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Home My WebLink About17-Human Resources . . CITY OF SAN BERNARDINO -REQUEST FOR COUNCIL ACTION From: Lori Sassoon, Acting Director Subject: 0..., . . '.' . f.. Iv, i. ./iL ESTABLISHMENT OF SALARIES FOR FIRE DEPARTMENT RANGES P-5, P-6 & P-7, FIRE MARSHAL & TRAINING OFFICER, EFFECTIVE AUGUST 1, 2002 Dept: HUMAN RESOURCES Date: November 25, 2002 Synopsis of Previous Council Action: On October 1, 2001, the Mayor and Common Council established salaries for Fire Department Ranges P-5, (Battalion Chief), P-6 (Deputy Fire Chief), P-7 (Fire Chief), Fire Marshal and Training Officer, effective August 1, 2001. , Recommended Motion 1. That the salaries for Fire Department Ranges P-5, (Battalion Chief), P-6 (Deputy Fire Chief), P-7 (Fire Chief), Fire Marshal and Training Officer be established, effective August 1, 2002, as outlined in the attached Staff Report 2. That the Mayor and Common Council authorize the Director of Finance to amend the Fiscal Year 2002-2003 Budget to transfer $102,900 from the General Government Budget (001-092-5011) to the Fire Department Budget in th? ~en~ Fund. U/j )~ Signature Contact Person: Josi Kenline Phone: 384-5257 Supporting Data Attached: Yes Ward: FUNDING REQUIREMENTS: Amount: $102.900 Source: (Acet No) Various Fire Account Funds (Acet Description) Salaries and Benefits Finance: Council Notes: I;LIJ.,J~~ Agenda Item No. /'1 CITY OF SAN BERNARDINO -REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT Establishment of salaries for Fire Department Ranges P-5, P-6 & P-7, Fire Marshall & Training Officer, effective August 1, 2002. BACKGROUND Section 186 of the City Charter established a formula for setting salaries for local safety members, effective August 1 of each year. City staff has reached agreement with Fire Management Employees on the ten cities whose salaries will be averaged to determine this year's P-5, (Battalion Chief), P-6 (Deputy Fire Chief), P-7 (Fire Chief), Fire Marshal and Training Officer salaries for the Fire Department. The cities selected are: Downey Burbank Rancho Cucamonga Glendale Corona Daly City Richmond Fremont Huntington Beach Costa Mesa The Fire Association sought a City Attorney opinion regarding uniform allowance and whether it should be included as part of the total salary calculation. The City Attorney's opinion; which was given to Human Resources on November 20, 2002, determined that uniform allowances are not considered within the definition of "salary" for the purposes of Section 186 calculations if they are not reported as wages or income for tax purposes and are not part of a salary plan adopted by the goveming body setting forth plans consisting of money to be paid at various ranges and steps within the ranges for each position. As a result of this conclusion, Human Resources is now able to present the completed salary calculations for Fire Management. The new monthly salaries, effective August 1, 2002, are: RANGE CURRENT MONTHLY SALARY $8,044 $8,964 $8,964 $9,746 $11,123 NEW MONTHLY SALARY $8,771 $9,603 $9,603 $10,407 $11,777 P-5/Battalion Chief Training Officer Fire Marshal P-6/Deputy Fire Chief P-7/Fire Chief FINANCIAL IMPACT The increase in each range from 2001 is as follows: RANGE %CHANGE DOLLAR ADJUSTMENT PER MONTH (TOP STEP) #OF BUDGETED POSITIONS TOTAL ANNUAL ADJUSTMENT P-5 Training Officer Fire Marshal P-6 P-7 9.04% 7.13% 7.13% 6.78% 5.88% $727 $639 $639 $661 $654 6 1 1 1 1 $52,344 $7,668 $7,668 $7,932 $7,848 $83,460 Adding 23.319% to reflect variable fringe benefit costs that rise with salary, the total added cost for salaries and fringe benefits is $102.922. By comparison, total Section 186 costs for this group in FY 01/02 were $56,346. RECOMMENDATION 1. That the salaries for Fire Department Ranges P-5, (Battalion Chief), P-6 (Deputy Fire Chief), P-7 (Fire Chief), Fire Marshal and Training Officer be established, effective August 1, 2002, as outlined in the attached Staff Report. 2. That the Mayor and Common Council authorize the Director of Finance to amend the Fiscal Year 2002-2003 Budget to transfer $102,900 from the General Government Budget (001-092-5011) to the Fire Department Budget in the General Fund. HRlAgenda Items.SR.Fire.Mgmt.2002 I -1 OFFICE OF THE CITY ATTORNEY.. CITY OF SAN BERNARDINO JAMES F. PENMAN CITY ATTORNEY Opinion No. 02-07 November 20, 2002 TO: Lori Sassoon, Acting Director of Human Resources RE: Charter Section 186: Definition of Salary Regarding Uniform Allowances ISSUE Should uniform allowances be included in Charter ~ 186 salary comparisons? CONCLUSION Although all surveyed cities report uniform allowances as wages or income for tax purposes, if the uniform allowances paid by comparison cities are not part of a salary plan adopted by the governing body of such cities setting forth salary plans consisting of money to be paid at various ranges and steps within the ranges for each position, such amounts paid should not be included within the definition of salary for Charter ~ 186 salary comparisons. However, each city must be reviewed separately to determine if its uniform allowance is part of a salary plan and if such amounts are reported to the Internal Revenue Service and the State Franchise Tax Board as income or wages of the employee. SDE/ed[ uniform.opn] 300 NORTH "0" STREET. SAN BERNARDINO, CA 92418-0001 . (909) 384-5355. FAX (909) 384.5238 (NOT PAINTEO AT PUBL.IC EXPENSE) Lori Sassoon, Acting Director of Human Resources November 20, 2002 Page 2 ANAL YSIS The voters of the City of San Bernardino have adopted S 186 of the Charter of the City establishing "a basic standard for fixing salaries, classifications, and working conditions of the employees of the Police and Fire Departments of the City of San Bernardino." Charter S 186 provides that salaries for the employees will be set on August I of each year "at the amount equal to the arithmetic average of the monthly salaries paid or approved for payment to local safety members of like or most nearly comparable positions of the police and fire departments often cities of California with police and fire departments of ten cities of California with populations between 100,000 and 250,000 . . . "Id. The section goes on to prescribe how the ten cities are chosen. The San Bernardino City Professional Firefighters (SBCPF) have posed the question whether uniform allowances paid by comparison cities should be included in Charter gl86 salary calculations. In support of the position that such amounts should be included, SBCPF states that the relevant unifonn allowances are reported to PERS as well as the Internal Revenue Service and the Franchise Tax Board. The fact that amounts are reported to PERS is irrelevant for Charter S 186 salary comparisons. This is because PERS contributions are based upon "compensation" as defined in Government Code !l20630 as follows: "As used in this pmt, 'compensation' means the remuneration paid out offunds controlled by the employer in payment for the member's services performed during normal working hours or for time during which the member is excused from work because of holidays; sick leave; industrial disability leave, during which, benefits are payable pursuant to Sections 4800 and 4850 of the Labor Code or Article 4 (commencing with Section 19869) of Chapter 2.5 of Part 2.6; vacation; compensatory time off; or leave of absence . . . " Government Code S20630. Regarding the issue of compensation versus salary, City Attorney Opinion No. 93c 16 analyzed the history of the current language in Charter S 186, finding that "salary" was not intended to be as inclusive as "compensation." In that analysis, City Attorney Opinion No. 93-16 noted that before 1973, the relevant portion of Charter S 186 provided as follows: "[M]onthly salaries of said employees shall be fixed. . . at an amount of not less than the average of the monthly salaries, including increased cost of living bonuses, and all other financial rem uneration by whatever other name known, paid or approved for payment to employees of like or the most nearly comparable position of the Police and Fire Departments of the Cities of Riverside, South Gate, Burbank, Long Beach and Los Angeles. . ." City Attorney Opinion No. 93-16, pg. 4. SDE/ed[ uniform.opn] ," Lori Sassoon, Acting Director of Human Resources November 20,2002 Page 3 Furthermore, in 1962, the Court of Appeal found that the language "including increased cost of living bonuses, and all other financial remuneration by whatever name known" expressly required the City Council to consider so called "fringe benefits" in determining the amount of salaries paid by the guide cities. San Bernardino Fire and Police Protective League v. City of San Bernardino (1962) 199 Cal.App.2d 401,415. However, the language of Charter S 186 was changed in 1976 when it was amended by the voters to read as follows: 'The monthly salaries of Local Safety members of the San Bernardino Police and Fire Departments. . . shall be fixed. . . annually. . . at the amount equal to the arithmetic average of the monthly salaries, paid or approved for payment to Local Safety members of like or most nearly comparable positions of the police and fire departments of ten cities of California with populations of between 100,000 and 250,000 as shown in the latest Annual Report of Financial Transactions of California Cities published by the State Controller." Charter of the City of San Bernardino S 186. City Attorney Opinion No. 93-16 found that the 1976 amendment of Charter S 186 reduced the degree of discretion given to the City, since under the original Charter S 186, the City had to pay "not less than the average," but the amended section requires salaries to be set "at the amount equal to" the average. Furthermore, the language "including increased cost ofliving bonuses, and all other financial remuneration by whatever other name known" was entirely omitted. The amendment also removed the language requiring all other financial remuneration by whatever other name known to be included in the salary comparisons, thereby indicating an intent to exclude fringe benefits. In discussing the more recent history of Charter S 186, City Attorney Opinion No. 93-16 noted that in 1983, the Court of Appeal found the following: "The people of San Bernardino desired a tighter control on these salaries. More to the point, these amendments show that salary was to take on a narrower definition. No longer would fringe benefits 'by whatever other name known' be included." City Attorney Opinion No. 93-16, Pg. 5, citing San Bernardino Police Benefit Association v. City of San Bernardino, San Bernardino Superior Court, Case No. 206315 and 4th District Court of Appeal, Div. 2, Case No.4 Civil 29197. In 1984, in an attempt to simplifY Charter S 186 annual salary comparisons, the Mayor and Council adopted San Bernardino Municipal Code Chapter 1.28, codifYing the definition "salary" for Charter S 186 purposes as it had evolved by past practice: "Charter Section 186 Second, Article X, since its amendment in 1976, by administrative and legislative practice has consistently been interpreted in the manner SDE/ed[ uniform.opn ] Lori Sassoon, Acting Director of Human Resources November 20, 2002 Page 4 that the phrase'. . . . the monthly salaries, paid or approved for payment to local safety members of like or most nearly comparable positions of the police and fire departments often cities of California . . . .', as used to determine the monthly salaries of local safety members of the San Bernardino Police and Fire Departments by arithmetic averaging refers to those monthly salaries set by resolution or motion of the legislative bodies of such ten cities setting forth salary plans consisting of money to be paid at various ranges and steps within the ranges for each position and which amounts the cities report to the United States Internal Revenue Service and the California Franchise Tax Board as wages or income. Any compensation or remuneration paid or approved for payment to local safety members in such cities, regardless of how calculated, when paid or in what form, or however denominated, have not been included within 'monthly salaries' as that phrase is used in Charter Section 186 and are not 'monthly salaries' within the meaning of Charter Section 186. All such other forms of compensation or remuneration are fringe benefits which have been negotiated in good faith meet and confer sessions." San Bernardino Municipal Code S 1.28.0:20. Therefore, in accordance with San Bernardino Municipal Code S 1.28.20, the only criteria for determining what constitutes "salary" for the purposes of Charter S 186 are (I) whether the "salary" has been set by resolution or motion of the legislative bodies of such ten cities setting forth salary plans consisting of money to be paid at various ranges and steps within the ranges for each position; and, (2) whether the cities report those amounts to the Internal Revenue Service and Franchise Tax Board as wages and income. Regarding uniform allowances, a survey by personnel of the City's Human Resources Department (Human Resources) disclosed that the majority of cities surveyed pay uniform allowance amounts in an annual amount with a few cities paying uniform allowances on a semiannual, monthly, and biweekly basis. To determine whether these uniform allowances should be included in the salary comparisons of these cities, it must be determined whether the amounts are part of a salary plan of money to be paid at various ranges and steps within the ranges for each position and whether such amounts are reported to the Internal Revenue Service and California Franchise Tax Board. F or Charter S 186 salary comparisons, Human Resources surveyed 43 California cities. Of these 43 cities, the survey disclosed that 28 cities provide Fire uniform allowances, 13 cities do not provide their fire safety personnel with uniform allowances, and two cities did not respond to the Human Resource's inquiries. All 28 cities that provide uniform allowances to their fire safety employees report such amounts as wages or income for tax purposes. However, the amounts paid to employees for uniform allowances do not appear to be part of the monthly salaries set by resolution or motion by the cities' legislative bodies settin'g forth salary plans consisting of money to be paid at various ranges and steps within the ranges for each applicable position. Instead, the allowances tend to be a negotiated fringe benefit set forth in the applicable Memorandums of Understanding (MOUs), SDE/ed[ uniform.opn] I Lori Sassoon, Acting Director of Human Resources November 20, 2002 Page 5 with such amounts being a sum separate and apart from the salary of those employees subject to the terms and provisions of the MOU. An independent review by this office determined that in fact, none of the surveyed cities that provide uniform allowances include such amounts in the base salary of their fire safety employees, although such amounts are reported as wages or income for tax purposes. Since the uniform allowance amounts paid by the surveyed comparison cities are not part of a salary plan consisting of money to be paid at various ranges and steps within such range, but instead are amounts separate from the employee's salary, they do not meet the definition of salary set forth in San Bernardino Municipal Code 91.28.020 and should not be included in the Charter 9186 salary comparison. However, each surveyed City must be looked at to determine (I) whether its uniform allowance is paid to its fire safety employees as part of a salary plan; and, (2) whether such amounts are reported to the IRS and State Franchise Tax Board as income or wages of the employee. Since it appears that most cities and counties report their uniform allowances as income or wages of the employee, the focus must be on the manner in which payment is made to the employee as authorized by the governing body. Ifin fact a city or county's uniform allowance is paid to its safety employees as part of a salary plan rather than a fringe benefit, then such amounts must be included as part of that agency's reported salary for Charter 9186 salary comparison purposes. ectfully submitt~ ~~~l~ STEPH NIE D. EASLAND Deputy City Attorney Concur: JAMES F. PENMAN d ~ Judith Valles, Mayor Council Members Rachel Clark, City Clerk David C. Kennedy, City Treasurer Fred Wilson, City Administrator All Department Heads San Bernardino Fire Fighters' Local 891 San Bernardino Police Officers' Association San Bernardino Public Employees' Association San Bernardino Confidential - Management Association SDE/ed[ uniform.opn]