HomeMy WebLinkAboutRes2016-046 Sponsored by: Hunt
llCITY OF SEWARD, ALASKA
RESOLUTION 2016-046
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, RESTORING EMPLOYEE MERIT INCREASES AND A ONE
PERCENT BONUS FOR NON-UNION REGULAR EMPLOYEES, AND
APPROPRIATING FUNDS
WHEREAS, the City of Seward 2016/2017 budget saw a nearly 13% reduction in the
General Fund budget, largely the result of State budget cuts and uncertainty surrounding sales tax
revenues; and
WHEREAS,in order to balance the budget,employee merit increases and proposed cost of
living increases were eliminated from the budget in both 2016 and 2017; and
WHEREAS,merit increases were also frozen in 2014 and 2015,while employees received
3% cost of living increases in both 2014 and 2015; and
WHEREAS, the City Council agreed to consider reinstating some level of employee pay
increases following receipt of the City's financial performance results from 2015; especially
considering whether sales tax revenues came in higher than projected; and
WHEREAS,the General Fund ended 2015 with a positive net increase in Fund Balance of
$321,309, and the administration has recommended restoring merit increases in 2016 to those
employees who are eligible and providing a one percent bonus to all non-union regular employees
which shall not add to employees' future base year salaries.
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. Employee merit increases are restored for 2016 for all eligible employees who
meet the criteria as established in Seward City Code 3.15.035. Step increases,which require that an
employee"...must continue to demonstrate satisfactory service of a progressively greater value.Step
increases are not automatic based upon longevity and are awarded only where the department head
feels the employee has demonstrated service of a progressively greater value,progressively greater
responsibility, and performed what normally would be expected for the city during the past year.
Satisfactory performance alone shall not be grounds for a step increase."
Section 2. Employee merit increases shall be effective the first day of the pay period
following award,shall pertain only to the current position in which an employee is serving,and shall
not take effect retroactively.
Section 3. All non-union regular employees who are in regular employment status as of
August 6,2016 shall be eligible for a bonus at the rate of one percent of his/her regular annual salary
based on their regular rate of pay, excluding acting pay and overtime, on August 6, 2016. The one
percent bonus is offered in lieu of a cost of living increase, such that the bonus will not add to the
employee's base salary in future years. Such bonus shall be payable in the pay period which ends
August 6, 2016.
CITY OF SEWARD, ALASKA
RESOLUTION 2016-046
Section 4. The 2016 personnel budget is hereby amended and funds are authorized in the
following amounts as attached hereto in Exhibit A: 1) General Fund personnel budget increased
$111,611 from the General Fund reserves account no.01000-0000-3400;2)Harbor Fund personnel
budget increased$18,898 from the Harbor Fund reserves account no. 11000-0000-3400; 3)Parking
Fund personnel budget increased$1,297 from the Parking Fund reserves account no. 13000-0000-
3400; 4)Electric Fund personnel budget increased $7,161 from the Electric Fund reserves account
no. 15000-0000-3400; 5) Water Fund personnel budget increased $3,931 from the Water Fund
reserves account no. 17000-0000-3400;and 6)Sewer Fund personnel budget increased$1,580 from
the Sewer Fund reserves account no. 18000-0000-3400.
Section 5. The 2017 personnel budget is hereby amended and funds are authorized in the
following amounts as attached hereto in Exhibit A: 1) General Fund personnel budget increased
$62,951 from the General Fund reserves account no. 01000-0000-3400; 2)Harbor Fund personnel
budget increased$11,144 from the Harbor Fund reserves account no. 11000-0000-3400; 3)Electric
Fund personnel budget increased$3,458 from the Electric Fund reserves account no. 15000-0000-
3400; 4) Water Fund personnel budget increased $632 from the Water Fund reserves account no.
17000-0000-3400; and 5) Sewer Fund personnel budget increased $632 from the Sewer Fund
reserves account no. 18000-0000-3400. 111
Section 6. This resolution shall take affect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 25`h
day of July, 2016.
THE CITY OF SEWARD, ALASKA
AialCOA.e9v1Y
can Bardarson, Mayor
AYES: Keil, McClure, Alterman, Bardarson
NOES: Casagranda, Squires
ABSENT: Butts
ABSTAIN: None
AT ST:
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Brenda Ballo!, CMC d
Acting City Clerk a 0ssau ? a
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Agenda Statement
Meeting Date: July 25, 2016
To: City Council
Through: Jim Hunt, City Manager
From: Kristin Erchinger, Finance Director
Agenda Item: Restore Employee Merit Increases and a One Percent Bonus for Non-Union Regular
Employees
BACKGROUND & JUSTIFICATION:
The City Council met in a work session on June 27, 2016 for the purpose of discussing whether to reinstate some
measure of employee pay increases eliminated from the 2016 and 2017 Budgets. The discussion included the cost of
a number of scenarios including cost-of-living increase, restoring merit increases and/or a one-time bonus which
would not add to future base pay.
The administration proposed eliminating employee merit increases and cost of living increases in order to balance the
2016/2017 Budget, as it was necessary to reduce the General Fund budget by 13% due largely to State budget cuts
and uncertainty surrounding sales tax revenues. The General Fund ended 2015 with an overall increase in Fund
Balance of $321,309.
The work session included a discussion of future calls on General Fund reserves, including cost-sharing for Lowell
Canyon Tunnel ($1.65 Million, excluding construction); City Hall carpet asbestos mitigation and replacement
($270,000); Orion legal fees ($45,000 to-date); waterfront erosion ($80,000 to $100,000 waterfront park and
$200,000 sealife center); future State budget cuts which could reduce City revenues (community jails, revenue
sharing, PERS), etc.
Council directed that a resolution be prepared to restore some level of employee pay increases. Merit increases are
proposed to be reinstated, as they reward employees who earn them through progressively greater value and
responsibility to the City. Seward City Code 3.15.035. - Step increases states that an employee “…must continue to
demonstrate satisfactory service of a progressively greater value. Step increases are not automatic based upon longevity and
are awarded only where the department head feels the employee has demonstrated service of a progressively greater value,
progressively greater responsibility, and performed beyond what normally would be expected for the city during the past year.
Satisfactory performance alone shall not be grounds for a step increase.”
Since 35% of City employees are not eligible for merit increases due to reaching the J Step on the pay scale, a one percent bonus is
recommended, and will not add to future base pay.
INTENT:
To restore a portion of employee pay increases eliminated during preparation of the 2016 and 2017 annual budget.
Yes No N/A
CONSISTENCY CHECKLIST:
1. Comprehensive Plan X
2. Strategic Plan : X
3. Other (list):
FISCAL NOTE:
The merit increases will add to base pay for eligible employees in future years, while the one-time bonus will not. A
merit increase is equal to 2.5% of an employee’s pay. The total impact of the proposed pay increases is $144,478 for
all Funds in 2016. The total impact of the proposed pay increases is $78,817 for all Funds in 2017. Please see
attached Appendix “A” for a schedule of the impact by Fund.
Approved by Finance Department: __________________________
ATTORNEY REVIEW: Yes________ No___X______ Not Applicable_________
RECOMMENDATION:
City Council approve Resolution 2016-___ restoring employee merit increases and a one-percent bonus for non-
union regular employees of the City, and appropriating funds.