June 13, 2006
SUBJECT: MILITARY RESERVIST – EXTENSION OF BENEFITS AND SUPPLEMENTAL SALARY AMENDMENT
REPORT IN BRIEF
This report recommends approval of a twenty-six pay period extension of military leave benefits and supplemental salary for eligible employees, who are current United States military reservists through June 30, 2007. Council had previously approved a maximum of sixty pay periods for each employee through the end of June 2006.
This action would continue the extended benefits and supplemental salary only for mandatory active duty per Executive Order 13223 issued on September 14, 2001 and to any involuntary extension related to the same Order. In addition, it would extend coverage of the military leave benefits and supplemental salary under the same conditions as stipulated in City Council Resolution 165-05 approved on June 14, 2005.
The City has a current total of nine employees who are military reservists, five employees have received supplemental pay and benefits for pay periods ranging from zero to thirty-three. The employee who has received thirty–three pay periods is currently deployed and four employees have not been deployed at all. Three employees from the original list (October 2001) have since been discharged; one employee, who was not deployed at all, left City employment and six new employees have been added since 2001.
To fund this proposal, it is recommended that the unspent FY 2005/2006 Military Reservist Leave Budget estimated at $298,776 be carried over to FY 2006/2007. In addition, the regular military leave for FY 2006/2007 and salary savings from the operating programs where the reservists are budgeted, will be sufficient to fund the twenty-six pay periods of extension in benefits and supplemental salary for those military reservists, who may be called to active duty.
BACKGROUND
The Council first adopted extended military benefits and supplemental salary in October 2001, extensions were approved in April 2003, May 4, 2004 and June 14, 2005. The purpose of these Council actions was to minimize the impact that a call to active duty has on these City employees and their families because of the unusual length of mandatory military service, which would have deprived them from full-time employment income and benefits.
EXISTING POLICY
Current State Law (Military and Veteran’s Code, Section 395), the 1994 Uniformed Services Employment and Reemployment Rights Act (USERRA), the Veterans Benefits Improvement Act of 2004 (VBIA), and the final VBIA rule in March 10, 2005 requirements are being exceeded.
Existing City policy continues City provided benefits and supplemental salary for qualified individuals for a period of up to sixty pay periods beyond those required by current State law. Funding for the current program expires on June 30, 2006.
DISCUSSION
It is proposed that military leave benefits and supplemental salary be extended for an additional twenty-six pay periods for employees who may be involuntarily recalled to active duty through June 30, 2007. The employee will continue to reimburse the City the amounts paid for military service, plus allowances, including the Basic Allowance for Housing (BAH). The mandatory active duty eligibility requirements remain the same as stated in the Report to Council 05-176 approved on June 14, 2005.
Those who elect not to return to City employment would be required to repay the City for the cost of benefits and supplemental salary exceeding those required by law, plus interest at the 26-week T bill rate. The City Manager will have the discretion not to require repayment in the event of an employee’s death or disability as a result of active military duty.
Supplemental Salary
The City will provide or continue to provide base salary, plus any other compensation the employee would have received had he/she been actually working.
Benefits
The City’s contribution and employee deductions towards applicable benefits (retirement, medical, dental, dental premiums to PSOA, vision and the Employee Assistance Program) will continue as if the employee was actively at work. Life insurance coverage, short-term and long term disability coverage cease upon start or redeployment of active military duty.
FISCAL IMPACT
To fund this proposal, it is recommended that the unspent FY 2005/2006 Military Reservist Leave Budget estimated at $298,776 be carried over to FY 2006/2007; this amount, along with the regular military leave for FY 2006/2007, will be sufficient to fund the 26 pay period extension. The cost of this supplemental salary and benefits has been the following for the last three calendar years after reimbursements: $142,822 for 2003; $81, 785 for 2004 and $11,572 for 2005.
CONCLUSION
Council approval of this recommendation will continue to provide City benefits and supplemental salary to eligible employees, through June 30, 2007.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City’s office notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.
ALTERNATIVES
1. That the City Council adopt a Resolution to extend benefits and supplemental salary through June 30, 2007. Fund the extension by carrying over the remaining FY 2005/06 Military Reservist Leave Budget estimated at $298,776 to FY 2006/2007 budget. Unspent funds will be returned to the Employee Benefits Fund and General Fund at the end of FY 2006/2007.
2. That the City Council does not adopt a Resolution to extend the current military benefits and supplemental salary beyond June 30, 2006.
3. The City Council modifies any portion of this recommendation.
RECOMMENDATION
Staff recommends approval of Alternative #1: That the City Council adopt a Resolution to extend benefits and supplemental salary through June 30, 2007. Fund the extension by carrying over the remaining FY 2005/06 Military Reservist Leave Budget estimated at $298,776 to FY 2006/2007 budget. Unspent funds will be returned to the Employee Benefits Fund and General Fund at the end of FY 2006/2007.
Reviewed by:
Erwin Young, Director, Human Resources Department
Prepared by: Myriam Castaneda, Human Resources Supervisor
Approved by:
Amy Chan
City Manager
Attachments
A. Resolution (.pdf)