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Home My Public Portal About17) 9E Council CompensationDATE: May 15, 2012 AGENDA ITEM 9.E. MANAGEMENT SERVICES DEPARTMENT TO: The Honorable City Council FROM: Eric S. Vail, City Attorney MEMORANDUM SUBJECT: CITY COUNCIL COMPENSATION RECOMMENDATION: The City Council is requested to receive an update from the City Attorney and consider the following three options: a) Proceed with the statutory allowed compensation increase from $480 to $720 per month; b) Adjust the existing Council compensation by some amount less than 50% and provide the City Attorney direction to revise the proposed Ordinance accordingly; or c) Take no action, and leave the Council compensation "as is," at $480 per month. BACKGROUND: 1. On January 21, 2003, Ordinance 03-882 adjusting City Council compensation was last adopted. Government Code section 36516 permits the City Council to adjust the compensation by an amount equal to five percent (5%) for each calendar year from the last adjustment. Pursuant to Section 2102 of the Temple City Municipal Code ("TCMC"), each member of the City Council receive as a compensation the sum of $480.00 per month, with such adjustments as may be permitted from time to time by state law. 2. On May 1, 2012, members of the City Council requested that the City Attorney provide them with an update and options to address their compensation consistent with Government Code section 36156. LA #4816-4795-1631 v1 City Council May 15, 2012 Page 2 ANALYSIS: During its last regular meeting, the members of the City Council requested that the City Attorney's Office prepare a proposed Ordinance adjusting the City compensation consistent with Government Code section 36156. Government Code section 36156, in relevant part provides: "The salary of council members may be increased beyond the amount provided in this subdivision by an ordinance or by an amendment to an ordinance, but the amount of the increase shall not exceed an amount equal to 5 percent for each calendar year from the operative date of the last adjustment of the salary in effect when the ordinance or amendment is enacted. No ordinance shall be enacted or amended to provide automatic future increases in salary." Government Code, section 36516.5, provides that changes to Council salaries may only take effect in years of a Council election. This section states, in relevant part: "A change in compensation does not apply to a councilman during his term of office; however, the prohibition herein expressed shall not prevent the adjustment of the compensation of all members of a council serving staggered terms whenever one or more members of such council becomes eligible for a salary increase by virtue of his beginning a new term of office." It is a common misconception that adjustment in council salaries cannot apply to seated councilmembers. Government Code section 36516.5 expressly provides that when one or more members of the Council (new or existing) begin a new term, (i.e., after a regular election) then every councilmember is eligible for the adjusted compensation. Section 605 "Compensation of Councilmen" of the City's Charter provides: "Compensation of councilmen, other than reimbursement for expenses, may be established in the manner and amount as provided by general law, relating to councilmanic [sic] salaries in general law cities in this state." The California Attorney General has opined that this provision allows City Councils to increase the existing compensation by an amount equal to five percent (5%) multiplied by the number of years since the last request. LA #4816-4795-1631 v1 City Council May 15, 2012 Page 3 Council may adopt the proposed ordinance at any time prior to the next regular election, provided the ordinance becomes effective prior to election day. Here, the proposed ordinance is structured to take effect thirty days after adoption, but by operation of section 36516.5, the salary increase will not take effect until the first pay period after the seating of a new councilmember or the confirmation of the new term of an existing councilmember in March of 2013. The current compensation of $480 per month ($5,760 per year) was established in 2003. The next adjustment to Council compensation will take effect, if approved, in March of 2013. Therefore, ten years will have elapsed between adjustments. Applying the rule established in Section 36516, the Council compensation may be increased by a maximum of 50% (i.e., 5% x 10 years). If a 50% increase is applied to the existing compensation of $480 per month, the resulting monthly compensation would be $720 per month (i.e., $480 x 50% = $240; $480 + $240 = $720) or $8,640. Accordingly, the proposed Ordinance has been prepared to increase the Council compensation to $720 per month. It should be noted that the City currently and appropriately pays the Council salaries in the same method it pays City employees, by issuance of a check every two weeks (26 checks per year). As a result, any Councilmember or member of the public comparing checks issued by the City for compensation would see an amount of approximately $221.54 per pay period. There is no discrepancy, as this amount rounded equals the same annual authorized payment of $5760. CONCLUSION: The City Council is requested to consider the options provided by the City Attorney regarding City Council Compensation and select one of those options. FISCAL IMPACT Adoption of Ordinance No. 12-954, as proposed, will result in an increase of $2,880 in compensation for each Council person per Calendar year, or $14,400 in total for the City. Other benefit amounts paid by the City to Councilmembers that are based on a percentage of compensation may increase slightly based on the proposed compensation increase. ATTACHMENT(S) A. Ordinance No. 12-954. LA #4816-4795-1631 v1 ORDINANCE NO. 12-954 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMPLE CITY, CALIFORNIA, AMENDING SECTION 2102 "COUNCIL EXPENSES AND COMPENSATION" OF CHAPTER 1 "CITY COUNCIL" OF TITLE 2 "ADMINISTRATION" OF THE TEMPLE CITY MUNICIPAL CODE. WHEREAS, section 605 "Compensation of Councilmen" of the City Charter permits Councilmembers to receive compensation for their service, as provided by general law; and, WHEREAS, sections 36516 and 36516.5 of the California Government Code permit Councilmembers to be paid a monthly salary for their service in accordance with those provisions; and, WHEREAS, pursuant to Ordinance 03-883 the monthly salary for Councilmembers was last adjusted ten (10) years ago to $480 per month; and, WHEREAS, the provisions of the Government Code permit an increase in the monthly Council salary by an amount equal to five percent (5%) multiplied by the number of years since the last adjustment, the Council salary may be adjusted by 50% (i.e., an increase of $240 per month) to a new salary of $720 per month; and, WHEREAS, pursuant to Government Code section 36516.5, any increase in Council salary will take place upon the seating of a new Council member or the reelection of an existing Council member to a new term in March of 2013. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEMPLE CITY HEREBY ORDAINS AS FOLLOWS.- SECTION OLLOWS: SECTION 1. Amendment of Section 2102 of the Temple City Municipal Code. The City Council hereby amends Section 2102 "Council Expenses and Compensation" of Chapter 1 "City Council" of Title 2 "Administration" of the Temple City Municipal Code, which shall read as follows: "2102 EXPENSES AND COMPENSATION Upon the submission of an itemized account any councilmember may be reimbursed for the member's actual and necessary expenses incurred in the performance of official duty. Pursuant to section 36516 of the Government Code of the state of California, each member of the city council shall receive as salary the sum of seven hundred twenty dollars ($720.00) per month, with such adjustments as may be permitted from time to time by state law. Such salaries shall be payable in the same LA #4845-8481-6399 vl manner and with the similar fringe benefits as are paid to other employees of the city." SECTION 2. Severability. The City Council hereby declares that, should any provision, section, subsection, paragraph, sentence, clause, phrase, or word of this Ordinance, or any part thereof, be rendered or declared invalid or unconstitutional by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, such decision or action shall not affect the validity of the remaining section or portions of the Ordinance or part thereof. The City Council hereby declares that it would have independently adopted the remaining provisions, sections, subsections, paragraphs, sentences, clauses, phrases, or words of this Ordinance irrespective of the fact that any one or more provisions, sections, subsections, paragraphs, sentences, clauses, phrases, or words may be declared invalid or unconstitutional. SECTION 3. Publication. The City Clerk shall certify to the passage and adoption of this Ordinance and to its approval by the Mayor and shall cause the same to be published according to law. INTRODUCED this 15th day of May 2012. PASSED, APPROVED, AND ADOPTED this 15th day of May, 2012, MAYOR ATTEST: APPROVED AS TO FORM: Deputy City Clerk City Attorney 1, Peggy Kou, Deputy City Clerk of the City of Temple City, hereby certify that the foregoing Ordinance No. 12-954 was introduced at the regular meeting of the City Council of the City of Temple City held on the 15th day of May 2012, and was duly passed, approved and adopted by said Council at the regular meeting held on 15th day of May, 2012 by the following vote: AYES: NOES: ABSENT: Deputy City Clerk LA #4845-8481-6399 vl