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HomeMy WebLinkAbout2019-12-10; City Council; Resolution 2019-246RESOLUTION NO. 2019-246 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING SIDE LETTER AGREEMENTS W.ITH THE CITY OF CARLSBAD AND THE CARLSBAD POLICE MANAGEMENT ASSOCIATION (CPMA), CARLSBAD POLICE OFFICERS' ASSOCIATION (CPOA), CARLSBAD CITY EMPLOYEES' ASSOCIATION (CCEA), AND CARLSBAD FIREFIGHTERS' ASSOCIATION, INC. (CFA) AND APPROVING AMENDMENTS TO THE MANAGEMENT COMPENSATION AND BENEFITS PLAN TO MODIFY THE VACATION AND COMP TIME CONVERSION PROGRAMS TO COMPLY WITH IRS CONSTRUCTIVE RECEIPT RULES. WHEREAS, the City of Carlsbad and the Carlsbad Police Management Association (CPMA), the Carlsbad Police Officers' Association (CPOA), the Carlsbad City Employees' Association (CCEA), and the Carlsbad Firefighters' Association, Inc. (CFA) have met and conferred in good faith pursuant to the Meyers-Milias-Brown Act regarding benefits and other terms and conditions of employment; and WHEREAS, said representatives have reached agreement which they desire to submit to the City Council for consideration and approval; and WHEREAS, the City Council of the City of Carlsbad, California has determined the need to accept such agreements in the form of a CPMA Side Letter (Attachment A), a CPOA Side Letter (Attachment B), a CCEA Side Letter (Attachment C), and a CFA Side Letter (Attachment D); and WHEREAS, the City Council has determined it to be in the public interest to accept the revised Management Compensation and Benefits Plan (Attachment E). NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That Attachment A, the Side Letter between CPMA and the City of Carlsbad, attached hereto is hereby adopted by the City Council and the city manager is directed to execute it. 3. That Attachment B, the Side Letter between CPOA and the City of Carlsbad, attached hereto is hereby adopted by the City Council and the city manager is directed to execute it. 4. That Attachment C, the Side Letter between CCEA and the City of Carlsbad, attached hereto is hereby adopted by the City Council and the city manager is directed to execute it. Dec. 10, 2019 Item #2 Page 4 of 38 5. That Attachment D, the Side Letter between CFA and the City of Carlsbad, attached hereto is hereby adopted by the City Council and the city manager is directed to execute it. 6. That Attachment E, the revised Management Compensation and Benefits Plan attached hereto is hereby adopted by the City Council and the city manager is directed to execute it. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 10th day of December 2019, by the following vote, to wit: AYES: Hall, Blackburn, Bhat-Patel, Schumacher. NAYS: None. ABSENT: None. ti BARBARA ENGLESON, City Clerk / ·'II C1 (SEAL) C ertC Dec. 10, 2019 Item #2 Page 5 of 38 SIDE LETTER AGREEMENT BETWEEN THE THE CARLSBAD POLICE MANAGEMENT ASSOCIATION AND THE CITY OF CARLSBAD REGARDING VACATION AND COMPENSATORY TIME CASH OUT The City of Carlsbad (hereinafter referred to as "city") and the Carlsbad Police Management Association (hereinafter referred to as the "CPMA") entered into a Memorandum of Understanding ("MOU") with a term beginning on January 1, 2019 and terminating on December 31, 2021. The city and the CPMA are collectively referred to herein as the "Parties." Background and Overview This Agreement relates to modifications to the city's use and accrual of vacation time whereby an employee has the option to receive either vacation time off or to cash out the vacation time. This Agreement also relates to modifications to the city's use and accrual of compensatory time whereby an employee has the option to receive compensatory time off in lieu of overtime and clarifies that employees will not have the option beginning January 1, 2020 to carry over compensatory time from one calendar year to the next. All compensatory time must be used in the calendar year it is accrued or it will be paid out on the last pay date of the calendar year. The city will allow an employee an option to convert existing accrued and unused vacation to cash up to one hundred and sixty (160) hours no later than December 10, 2019. The city will also allow an employee the option of carrying over their existing compensatory time balance as of December 31, 2019 through June 14, 2020, and will be cashed out on the last pay date in June 2020. Effective January 1, 2020 all accrued and unused compensatory time will be cashed out on the last pay date in December of each calendar year. The specific provisions contained in this Agreement are intended to supersede any previous agreements, whether oral or written, regarding the matters contained in this Agreement. The Parties have satisfied their obligations to meet and confer in good faith in accordance with the Meyers-Milias-Brown Act ("MMBA") in response to city's determination, based on the advice of tax counsel, that this program feature must be modified to comply with federal Internal Revenue Service (IRS) Regulations. Under these Regulations, the IRS considers income to be received for tax purposes if the individual actually receives it or has the option to receive it during each tax year. This is known as the constructive receipt doctrine. Several IRS private letter rulings illustrate how the IRS applies this doctrine when employees are given the option to cash out accumulated paid leave. In these private letter rulings, the IRS has concluded that paid leave accruals must be included in an individual's gross income for the tax year in which these accruals were credited to his or her account if the employee has a cash out option, even if the individual does not elect to cash out the accruals in that tax year. As far as the IRS is concerned, the fact that the individual has unrestricted access to cash out accumulated paid leave means that the or she is in constructive receipt of this cash and it must be included in the individual's gross income for the tax year, even if no election is made during the tax year to cash out the accumulated paid leave. Dec. 10, 2019 Item #2 Page 6 of 38 Application of this constructive receipt doctrine to the city's vacation and compensatory time policies would mean that all vacation time and compensatory time would have to be taxed as in the calendar year it is accrued to the extent the city allows the employee a relatively unimpeded option to take this leave as cash or leave and carry it over from one calendar year to the next. Based on the above, the city has proposed and the CPMA has agreed to modify the vacation and compensatory time provisions in the MOU prospectively to comply with applicable IRS Regulations. The modification is designed to preserve the employee's ability to receive pay for earned and unused vacation but ensure the vacation cash out policy does not result in constructive receipt of income as the IRS defines it. The modification also makes clear there is no carry over option for compensatory time. Except as provided here, all wages, hours, and other terms and conditions of employment presently in the city's MOU with the CPMA remain in full force and effect. The Parties mutually agree to replace Article 24, Section 24.3 Vacation Conversion and_Article 12.2 Comp. Time Option to read as follows: 24.3 Vacation Conversion 1. No later than December 10, 2019, employees will be provided an option to convert accrued and unused vacation to cash in an amount of up to one hundred sixty (160) hours. All accrued and unused vacation earned up through the last full period in December 2019, that is not requested to be cashed out by December 10, 2019 is no longer eligible to . be converted to cash, except upon separation of employment with the city. 2. Employees are also eligible to submit an irrevocable request to elect to cash out up to 160 hours of accrued vacation hours for the following calendar year. 3. All employees wishing to convert accrued vacation to cash in the year following the election will complete a form between November 10 and December 10 of each year. Elections will not carry over from one calendar year to the next calendar year. 4. Only vacation hours accrued during the calendar year following the election may be cashed out. Employees accruing less than the election amount may cash out no more than their total vacation accrual in the following calendar year. 5. The employee's accrued vacation to convert to cash will be credited first to the cash out account with the employee's earned vacation leave until the employee's full election amount is reached. The vacation hours designated to the cash out account will not be credited toward the employee's maximum vacation accrual. During this period of time, no earned vacation leave will be credited to the employee's vacation time off balance. Dec. 10, 2019 Item #2 Page 7 of 38 6. Payment of vacation hours elected for cash out will be in the last paycheck in December unless the employee has accrued all the elected vacation hours by June 30, in which case payment of the elected vacation hours may be cashed out in July at the employee's request. All vacation hours will be paid in the calendar year in which the vacation hours accrue. If the employee does not accrue all requested vacation hours in the calendar year, the vacation payment amount will be reduced to the total number of vacation hours the employee actually accrues in the calendar year and the payout will be made no later than the last pay date in the calendar year. 7. The vacation payment amount will be based on the employee's rate of pay at the ~e of the payout The vacation payment amount is taxable income, subject to all applicable withholding amounts and payroll deductions. 8. An employee who does not elect to cash out vacation by December 10 waives their right to do _so and will not be allowed to cash out any vacation accruing in the following year. 12.2 COMP TIME OPTION: Lieutenants shall have the option (with the exception of "Pay Only Details'') of earning compensatory time off in lieu of cash, subject to a maximum accumulation of one hundred and fifty {150) hours of compensatory time off. When a Lieutenant has accumulated the maximum number of hours of compensatory time off, he/she shall receive all overtime compensation in cash until such time as the Lieutenant's compensatory ti,me off bank is no longer at the maximum. Any accrued and unused compensatory time through December 31, 2019 will be cashed out on the1ast pay date in June 2020. Effective January 1, 2020, all accrued and unused compensatory · time during the calendar year will be cashed out on the last pay date of the calendar year. No compensatory time may be accrued beginning on the last pay period of the calendar year through the end of the calendar year. CITY OF CARLSBAD: Date: Date: ) ~ Dt.C.(9 ~=2?· . Ge KO-ENT. CARLSBAD POL MANAGEMENT ASSOCIATION SCOTT CHADWICK, CITY MANAGER, CITY OF CARLSBAD Dec. 10, 2019 Item #2 Page 8 of 38 SIDE LETTER AGREEMENT BETWEEN THE THE CARLSBAD POLICE OFFICERS' ASSOCIATION AND THE CITY OF CARLSBAD RELATING TO VACATION AND COMPENSATORY TIME CASH OUT The City of Carlsbad (hereinafter referred to as "city") and the Carlsbad Police Officers' Association (hereinafter referred to as the "CPOA") entered into a Memorandum of Understanding ("MOU") with a term beginning on January 1, 2019 and terminating on December 31, 2021. The city and the CPOA are collectively referred to herein as the "Parties." Background and Overview This Agreement relates to modifications to the city's use and accrual of vacation time whereby an employee has the option to receive either vacation time off or to cash out the vacation time. This Agreement also relates to modifications to the city's use and accrual of compensatory time whereby an employee has the option to receive compensatory time off in lieu of overtime and clarifies that employees will not have the option beginning January 1, 2020 to carry over compensatory time from one calendar year to the next. All compensatory time must be used in the calendar year it is accrued or it will be paid out on the last pay date of the calendar year. The city will allow an employee an option to convert existing accrued and unused vacation to cash up to one hundred and sixty (160) hours no later than December 10, 2019. The city will also allow an employee the option of carrying over their existing compensatory time balance as of December 31, 2019 through June 14, 2020, and will be cashed out on the last pay date in June 2020. Effective January 1, 2020 all accrued and unused compensatory time will be cashed out on the last pay date in December of each calendar year. The specific provisions contained in this Agreement are intended to supersede any previous agreements, whether oral or written, regarding the matters contained in this Agreement. The Parties have satisfied their obligations to meet and confer in good faith in accordance with the Meyers-Milias-Brown Act ("MMBA") in response to city's determination, based on the advice of tax counsel, that this program feature must be modified to comply with federal Internal Revenue Service (IRS) Regulations. Under these Regulations, the IRS considers income to be received for tax purposes if the individual actually receives it or has the option to receive it during each tax year. This is known as the constructive receipt doctrine. Several IRS private letter rulings illustrate how the IRS applies this doctrine when employees are given the option to cash out accumulated paid leave. In these private letter rulings, the IRS has concluded that paid leave accruals must be included in an individual's gross income for the tax year in which these accruals were credited to his or her account if the employee has a cash out option, even if the individual does not elect to cash out the accruals in that tax year. As far as the IRS is concerned, the fact that the individual has unrestricted access to cash out accumulated paid leave means that the or she is in constructive receipt of this cash and it must be included in the individual's gross income for the tax year, even if no election is made during the tax year to cash out the accumulated paid leave. Dec. 10, 2019 Item #2 Page 9 of 38 Application of this constructive receipt doctrine to the city's vacation and compensatory time policies would mean that all vacation time and compensatory time would have to be taxed as in the calendar year it is accrued to the extent the city allows the employee a relatively unimpeded option to take this leave as cash or leave and carry it over from one calendar year to the next. Based on the above, the city has proposed and the CPOA has agreed to modify the vacation and compensatory time provisions in the MOU prospectively to comply with applicable IRS Regulations. The modification is designed to preserve the employee's ability to receive pay for earned and unused vacation but ensure the vacation cash out policy does not result in constructive receipt of income as the IRS defines it. The modification also makes clear there is no carry over option for compensatory time. Except as provided here, all wages, hours, and other terms and conditions of employment presently in the city's MOU with the CPOA remain in full force and effect. The Parties mutually agree to replace Article 33, Section 33.3 Vacation Conversion and_Article 1 7 .1 Comp. Time Option to read as follows: 33.3 Vacation Conversion 1. No later than December 10, 2019, employees will be provided an option to convert accrued and unused vacation to cash in an amount of up to one hundred and sixty (160) hours. All accrued and unused vacation earned up through the last full period in December 2019, that is not requested to be cashed out by December 10, 2019 is no longer eligible to be converted to cash, except upon separation of employment with the city. 2. Employees are also eligible to submit an irrevocable request to elect to cash out up to one hundred and sixty ( 160) hours of accrued vacation hours for the following calendar year. 3. All employees wishing to convert accrued vacation to cash in the year following the election will complete a form between November 10 and December 10 of each year. Elections will not carry over from one calendar year to the next calendar year. 4. Only vacation hours accrued during the calendar year following the election may be cashed out. Employees accruing less than the election amount may cash out no more than their total vacation accrual in the following calendar year. 5. The employee's accrued vacation to convert to cash will be credited first to the cash out account with the employee's earned vacation leave until the employee's full election amount is reached. The vacation hours designated to the cash out account will not be credited toward the employee's maximum vacation accrual. During this period of time, no earned vacation leave will be credited to the employee's vacation time off balance. Dec. 10, 2019 Item #2 Page 10 of 38 6. Payment of vacation hours elected for cash out will be in the last paycheck in December unless the employee has accrued all the elected vacation hours by June 30, in which case payment of the all the elected vacation hours may be cashed out in July at the employee's request. All vacation hours will be paid in the calendar year in which the vacation hours accrue. If the employee does not accrue all requested vacation hours in the calendar year, the vacation payment amount will be reduced to the total number of vacation hours the employee actually accrues in the calendar year and the payout will be made no later than the last pay date in the calendar year. 7. The vacation payment amount will be based on the employee's rate of pay at the time of the payout. The vacation payment amount is taxable income, subject to all applicable withholding amounts and payroll deductions. 8. An employee who does not elect to cash out vacation by December 10 waives their right to do so and will not be allowed to cash out any vacation accruing in the following year. 9. The parties agree to discuss any CPOA concerns regarding vacation request denials as a standing agenda item at labor-management committee meetings. The CPOA agrees to discuss any issues regarding vacation scheduling with Police Department Management and attempt to resolve them. If the CPOA and Police Department Management are unable to resolve issues related to vacation scheduling after good faith efforts have been exhausted, the CPOA will continue discussions on their concerns with the City's Human Resources Department. The city and CPOA also agree that if the parties are unable to resolve CPOA issues related to vacation scheduling, then upon written mutual agreement between the parties the following procedure for vacation scheduling may be implemented during the term of the MOU: a. Any employee with 40 or more accrued hours of compensation time that is paid out on the last pay date of December will be permitted to use a total of 20 hours of vacation in January or February of the following calendar year subject to the provisions of Article 17. 17.1 Comp. Time Option: Each employee shall have the option (with the exception of "Pay Only Details") of receiving compensatory time off in lieu of cash, subject to a maximum accumulation of one hundred fifty (150) hours of compensatory time off. When an employee has accumulated the maximum number of hours of compensatory time off, they shall receive all overtime compensation in cash until such time as the employee's compensatory time off bank is no longer at the maximum. An employee may use such compensatory time within a reasonable period after making the request if the use of compensatory time does not unduly disrupt the operations of the department. Required use of overtime to backfill staff shall not be considered to unduly disrupt operations. Any accrued and unused compensatory time through December 31, 2019 will be cashed out on the last pay date in June 2020. Effective January 1, 2020, all accrued and unused compensatory time during the calendar year will be cashed out on the last pay date of the calendar year. No compensatory time may be accrued beginning on the last pay period of the calendar year through the end of the calendar year. Dec. 10, 2019 Item #2 Page 11 of 38 At any time an employee may elect to "cash out" any portion of his/her accrued compensatory time balance at his/her regular rate of pay by requesting this "cash out" on his/her time card. Upon separation from the city service an employee who has a balance of unused compensatory time shall be paid out the remainder of their compensatory balance. CITY OF CARLSBAD: Date: //-12. -J 1 Date:/, · 12= • ICZ, MATT LOW-e'PRESIDENT, CARLSBAD POLICE OFFICERS' ASSOCIATION SCOTT CHADWICK, CITY l'vlANAGER, CITY OF CARLSBAD Dec. 10, 2019 Item #2 Page 12 of 38 SIDE LETTER AGREEMENT BETWEEN THE THE CARLSBAD CITY EMPLOYEES' ASSOCIATION AND THE CITY OF CARLSBAD RELATED TO VACATION AND COMPENSATORY TIME CASH OUT The City of Carlsbad (hereinafter referred to as "city") and the Carlsbad City Employees' Association (hereinafter referred to as the "CCEA") entered into a Memorandum of Understanding ("MOU") with a term beginning on January 1, 2018 and terminating on December 31, 2020. The city and the CCEA are collectively referred to herein as the "Parties." Background and Overview This Agreement relates to modifications to the city's use and accrual of vacation time whereby an employee has the option to receive either vacation time off or to cash out the vacation time. This Agreement also relates to modifications to the city's use and accrual of compensatory time whereby an employee has the option to receive compensatory time off in lieu of overtime and clarifies that employees will not have the option beginning January 1, 2020 to carry over compensatory time from one calendar year to the next. All compensatory time must be used in the calendar year it is accrued or it will be paid out on the last pay date of the calendar year. The city will allow an employee an option to convert existing accrued and unused vacation to cash up to 80 hours no later than December 10, 2019. The city will also allow an employee the option of carrying over their existing compensatory time balance as of December. 31, 2019 through June 14, 2020, and will be cashed out on the last pay date in June 2020. Effective January 1, 2020 all accrued and unused compensatory time will be cashed out on the last pay date in December of each calendar year. The specific provisions contained in this Agreement are intended to supersede any previous agreements, whether oral or written, regarding the matters contained in this Agreement. The Parties have satisfied their obligations to meet and confer in good faith in accordance with the Meyers-Milias-Brown Act ("MMBA") in response to city's determination, based on the advice of tax counsel, that this program feature must be modified to comply with federal Internal Revenue Service (IRS) Regulations. Under .these Regulations, the IRS considers income to be received for tax purposes if the individual actually receives it or has the option to receive it during each tax year. This is known as the constructive receipt doctrine. Several IRS private letter rulings illustrate how the IRS applies this doctrine when employees are given the option to cash out accumulated paid leave. In these private letter rulings, the IRS has concluded that paid leave accruals must be included in an individual's gross income for the tax year in which these accruals were credited to his or her account if the employee has a cash out option, even if the individual does not elect to cash out the accruals in that tax year. As far as the IRS is concerned, the fact that the individual has unrestricted access to cash out accumulated paid leave means that the or she is in constructive receipt of this cash and it must be included in the individual's gross income for the tax year, even if no election is made during the tax year to cash out the accumulat~d paid leave. Dec. 10, 2019 Item #2 Page 13 of 38 Application of this constructive receipt doctrine to the city's vacation and compensatory time policies would mean that all vacation time and compensatory time would have to be taxed as in the calendar year it is accrued to the extent the city allows the employee a relatively unimpeded option to take this leave as cash or leave and carry it over from one calendar year to the next. Based on the above, the city has proposed and the CCEA has agreed to modify the vacation and compensatory time provisions in the MOU prospectively to comply with applicable IRS Regulations. The modification is designed to preserve the employee's ability to receive pay for earned and unused vacation but ensure the vacation cash out policy does not result in constructive receipt of income as the IRS defines it. The modification also makes clear there is no carry over option for compensatory time. Except as provided here, all wages, hours, and other terms and conditions of employment presently in the city's MOU with the CCEA remain in full force and effect. The Parties mutually agree to replace Article 20, Section C Vacation Conversion and Article 14, Section 4 Compensatory Time to read as follows C. Vacation Conversion 1. No later than December 10, 2019, employees will be provided an option to convert accrued and unused vacation to cash in amount of 80 hours. All accrued and unused vacation earned up through the last full period in December 2019, that is not requested to be cashed out by December 10, 2019 is no longer eligible to be converted to cash, except upon separation of employment with the city. 2. Employees are also eligible to submit an irrevocable request to elect to cash out up to 80 hours of accrued vacation hours for the following calendar year. 3. All employees wishing to convert accrued vacation to cash in the year following the election will complete a form between November 10 and December 10 of each year. Elections will not carry over from one calendar year to the next calendar year. 4. Only vacation hours accrued during the calendar year following the election may be cashed out. Employees accruing less than the election amount may cash out no more than their total vacation accrual in the following calendar year. 5. The employee's accrued vacation to convert to cash will be credited first to the cash out account with the employee's earned vacation leave until the employee's full election amount is reached. The vacation hours designated to the cash out account will not be credited toward the employee's maximum vacation accrual. During this period oftime, no earned vacation leave will be credited to the employee's vacation time off balance. 6. Payment of vacation hours elected for cash out will be in the last paycheck in December unless the employee has accrued all the elected vacation hours by June 30, in which case Dec. 10, 2019 Item #2 Page 14 of 38 ' payment of the elected vacation hours may be _cashed out in July at the employee's request All vacation hours will be paid in the calendar year in which the vacation hours accrue. If the employee does not accrue all requested vacation hours in the calendar year, the vacation payment amount will be reduced to the total number of vacation hours the employee actually accrues in the calendar year and the payout will be made no later than the last pay date in the calendar year. 7. The vacation payment amount will be based on the employee's rate of pay at the time of the payout. The vacation payment amount is taxable income, subject to all applicable withholding amounts and payroll deductions. 8. An employee who does not elect to cash out vacation by December 10 waives their right to do so and will not be allowed to cash out any vacation accruing in the following year. Article 14, Section 4. Compensatory Time In lieu of receiving overtime pay pursuant to Section 1 above, an employee may elect, subject to department approval, to receive compensatory time off. No employee shall accrue more than eighty (80) hours of such compensatory time. When an employee has accumulated the maximum number of hours of compensatory time off he/she shall receive all overtime compensation in cash. An employee may use such compensatory time within a reasonable period after making the request if the use of compensatory time does not unduly disrupt the operations of the department. Any accrued and unused compensatory time through December 31, 2019 will be cashed out on the last pay date in June 2020. Effective January 1, 2020, all accrued and unused compensatory time during the calendar year will be cashed out on the last pay date of the calendar year. No compensatory time may be accrued beginning on the last pay period of the calendar year through the end of the calendar year. At any time an employee may elect to "cash out" any portion of his/her accrued compensatory time balance at his/her regular rate of pay by requesting this "cash out" on his/her time card. Upon separation from the city service an employee who has a balance of unused compensatory time shall be paid out the remainder of their compensatory balance. CITY OF CARLSBAD: Date:_l,t_..:;_{ ll_[____.L 1~ SBAD CITY EMPLOYEES' ASSOCIATION HADWICK, CITY MANAGER, CITY OF CARLSBAD Dec. 10, 2019 Item #2 Page 15 of 38 SIDE LETTER AGREEMENT BETWEEN THE THE CARLSBAD FIREFIGHTERS' ASSOCIATION AND THE CITY OF CARLSBAD REGARDING VACATION AND COMPENSATORY TIME CASH OUT The City of Carlsbad (hereinafter referred to as "city") and the Carlsbad Firefighters' Association (hereinafter referred to as the "CF A") entered into a Memorandum of Understanding ("MOU") with a term beginning on January 1, 2017 and terminating on December 31, 2019. The city and the CF A are collectively referred to herein as the "Parties." Background and Overview This Agreement relates to modifications to the city's use and accrual of vacation time whereby an employee has the option to receive either vacation time off or to cash out the vacation time. This Agreement also relates to modifications to the city's use and accrual of compensatory time whereby an employee has the option to receive compensatory time off in lieu of overtime and clarifies that employees will not have the option beginning January 1, 2020 to carry over compensatory time from one calendar year to the next. All compensatory time must be used in the calendar year it is accrued or it will be paid out on the last pay date of the calendar year. For employees working an 112-hour per pay period schedule, the city will allow an employee an option to convert existing accrued and unused vacation to cash up to one hundred twelve (112) hours no later than December 10, 2019. For employees working an 80-hour per pay period schedule, the city will allow an employee an option to convert existing accrued and unused vacation to cash up to eighty (80) hours no later than December 10, 2019 .. The city will also allow an employee working an 80-hour per week pay schedule the option of carrying over their existing compensatory time balance as of December 31, 2019 through June 14, 2020, and will be cashed out on the last pay date in June 2020. Effective January 1, 2020 all accrued and unused compensatory time will be cashed out on the last pay date in December of each calendar year. The specific provisions contained in this Agreement are intended to supersede any previous agreements, whether oral or written, regarding the matters contained in this Agreement. The Parties have satisfied their obligations to meet and confer in good faith in accordance with the Meyers-Milias-Brown Act ("MMBA") in response to city's determination, based on the advice of tax counsel, that this program feature must be modified to comply with federal Internal Revenue Service (IRS) Regulations. Dec. 10, 2019 Item #2 Page 16 of 38 Under these Regulations, the IRS considers income to be received for tax purposes if the individual actually receives it or has the option to receive it during each tax year. This is known as the constructive receipt doctrine. Several IRS private letter rulings illustrate how the IRS applies this doctrine when employees are given the option to cash out accumulated paid leave. In these private letter rulings, the IRS has concluded that paid leave accruals must be included in an individual's gross income for the tax year in which these accruals were credited to his or her account if the employee has a cash out option, even if the individual does not elect to cash out the accruals in that tax year. As far as the IRS is concerned, the fact that the individual has unrestricted access to cash out accumulated paid leave means that the or she is in constructive receipt of this cash and it must be included in the individual's gross income for the tax year, even if no election is made during the tax year to cash out the accumulated paid leave. Application of this constructive receipt doctrine to the city's vacation and compensatory time policies would mean that all vacation time and compensatory time would have to be taxed as in the calendar year it is accrued to the extent the city allows the employee a relatively unimpeded option to take this leave as cash or leave and carry it over from one calendar year to the next. Based on the above, the city has proposed and the CF A has agreed to modify the vacation and compensatory time provisions in the MOU prospectively to comply with applicable IRS Regulations. The modification is designed to preserve the employee's ability to receive pay for earned and unused vacation but ensure the vacation cash out policy does not result in constructive receipt of income as the IRS defines it. The modification also makes clear there is no carry over option for compensatory time. Except as provided here, all wages, hours, and other terms and conditions of employment presently in the city's MOU with the CF A remain in full force and effect. The Parties mutually agree to replace Article 11, Section C Vacation Conversion and Article 19, Section B.2 Compensatory Time to read as follows: C. Vacation Conversion 1. No later than December 10, 2019, employees working an 112-hour per pay period schedule will be provided an option to convert accrued and unused vacation to cash in amount of one hundred twelve (112) hours. No later than December 10, 2019, employees working an 80-hour per pay period schedule will be provided an option to convert accrued and unused vacation to cash in amount of eighty (80) hours. All accrued and unused vacation earned up through the last full period in December 2019, that is not requested to be cashed out by December 10, 2019 is no longer eligible to be converted to cash, except upon separation of employment with the city. 2. Employees working anl 12-hour per pay period schedule are also eligible to submit an irrevocable request to elect to cash out up to 112 hours of accrued Dec. 10, 2019 Item #2 Page 17 of 38 vacation hours for the following calendar year. Employees working an 80-hour pay period schedule are also eligible to submit an irrevocable request to elect to cash out up to 80 hours of accrued vacation hours for the following calendar year. 3. All employees wishing to convert accrued vacation to cash in the year following the election will complete a form between November 10 and December 10 of each year. Elections will not carry over from one calendar year to the next calendar year. 4. Only vacation hours accrued during the calendar year following the election may be cashed out. Employees accruing less than the election amount may cash out no more than their total vacation accrual in the following calendar year. 5. The employee's accrued vacation to convert to cash will be credited first to the cash out account with the employee's earned vacation leave until the employee's full election amount is reached. The vacation hours designated to the cash out account will not be credited toward the employee's maximum vacation accrual. During this period of time, no earned vacation leave will be credited to the employee's vacation time off balance. 6. Payment of vacation hours elected for cash out will be in the last paycheck in December unless the employee has accrued all the elected vacation hours by June 30, in which case payment of the elected vacation hours may be cashed out in July at the employee's request. All vacation hours will be paid in the calendar year in which the vacation hours accrue. If the employee does not accrue all requested vacation hours in the calendar year, the vacation payment amount will be reduced to the total number of vacation hours the employee actually accrues in the calendar year and the payout will be made no later than the last pay date in the calendar year. 7. The vacation payment amount will be based on the employee's rate of pay at the time of the payout. The vacation payment amount is taxable income, subject to all applicable withholding amounts and payroll deductions. 8. An employee who does not elect to cash out vacation by December 10 waives their right to do so and will not be allowed to cash out any vacation accruing in the following year. B. EMPLOYEES WORKING AN 80 HOURS/PAY PERIOD SCHEDULE 2. Compensatory Time In lieu of receiving overtime pay pursuant to Section 1 above, a Fire Prevention employee may elect, subject to department approval, to receive compensatory time off. No employee shall accrue more than 80 hours of such compensatory time. When an employee has accumulated the maximum number of hours of compensatory time off, he/she shall receive all overtime compensation in cash. Dec. 10, 2019 Item #2 Page 18 of 38 An employee may use such compensatory time within a reasonable period after making the request if the use of compensatory time does not unduly disrupt the operations of the department. Any accrued and unused compensatory time through December 31, 2019 will be cashed out on the last pay date in June 2020. Effective January 1, 2020, all accrued and unused compensatory time during the calendar year will be cashed out on the last pay date of the calendar year. No compensatory time may be accrued beginning on the last pay period of the calendar year through the end of the calendar year. An employee may elect to "cash out" any portion of his/her accrued compensatory time at his/her regular rate of pay in any pay period. The employee shall indicate the number of hours to be cashed out on his/her timesheet. CITY OF CARLSBAD: Date: U { L( I lC1 Date: I..!, ~,(t:} C ADWICK, CITY l'vfANAGER, CITY OF CARLSBAD Dec. 10, 2019 Item #2 Page 19 of 38 Attachment E MANAGEMENT COMPENSATION AND BENEFITS PLAN TABLE OF CONTENTS Section 1 Section 2 Section 3 Introduction ............................................................................ Page 2 Compensation ........................................................................ Page 2 Pay Ranges ....................................................................... Page 2 Compensation Adjustments ............................................ Page 3 Survey Market .................................................................. Page 3 Benefits and Other Types of Pay ........................................... Page 4 Life Insurance and Voluntary Benefits ............................ Page 4 Retirement ........................................................................ Page 4 Leave of Absence ............................................................. Page 5 1. Vacation ........................ Page 6 2. Executive Leave ........... Page 8 3. Sick Leave .................... Page 8 4. Bereavement Leave ...... Page 8 5. Leave Without Pay ....... Page 9 6. Pregnancy Disability LeavePage 10 7. FMLA ........................... Page 10 8. Military Leave .............. Page 11 9. Jury Duty ...................... Page 11 10. Extended Leave of AbsencePage 11 Separation Compensation ................................................ Page 11 Holidays ........................................................................... Page 12 Health Benefits ................................................................. Page 12 Health Insurance for Retirees ........................................... Page 14 Physical Fitness Reimbursement ..................................... Page 14 Long-Term Disability Insurance (LTD) .......................... Page 15 Deferred Compensation ................................................... Page 15 Drug and Alcohol Policy ................................................. Page 15 Uniform Reimbursement and Reporting the Value of Uniforms to CalPERS .................................................. Page 15 Fire Safety Management.. ................................................ Page 15 Special Assignment and Temporary Upgrade Pay .......... Page 16 Educational Incentive Pay ................................................ Page 17 Dec. 10, 2019 Item #2 Page 20 of 38 Management Compensation and Benefits Plan SECTION 1: INTRODUCTION The Management Compensation and Benefits Plan contains three parts: 1) an introduction, 2) an overview of compensation and 3) a description of benefits for management employees. Definitions 1. Management Employees -Management employees are defined as those employees whose classifications are listed on the Management Salary Structure. Except as to those management employees subject to an applicable law, all management employees are considered "at-will" and have no property rights to their position. At will employment with the City may be terminated at any time by either party, with or without cause, for any reason or no reason whatsoever, and with or without advance notice. At will employees do not have the right to appeal. 2. City Council Appointed Employees -The City Manager and City Attorney are hired by and responsible directly to the City Council. The salaries for these positions shall be set by the City Council. The City Manager and City Attorney will not be subject to the provisions of the Compensation program as outlined in Section 2 of this document. The schedule of management benefits (as outlined in Section 3 of this document) will apply to these positions, except as otherwise provided by the City Council. SECTION 2: COMPENSATION Pay Ranges Each management job classification is assigned to a specific pay range. An employee may be paid anywhere in the pay range associated with their job classification. Any employee may be advanced in the pay range regardless of the length of time served at the employee's present pay rate. This advancement requires the written recommendation of the employee's manager and the approval of the employee's department head and City Manager (or City Attorney, for management employees in the City Attorney's Office)1• If, as a result of a pay range adjustment, an employee's base salary falls below the minimum of the pay range, the employee's salary will be increased to the new range minimum as of the date City Council approves the pay range adjustment. Periodically the Human Resources Department will bring forth salary range movement recommendations to City Council that are based on market and economic conditions, and may include one or more salary ranges. Hereafter, all references to the City Manager include, with regard to management employees in the City Attorney's Office, the City Attorney. 2 Revised I I /12/ 19 Dec. 10, 2019 Item #2 Page 21 of 38 Management Compensation and Benefits Plan Compensation Adjustments Effective January 1, 2020, all management employee salaries will be increased by three percent (3%). As a result, all management salary ranges will be adjusted to reflect this increase. An employee's salary may not exceed the maximum of the pay range for their classification. Survey Market In keeping with the City Council's philosophy of surveying the total compensation of local agencies, the agencies listed below will be considered in the survey market for management classifications. • City of Chula Vista • City of Coronado • City of Del Mar • City of El Cajon • City of Encinitas • City of Escondido • City of Imperial Beach • City of La Mesa • City of National City • City of Oceanside • City of Poway • City of San Marcos • City of Solana Beach • City of San Diego • City of Santee • City of Vista • County of San Diego In addition to the agencies listed above, the following agencies will be considered in the survey market only for Utilities Director, Utilities Manager and Utilities Supervisor classifications. • Encina Wastewater Authority • Helix Water District • Olivenhain Municipal Water District • Otay Water District • Padre Dam Municipal Water District • Vallecitos Water District • Vista Irrigation District The Human Resources Department will compare salary and benefits information on each City of Carlsbad benchmark classification with appropriate classifications in the survey market. Those classifications that are considered benchmarks are those in which there was a substantial match between the competencies and duties required for jobs at the City of Carlsbad and those for jobs in the survey market. Each City of Carlsbad job classification is assigned to a specific pay range. The non-benchmark positions are assigned to a pay range based on internal relationships, responsibility and/or 3 Revised 11 / 12/19 Dec. 10, 2019 Item #2 Page 22 of 38 Management Compensation and Benefits Plan knowledge, skills and abilities of jobs. The benchmark salary data will be surveyed regularly and the benchmark comparisons will be modified when the classifications change within the organization. The City Council delegates to the City Manager the authority to create and change job classifications and assign job classifications to a specific pay range, based on both benchmark salary information and internal relationships within the organization. SECTION 3: BENEFITS AND OTHER TYPES OF PAY Life Insurance and Voluntary Benefits All management employees shall receive City paid life insurance in an amount equal to two times the basic yearly earnings. To determine benefits, the amount of insurance is rounded to the next higher $1,000 multiple, unless the amount equals a $1,000 multiple. The City provides various voluntary benefits available at the employee's cost. Employees may select among various levels of coverage. For information regarding these benefits, contact the Human Resources Department at 760-602-2440. Retirement All management employees shall participate in the California Public Employees' Retirement System (CalPERS). The specific retirement formula applied will be determined based on whether the position is deemed safety or miscellaneous. All positions not deemed eligible for safety retirement will be deemed miscellaneous under the CalPERS system. Optional benefits unique to the City of Carlsbad's contract with CalPERS are outlined in the contract between the city and CalPERS. A copy of this contract is kept on file in the Human Resources Department. Management employees who are considered fire safety employees are eligible for the same retirement benefit formula and are subject to the same optional retirement benefits described in the City of Carlsbad CalPERS safety contract (and are the same as those provided to employees represented by the Carlsbad Firefighters' Association, Inc.). Unrepresented sworn police management employees are eligible for the same retirement benefit formula and are subject to the same optional retirement benefits described in the City of Carlsbad CalPERS safety contract (and are the same as those provided to employees represented by the Carlsbad Police Officers' Association). A. The City has contracted with CalPERS for the following retirement benefits: Miscellaneous "Classic" Members (those that do not qualify as "New Members" as defined below) a) Employees entering City of Carlsbad miscellaneous CalPERS membership for the first time prior to November 28, 2011 -The retirement formula shall be 3%@ 60; single highest year final compensation. b) Employees entering City of Carlsbad miscellaneous CalPERS membership for the first time on or after November 28, 2011 -The retirement formula shall be 2%@ 60; three year average final compensation. 4 Revised I 1 / l 2/19 Dec. 10, 2019 Item #2 Page 23 of 38 Management Compensation and Benefits Plan c) Employees entering City of Carlsbad safety CalPERS membership for the first time prior to October 4, 2010 -The retirement formula shall be 3%@ 50; single highest year final compensation. d) Employees entering City of Carlsbad safety CalPERS membership for the first time on or after October 4, 2010 -The retirement formula shall be 2%@ 50; three year average final compensation. "New Members" Employees who are "New Members" as defined by the California Public Employees' Pension Reform Act of 2013 (PEPRA) (e.g., an employee hired on or after 1/1/2013 who has never been a CalPERS member or member of a reciprocal system or who has had a break in CalPERS service of at least 6 months or more) will be subject to all the applicable PEPRA provisions, which include but are not limited to the following retirement benefits. a) Miscellaneous employees -Retirement formula shall be 2% @ 62; three year average final compensation. b) Safety employees -Retirement formula shall be 2.7%@ 57; three year average final compensation. B. Employee Retirement Contribution The employee retirement contribution will be made on a pre-tax basis by implementing provisions of section 4 l 4(h)(2) of the Internal Revenue Code (IRC). Employees shall make the following employee retirement contributions through payroll deductions: • • • • Leave of Absence miscellaneous employees subject to the 3%@ 60 benefit formula shall pay all of the employee retirement contribution (8% ), miscellaneous employees subject to the 2% @ 60 benefit formula shall pay all of the employee retirement contribution (7%), safety employees subject to the 3% @ 50 or 2% @ 50 benefit formulas shall pay all of the employee retirement contribution (9% ), and miscellaneous and safety employees who meet the definition of "New Member" under PEP RA shall pay one half of the normal cost rate associated with their benefit plan. Management employees are exempt from overtime requirements under the Fair Labor Standards Act. Management employees in the City are paid on a salary basis versus an hourly basis. Pursuant to FLSA regulation 29 CFR Section 541.5d, the City can make deductions from salary or leave accounts for partial day absences for personal reasons or sickness because the City has a policy and practice of requiring its employees to be accountable to the public that they have earned their salaries. A partial day absence is an absence ofless than the employee's regular work day. Pursuant to FLSA regulation 29 CFR Section 541.118 (a)(2) and (a)(3), the City may make salary or leave reductions based upon full day absences. 5 Revised 1 l /12/19 Dec. 10, 2019 Item #2 Page 24 of 38 Management Compensation and Benefits Plan Partial day or full day absences shall be first charged against the exempt employee's vacation, sick, or executive leave account. In the event the exempt employee does not have sufficient time in his/her leave account to cover the absence, deductions without pay will be made on full days only. 1. Vacation a. Vacation Accrual Revised I I /12/19 Every management employee shall accrue vacation leave for each calendar year of actual continuous service dating from the commencement of said service, with such time to be accrued on a daily (calendar day) basis. Vacation leave can be used in 15 minute increments. All management employees (except Fire Battalion Chiefs) shall earn vacation on the following basis: Beginning with the first (1st) working day through the completion of five (5) full calendar years of continuous service -13 minutes/day. Beginning the sixth (6th) year of employment through the completion often (10) full calendar years of continuous service -20 minutes/day. Beginning the eleventh (11th) year of employment through the completion of eleven (11) full calendar years of continuous service -21 minutes/day. Beginning the twelfth (12th) year of employment through the completion of twelve (12) full calendar years of continuous service -22 minutes/day. Beginning the thirteenth ( 13th) year of employment through the completion of thirteen (13) full calendar years of continuous service -24 minutes/day. Beginning the fourteenth (14th) year of employment through the completion of fifteen ( 15) full calendar years of continuous service -25 minutes/day. Beginning the sixteenth {16th) year of continuous employment, vacation time shall be accrued, and remain at a rate of 26 minutes/day for every full calendar year of continuous employment thereafter. Management employees with comparable service may be granted credit for such service for the purpose of computing vacation at the discretion of the City Manager. All management employees shall be permitted to earn and accrue up to and including three hundred and twenty (320) hours of vacation, and no employee will be allowed to earn and accrue vacation hours in excess of the three hundred and twenty (320) hour maximum.* The City Manager shall be responsible for the granting of vacation to all management personnel, except in the case of the City Attorney's Office, where the City Attorney shall be responsible for granting vacation. * If there are unusual circumstances that would require an employee to exceed the vacation accrual maximum, he/she must submit a request in writing to the Department Head and the City Manager or 6 Dec. 10, 2019 Item #2 Page 25 of 38 Management Compensation and Benefits Plan Designee. The Department Head and the City Manager or Designee may grant such a request if it is in the best interest of the City. Requests will be handled on a case-by-case basis and will be considered only in extreme circumstances. Fire Battalion Chiefs shall accrue vacation in the same manner and up to the same maximum as Carlsbad Firefighters' Association (CF A) represented employees. b. Vacation Conversion 1. No later than December 10, 2019, management employees will be provided an option to convert accrued and unused vacation to cash in an amount of up to 80 hours. Fire Battalion Chiefs who work 112 hours/pay period will be allowed to convert accrued and unused vacation to cash in an amount of up to 112 hours. All accrued and unused vacation earned up through the last full period in December 2019, that is not requested to be cashed out by December 10, 2019 is no longer eligible to be converted to cash, except upon separation of employment with the city. 2. Employees are also eligible to submit an irrevocable request to elect to cash out up to 80 hours ( or up to 112 hours if a Battalion Chief on a 112 hours/pay period schedule) of accrued vacation hours for the following calendar year. 3. All employees wishing to convert accrued vacation to cash in the year following the election will complete a form between November 10 and December 10 of each year. Elections will not carry over from one calendar year to the next calendar year. 4. Only vacation hours accrued during the calendar year following the election may be cashed out. Employees accruing less than the election amount may cash out no more than their total vacation accrual in the following calendar year. 5. The employee's accrued vacation to convert to cash will be credited first to the cash out account with the employee's earned vacation leave until the employee's full election amount is reached. The vacation hours designated to the cash out account will not be credited toward the employee's maximum vacation accrual. During this period of time, no earned vacation leave will be credited to the employee's vacation time off balance. 6. Payment of vacation hours elected for cash out will be in the last paycheck in December unless the employee has accrued all the elected vacation hours by June 30, in which case payment of the all the elected vacation hours may be cashed out in July at the employee's request. All vacation hours will be paid in the calendar year in which the vacation hours accrue. If the employee does not accrue all requested vacation hours in the calendar year, the vacation payment amount will be reduced to the total number of vacation hours the employee actually accrues in the calendar year and the payout will be made no later than the last pay date in the calendar year. 7. The vacation payment amount will be based on the employee's rate of pay at the time of the payout. The vacation payment amount is taxable income, subject to all applicable withholding amounts and payroll deductions. 7 Revised 11/12/19 Dec. 10, 2019 Item #2 Page 26 of 38 Management Compensation and Benefits Plan 8. An employee who does not elect to cash out vacation by December 10 waives their right to do so and will not be allowed to cash out any vacation accruing in the following year. c. Vacation Payout An employee separating from the City service who has a balance of unused accrued vacation leave shall be entitled to be paid for the remainder of their unused accrued vacation leave as of their last day on payroll. 2. Executive Leave (E-time) Effective July 1, 2018, all management personnel shall receive sixty-four (64) hours per fiscal year for executive leave. The sixty-four ( 64) hours will be credited upon hire or promotion into management and at the beginning of each fiscal year to individual leave balances. This leave must be used within the same fiscal year. The City Manager is authorized to provide ten (10) additional hours of executive leave per year to any management employee who is required to work extended hours due to emergencies such as fires, storms, floods, or other emergencies. 3. Sick Leave Sick leave can be used in 15 minute increments. Sixteen (16) minutes of sick leave are accrued per calendar day. Accumulation is unlimited ( employees cannot receive payment for unused sick leave). Fire Battalion Chiefs that work 112 hours per bi-weekly pay period shall accrue sick leave commensurate with CFA represented employees that work at 112 hours per bi-weekly pay period. Any management employee who has accrued and maintains a minimum of one hundred (100) hours of sick leave shall be permitted to convert up to twelve (12) days of sick leave and uncompensated sick leave to vacation at a ratio of three (3) sick leave days per one (1) day of vacation. The sick leave conversion option will be provided during the first week of each fiscal year. Conversion can only be made in increments of full day vacation days. Employees will not be allowed to convert sick leave to vacation if such conversion would put them over the vacation accrual maximum. Any permanent employee applying for retirement with the Public Employees' Retirement System may convert accrued and unused sick leave time to extend service time in the system at the ratio of twenty-five (25) days of accrued sick leave to one month of extended service. 4. Bereavement Leave An employee may use up to an equivalent of three work days of paid leave ifrequired to be absent from duty due to the death of a member of the employee's immediate family. Additional time off may be authorized by the Department Head and charged to accrued vacation or sick leave or, when no accrued leave is available, treated as leave without pay. 8 Revised 11/12/19 Dec. 10, 2019 Item #2 Page 27 of 38 Management Compensation and Benefits Plan The "immediate family" shall be defined in the personnel rules and regulations. The employee may be required to submit proof of relative' s death before final approval of bereavement leave is granted. 5. Leave of Absence Without Pay a. General Policy Any employee may be granted a leave of absence without pay pursuant to the approval of his/her Department Head for less than two calendar weeks. If the duration of the leave of absence will be longer, the approval of the City Manager or his/her designee is required. An employee shall utilize all his/her vacation, e-time and/or sick leave (if applicable) prior to taking an authorized leave of absence without pay. A leave without pay may be granted for any of the following reasons: 1. Illness or disability. 2. To take a course of study which will increase the employee's usefulness on return to his/her position in the City service. 3. For personal reasons acceptable to the City Manager and Department Head. b. Authorization Procedure Requests for leave of absence without pay shall be made in writing and shall state specifically the reason for the request, the date when the leave is desired to begin, the probable date of return, and the agreement to reimburse the City for any benefit premiums paid by the City during the leave of absence. The request shall normally be initiated by the _employee, but may be initiated by his/her Department Head, and, if applicable, shall be promptly transmitted to the City Manager or his/her designee for approval. A copy of any approved request for leave of absence without pay with a duration equal to or greater than two calendar weeks shall be delivered promptly to the Directors of Finance and Human Resources. c. Length of Leave and Extension A leave of absence without pay may be made for a period not to exceed six months, unless otherwise approved by the City Manager. The procedure for granting extensions shall be the same as that in granting the original leave provided that the request for extension is made no later than fourteen ( 14) calendar days prior to the expiration of the original leave. d. Return From Leave Revised 11112/19 When an employee intends to return from an authorized leave of absence without pay either before or upon the expiration of such leave, he/she shall contact his/her 9 Dec. 10, 2019 Item #2 Page 28 of 38 Management Compensation and Benefits Plan Department Head at least fourteen (14) calendar days prior to the day he/she plans to return. The Department Head shall promptly notify the Human Resources Department of the employee's intention. The employee shall return at a rate of pay not less than the rate at the time the leave of absence began. e. Insurance Payments and Privileges An employee on leave without pay may continue his/her City insurance benefits by reimbursing the City for the employee's costs of insurance on a monthly basis during the period of the leave. Failure to reimburse the City for such benefits during the term of a leave of absence will result in the employee's coverage terminating on the first day following the month in which the last payment was received. Upon the employee's return to paid status, any sums due to the City shall be repaid through payroll deductions. This applies to sums due for insurance as well as other payment plans entered into between the City and the employee ( e.g., computer loan). Upon eligibility for COBRA, the employee will be notified of the opportunity to continue benefit coverage via the COBRA process. An employee on leave of absence without pay shall not have all of the privileges granted to regular employees (e.g., holiday pay), unless required by law. 6. Pregnancy Disability Leave Pregnancy Disability Leave shall be authorized and/or administered in accordance with the provisions of State and Federal law. An employee disabled by pregnancy shall be allowed to utilize a combination of accrued sick leave and vacation time and leave without pay to take a leave for a reasonable period of time, not to exceed four months. An employee shall utilize all accrued leave prior to taking leave without pay. Reasonable period oftime means that period during which the employee is disabled on account of pregnancy, childbirth, or related conditions. An employee who plans to take a leave pursuant to this article shall give the City reasonable notice of the date the leave shall commence and the estimated duration of the leave. 7. Family and Medical Leave of Absence (FMLA) An employee may be granted a FMLA of up to 12 weeks in a 12 month period for one or more of the following reasons: for the birth/placement of a child for adoption or foster care, to care for an immediate family member with a serious health condition, or to take medical leave when the employee is unable to work because of a serious condition. 10 Revised I 1/12/19 Dec. 10, 2019 Item #2 Page 29 of 38 Management Compensation and Benefits Plan FMLA may be paid or unpaid and may be granted concurrently and in conjunction with other leave and benefit provisions. Specific details regarding the provisions of this leave are available by contacting the Human Resources Department. 8. Military Leave Military leave shall be authorized in accordance with the provisions of State and Federal law. The employee must furnish satisfactory proof to his/her Department Head, as far in advance as possible, that he/she must report to military duty. 9. Jury Duty When called to jury duty, an employee shall be entitled to his/her regular compensation. Employees released early from jury duty shall report to their supervisor for assignment for the duration of the shift. Employees shall be entitled to keep mileage reimbursement paid while onjury duty. A Department Head may, at his/her sole discretion, contact the court and request an exemption and/or postponement of jury service on behalf of an employee. Employees released early from jury duty shall report to their supervisor for assignment for the duration of the work day. At the discretion of the supervisor, an employee may be released from reporting back to work if an unreasonable amount of the work day remains in light of travel time to the job site after release. 10. Extended Leave of Absence Upon completion of84 consecutive calendar days (12 weeks) ofleave of absence (paid or unpaid and except when leave is ordered by the city or when an employee is on an active duty military leave) or completion of a leave of absence related to Section 4850 of the Labor Code, whichever occurs later, an employee will not be eligible for the benefits listed below: • accrual of sick leave and vacation, • cell phone allowance, • car allowance and • holiday pay for Fire Battalion Chiefs. On the day that the employee returns to work from the extended leave of absence, the employee will resume eligibility for the abovementioned benefits and the employee's vacation anniversary date and seniority ( calculation of continuous service with the City) will be adjusted for each calendar day the leave of absence lasted beyond 84 consecutive calendar days or the completion of a leave of absence related to Section 4850 of the Labor Code, whichever was longer. Separation Compensation All management employees involuntarily separated from the City service due to budget cutbacks, layoffs, contracting out of service or for other reasons not due to misconduct which would justify 11 Revised 11/ l 2/ l 9 Dec. 10, 2019 Item #2 Page 30 of 38 Management Compensation and Benefits Plan involuntary separation shall receive one month's salary computed at the employee's actual salary at the time of separation. Holidays All management employees shall be paid holidays in accordance with the schedule of eleven ( 11) holidays as established by the City Council. Fire Battalion Chiefs are subject to the same holiday schedule that is outlined for management employees. However, they are compensated for holidays in the same manner as CFA represented employees that work 112 hours per bi-weekly pay period. The scheduled paid holidays that will be official City holidays shall be as follows: New Year's Day Martin Luther King's Birthday Presidents' Day Memorial Day Independence Day Labor Day Columbus Day Veteran's Day Thanksgiving Day Thanksgiving Friday Christmas Day Only employees who are on employed status on their last scheduled work day before a holiday shall be entitled to the paid holiday except where otherwise required by law. Effective July 1, 2019, all management employees will receive two floating holidays per fiscal year, each year on July 1st. The floating holiday may be used at the discretion of the employee with prior approval of the employee's supervisor. The floating holiday must be taken as a full day off. There is no partial day use of a floating holiday. The floating holiday pay is paid at straight time equal to the number of hours in the employee's regular work shift on that day. Unused floating holidays will not carry over to the next fiscal year and will not paid out upon separation of employment. Health Benefits Management employees will participate in a flexible benefits program which includes medical insurance, dental insurance, vision insurance, flexible spending accounts (FSAs) and Accidental Death & Dismemberment insurance (AD&D). Each of these components is outlined below. 1. Medical Insurance Management employees will be covered by the Public Employees' Medical and Hospital Care Act (PEMHCA) and will be eligible to participate in the California Public Employees' Retirement System (CalPERS) Health Program. The City will pay on behalf of all management employees and their eligible dependents and those retirees mentioned in the section of this document titled, "Health Insurance for Retirees," the minimum amount per month required under Government Code Section 22892 of the PEMHCA for medical insurance through the California Public Employees' Retirement System (CalPERS). If electing to enroll for medical benefits, the employee must select one medical plan from the variety of medical plans offered. 12 Revised 11/12/19 Dec. 10, 2019 Item #2 Page 31 of 38 Management Compensation and Benefits Plan Effective January 1, 2018, the City will contribute the following monthly amounts ( called "Benefits Credits") on behalf of each active management employee and eligible dependents toward the payment of 1) medical premiums under the CalPERS Health Program, 2) contributions in the name of the employee to the City's flexible spending account(s), 3) dental premiums 4) vision premiums and/or 5) accidental death and dismemberment (AD&D) premmms: (a) (b) (c) For employees with "Employee" coverage, the City shall contribute five hundred seventy-three ($573) per month that shall include the mandatory payments to CalPERS. If the actual total premiums exceed the City's total contributions, the employee will pay the difference. For employees with "Employee Plus One" coverage, the City shall contribute one thousand one hundred forty-six dollars ($1,146) per month that shall include the mandatory payments to CalPERS. If the actual total premiums exceed the City's total contributions, the employee will pay the difference. For employees with "Family" coverage, the City shall contribute one thousand five hundred two dollars ($1,502) per month that shall include the mandatory payments to CalPERS. If the actual total premiums exceed the City's total contributions, the employee will pay the difference. Subsequently, effective January 1 of each calendar year, the City monthly Benefits Credits will change for each coverage level. The monthly Benefits Credits will be set to dollar amounts that equate to 80% of the average health (medical, dental and vision) premium for Employee, Employee Plus One and Family coverage levels, rounded to the nearest whole dollar based on the premiums that will take effect on January 1 of the respective calendar year. Unused Benefits Credits as outlined above will be paid to the employee in cash and reported as taxable income. If the amount contributed by the City (Benefits Credits) exceeds the cost of the medical insurance purchased by the employee, the employee will have the option of using any "excess credits" to purchase dental, vision, or accidental death and dismemberment (AD&D) insurance or to contribute to a healthcare or dependent care flexible spending account (FSA), instead of receiving taxable cash. All management employees who work three quarter-time or less will receive prorated Benefits Credits. 2. Dental Insurance Management employees will be eligible to enroll in or waive enrollment in a City-sponsored dental plan at any coverage level. 3. Vision Insurance Management employees will be eligible to enroll in or waive enrollment in a City-sponsored vision insurance plan at any coverage level. 13 Revised 11/12/19 Dec. 10, 2019 Item #2 Page 32 of 38 Management Compensation and Benefits Plan 4. Waiver Provision Management employees who do not wish to participate in the CalPERS Health Program will have the choice of waiving the City's medical insurance program, provided they can show that they are covered under another group insurance program. The dollar amount paid by the City for employees who elect the waiver provision may change in the first pay period of each calendar year. The Benefits Credits associated with waiving medical coverage will be set equal to 50% of the Benefits Credits associated with Employee medical coverage. If this results in a situation where the unused benefit credits associated with any medical plan exceed the benefit credits associated with waiving medical coverage, the benefit credits associated with waiving medical coverage will be set equal to one dollar ($1) above the unused benefit credits associated with that medical plan. Unused Benefits Credits as outlined above will be paid to the employee in cash and reported as taxable income. Health Insurance for Retirees Effective January 1, 2001, management employees will be covered by the Public Employees' Medical and Hospital Care Act and will be eligible to participate in the California Public Employees' Retirement System (CalPERS) Health Program. Management employees who retire from the City, either service or disability, shall be eligible to continue their enrollment in the CalPERS Health Program when they retire, provided that the individual is enrolled or eligible to enroll in a CalPERS medical plan at the time of separation from employment and their effective date of retirement is within 120 days of separation. The City will contribute the minimum amount per month required under Government Code Section 22892 of the PEMHCA toward the cost of each retiree's enrollment in the CalPERS Health Program. Employees who retire from the City, either service or disability, shall be eligible to elect, upon retirement to participate in the City's dental and/or vision insurance programs as a retiree. The cost of such dental and/or vision insurance for the retiree and eligible dependents shall be borne solely by the retiree. An individual who does not choose coverage upon retirement, or who chooses coverage and later drops it is not eligible to return to the City's dental and vision insurance program. The City will invoice the retiree for his/her monthly premiums for dental and/or vision insurance and the retiree must keep such payments current to ensure continued coverage. Physical Fitness Reimbursement All management employees shall be eligible for reimbursement of up to the amount of four hundred fifty dollars ($450) during each fiscal year for the costs associated with physical fitness. Each employee claiming reimbursement shall be required to submit original receipts to the Human Resources department for approval and reimbursement. 14 Revised 11/12/19 Dec. 10, 2019 Item #2 Page 33 of 38 Management Compensation and Benefits Plan The physical fitness reimbursement is offered to management employees to promote optimum health. Services include, but are not limited to: health assessment testing and examinations, computerized heart risk profile, complete blood profile, fees paid to physical fitness providers, nutritional assessment and diet program. Long-Term Disability Insurance (LTD) Long-term disability is available for all management personnel after 30 calendar days of disability. The LTD premium cost is paid by the City. Employees shall be entitled to combine accumulated vacation leave ore-time with LTD payments for the purpose of achieving the equivalent of their pre-disability salary to the extent allowed by law during any period of nonindustrial disability. Accumulated sick leave may not be combined with LTD payments. Under no circumstances shall the combination of accumulated leave and LTD payments exceed the employee's pre-disability salary. Deferred Compensation The City shall provide deferred compensation plan(s) which may be utilized by any management employee. The City reserves the right to accept or reject any particular plan and to impose specific conditions upon the use of any plan. It is acknowledged that the City will assist in the administration of this benefit but that the City has no liability if an employee should default on the repayment of such a loan. Drug and Alcohol Policy It is the policy of the City of Carlsbad to provide a work environment free from the effects of drugs and alcohol consistent with the directives of the Drug Free Workplace Act. The City provides a voluntary Employee Assistance Program (EAP) to assist employees who seek help for substance abuse or other personal problems affecting work or family life. This program is available to employees and their family members and offers 24-hour access to confidential professional EAP assistance for emergency or urgent situations. For more specific information, contact the Human Resources Department or visit the City's intranet site. Uniform Reimbursement & Reporting the Value of Uniforms to CalPERS Reimbursement to the Police Chief and Assistant Police Chief for the cost of purchasing and maintenance of required uniforms shall be $34.62 per pay period. Effective May 31, 2010, all fire management employees who are required to wear City-provided uniforms will have the amount of $17 .31 reported to CalPERS bi-weekly as special compensation related to the monetary value of the required uniforms, excluding boots. Under PEPRA, this benefit is not reported to CalPERS as special compensation for new members. Fire Safety Management 1. Post-Retirement Healthcare Trust 15 Revised 11/12/19 Dec. 10, 2019 Item #2 Page 34 of 38 Management Compensation and Benefits Plan Employees promoted into a fire safety management classification from a position represented by CF A, Inc. after the establishment of the post-retirement healthcare trust by CF A, Inc. shall contribute into the post-retirement healthcare trust established by CF A, Inc. via payroll deductions until participation by CF A, Inc., in this type of trust is terminated. The employee contribution amount shall be equal to the amount established for employees represented by CF A, Inc. In addition, the city will make monthly contributions per fire safety management employee who is contributing to the trust. The city contribution amount will be equal to the amount established for employees represented by CF A, Inc. The City has no administrative responsibilities or liabilities related to this benefit, other than processing of payroll contributions as described above. 2.0vertime The classifications of Fire Chief, Fire Division Chief, Fire Battalion Chief and Fire Marshal are exempt from overtime requirements under FLSA. However, Fire Battalion Chiefs are paid straight time for overtime when they are covering the duty for a Battalion Chief who is on a leave of absence and when they are directed to attend a mandatory training class associated with the rank of Battalion Chief on a non-scheduled work day. Through the California Fire and Rescue Mutual Aid System and California Fire Assistance Agreement (CFAA), and at the request of the California Governor's Office of Emergency Services (Cal OES), California Department of Forestry and Fire Protection (CAL FIRE), Federal Fire Agencies or other fire agencies, City of Carlsbad Fire Department personnel can be assigned to locations throughout California in the event of a local, State, or Federal emergency. In the event this occurs, employees in the classification of Fire Division Chief and Fire Marshal who are assigned to the emergency location are paid straight time for overtime (portal to portal) beginning at the time of dispatch to the return to jurisdiction and employees in the classification of Fire Battalion Chief who are assigned to the emergency location are paid at a rate of 1.5 for overtime (portal to portal) beginning at the time of dispatch to the return to jurisdiction. Special Assignment and Temporary Upgrade Pay Whenever the needs of the City require an employee to temporarily perform the duties of a job classification that has a higher pay range than the pay range associated with their current job classification for a period of more than twenty-one (21) calendar days, the employee shall be designated as being in a special assignment and receive additional temporary upgrade pay. In such cases, the employee shall be paid at an appropriate level which will assure an increase of not less than five percent (5%) greater than his/her current salary. Subsequent to designation in a special assignment, in the event that the situation changes and the City does not need the employee to serve in the assignment for at least twenty-one (21) consecutive calendar days, the employee shall receive the temporary upgrade pay for that period of time the assignment lasts. In the event that at the beginning of a special assignment, it is not perceived that the assignment will last at least twenty- one (21) consecutive calendar days, and the assignment nonetheless extends beyond twenty-one (21) consecutive calendar days, the employee in the assignment shall receive the temporary upgrade pay retroactive to the first day of the acting assignment. No employee shall be required to perform any of the duties of a higher classification unless that employee is deemed to possess the minimum qualifications of the higher classification by the Human Resources Director as recommended by the affected Department Head. Exceptions to the minimum qualifications criteria may be recommended by the affected Department Head on a case 16 Revised I 1/12/19 Dec. 10, 2019 Item #2 Page 35 of 38 Management Compensation and Benefits Plan by case basis. If the employee does not meet the minimum qualifications for the higher classification he/she shall receive not less than 2.5% temporary upgrade pay. The temporary upgrade pay shall commence on the first (1st) calendar day of the special assignment. The recommendation that an employee be placed in a special assignment shall be put in writing by the affected Department Head and submitted to the Human Resources Director for approval. The employee shall not serve for more than one hundred and eighty (180) calendar days in a special assignment unless approved by the City Manager or his/her designee. If an employee is on a leave of absence (paid or unpaid and except when leave is ordered by the city) for more than twenty-one (21) calendar days, the temporary upgrade pay associated with their special assignment shall cease on the twenty-second (22nd) day. On the day that the employee returns to work, if the supervisor determines that the employee is required to continue to perform the duties of the special assignment, the temporary upgrade pay will resume as of the day the employee returns to work. A person in a special assignment shall be eligible to receive pay increases in his/her regular position during the special assignment. The Human Resources Director shall obtain the employee's consent for the special assignment prior to the employee's assuming or continuing the duties and additional compensation, which shall clearly state that it is understood that a reduction in salary will occur due to cessation of the temporary upgrade pay upon the expiration of the need for the special assignment. Educational Incentive Effective January 1, 2019, employees in the classifications of Police Chief and Assistant Police Chief who present proof to the Professional Standards Division Sergeant, Carlsbad Police Department, of evidence of the award of a Management certificate issued by the State of California Commission on Peace Officer Standards and Training (POST) will be eligible to receive educational incentive pay in the amount of four hundred sixty-two dollars ($462) biweekly. Eligibility for receiving the compensation will be based upon the date the employee provides evidence of eligibility to the Professional Standards Division Sergeant. It is the sole responsibility of the employee to make notification of eligibility for the educational incentive pay. 17 Revised 11/12/19 Dec. 10, 2019 Item #2 Page 36 of 38