TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Lisa Jenkins, Human Resources Director
SUBJECT:Title
Consideration of a Resolution Approving a Compensation Plan for Full-Time Unrepresented Employees (Budgeted for Fiscal Year 2025-26) (Human Resources Director Jenkins).
ADOPT RESOLUTION NO. 25-0086
Body
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RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 25-0086 approving a compensation plan for full-time unrepresented employees of the City of Manhattan Beach.
FISCAL IMPLICATIONS:
The annual costs associated with the compensation increases under the Full-Time Unrepresented Employees Compensation Plan for the current Fiscal Year (2025-26) is $471,698. The ongoing annual cost associated with the compensation increases by the end of the three-year compensation plan will be $1,138,846. The approved compensation plan also includes an additional one-time cost in the amount of $99,898 in Fiscal Year 2026-27 related to the approval of a one-time transfer of frozen sick leave hours at 50% value to a retiree medical trust for the Division Chiefs. The cost of the compensation increases are included in the FY 2025-26 Adopted Budget and will be reflected in future budget years accordingly.
BACKGROUND:
The City has a Full-Time Unrepresented Employees Compensation Plan (“compensation plan”) which covers the terms, conditions, salaries, and benefits for all full-time positions that are not represented by a bargaining unit. The compensation plan includes a listing of all the classifications that are unrepresented and therefore covered within the plan. All positions in the Management Services and Human Resources departments, all executive management employees, select management positions in the Finance department, and sworn fire managers (Fire Deputy Chief and Division Chiefs) are all currently included within the Full-Time Unrepresented Employees Compensation Plan. The most recent compensation plan was for a term of July 1, 2022 through June 30, 2025.
DISCUSSION:
The City Council typically provides direction and authority for changes to the compensation plan for the unrepresented employees following the conclusion of labor negotiations with the employee associations whose Memoranda of Understanding (MOU’s) had the same end dates as the prior compensation plan. Most recently, the City Council approved MOU’s with the Manhattan Beach Police Officers' Association (MBPOA), Police Management Association (MBPMA), Mid-Management Employees Association (MBMEA), and the Teamsters Local 911 (Teamsters) for terms of July 1, 2025 through June 30, 2028. Subsequently, the City Council provided direction and authority for the terms and conditions of employment for the unrepresented employees, which are now being considered for final approval.
The following summarizes the terms of the compensation plan recommended for City Council approval:
1. Term: July 1, 2025 through June 30, 2028.
2. Salary:
a. Unrepresented employees will receive the following Cost of Living (COLA) salary increases:
o Effective the pay period following July 1, 2025: 5.0%
o Effective the pay period following July 1, 2026: 4.5%
o Effective the pay period following July 1, 2027: 4.0%
b. Language is being added to the compensation plan to ensure that established salary differentials between sworn Fire Department ranks (e.g. Division Chief and Deputy Chief) will be maintained during the term of the compensation plan.
3. Holiday
a. Add Juneteenth (June 19th) as a paid City Holiday starting in 2026
b. Modify holiday-in-lieu pay to be applicable to the Deputy Chief (in addition to the Division Chiefs) and increase holiday-in-lieu pay hours in recognition of Juneteenth holiday.
c. Add two (2) additional paid half-day holidays (Christmas Eve and New Year's Eve) for employees who observe holidays as taken (not including Deputy Chief and Division Chiefs).
4. Parental Leave - Add a Parental Leave provision, allowing the employee to receive up to 80 hours of paid leave following the birth of a child or in connection with the adoption, or foster care placement of a child.
5. Miscellaneous:
• Mirror the acting pay provision, temporary assignment pay provision and performance bonus provision to those provided within the MBMEA MOU.
• Effective the pay period following July 1, 2025, the City will contribute $75 per month to the Retiree Health Savings Account for each employee.
• The City will establish participation in a Medical Expense Reimbursement Plan (Plan) Account (through the International Association of Firefighters) for the Fire Chief, Division Chief and Deputy Chief to contribute to the Plan, in accordance with the employee contribution for Manhattan Beach Firefighters Association (MBFA) employees recently established in August 2025.
• Effective July 2026, the City will provide the Division Chiefs with a one-time transfer of any available “frozen sick leave” balances to the Plan at 50% of the leave value, based upon their Fire Captain(/Paramedic) salary rate immediately prior to their promotion to Division Chief. Employees who promote into the position of Division Chief in the future will receive 50% of the value of their sick leave balances transferred to the Plan at the time of promotion.
• Effective the beginning of the pay period following City Council approval of the plan, the City will increase the City’s contribution to a 401(a) deferred compensation plan from 2.5% to 3.0% on behalf of sworn employees and from 4.5% to 5% on behalf of non-sworn employees.
• Effective the pay period following City Council approval of the compensation plan, the existing 2% City contribution to a Retiree Health Savings Account (RHS) will instead be added to the City’s contribution to the 401(a) deferred compensation account for the City’s executive management employees, resulting in a 5% contribution for sworn executive management (Police Chief and Fire Chief) and 7% for non-sworn executive management employees.
The change from the City contribution to an RHS account to a 401(a) account for the executive management employees is the same cost to the City but addresses some existing ambiguity in the tax consequences and obligations for future distributions from the RHS plan.
Additionally, the compensation plan also includes the addition of the Deputy City Manager, a position approved by the City Council in the current year’s budget, which was formally established by Council action September 16, 2025, with an effective of September 20, 2025. As the position was established at the salary level approved in the budget and was inclusive of the 5% adjustment, the approval of this compensation plan, with the 5% range adjustment for other executive positions, establishes all non-sworn department heads and the Deputy City Manager at the same salary level, consistent with the City Council’s direction and approval during the budget adoption process. The compensation plan also includes an adjustment to the Human Resources Technician salary range to support internal alignment and career laddering considerations. The new compensation plan also includes various language changes for clarity or consistency.
PUBLIC OUTREACH:
Staff determined that public outreach was not required for this issue.
LEGAL REVIEW:
Special Counsel has reviewed the MOUs and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Resolution No. 25-0086
2. Compensation Plan - Full-time Unrepresented Employees (Tracked Changes)
3. Compensation Plan - Full-time Unrepresented Employees (Final)