sharing" as provided under GC Section 20516(f). Tier 1 Employees: Effective upon City Council approval of the Compensation Plan:, 1) Employees will continue to contribute 5.58% toward the Member Contribution and 2.42% toward the Employer Contribution for a total of 8 %, as provided in the prior Compensation Plan, and 2) the City will eliminate reporting the value of the 2.42% Employer Paid Member Contribution (EPMC) as special compensation. m City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 Effective the pay period including June 30, 2013, Tier 1 employees shall contribute an additional 1.45% of pensionable pay toward retirement costs pursuant to Government Code Section 20516 0, for a total of 9.45 %. Effective the pay period including June 30, 2014, Tier 1 employees shall contribute an additional 1.45% of pensionable pay toward retirement costs for a total of 10.90 %; and effective the pay period including June 30, 2015, Tier 1 employees shall contribute an additional 1.45% of pensionable pay toward retirement costs, for a total employee contribution of 12.35 %. Tier 2 Employees: Upon City Council approval of the Compensation Plan, employees will continue to contribute the full 7.0% statutory PERS Member Contribution. Effective the pay period including June 30, 2013 Tier 2 employees shall contribute an additional 2.45% of pensionable pay toward retirement costs pursuant to Government Code Section 20516(0, for a total of 9.45 %. Effective the pay period including June 30, 2014, Tier 2 employees shall contribute an additional 1.45% of pensionable pay toward retirement costs for a total of 10.90 %; and effective the pay period including June 30, 2015, Tier 2 employees shall contribute an additional 1.45% of pensionable pay toward retirement costs, for a total employee contribution of 12.35 %. Tier 3 Employees: The minimum statutory employee contribution for employees in Tier 3 is subject to the provisions of the Public Employees Pension Reform Act of 2012 (PEPRA) and equals 50% of the `total normal cost" For FYI 2-13, the employee rate is 6.25% and is subject to change based on annual PERS actuarial valuations. Effective the pay period including June 30, 2013, in addition to the statutorily required 50% contribution of total normal costs, Tier 3 employees shall contribute an additional 3.20% of base pay toward retirement pursuant to Government Code Section 205160, for a total of 9.45 %. If the FY13 -14 member contribution rate for employees in Tier 3 is greater or less than 6.25 %, as determined by PERS valuation, the additional contribution made by the employee under 205160 will be increased or decreased accordingly, such that the total contribution equals 9.45 %. Effective the pay period including June 30, 2014, in addition to the statutorily required 50% contribution of total normal costs, Tier 3 employees shall contribute an additional 4.65% of pensionable pay toward retirement. If the FY14 -15 member contribution rate for employees in Tier 3 is greater or less than 6.25 %, as determined by PERS valuation, the 11 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 additional contribution made by the employee under 20516(0 will be increased or decreased accordingly, such that the total contribution equals 10.9 %. Effective the pay period including June 30, 2015, in addition to the statutorily required 50% contribution of total normal costs, Tier 3 employees shall contribute an additional 6.10% of pensionable pay toward retirement if the FY15 -16 member contribution rate for employees in Tier 3 is greater or less than 6.25 %, as determined by PERS valuation, the additional contribution made by the employee under 20516(0 will be increased or decreased accordingly, such that the total contribution equals 12.35 %. 3. LIUNA Supplemental Pension The City shall contribute, on behalf of each Key and Management employee, one and one half percent (1.5 %) of base salary into the LIUNA Supplemental Pension Fund. The City's sole obligation is to forward the agreed upon amount to the fund. The City is not responsible for, nor does it make any representation regarding, the payment of benefits to unit members. Effective January 1, 2007, the City increased the base salary of all Key & Management employees by 1.5 %, and then deducted that same amount as a mandatory employee contribution. For tax purposes, the contributions, although designated employee contributions, are being paid by the employer in lieu of contributions by the employee. The contributions are deemed "picked -up' and treated as employer contributions, thereby excluding the employee's gross income until distributed. Employees cannot opt out of the "pick -up," or receive the contributed amounts directly instead of having them paid to the plan. Participation at the same level will continue to be mandatory for members of the Key & Management Group. In accordance with correspondence received from a legal expert retained by the City, this amount will not be taxable, except for Medicare. Minor changes to other compensation related items that are calculated from base salary will also result from this administrative change. Key & Management employees who leave City employment prior to vesting in the LIUNA pension plan will have no right to the return of amounts contributed, or other recourse against the City concerning LIUNA. 12 FRI City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 As of date of adoption of this Compensation Plan, pursuant to Government Code 7518.22(c) under the California Public Employees Pension Reform Act of 2092, effective January 9, 2013, newly hired employees may be ineligible to participate in the LIUNA Supplemental Pension Fund, Retiree Medical Benefits 1. Background In 2005, the City and all Employee Associations agreed to replace the previous "defined benefit" retiree medical program with a new "defined contribution" program. The process of fully converting to the new program will be ongoing for an extended period. During the transition, employees and (then) existing retirees have been administratively classified Into one of four categories. The benefit is structured differently for each of the categories. The categories are as follows: a. Category 1 - Employees newly hired after January 1, 2006. b. Category 2 - Active employees hired prior to January 1, 2006, whose age plus years of service as of January 1, 2006, was less than 50 (46 for public safety employees). C. Category 3 - Active employees hired prior to January 1, 2006, whose age plus years of service was 50 or greater (46 for public safety employees) as of January 1, 2006. d, Category 4 - Employees who had already retired from the City prior to January 1, 2006, and were participating in the previous retiree medical program. 2. Program Structure This is an Integral Part Trust (IPT) Retiree Health Savings (RHS) Plan (formerly the Medical Expense Reimbursement Program - "MERP"). a. For employees in Category 1, the program is structured as follows: Each employee will have an individual RHS account (Employee Account). This account will accumulate contributions to be used for health care expense after separation. All contributions to the plan 13 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 are either mandatory employee contributions or City paid employer contributions, so they are not taxable to employees at the time of deposit. Earnings from investment of funds in the account are not taxable when posted to the account. Benefit payments are not taxable when withdrawn, because the plan requires that all distributions be spent for specified health care purposes. Contributions will be in three parts: Part A contributions (mandatory employee contributions): 1% of Salary. Part B contributions (employer contributions): $2.50 per month for each year of service plus year of aye (updated every January 1sf based on status as of December 315 of the prior year). Part C contributions (leave settlement as determined by Key and Management employees): Key and Management employees will determine the level of contribution, subject to the following constraints. All employees within Key and Management must participate at the same level. The participation level should be specified as a percentage of the leave balance on hand in each employee's leave bank at the time of separation from the City. For example, if Key and Management employees determine to specify 50% of the leave balance as the participation level, then each member leaving the City or cashing out leave at any other time, would have the cash equivalent of 50% of the amount that is cashed out added to the RHS, on a pre -tax basis. The remaining 50% would be paid in cash as taxable income. Individual employees would not have the option to deviate from this breakout. Sick leave balances may also be included in the RHS Part C contributions, but only to the extent and within all the numeric parameters specified in the Employee Policy Manual. Sick leave participation is a separate item from vacation /flex leave participation, and thresholds must be separately identified by the Key and Management group. Key and Management employees have agreed to Part C contributions at the level of 0% of sick leave and 30% of Flex 14 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 leave. This amount may be changed, on a go forward basis, as determined among the Key and Management group. Nothing in this section restricts taking leave for time off purposes. Part A contributions may be included in PERS compensation. Part B and Part C contributions will not be included in PERS compensation. Part A contributions begin upon enrollment in the program and are credited to each RHS Employee Account each pay period. Eligibility for Part B contributions is set at five years of vested City employment. At that time, the City will credit the first five years worth of Part B contributions into the Employee Account (interest does not accrue during that period). Thereafter, contributions are made bi-weekly. Part C deposits, if any, will be made at the time of employment separation. Each Employee has a right to reimbursement of medical expenses (as defined below) from the Plan until the Employee Account balance is zero. This right is triggered upon separation. If an employee leaves the City prior to five years employment, only the Part A contributions and Part C leave settlement contributions, if any, will be in the RHS Employee Account. Such an employee will not be entitled to any Part B contributions. Distributions from RHS Employee Accounts are restricted to use for health insurance and medical care expenses after separation, as defined by the Internal Revenue Code Section 213(d) (as explained in IRS Publication 502), and specified in the Plan Document. In accordance with current IRS regulations and practices, this generally includes premiums for medical insurance, dental insurance, vision insurance, supplemental medical insurance, long term care insurance, and miscellaneous medical expenses not covered by insurance for the employee and his or her spouse and legal dependents — again only as permitted by IRS Publication 502, Qualification for dependency status will be determined by guidelines in IRC 152. If used for these purposes, distributions from the RHS accounts will not be taxable. Cash withdrawal for any other purpose is prohibited. Under IRS Revenue Ruling 2005-24, any balance remaining in the Employee Account after the death of the employee and his or her spouse and/or other authorized dependents (if any) must be forfeited, 15 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 01 C. That particular RHS Employee Account will be closed, and any remaining funds will become general assets of the plan. The City's Part B contributions during active employment constitute the minimum CaIPERS participating employer's contribution towards medical insurance after retirement. In addition, retirees selecting a CaiPERS medical plan or any other plan with a similar employer contribution requirement, the required City contribution will be withdrawn from the retiree's RHS account. In addition to the new plan contributions listed above, current employees who fully convert to the new plan will also receive a one -time City contribution to their individual RHS accounts that equates to $100 per month for every month they contributed to the previous "defined benefit" plan, to a maximum of 15 years (180 months). This contribution will be made only if the employee retires from the City and at the time of retirement. No interest will be earned in the interim. Employees in Category 2 who had less than five years service with the City prior to implementation of the new program will only receive Part B contributions back to January 1, 2006 when they reach five years total service. For employees in this category, the City will make no Part B contributions while the employees are still in the active work force. Instead, the City will contribute $400 per month into each of their RHS accounts after they retire from the City, to continue as long as the employee or spouse is still living. Each employee will contribute a flat $100 per month to the plan for the duration of their employment to partially offset part of this expense to the City. The maximum benefit provided by the City after retirement is $4,800 per year, accruing at the rate of $400per month. There is no cash out option for these funds, and they may not be spent in advance of receipt. ii City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 Employees in this category will also receive an additional one -time City contribution of $75 per month for every month they contributed to the previous plan prior to January 1, 2006, up to a maximum of 15 years (180 months). This contribution will be made to the RHS account at the time of retirement, and only if the employee retires from the City. No interest will be earned in the interim. d. For employees (retirees) in Category 4, the structure is very similar can be used for any IRS authorized purpose, not lust City insurance premiums. Effective July 1, 2006, a RHS account has been opened for each retiree in this category, and the City will contribute $400 per month to each account as long as the retiree or spouse remains living. 3. Administration Vendors have been selected by the City to administer the program. The contract expense for program -wide administration by the vendor will be paid by the City. However, specific vendor charges for individual account transactions that vary according to the investment actions taken by each employee, such as fees or commissions for trades, will be paid by each employee. The City's Deferred Compensation Committee, or its successor committee, will have the authority to determine investment options that will be available through the plan. 4. Value of Benefit For all purposes, including compensation comparisons, the Retiree Medical Program shall be valued at 1% of salary on which PERS retirement is based (Part A); plus .25% of other compensation (Part B). E. Tuition Reimbursement Key and Management employees attending accredited community colleges, colleges, trade schools or universities, or recognized professional organizations or agencies may apply for reimbursement of one hundred percent (100 %) of the actual cost of tuition, books, fees or other student expenses for approved job — related coursework, seminars or professional development programs. Maximum 17 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 tuition reimbursement for employees shall be $1,400 per fiscal year. Effective January 1, 2013, reimbursement will increase by $100, for a maximum annual benefit of $1,500 per rascal year. Reimbursement is contingent upon the successful completion of the course. Successful completion means a grade of "C" or better for undergraduate courses and a grade of "B" or better for graduate courses. All claims for tuition reimbursement require the approval of the Human Resources Director or designee. MISCELLANEOUS A. Probationary Period Newly hired employees shall serve a twelve -month probationary period. Any employee who is promoted shall be required to successfully complete a six (6) month probationary period in the new position. All Executive Management positions serve at -will and can be released from employment at any time. The City Manager, City Attorney and City Clerk serve at the pleasure of the City Council. B. Direct Deposit All newly hired employees shall participate in the payroll direct deposit system. C. Exempt and Non - exempt Status All classifications in Key and Management are classified as exempt under the FLSA, with the following exceptions: Deputy City Clerk Administrative Assistants to the Police Chief, Fire Chief, City Attorney, Assistant City Manager, and Human Resources Director Administrative Assistant - Confidential Administrative Support Services Coordinator Executive Assistant to the City Manager Human Resources Specialist l /II Human Resources Analyst Budget Analyst Paralegal Public Information Specialist Legal Assistant W1 City of Newport Beach KEY AND MANAGEMENT COMPENSATION PLAN Effective July 1, 2012 through June 30, 2015 D. 9/80 Scheduling Plan The City agrees to maintain flex - scheduling where it is currently operating successfully. Any new flex scheduling must be approved by the City Manager prior to implementation. Effective the pay period beginning January 15, 2011, the 9/80 flex - schedule will be modified as follows: employees will have the option of alternating Fridays off only. Employees currently on a 9/80 schedule with alternating Mondays or any other day off, will convert to Fridays off beginning in January 2011. To ensure effective coverage, employees on the 9/80 schedule will be divided into groups A or B, with equal numbers of staff as much as possible, including management and supervisory staff, off on alternating Fridays. To ensure ongoing compliance with Fair Labor Standards Act, and to maintain organizational efficiency, deviations from established flex days, If legally permitted, will be considered on a case -by -case basis. The City of Newport Beach's Employee Policy Manual shall govern all issues not addressed in this document with respect to wages, hours and other terms and conditions of employment. Revised 1/16/2013 19 Appendix A Key & Management Classifications 2012 -2015 Administrative Management Confidential Assistant City Attorney Deputy Director, Community Development Deputy Director, Finance Deputy Director, Municipal Operations Deputy Director, PW /City, Engineer IT Manager Police Support Services Administrator Utilities General Manager Administrative Management- Safety Assistant Chief, Fire Assistant Chief, Lifeguard Operations Assistant Chief, Police Division Heads Accounting Manager Administrative Manager Assistant City Engineer Assistant to the City Manager Building Manager /CBO Budget Manager Chief Building Inspector City Traffic Engineer Civil Engineer, Principal Civil Engineer, Principal — Plan Check Code & Water Quality Enforcement Div. Mgr Deputy City Attorney Equipment Maintenance Superintendent Field Maintenance Superintendent Harbor Resources Manager Human Resources /Risk Mgmt Administrator Library Services Manager Operations Support Superintendent Park & Tree Superintendent Planning Manager Public Information Manager PW Finance /Admin Manager Recreation Manager Recreation Superintendent Refuse Superintendent Revenue Manager Senior Services Manager Systems & Administrative Manager Administrative Analyst Administrative Assistant - Confidential Administrative Assistant to Asst City Manager Administrative Assistant to City Attorney Administrative Assistant to Fire Chief Administrative Assistant to HR Director Administrative Assistant to Police Chief Administrative Support Services Coordinator Assistant City Clerk Budget Analyst Budget Analyst, Senior Deputy City Clerk EMS Manager Executive Assistant to City Manager Facilities Manager Human Resources Analyst Human Resources Analyst, Senior Human Resources Specialist 1/II Human Resources Supervisor Legal Assistant Paralegal Principal Planner Public Information Specialist Purchasing Agent Executive Management Assistant City Manager City Attorney City Clerk City Manager Community Development Director Deputy City Manager/ Human Resources Director Finance Director/Treasurer Fire Chief Library Services Director Municipal Operations Director Police Chief Public Works Director Recreation and Senior Services Director Revised 1/11/13 STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2013 -10 was duty and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 22"" day of January, 2013, and that the same was so passed and adopted by the following vote, to wit: Ayes: Gardner, Petros, Hill, Selich, Henn, Daigle, Mayor Curry Noes: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 23s6 day of January 2013, City Clerk Newport Beach, California (Seal)