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HomeMy Public PortalAbout02) 4A Staff Report_Admin Leave - COVID-19AGENDA ITEM 4.A. ADMINISTRATIVE SERVICES DEPARTMENT MEMORANDUM DATE: March 31, 2020 TO: The Honorable City Council FROM: Bryan Cook, City Manager SUBJECT: OVERVIEW OF TEMPORARY EMERGENCY ACTION RELATED TO CONTINUITY OF CITY SERVICES AND PERSONNEL AND REQUEST FOR DIRECTION RECOMMENDATION: The City Council is recommended to provide direction as to how the City Manager, as the Director of Emergency Services, is to proceed regarding certain personnel status for City staff and the budgetary considerations associated with such status in the time period after his emergency authority expires on April 2, 2020. BACKGROUND: 1. On January 21, 2020, the first case of the Novel Coronavirus 2019 (COVID-19) was reported. 2. On March 4, 2020, the Health Officer of Los Angeles County declared a local health emergency regarding COVID-19 and the Los Angeles County Board of Supervisors concurrently proclaimed the existence of a local emer gency for the County of Los Angeles. 3. On March 4, 2020, Governor Newsom of the State of California declared a State of Emergency in response to the COVID-19. 4. On March 12, 2020, Governor Newsom of the State of California issued Executive Order N-25-20 in a further effort to confront and contain COVID-19 that among other things suspended certain provisions of the Ralph M. Brown Act providing local agencies with greater flexibility to hold meetings via teleconferencing. City Council March 31, 2020 Page 2 5. On March 13, 2020, the President of the United States declared a national state of emergency regarding COVID-19. On this same day, the City Council adopted Resolution No. 20-5457, declaring a local state of emergency which gave authority to the City Manager in his role as Director of Emergency Services to implement measures in line with state and county health officials’ recommendations to slow the spread of COVID-19 while not impacting critical services. 6. On March 18, 2020, in an abundance of caution for the health and safety of City staff and patrons, the City indefinitely closed City buildings to the public and modified services. On the same day, the United States Senate passed the Families First Coronavirus Response Act (the Act) with President Trump signing the bill into law shortly thereafter. 7. On March 19, 2020, to mitigate the spread of COVID-19, state and county officials ordered residents to stay home or at their place of residence. On the same day, with the authorization granted by the declaration of local emergency, the City Manager ordered some staff to work from home, though essential office workers are to come to the office if needed and if sufficient distancing is maintainable, and essential field staff are to practice all safety and social distancing related to such work in the field. ANALYSIS: Resolution No. 20-5457, declaring a local emergency by the Council on March 13, 2020, allows the Director of Emergency Services (the City Manager) to, among other things:  Mobilize local resources;  Coordinate interagency response;  Make or issue rules and regulations reasonably related to the protection of life and property; and  Require emergency services of any city employee. To help to control the spread of COVID-19, the City Manager invoked his emergency authority from March 20, 2020 to April 2, 2020, a period of 14 days, in implementing the state and county stay at home orders by:  Directing most City staff to work from home, if and when possible;  Directing only those staff who were determined to perform “essential duties” to continue reporting to work at the City;  Directing staff performing essential duties to adhere to the measures implemented by the City for social distancing and other similar precautions and to discuss working from home if distancing could not be maintained;  Providing for limited-term paid administrative leave, to the extent it is not feasible to assign sufficient work to specific employees to cover their full City Council March 31, 2020 Page 3 expected weekly hours (40 for full-time employees; the weekly individual average for part-time employees). Before the expiration of the 14-day period, the City Manager is seeking direction from the Council regarding those members of staff who fall into the category of receiving paid administrative leave. Paid administrative leave is a tool that permits the City to temporarily compensate an employee who is ready and able to work but whom the City has directed to remain away from the workplace in the City’s interest. It is not a tool with its genesis in statute, but rather one that has been developed over time and recognized by the courts. This report provides the City Council with several key areas of analysis including: payroll costs of the administrative leave, preliminary financial analysis of the immediate term of this event, and lastly an overview of relevant and new legal considerations, including the availability of paid leave for some employees under the Families First Coronavirus Relief Act (“FFCRA”) that takes effect on April 1, 2020. Financial Considerations Immediate Payroll Costs of Administrative Leave The estimated costs for the administrative leave for the following periods are: Periods: Source of Parameter Est. Cost: March 20 to April 2, 2020 City Manager Authority under Declaration of Local Emergency $ 29,600 April 3 to April 19, 2020 Additional time until Governor Newsom Executive Order N-33-20 and County of Los Angeles Department of Public Health Order Deadline $ 36,200 April 20 to May 1, 2020 Additional time until anticipated end of County of Los Angeles Office of Education recommended closure $ 39,500 Total Est. Salary Costs-Admin. Leave $105,300 Please note that these costs are budgeted in the current fiscal year (FY) 2019-2020 in the form of regular employee compensation. Hence, no additional appropriation is required at this time. Also, as will be discussed further below, the City is now legally obligated to provide at least partially-compensated leave under the new Families First Coronavirus Response Act (FFCRA) to eligible employees for qualifying reasons such as school and daycare closures for a period of up to 12 work weeks, commencing on April 1, 2020. The interplay between the City’s duties under this new Federal law and the option to provide administrative leave is fluid at this time due to the lack of Federal regulations interpreting the law. These regulations are anticipated to be issued in early April. City Council March 31, 2020 Page 4 Revenue Reductions The City will inevitably see revenue reductions due to the orders directly related to COVID-19. It is difficult at this time to determine the size of the impact. However, as stated in the Mid-Year staff report on March 17, 2020, the estimated FY 2019-2020 surplus is $523,270 with the Council approved adjustments. Nevertheless, the revenues will be closely monitored and should significant adjustments arise, Council will be notified immediately. City Financial Stability – Planning for an Emergency The third area involves the fiscal health of the City and the potential impact if the above revenue losses were to last several months. Because of the fiscally prudent and conservative steps taken by the City over the last decade, the City’s General Fund reserves are in good standing as the City has been able to set aside $50,000 in Emergency/Disasters as well as $1,450,000 in Local Economic Uncertainty. Therefore, even if the City were to experience additional revenue reductions that would result in a deficit for FY 2019-2020, the General Fund reserve is able to handle the temporary setback. New Relevant Legal Issues On April 1, 2020, the federal FFCRA takes effect and will require the City to provide two types of leave to eligible employees who request to use leave for qualifying reasons: expanded Family Medical Leave Act (FMLA) leave and emergency paid sick leave. Leave Due to School or Daycare Closure In its current form, the expanded FMLA applies to provide up to 12 work weeks of at least partially-paid time off to employees who are unable to work due to a need to care for their child(ren) whose school(s) or daycare(s) are closed due to COVID-19-related reasons. The expanded FMLA is available to all employees who have worked for the City at least 30 days, whether they are part-time or full-time. Emergency Paid Sick Leave The emergency paid sick leave under FFCRA can be used for the same reason, although there is no minimum length of employment required for employees to be eligible. Emergency paid sick leave consists of up to 80 hours over a two-week period (with the amount available to part-time employees determined on a pro-rated basis.) Employees Subject to Federal, State, or local quarantine or isolation order related to COVID-19 FFCRA will also require the City to provide up to 80 hours of paid emergency sick leave if an employee is “subject to a Federal, State, or local quarantine or isolation order City Council March 31, 2020 Page 5 related to COVID-19.” Although neither “quarantine” or “isolation order” are defined in the FFCRA, and the anticipated regulations from the Department of Labor may use a narrower definition, there is good reason to conclude that Governor Newsom’s Executive Order N-33-20 would constitute a “quarantine order.” Accordingly, employees who are not “essential” and for whom the City has not identified feasible remote work (and who are not using the 80 hours due to daycare/school closure,) likely qualify to receive paid leave regardless of the City’s position on administrative leave. The City cannot force an eligible employee to take leave under the FFCRA; however, an employee may choose to do so, and may want to do so if the alternative is either unpaid time or use of their available accrued paid leaves. Practical Considerations in Implementing Administrative Leave Placement of an employee on paid administrative leave requires that the employee be on-call and able to respond to work if directed to do so. If employees are not teleworking and are unable to respond to work in person, then they are not eligible for paid administrative leave. As a rule, paid administrative leave should only be implemented for employees who are “essential” but for whom the City does not have sufficient workload because of COVID-19 shutdowns. If an employee’s inability to perform work is due to childcare issues resulting from school/daycare closure related to COVID-19, or because that employee is non-essential and subject to a quarantine order, or another qualifying reason for paid emergency sick leave, then the employee must either use available accrued leave time or go unpaid, if they choose not to use any of the newly-available financial safety nets in FFCRA. Alternatives to Use of Current Administrative Leave Three alternate options outside the use of Administrative Leave are available. These options would still need to consider any rights employees have under FFCRA: 1. Decline to pay for non-working hours and require staff to use accrued leave balances to receive a normal pay during this period (40 hours, or average hours for part-time employees); 2. For part-timers, reduce work hours; or 3. Impose furlough. Use of Accrued Leave Staff could be required to use their accrued leave balances to offset unpaid non-work hours to make their paychecks whole. One or more individual staff members might not have enough accrued leave to last several weeks, and there could be an impact on the health insurance status of staff members if they are only being considered part -time employees. City Council March 31, 2020 Page 6 Reduction in Work Hours The City could pay staff based on hours worked, thus creating a significant reduction in work hours. This would apply primarily to part-time staff. However, the affected staff would be able to file unemployment with the State Employment Development Department (EDD). Eligible staff can receive benefits that range from $40-$450 per week which is calculated at about 46% to 50% of their normal pay. The City would be invoiced by EDD for all payments made to City employees. As such, the cost savings in taking this route may be minimal. Implementation of Furloughs A factor to weigh in considering furloughs is the period after the State and County terminate their stay-at-home orders and the City restarts its programs. With furloughs, the City would have lost a significant portion of its part-time workforce which could create difficulties in running the programs and mobilizing for potential adjustments of needed services. CONCLUSION Given the fluid and rapidly-changing situation, the City continues to monitor the impacts of COVID-19 and implement recommendations of State and County health officials. This is an evolving situation that staff is responding to quickly with the safety and well-being of the community and City employees as its priority while keeping an eye on the City’s long- term financial health. The City Council is asked to consider directing the City Manager to implement paid administrative leave for either the period April 3 to April 19, 2020 or the period April 3 to May 1, 2020, or to direct the City Manager to implement an alternative approach to addressing the impact of City employees not working or working from home. No matter the approach, the City will be bound by FFCRA and the financial implications thereof . CITY STRATEGIC GOALS: Actions contained in this report align with the City’s strategic goal of Good Governance. FISCAL IMPACT: There are no additional appropriations recommended at this time.