Memorandum

City of Lawrence

 

TO:

David L. Corliss, City Manager

 

FROM:

Diane Stoddard, Assistant City Manager

Lori Carnahan, Human Resources Manager

Marlo Cohen, Management Analyst

CC:

Cynthia Wagner, Assistant City Manager

Diane Stoddard, Assistant City Manager

Jonathan Douglass, Assistant to the City Manager

 

Date:

October 20, 2009

 

RE:

2009 Longevity Payments

 

Background:   

Near the end of each fiscal year, the City Commission considers whether or not to pay a one-time longevity payment to full-time regular employees who have completed five or more full and continuous years of full-time regular employment as of January 1 of the current fiscal year.  This payment is considered a discretionary pay item for employees to be paid in December of any year it is approved by the City Commission for payment. 

 

The amount of the payment is determined by the number of complete years of service on December 31 of the current year multiplied by an amount of money for each month of service.  For 2009, $24 per year of service was the amount budgeted for longevity payments during the budget process.  Most recently, the rate had been $48 per year of service (see history table below).  Based upon the $24 per year rate, the total amount of longevity payments, if approved, would be $196,381.88.  Adjustments downward will be made to this amount for employees who terminate employment prior to the date paid.  There are budgeted funds available to cover this amount.  As discussed later in this memorandum, the City Commission is provided several different options for funding the discretionary 2009 longevity payments.

 

History of Longevity Payments:

While the longevity payment program has existed for a longer period of time, the history of the program since 1997 is provided in the following table:

 

 

 

 

Date Paid

Amount Pd/Mo

Amount Pd/Year

Latest Date of Service Eligible

Cap on years of Service

# of Emp Rec Pmt

Amount Increase

Percent Increase

Total Amount Paid

Amount Increase

Percent Increase

12/19/97

$3.50

$42

1/1/93

25

410

Unknown

Unknown

$229,120.43

Unknown

Unknown

12/18/98

$3.50

$42

1/1/94

25

412

2

0.4%

$232,809.57

$3,689.14

1.6%

12/17/99

$3.50

$42

1/1/95

25

417

5

1.2%

$237,854.92

$5,045.35

2.1%

12/15/00

$4.00

$48

1/1/96

25

424

7

1.7%

$279,507.96

$41,653.04

17.5%

12/14/01

$4.00

$48

1/1/97

None

431

7

1.7%

$294,583.80

$15,075.84

5.4%

12/13/02

$4.00

$48

1/1/98

None

449

18

4.2%

$300,859.89

$6,276.09

2.1%

12/12/03

$4.00

$48

1/1/99

None

472

23

5.1%

$319,135,93

$18,276.04

6.1%

12/23/04

$4.00

$48

1/1/00

None

480

8

1.7%

$333,279.96

$14,168.03

4.4%

12/23/05

$4.00

$48

1/1/01

None

502

22

4.6%

$347,251.92

$13,971.96

4.2%

12/08/06

$4.00

$48

1/1/02

None

533

31

6.2%

$363,588.00

$16,336.08

4.7%

12/07/07

$4.00

$48

1/1/03

None

563

30

5.6%

$380,727.85

$17,139.85

4.7%

12/07/08

$4.00

$48

1/1/04

None

558

-5

-0.8%

$389,815.89

$9,088.04

2.3%

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The 2009 Memoranda of Understanding (MOUs) with the IAFF Local 1596 and the Lawrence Police Officers Association (LPOA) acknowledge the discretionary nature of the longevity payment. 

 

City Commission Suggested Parameters and Options for Consideration of 2009 Longevity Compensation:

The following are general longevity pay parameters which have historically been utilized regarding the calculation of employee longevity payments:

 

1. It is a discretionary payment considered by the City Commission each year.

 

2. If approved, Longevity payments:

a.    Commence January 1 of the year following the fifth (5th) year of employment.

(2009: full-time regular employees with a service date of 1-1-2005 or earlier)

b.    Be issued by a special paycheck in December.

(2009: December 4, 2009)

c.    Credited for all whole years completed as of December 31 at the established rate multiplied by the number of years of consecutive service with the City of Lawrence.

(2009: See chart below showing longevity pay calculation options for possible consideration.)

 

3. Periods of Military leave will not constitute a break in consecutive service, as long as the employee returns to work immediately after discharge.

(2009: We currently have one employee on active duty at this time.)

 

4. If Longevity is approved for payment, any employee who retires or is approved for long term disability during the current fiscal year shall receive Longevity Compensation at a pro-rated basis according to the following parameters:

a.    1/12 for each month worked in the current year multiplied by number of years of service multiplied by the annual rate as determined by 2c.

 

5. Employees, who voluntarily terminate employment, are separated by the City, die, or leave City employment for any reason other than KPERS/KP&F retirement or approved long term disability during the year, are not eligible to receive longevity.

 

6. If longevity is issued, the following will apply to the checks received:

a.    All required federal and state deductions including:

                                     i.    Income tax withholding

                                    ii.    KPERS and KP&F contributions (including double and triple deductions) for active employees

                                   iii.    NO KPERS & KP&F contributions for Retirees

b.    Garnishments and Tax Levies currently in force

 

As previously noted, longevity has been budgeted for 2009 at the $24/year rate, though paid in recent past history at a rate of $48/year. In order to assist the City Commission with the cost impact of these options, the chart below sets forth the calculations of two of the options. 

 

2009 Longevity Pay Calculation Options Based Upon $24/Year and $48/Year of Service

 

 

$24/Year

(amount budgeted for 2009)

$48/Year

Longevity Pay

$196,381.88

$392,763.75

 

2009 Timeline:

 

ˇ     Preferred date for City Commission to consider:             November 3,  2009

ˇ     Last date for City Commission to consider payment:                 November 17, 2009

ˇ     Date payroll process must begin to make timely payment:        November 25, 2009

ˇ     Date of Longevity payment (if approved):                     December 04, 2009