Score: +5 (10/8/5)

Santa Clara County Grand Jury • 2009-2010 • Agency Response

Response to: City of Sunnyvale

C it Y of Sunnyvale The Heart of SUkon Valley

Published: August 13, 2010 12 pages

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⚠️ Aviso de traducción: Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Note: Missing finding numbers detected: F10

Findings and Recommendations 11 findings

F1 Page 2

The costs of total compensation for employees have grown substantially in the past decade and now threaten the cities' fiscal stability. City Response: Agree

Related Recommendations (1)

Page 2

All of the cities in the County need to implement measures that will control employee costs. As a starting point, each city should determine the percentage of savings required from the total compensation package to reach budget stability, and provide choices of wages and benefits in collective bargaining sessions for the unions to choose to achieve that percentage goal.

F2 Page 3

Salary and wage increases do not reflect changes in economic conditions; e.g. even with minimal inflation, yearly COLAsare granted with little bearing on the actual increase in cost of living or market conditions. City Response: Agree

Related Recommendations (1)

Page 3

Cities should not increase salaries and wages that are not supported by planned revenue increases. Cities should tie COLA increases to clear indicators and retain the ability to adjust or withhold based on current economic data.

F3 Page 3

Step increases are arbitrary and do not adequately represent an employee's added value to a city. Combined with COLAs, new employee's wages increase quickly and are not necessarily reflective of improved knowledge and skills. City Response: Disagree based on the City of Sunnyvale's salary structure and requirements for step increases. This is discussed in detail below.

Related Recommendations (1)

Page 4

Cities should negotiate step progressions from the current three and a half years to seven years. Employees should not receive COLAincreases while in step progression.

F4 Page 4

Medicalinsurance costs for active employees are growingyear after year at rates that exceed most cities' revenue growth, while the employee contribution to medical care is minimal. City Response: The City agrees with the fact that medical insurance costs are growing at a rate greater than the rate of revenue growth. The City disagrees that "the employee contribution to medical care is minimaL" While specifics vary by employee group, the City has capped its share of medical costs. As a result, employees have taken an increased share ofmedical costs in the last several years.

Related Recommendations (1)

Page 4

Cities should negotiate that employees assume some of these increased costs for their medical benefits. To contain medical costs cities should consider the following: A. Split monthly premiums between the city and employee and increase the employee's share, if already cost splitting, and remove any employee caps. B. Establish reasonable co-pays for doctors' visits, prescription drugs, and in-patient and out-patient hospital care. C. Prohibit an employee from being covered by both city-provided medical benefits and as a dependent on another city employee. D. Reduce cash-in-lieu payments. E. Introduce a new lowerpremium, high-deductible medical plan.

F5 Page 5

Pension formula changes instituted in the past decade, stock market losses, the aging "baby boomer" work force, and the growing unfunded pension and OPEB liability all contribute to making retiree pension and health care costs the most problematic and unsustainable expense the cities are facing. The city contribution to pension plans and OPEBsfar exceeds the employeecontribution. City Response: Agree

Related Recommendations (1)

R5b

Page 6

Cities should thoroughly investigate reverting to prior pension formulas that were less costly.

F6 Page 7

Public sector employees are granted a generous number of holidays, personal days, vacation days and sick leave annually. Rules 6 and limits on accrual vary by city and union, but vacation days and sick leave can be accumulated and converted to cash or calculated into the pension benefit within those limits. City Response: Agree

Related Recommendations (2)

R6a

Page 8

Cities should renegotiate with the bargaining units to 1) reduce vacation time; 2) reduce the number of holidays and/or personal days; 3) cap sick leave and eliminate the practice of converting accumulated sick leave to cash or adding into their years of service for inclusion in their retirement benefit.

R6b

Page 8

Cities should negotiate to substitute paid days off for unpaid days instead of imposing furloughs. For example, reduce paid holidays to major holidays only, consistent with private industry; and convert minor holidays to unpaid. Therefore, the public is not impacted by fewer services caused by furloughs, and the city saves the employee cost.

F7 Page 8

Cities traditionally determine their compensation packages by surveying the wages and benefits of other public sector employees in the same geographic area. There is a major resistance to comparing themselves or mirroring trends with the private sector. This has allowed wages and benefits to become artificially high and out of sync with market trends. City Response: Disagree, see responses to recommendations below for further detail. 7

Related Recommendations (2)

R7a

Page 9

Cities should research competitive hiring practices and alter the approach to determine fair wages and benefits for each city by using public and private sector data.

R7b

Page 9

Cities should renegotiate salaries and wages using valid market comparisons and not only the current wage index. Cities should utilize more market-oriented compensation practices so that salaries can adjust as competition for labor changes. Cities should reduce entry-level compensation for positions for which there are many qualified applicants.

F8 Page 9

Allcities perform certain core functions to run smoothly and provide services to their residents. To reduce employee costs and streamline operations, the cities are in various stages of contracting services to private industry or partnering with other cities, special districts or the County to deliver services. CityResponse: Agree

Related Recommendations (2)

R8a

Page 9

Cities should explore outsourcing some functions and services to private industry. Cities should discuss the prospect with cities that are successfully doing this to determine best practices and areas for success. Cities should develop contracts with measurable objectives, performance goals, and timelines.

R8b

Page 10

Cities should create partnerships with other cities, special districts and/ or the County for services, such as payroll, human resources, animal control, police and fire. Cities should investigate sharing the cost ofnew information technology systems.

F9 Page 10

Cities can gain operational efficiencies and effectiveness with lower employee costs by making sure they are staffed with the correct numbers ofpeople in the appropriate job classification in all departments and work groups. City Response: Agree.

Related Recommendations (1)

Page 10

Cities should analyze the functions performed by all job classifications and make adjustments in the work force. Consolidate functions within the same group or a similar group. Reassign appropriate work to lower paid job classifications. Eliminate unnecessary functions.

F11 Page 10

In many cities, the contract negotiation process is completed by placing the negotiated collective bargaining agreements on 9 the consent calendar for approval, which is acted on quickly at the start ofthe council meetings by a single motion and vote ofthe council. City Response: Agree, however it should be noted that any consent item on the agenda can be pulled for separate consideration by the Mayoror a city councilmember. Also, a member of the public can comment on a consent item prior to the CityCouncil taking action.

No recommendations for this finding

F12 Page 11

Current contracts were negotiated in good faith by representatives ofthe cities and the bargaining units; they were approved by the city councils. Promises made to employees were made by elected officials, past and present. Responsibility for formulating and approving solutions to restore the cities' financial stability resides squarely with our elected officials. The economic downturn has placed additional pressure on the situation. City Response: Agree

Related Recommendations (4)

R12a

Page 11

City Council members and mayors should become better informed about the fiscal realities in their cities, long-term costs and commitments, and be cognizant of potential issues in labor agreements.

R12b

Page 11

City councils and mayors should direct city administrators to (re)negotiate collective bargaining agreements that reverse the escalation of employee costs through concessions, cost sharing, and a second tier for new employees. 10

R12c

Page 12

City councils and mayors should meet with the bargaining units to clearly outline the cities' financial health and show how employee costs are impacting the budget.

R12d

Page 12

City councils and mayors should inform citizens of their plans for controlling unsustainable costs and remove politics from the equation.

Agency Responses 2

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.

City of Sunnyvale

September 20, 2010 • 6 pages • 8 responses • Score: -1 (+2, 3, -3) View Details ▾

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8 responses to findings and recommendations

The costs of total compensation for employees have grown substantially in the past decade and now threaten the cities' fiscal stability. City Response: Agree

Response: Disagree Score: -1

, above. FINDING 2 Council's December 16, 2008, agenda item #9, RTC 08-377, failed to reasonably inform interested members of the public that a predetermined interim councilmember would be appointed at the meeting. City Response Disagree with the finding. As the Grand Jury acknowledges, the Brown Act requires that 72 hours prior to a legislative meeting, an agenda must be posted with a brief general description of items to be discussed. The posted agenda description for the December 16,2008, meeting included as a topic of discussion "Options for Appointment ofInterim Councilmember." Accordin...

Response: Implemented

Score: 0

The Council should establish a clear written process to appoint future interim Council replacements. City Response The recommendation has been implemented, as summarized in the Response to Finding 1, above.

Response: Disagree Score: -1

Council's December 16, 2008, agenda item #9, RTC 08-377, failed to reasonably inform interested members of the public that a predetermined interim councilmember would be appointed at the meeting. City Response Disagree with the finding. As the Grand Jury acknowledges, the Brown Act requires that 72 hours prior to a legislative meeting, an agenda must be posted with a brief general description of items to be discussed. The posted agenda description for the December 16,2008, meeting included as a topic of discussion "Options for Appointment ofInterim Councilmember." Accordingly, a citizen readin...

Response: Implemented

Score: 0

The Council needs to properly notice the public, by ensuring that the published agenda clearly describes the items to be considered. City Response The recommendation has been implemented and was implemented prior to the release of the Grand Jury Report. The City's published agenda complies with Brown Act requirements for "a brief general description of each item to be discussed." Honorable Jamie A. Jacobs-May, Presiding Judge Santa Clara County Superior Court Re: Sunnyvale City Council Response to June 18,2010 CivilGrand Jury Report Titled: Sunnyvale City Council Actions Lack Transparency Sep...

Response: Agree Score: +1

The City agrees with Finding 3.

Cities should negotiate step progressions from the current three and a half years to seven years. Employees should not receive COLAincreases while in step progression.

Response: Will Implement

Score: +1

The Council should direct City staff to provide comprehensive information in their report, so the public has complete information about the cost of an interim appointment. City Response The recommendation has not yet been implemented but will be implemented in the future. Recommendation 3 is applicable only at the time the City is making an interim appointment for a Council seat. There is no interim appointment pending at this time, so the recommendation cannot be implemented until that occurs. Although the City fully disclosed the fiscal impacts for Honorable Jamie A. Jacobs-May, Presiding J...

Response: Disagree Score: -1

The Council gave a benefit option to a councilmember that is not available to other City employees. City Response Disagree with the finding. Unfortunately, the Grand Jury finding demonstrates a misunderstanding of how the continuation of benefits was provided to Councilmember Lee during his active military service. As the Grand Jury acknowledges, the City of Sunnyvale provides for a continuation of City salary and benefits for City employees who are called to active military duty in recognition of their sacrifices on behalf of the City and country. In almost all cases of employees called to ac...

Response: Implemented

Score: 0

The Council must follow protocols to ensure it provides no greater benefits to councilmembers than it provides to employees. City Response The recommendation has been implemented through the City's current resolution and practice. Respectfully submitted, -~~dtv~ Mayor Melinda Hamilton for Sunnyvale City Council Pursuant to California Penal Code Section 933(c) MMH:sam David\Council\Grand Jury\20 lO\Lacks Transparency-Response0920 10 cc: GaryLuebbers,CityManager DavidKahn,CityAttorney KathleenFrancoSimmons,CityClerk

City of Sunnyvale

August 13, 2010 • 12 pages • 25 responses • Score: +6 (+8, 5, -2) View Details ▾

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25 responses to findings and recommendations

The costs of total compensation for employees have grown substantially in the past decade and now threaten the cities' fiscal stability. City Response: Agree

Response: Agree Score: +1

Agree

Response: Unknown

Score: 0

This recommendation is in the process of being implemented. Through the dot com bust and the current global recession, the Cityhas worked to developbalanced budgets while turning to layoffsas the last resort. This has meant that the impact on employees has been minimized at the cost of reduced service levels and deteriorating infrastructure. The City is currently working to determine the amount of funding required to restore services to appropriate levels and rehabilitate and maintain our infrastructure. Because salaries and benefits are over 80% of the City's General Fund operating expenses, ...

Response: Agree Score: +1

Agree

Response: Implemented

Score: 0

This recommendation has been implemented, at least partially. Salary increase projections, beyond the current contractual obligations, do not exceed planned increases to revenues over the course of our 20-year long-term financial plan. We have not gone so far as to adjust contractual increases based on changes in economic conditions, and this would have to be negotiated into future contracts. This option has been discussed and will be considered and analyzed during future contract negotiations.

Response: Disagree Score: -1

Disagree based on the City of Sunnyvale's salary structure and requirements for step increases. This is discussed in detail below.

Cities should negotiate step progressions from the current three and a half years to seven years. Employees should not receive COLAincreases while in step progression.

Response: Unknown

Score: 0

Step increases are based on completion ofa probationary period and satisfactory performance in their current job classification. For example, if you do not receive a satisfactory performance evaluation rating, you do not complete probationary status and do not receive an increase on the salary schedule. The idea behind the steps on the salary schedule is that as you become more knowledgeable in the essential job functions of your position, you are compensated accordingly. If you are not performing satisfactorily, then you would remain at a current step on the salary range, until your performan...

Response: Agree Score: +1

The City agrees with the fact that medical insurance costs are growing at a rate greater than the rate of revenue growth. The City disagrees that "the employee contribution to medical care is minimaL" While specifics vary by employee group, the City has capped its share of medical costs. As a result, employees have taken an increased share ofmedical costs in the last several years.

Response: Agree Score: +1

Agree Recommendation Sa: Cities should: 4 1) Renegotiate and make provisions for increasing the employees' contribution for current pension plans. 2) Renegotiate to stop paying the employees' contribution amount to pension plans. 3) Renegotiate to implement a contribution amount for employees to OPEB; this contribution should provide for a reasonable split ofcosts between a city and the employee for retiree medical and dental benefits. City Response: 1)This recommendation is under further evaluation to determine an implementation strategy. Developing a sustainable long term pension plan for t...

R5b

Cities should thoroughly investigate reverting to prior pension formulas that were less costly.

Response: Unknown

Scheduled: FY2010/2011 Score: 0

This recommendation is being implemented. As noted in the response to 5a1, the City Council has directed staff to study 5 alternatives to our current pension formulas to develop a more sustainable long-term solution. The City has already done extensive analysis on moving new employees onto a second (and lower) tier retirement plan and are continuing to analyze this and other alternatives. This study willconclude in FY2010/2011. Movingonto any alternative to the current formulas does have to be negotiated, and as noted, nearly all contracts are not up until 2012. The City believes moving to a ...

Response: Agree Score: +1

Agree

R6a

Response: Requires Analysis

Score: 0

The City will take all of these options under consideration when we start negotiations with represented bargaining units. The current agreements expire in 2012 and that will be our first opportunity to start making some changes. Wecan look at the reduction ofvacation time and the number ofholidays and/ or personal days, while still taking into consideration competitiveness in the market place. The City does have a cap on paid time offand could negotiate a lower cap in future agreements. The benefit of converting sick leave balance to years of service is provided through CaIPERS.The City of Sun...

R6b

Response: Unknown

Score: 0

The City of Sunnyvale has not utilized a furlough program. The City will look at holidays that are provided and a negotiated reduction in paid holidays willbe a cost savings to the City.

Response: Disagree Score: -1

Disagree, see responses to recommendations below for further detail. 7

R7a

Cities should research competitive hiring practices and alter the approach to determine fair wages and benefits for each city by using public and private sector data.

Response: Unknown

Score: 0

Cities compare themselves to public sector agencies in the same geographic area to stay competitive. It is a significant investment to hire and train employees, therefore the goal is to retain these employees and not lose them to neighboring age'ncieswho are more competitive with salary and benefits. It is difficult to compare ourselves to the private sector for several reasons. First, the private sector is not open to disclosing salary amounts for its employees; second, the private sector often has benefits such as bonuses, profit sharing, etc. that do not apply to the public sector; and thir...

R7b

Response: Unknown

Score: 0

The City of Sunnyvale will continue to use market surveys as one element in determining salary negotiations with its labor groups as long as it is determined the best method for our agency. Asour labor market cities face economic declines, the salaries and benefits will have a direct impact on our market survey data.

R8a

Response: Implemented

Score: 0

This recommendation has been implemented to a limited degree. The City currently contracts out several functions to the private sector. Wewillcontinue to look at this as an option going forward as long 8 as we are able to do it cost-effectively with no degradation to servIce levels.

R8b

Response: Requires Analysis

Score: 0

This recommendation requires further analysis. This is something that we are just beginning to analyze as an option, and it requires quite a bit of coordination between neighboring jurisdictions. We see great potential value in this area; however, we do not see being prepared to have a substantive conversation with our governing body within six months ofthe date ofpublication ofthe grand jury report.

Response: Agree Score: +1

Agree.

Response: Unknown

Scheduled: FY2010/2011 Score: 0

This has already been implemented. The City has recently contracted with a consultant to perform an optimal staffing and organizational efficiency study. The result was a number of organizational changes that resulted in greater efficiency and reduced headcount (through attrition). Additionally, the City's FY2010/2011 budget includes the civilianization of 10 sworn positions in the Department of Public Safety. This is the result ofan internal analysis conducted that identified a number ofareas where sworn officers could be replaced by civilian employees with no impact to services provided. Thi...

F11

Response: Agree Score: +1

Agree, however it should be noted that any consent item on the agenda can be pulled for separate consideration by the Mayoror a city councilmember. Also, a member of the public can comment on a consent item prior to the CityCouncil taking action. Recommendation Cities should consider holding well-publicized 11: hearings about the cities' goals of negotiations before negotiations begin, and again at the end of negotiations to report to citizens clearly what changes have been made in contract. City Response: The recommendation has been implemented, however improvements can be made in the area of...

F12

Response: Agree Score: +1

Agree

R12a

City Council members and mayors should become better informed about the fiscal realities in their cities, long-term costs and commitments, and be cognizant of potential issues in labor agreements.

Response: Unknown

Score: 0

This has already been implemented. Staff has presented detailed information on the current fiscal realities through the Budget and Budget Workshop. Staff has also presented information on pension costs and meets regularly with Council on labor negotiations.

R12b

Response: Unknown

Score: 0

This has already been implemented. The City Council has directed the City Manager to work with the employee groups to develop a plan for attaining more sustainable employee costs, specifically as it relates to pensions. The City Manager and the employee groups are in active discussions on this subject. Council has also directed staff to study the various alternatives to the current pension formulas provided to employees to develop recommendations for implementing a more sustainable long-term pension program.

R12c

City councils and mayors should meet with the bargaining units to clearly outline the cities' financial health and show how employee costs are impacting the budget.

Response: Implemented

Score: 0

This has been implemented. The CityCouncil and Mayor have provided direction to the City Manager to convey this information to the bargaining units.

R12d

City councils and mayors should inform citizens of their plans for controlling unsustainable costs and remove politics from the equation.

Response: Unknown

Score: 0

This has already been implemented. The City Council and Mayor have communicated this information in several public forums, including the annual Budget Workshop and the public hearing that is conducted prior to the adoption ofthe City's budget. 11