BOARD MEETING DATE: January 6, 2006
AGENDA NO. 11

Approve Salary and Benefits Adjustments for Management,
Confidential, and Attorney Employees

SYNPOSIS:

Three-year labor contracts that provide annual salary and benefits ad-justments for union-represented employees are being recommended un-der a separate item. This recommendation is to approve comparable ad-justments for management, confidential, and attorney employees for the same period and to approve a comparable salary adjustment for Board Assistants/Consultants for FY 2005-06.

COMMITTEE:

Not Applicable

RECOMMENDED ACTIONS:

1. Adopt the attached Resolution amending AQMD’s Salary Resolution and Administrative Code to provide comparable three-year adjustments for management, confidential, attorney employees and designated deputies as is being recommended under a separate item for union-represented employees;
2. Approve a comparable FY 2005-06 adjustment for the Executive Officer and District Counsel, based on the Personnel Committee’s recommendation;
3. Approve a 4% salary adjustment for Board Assistants/Consultants effective January 2, 2006; and
4. Appropriate from the Undesignated Fund Balance to the Salary and Benefits Major Object for FY 2005-06: $502,800 to fund the FY 2005-06 salary and benefit adjustments; and $694,315 to restore budget reductions approved in June, 2005 related to employee retirement contributions.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Under separate action, the Board is considering three-year labor contracts with union-represented employees that include annual salary and benefits adjustments, retirement contribution adjustments, and the elimination of certain benefits for new employees.
This recommendation would provide comparable adjustments to non-represented employees for same three-year period.

Proposal

The salary and health benefit adjustments, the added employee retirement contribution of 3.25% (effective January 2, 2006), and the elimination of skill-based pay, parking allow-ance, rideshare incentive, and vacation sell-back benefits for those hired on or after Janu-ary 1, 2006, recommended here for management, confidential, and attorney employees and designated deputies and described below are the same three-year adjustments being considered by the Board under a separate action item for the majority of union-represented employees.

For management, confidential, and attorney employees and designated deputies

1. An additional retirement contribution of 3.25% of “compensation earnable” as defined by the retirement system (relieving AQMD of the cost of this contribution), effective January 2, 2006;
2. An 8% salary adjustment, effective January 2, 2006;
3. On July 3, 2006, and July 2, 2007, a salary adjustment equal to the local CPI increase in the preceding year with a minimum annual increase of 3% and a maximum annual increase of 4%;
4. An 8% adjustment to the fixed monthly health benefit amount, effective September 1, 2005, and September 1, 2006, and a 9% adjustment, effective September 1, 2007; and
5. Establish a maximum monthly health benefit amount, effective September 1, 2006.

For management, confidential, and attorney employees and designated deputies hired on or after January 1, 2006

1. Elimination of skill-based pay (currently available only to confidential employees), rideshare incentive, parking allowance, and vacation sell-back benefits; and
2. Inclusion of only the portion of the fixed monthly health benefit amount that is taken as cash as “compensation earnable” for retirement purposes.

This recommendation includes a commitment to transition management and confidential employees from the current major medical plan to a lower-cost preferred provider health plan (PPO) in FY 2006-07 and to include funding in the FY 2006-07 Budget to keep the premium cost of a basic insurance package that includes this PPO plan within the monthly benefit amount.

Based on annual performance evaluations conducted earlier, the Personnel Committee recommends the Executive Officer and District Counsel receive the same FY 2005-06 adjustments approved for management employees.

Finally, since the net effect of the salary and retirement adjustments for non-represented employees for FY 2005-06 is approximately 4%, an adjustment of 4%, effective January 2, 2006, is recommended for Board Assistants/Consultants. Subsequent adjustments comparable to Management and Confidential employees will be included in the upcoming AQMD budgets.

Resource Impacts

The cost for all management, confidential, and attorney employees, including designated deputies, of these recommended salary and benefits adjustments for this three year period is approximately $3.6-$4.1 million, depending on CPI increases in 2006 and 2007. The FY 2005-06 Budget as approved by the Board included no funding for cost-of-living in-creases to employee salaries and benefits. Additionally, $3.1 million in retirement costs was eliminated in the expectation that additional employee contributions toward retirement would be negotiated, saving the agency this amount. To ensure sufficient funding is available in the adopted Budget for the current fiscal year to finance these recommendations for management, confidential, and attorney employees and designated deputies and the salary adjustment for Board Assistants/Consultants, $694,315 needs to be restored to the Budget from the Undesignated Reserve Fund.

Attachments (TYPE size)

ATTACHMENT A

RESOLUTION NO. 06-

A Resolution of the South Coast Air Quality Management District Board amending AQMD’s Salary Resolution and Administrative Code to 1) adopt new salaries, change the retirement contribution rates, and make other benefit changes, effective January 2, 2006, for management, confidential, and attorney employees and designated deputies, and 2) eliminate certain benefits for management, confidential, and attorney employees and designated deputies hired on or after January 1, 2006.

                    WHEREAS the Governing Board of the South Coast Air Quality Management District exercises its duty to review and determine appropriate wages, hours, and other terms and conditions of employment provided to employees.

                    THEREFORE, BE IT RESOLVED that the Board of the South Coast Air Quality Management District, State of California, in regular session assembled on January 6, 2006, does hereby amend AQMD’s Salary Resolution to adopt new salaries, effective January 2, 2006, July 3, 2006, and July 2, 2007, for management, confidential, and attorney classes, and designated deputies.

                    BE IT FURTHER RESOLVED that management, confidential, and attorney employees and designated deputies shall contribute an additional 3.25% of “compensation earn-able” as defined by the retirement system (relieving AQMD of the cost of this contribution) effective January 2, 2006 and that staff is directed to take the steps necessary in coordination with the San Bernardino County Employees’ Retirement Association to accomplish this result.

                    BE IT FURTHER RESOLVED that the fixed monthly health benefit amount for management, confidential, and attorney employees and designated deputies be adjusted by 8%, effective September 1, 2005, and September 1, 2006, and by 9%, effective September 1, 2007, and that the health benefit amounts established on September 1, 2006 and September 1, 2007, be the maximum AQMD contribution.

                    BE IT FURTHER RESOLVED that skill-based pay, parking allowance, ride-share incentive, and vacation sell-back benefits will be eliminated for new management, confidential, and attorney employees and designated deputies hired after January 1, 2006.

                    BE IT FURTHER RESOLVED that only the portion of the fixed monthly health benefit amount that is taken as cash will be included as “compensation earnable” for retirement purposes for management, confidential, and attorney employees and designated deputies hired after January 1, 2006.

________________________________     _________________________________
Date                                                      Clerk of the Board

ATTACHMENT B

SALARY RESOLUTION AMENDMENT

Section 41. TIME OF TAKING VACATIONS

1. Vacations may be taken in the year in which they are earned or in subsequent years. Designated Deputies and management and confidential employees who are subject to this section of this Salary Resolution may accrue more than 360 hours of vacation through the end of the last pay period beginning in December. This pay period in Fiscal Year 2004-05 is December 20, 2004, through January 2, 2005. Effective January 1, 1995, Designated Deputies and management and confidential employees who are subject to this section of the Salary Resolution and whose vacation accrual balances exceed 360 hours by the end of the last pay period beginning in December may not accrue additional vacation until balances are lowered to 360 hours. Vacation accrual will resume at the beginning of the pay period immediately following the pay period in which the balance falls to 360 hours or less. Designated Deputies and management and confidential employees will be paid for all accrued vacation time at termination.

A management or confidential employee who has 360 hours of accrued vacation may sell back up to 80 hours of vacation, provided the employee has taken off at least 80 hours of vacation in the prior 12 months. Once an employee has sold back vacation time, he or she may not do so again for another 26 biweekly pay periods.

Management or confidential employees hired after January 1, 2006, are not eligible to sell back vacation time.

2. Vacations shall be taken at such time as authorized by the appointing authority.
    

3. In addition to the vacation sellback provisions under subsection a. above, confidential employees may sell back up to 16 hours of vacation time. To qualify for this sellback, a confidential employee needs only to have accrued as many unused vacation hours as he or she wishes to sell back and to have taken off at least 80 hours of vacation time in the prior 12 months. However, the combined total annual vacation sellback under both the options presented in subsection a. above and this 16-hour sellback option may not exceed 80 hours. Once an employee has sold back vacation time, either under the provisions of subsection a. above or under this subsection, he or she may not do so again for another 26 biweekly pay periods.

Confidential employees hired after January 1, 2006, are not eligible for this vacation sell-back provision.

Section 43. LEAVE FOR SICKNESS OR INJURY

3. Sick Leave at Full Pay - Special Provisions

(1)      In addition to other authorized uses, an employee may use accrued sick
          leave at full pay for:

(a)      Nonemergency medical or dental care, or

(b)      Any personal reason that does not interfere with the
          public service mission of AQMD to a maximum of three (3)
          four (4) working days per 26-pay period year beginning
          with pay period #2.

Section 45. OTHER LEAVES OF ABSENCE

7. Catastrophic Leave. Effective January 11, 1998, management employees, attorneys, and confidential employees may request paid catastrophic leave for personal emergencies once they have exhausted all their own available paid leave time. If approved, paid leave time will be drawn from a catastrophic leave fund comprised of donated paid vacation time. Designated deputies, management employees, attorneys, and confidential employees may donate one-half of vacation hours that would otherwise cause vacation accrual to cease under the provisions of Article 9, Section 41(a), of the Salary Resolution, that prohibits further accrual of vacation at the end of the last pay period beginning in December if the accrued vacation balance exceeds 360 hours. Effective the last pay period beginning in December, 2005, management, confidential, and attorney employees may donate any vacation hours in excess of 200 hours. Donations may be made twice yearly, during the last pay period that begins in December, and during the first pay period that begins in July. The dollar value of donated vacation hours in the fund will be computed by multi-plying the number of hours donated by the donating employee's current regularly hourly pay rate. The catastrophic leave fund balance may not exceed $25,000$50,000 Catastrophic leave requests must be approved by the committee established to review catastrophic leave requests.

Section 54. MANAGEMENT AND CONFIDENTIAL CLASSIFICATION SALARIES

Effective July 5, 2004January 2, 2006