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6.2. SR 11-14-2011Item #6_2. MEMORANDUM TO: Mayor and City Council FROM: Cal Portner, City Administrator DATE: November 14, 201 I SUBJECT: Overtime Review As I understand from past correspondence, the Council has had concerns with the execution of the city's overtime and compensatory (comp) time policy. The intent of this discussion is to ensure the proper overtime/comp time issues are addressed and set parameters for the forthcoming overtime policy. A memo was prepared by Human Resources Representative, Lauren Wipper, dated October 3, 2011, that explained the city's current policies, contractual language, and provided recent historical expenditures. From the information provided by Interim Administrator Bob Thistle, there appears to be four concerns to address: 1. Excessive/compounding comp time 2. Inconsistent policy usage/application by each department 3. A desire for limits to when comp time can be taken or how much can be accrued 4. Snow plowing overtime Excessive/compounding comp time Operational changes for 2008 resulted in a decrease in overtime expenses and an increase in compensatory time accrual. The added accrual and use of comp time may have had the effect of further increasing accrual and use. We budget each year fox expected overtime based upon historical trends and known activities. The following non-police activities accrue a relatively consistent overtime/comp time expense. 1. Summer splash pad operations 2. .Flag raising 3. Outdoor ice rink maintenance 4. Recreation special events 5. Ball tournaments/field maintenance There are a number of other areas that accrue an overtime/comp time expense as well including but not limited to: N:\Public Bodies\City Council\Admuustrator\2011\Overtime.docx ~'/~E1E/ 11 A 1. Elections 2. Alarm calls 3. Wastewater system maintenance 4. Meeting minute-taking 5. Police report preparation The budget also accounts for overtime that is less consistent, snow event plowing. We currently budget specifically for plow route overtime. To avoid further disrupting workflow due to the use of comp time, the policy should allow for overtime earnings. Overtime can be budgeted for using historical trends and be managed by department directors and division managers. In the case of a budget overage, directors should be expected to hold expenditures elsewhere in their budget. Inconsistent policy usage/application by each department Individuals who plow specific street plow routes are currently able to earn overtime, regardless of which department they are assigned. Park Maintenance, Building Maintenance, Administration, Recreation and Equipment Services have relied on comp time. Budgeting for and tracking overtime use would allow us to better determine if staffing levels meet operational needs. Further, there is often a challenge with employees accounting for their total hours worked. Often, when overtime/comp time cuts are discussed it is misunderstood that timecards must reflect actual hours worked. Managers must consistently communicate this message and not keep any time off the books. The use of flex time is also often misunderstood, which can create a liability for the city. A good overtime policy will ensure managers have the tools needed to meet seasonal or unplanned events, maintain fairness and consistency that aids morale and ensure compliance with federal workplace law. A desire for limits to when comp time can be taken or how much can be accrued The city currently allows the federal law maximum with regard to annual accrual of comp time and allows 40 hours (one week) of time to carry over to the next year. Large "banks" of comp time can be a challenge fox work scheduling, especially since certain times of the year are more popular for time off. We currently allow for the cash out of excess time for some staff. We have also moved the year-end date for tracking comp time for some divisions to October 31. An option to further manage comp time is to use a rolling bank of hours. A rolling bank allows those who prefer time off to bank time up to a predetermined amount, after which overtime is paid out. As the bank is used throughout the year, additional comp time may be accrued. The incentive is to take time off periodically, which eases scheduling and not create a year-end rush to use up time, which now may be as many as 200 hours (25 days). N:\Public Bodies\Ciry Council\Administrator\2011\Overtime.docx Snowplowing overtime The Council approved a temporary snowplowing overtime policy for the 2011-2012 winter season. The updated overtime policy will include many of the provisions currently in the policy. Lastly, we do not budget overtime for other storm clean up, however you may wish to consider a storm event budget or similar that includes funding for other unplanned natural events. Attachment: Memo, October 3, 2011, Overtime and Compensatory Time N:\Public Bodies\City Council\Administrator\2011\Overtime.docx MEMORANDUM ~~ TO: City Council FROM: Lauren Wipper, Human Resource Representative DATE: October 3, 201 SUBJECT: Overtime and Compensatory Time Earlier this year, the City Council requested information regarding the City's overtime and compensatory time policies. This information is included for your discussion. The two written policies for non-union employees that address overtime and comp time are included with this memo. One is the Overtime and Compensatory Time for Non-Exempt Employees policy from the City's Employee Personnel Manual and the other is city council meeting minutes from May 28, 2002 indicating that employees working on snow removal on a Saturday or Sunday be paid overtime. The other policy that has been long time practice but that I am unable to find in writing is paying overtime to wastewater employees when they work the weekend rotation hours. The overtime and compensatory time articles from the city's two union contracts are included as well. Overtime pay is set each year in the annual budget. The Overtime and Compensatory Time fox Non-Exempt Employees policy defines overtime and then goes on to state that "overtime compensation will be paid for overtime hours" unless requested as comp time. When we began dealing with the constraints of a tight budget, overtime budgets were reduced and the interpretation of the overtime and comp time policy changed. As allowed by the Fair Labor Standards Act (ELBA), employees were required to bank compensatory time and then use those hours (not allowing a cash out) to ensure that they met the end of year policy requirements as stated in the second to last paragraph of the policy. (Patrol, investigations, and wastewater were allowed to continue cashing out comp hours.) The street and equipment services divisions have requested a change to their "year" a couple of times to ease the difficulty of meeting the end of year comp bank hours requirements while still performing necessary snow removal activities. The park division chose to stay with the December 31 year end date. The spreadsheets attached show the overtime and comp time details for all of 2010, and 2011 through September 10. When reviewing them, please remember that 2010 has three and a half months' worth of data more than 2011. Another item to note is that this data is for only non-exempt employees and does not include any data for exempt (salaried) employees. The spreadsheets show overtime and compensatory time for each division. Footnotes indicate items with additional detail at the bottom and hope to make the spreadsheets a bit more self-explanatory. As there are differences in the way overtime/comp time is handled from division to division, it is understandably a difficult spreadsheet to follow. The overtime budget shown is the annual budget approved by council. Overtime paid is just that and hours indicate the number of hours that were paid out as overtime. Comp time carry forward is the number of hours of comp time that were on the books fox that division at the beginning of the calendar year. Because under FLSA comp hours need to be accrued at time and one half, when an employee works an extra hour in a week, an hour and a half goes into that employee's comp bank. In some cases an employee may be earning double time and then two hours would go into the bank. Comp time taken is the number of hours employees used accrued comp time to take paid time off of work. Employees in patrol, investigations and wastewater have been allowed to cash in comp time. Prior to adjusting our policy to manage tight budgets, all non-exempt employees were allowed to cash in comp time. Cashed in comp time is charged to overtime and because most divisions do not have an overtime budget, they are not allowed to cash in comp time. On the spreadsheet, comp hours that are cashed in axe shown in that column and the cost for those hours are included in the overtime paid column. In the 2010 spreadsheet, we note the end of year balance for comp time and in the 2011 spreadsheet, we note the balance as of September 10. The end of year target hours in the 2011 spreadsheet indicates the maximum number of comp hours that each division should have by the end of the year. As mentioned earlier, streets and equipment services used a different year and needs to have their comp hours at or below 40 for each employee by October 31. The additional hours worked column is the sum of the overtime hours plus two-thirds of the comp earned hours. (Recall that comp is earned at time and one half.) This number reflects the additional hours (hours over 40 in a week) that employees worked during the year. The net column is additional hours worked minus comp hours taken off. 'This number indicates the number of extra hours of work that would have been necessary if employees hadn't taken any comp time off of work. Staff will be at Monday night's meeting to answer any questions you may have. Action Step An update of the City's Personnel Policy Manual is projected to be done in 2011 and 2012. Staff recommends exploring the options of having a comprehensive review of our Personnel Policies performed as part of that update.