The Burbank City Council this week voted to suspend bonuses for city executives and mid-level managers, but gave City Manager Mike Flad the ability to bump their paid time off by an additional 25 hours, which could be cashed out for up to $2,800.
The vote was initially pushed off after Councilman Dave Golonski proposed cutting employee salaries by the amount of possible merit-based bonus pay, and then having them strive for bonuses to make up the difference.
But Councilwoman Emily Gabel-Luddy reported that when she asked residents about the proposal, “the sentiment was to suspend the merit pay program.”
In the 3-1 decision, with Golonski dissenting and Councilman Gary Bric absent, the bottom level of executive salary ranges were also dropped by 10% and frozen at current levels.
The ability to grant the employees an additional 25 hours in unpaid time off was drafted in response to the possibility of bonuses or salaries being cut, according to a city report.
To cash-out their hours, employees must go through the payroll system. As long as the hours are available and the annual payout cap has not been reached, the request is approved, according to officials.
But Flad said the trade-off still amounts to a major concession by executives and mid-level managers.
“Executives are kicking in 6% by giving up merit pay and getting back about 1% in cash-outs,” Flad said. “No one is giving more back than the executives.”
Any changes to the bonus system for other rank-and-file employees would require changes negotiated in their existing contracts.
Upper level employees also will begin contributing to their pension benefits. Previously, pension benefits were fully covered by the city.
The move, which now calculates an employee’s retirement salary by taking the average of their highest 36 months of employment instead of the single highest annual salary, will reduce the possibility of pension spiking, officials said.
“This is important so hopefully we can get all the labor groups to step up and contribute,” Flad said.