Pay raise proposal for top Costa Mesa employees advances to second hearing

After a hearing that lasted less than 10 minutes and featured only one public speaker, Costa Mesa City Council members voted unanimously Tuesday night to give additional review to possible salary increases for top-level city employees and possibly adopt them later this month.

A second public hearing is scheduled for April 18, when the council is expected to vote on whether to approve the changes.

The salary-range increases presented to the council Tuesday would be the first since 2008 for the city’s executive and division management positions.

The current compensation packages create “challenges in recruiting and retaining top talent,” according to a city staff report.

The proposed raises would apply to executive-level officials, including the city manager, assistant city manager, finance director, information technology director, economic development services director, public services director, fire chief and police chief.

Also in line for possible raises are division managers including the assistant development services director, assistant finance director, building official, city clerk, city engineer, human-resources manager, legislative and public affairs manager, maintenance services manager, recreation manager, senior center program administrator and transportation services manager.

Those employees volunteered in 2012 to increase their contributions for their pensions to the California Public Employees’ Retirement System without a salary increase, which effectively resulted in a pay reduction, according to Assistant City Manager Tammy Letourneau.

If approved as proposed, raises for executives would range from 2% for the fire chief to 15.88% for the assistant city manager position.

City Manager Tom Hatch would see his salary increase by 9.33%, to $237,963. Annual salaries for Costa Mesa’s two current assistant city managers — Letourneau and Rick Francis — would rise to $213,047 and $184,040, respectively.

By comparison, Newport Beach City Manager Dave Kiff earns a base salary of $265,680 and the assistant city manager there, Carol Jacobs, makes $196,965 annually.

Increases proposed for Costa Mesa’s division managers would range from 2% for the legislative and public affairs manager to 15.76% for the assistant finance director.

Under the proposal, executives and division managers would contribute more of their pay toward their pensions.

They currently pay 7.75% to 10.47% but would be required to kick in 9% to 12%, depending on their retirement plan.

Resident Al Melone, a City Council candidate last year, addressed the proposed changes during Tuesday’s meeting.

He said he was concerned the plan might not take an employee’s job performance into account.

“The problem is that those who are superstars may be unhappy to see that their performance is not being accurately reflected in their compensation and they may choose to leave, which is not good,” he said.

The proposed increases were based on City Council direction to adjust the salaries so they are 5% below the average total compensation for similar positions in Fountain Valley, Huntington Beach, Irvine, Newport Beach and Santa Ana, according to city staff.

If a position’s salary range is already within that 5%, staff is recommending that the council adjust it so the employee wouldn’t see a pay reduction after contributing more to CalPERS.

The proposal also includes increasing the monthly car allowance for executives from $477 to $575 and issuing a technology allowance of $75 per month.

Management- and executive-level employees also would see a lower cap on the amount of vacation they can accrue each year — 320 hours rather than the current 424 — and a lower rate at which they earn vacation time.

All told, the proposed changes would create $362,723 in additional annual costs, according to city estimates.

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