CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office / HR		Commission Meeting Date:  11/14/2017
Staff Contact:	Marlo Cohen, Management Analyst II
Recommendations/Options/Action Requested:
Approve employee longevity payments for 2017 at a rate of $4/month ($48/year) for eligible employees. Manager’s Note:  The City Manager would recommend an alternative option:  Approve longevity payments at a rate of $2/month ($24/year) for eligible employees and place the balance of the amount budgeted for 2017 (approximately $207,670) in the merit pool for non-MOU covered employees in 2018.  The Manager also recommends employees hired on or after January 1, 2018 will not be eligible for longevity pay.
Executive Summary:		Longevity is a discretionary payment awarded to employees who have completed five (5) or more continuous years of regular employment.  Funding for longevity was budgeted in 2017 despite a recommendation from the City Manager to adjust the amount budgeted for the program and to discontinue the program for new employees.    Both Memoranda of Understanding with the International Association of Fire Fighters Local 1596 and the Lawrence Police Officers Association acknowledge the discretionary nature of the longevity payment.  However, the MOUs require discussion of the issue at a meeting of the City Commission in November.  At such time, the City Commission, at its sole discretion shall determine the actual rate of longevity pay for that year, taking into account the City’s fiscal condition and the state of revenues and expenditures at that time.  According to the MOU, options that the City Commission shall consider shall be: “$4 per month of service, $2 per month of service, or such other amount as the City Commission determines appropriate.”  How Longevity is Calculated Only employees who have completed five (5) or more continuous years of regular employment as of January 1 of the current fiscal year are eligible for longevity.  Longevity payments vary according to length of service, and are calculated using the following formula: Completed years of service (as of 12/31 of the current fiscal year) x rate/year = Longevity payment Example: 20 years of service x $48/year = $960 While longevity payments have existed for a longer period, the history of the program since 1997 is attached. Suggested Parameters and Options for 2017 The following are general pay parameters that have historically been utilized regarding the calculation of employee longevity payments: 1) Longevity 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 year of employment.  (2017: full-time and part-time regular employees with a service date of 1-1-2013 or earlier) b) Be issued in December and paid by direct deposit or payroll card.  (2017: December 15, 2017) 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. 3) Periods of military leave will not constitute a break in consecutive service, as long as the employee returns to work immediately after discharge. 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 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 payments are issued, the following payroll items will apply: a) All required federal and state deductions including i) Federal income tax withholding ii) State income tax withholding iii) KPERS and KP&F contributions (including double and triple deductions) for active employees iv) KPERS & KP&F contributions will NOT apply for retirees b) Garnishments and tax levies currently in force. 2017 Timeline Longevity payments considered by City Commission:              November 14, 2017 Longevity checks issued (if approved):                                December 15, 2017
Strategic Plan Critical Success Factor:
Fiscal Impact (Amount/Source):		The fiscal impact to the City is $415,339.53 net increase.  The 2017 adopted budget includes funding for longevity payments based on a rate of $48/year.  The maximum estimated total longevity payment amount, if approved, is $415,339.53 and will be adjusted downward for employees who separate from service prior to the payment date, or December 15, 2017.  Manager’s Note:  The recommended alternative would be a saving of approximately $207,670 in 2017.  However, a budget amendment may be required in 2018 increasing the budget for the merit pool by approximately $207,670.
Attachments:		History of Longevity Payments

Reviewed By: (for CMO use only)

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