HomeMy Public PortalAbout08) 10B Staff Report-COVID-19 Admin Leave Pay for staff Non-Working HourAGENDA
ITEM 10.B.
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
DATE: April 21, 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 May 1, 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 emergency 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 13, 2020, 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.
5. On March 18, 2020, in an abundance of caution for the health and safety of City staff
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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.
6. 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.
7. On March 31, 2020, City Council directed the City Manager to continue the
implementation of paid administrative leave for employees not working or working
from home from April 3, 2020 to May 1, 2020.
8. On April 10, 2020, the County of Los Angeles extended its order requiring residents
to stay home or at their place of residence through the date of May 15, 2020.
ANALYSIS:
Before the expiration date of May 1, 2020, 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.
This report provides the City Council with an update of 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 took 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:
May 2 to May 15, 2020 County of Los Angeles Department of
Public Health (CLADPH) Order Deadline
$ 32,900
May 16 to May 31, 2020 Anticipated Extension to CLADPH
Deadline
$ 32,900
Total Est. Salary Costs-Admin. Leave $ 65,800
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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 discussed at the special meeting on March 31, 2020, the City is now legally
obligated to provide at least a partially-compensated leave under the new Families First
Coronavirus Response Act (FFCRA) to eligible employees for qualifying reasons. The Act
went into effect on April 1, 2020, and, where applicable, will require the City to provide
leave upon an employee’s request. The availability of emergency paid sick leave and
extended FMLA leave under the Act likely takes on greater significance for employees
with non-worked hours should the Council direct the City Manager not to extend
administrative leave for affected employees.
Revenue Reductions
City staff continues to monitor the revenue impacts of COVID-19. It remains difficult at
this time to determine the size of the impact. Although, the City’s cash flow could
potentially be affected by the timing of its sales tax revenues collections.
Recently, the California Department of Tax and Fee Administration (CDTFA), the State
of California agency that collects sales tax liabilities from businesses, will allow small
businesses with less than $5 million in annual taxable sales to defer payment on up to
$50,000 of sales/use tax liabilities.
Under the program, qualifying businesses can enter into payment plans to distribute up
to $50,000 of sales tax liability over a 12-month period, interest-free. For example, a
qualified business that chooses to defer their first quarter 2020 (January to March) liability,
can defer up to $50,000 of their obligation and would pay it in twelve equal monthly
installments, instead of one full payment, with the first payment not due until July 31,
2020.
It is not clear if the CDTFA, or the State of California, will remit the full amount to the
receiving agencies, such as the City, on time. Additionally, it is unknown how many
businesses in the City will enter into this plan and what amount of revenue will affect the
City in the short term.
However, the City is well poised to handle the delay in the collection of these revenues
as discussed below.
City Financial Stability – Planning for an Emergency
As discussed in the special meeting on March 31, 2020, the fiscal health of the City would
be able to handle the potential revenue losses because of the build-up of the City’s
General Fund reserves over the last decade. Furthermore, if its sales tax revenue
collections were deferred due to CDTFA’s program, the City will be able to handle the
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temporary impact of its cash flow.
CONCLUSION
The City continues to monitor the impacts of COVID-19 and implement recommendations
of State and County health officials. Staff continues to respond quickly with the safety and
well-being of the community and City employees as its priority while closely monitoring
the effect to the City’s long-term financial health.
To address the impact of City employees not working or working from home, the City
Council is asked to consider directing the City Manager to implement one of the following:
1. Paid administrative leave for the period May 2 to May 15, 2020; or
2. Paid administrative leave for the period May 2 to May 31, 2020, or
3. An alternative approach such as:
a. Use of Accrued Leave; or
b. Reduction in Hours; or
c. Furloughs
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.