HomeMy WebLinkAboutORD 2010-15 - Amending Council CompensationORDINANCE NO. b0-15
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS (``CITY") AS TO AMENDING SECTION
2.16.010 and 2.16.020 OF THE CODE ..OF ORDINANCES AS IT
PERTAINS TO COMPENSATION OR EXPENSE REIMBURSEMENT
FOR THE MAYOR AND COUNCILMEMBERS; MAKING SUCH OTHER
FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, per Ord. 2000-63 and Ord. 900213, Chapter 2.16 of the Code of Ordinances states the
following:
Sec. 2.16.010 Mayor's salary
The Mayor shall be paid a salary of $350.00 per month, paid monthly; during the term for which he or
she is elected.
Sec. 2.16.020 City Council salaries
Each Councilmember shall receive a salary of $200.00 per mont
which he or she is elected.
h, paid monthly, during the term for
WHEREAS, Section 2.15 of the City Charter states the following;
The Mayor Shall name a committee, composed of qualified Voters, whose responsibility will be to
review, at least every two(2) years, the salaries of the Mayor and Council members, and make
recommendations regarding those salaries. The report of the committee shall be made at a regular
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Council meeting and shall .require an official act by Council to either enact, alter or reject the
recommendations. In all cases where action alters existing salaries for Mayor and Council members,
the changes in salaries will begin immediately following the next election of City officials.
WHEREAS, on April 8, 2008, the City Council adopted the recommendations of the Committee as
presented by the Committee Chairman which are attached hereto as Exhibit "A", and
WHEREAS, the following re Commendations were approved;
Base Operational Expense compensation is intended to defer a portion of the normal expenses
incurred while serving in the office, transportation costs and maintaining communication with
constituents. This monthly payment should be $300 for each cou cilmember and $450 for the Mayor.
No expense Statement or accounting of the detailed expenses incurred will be required.
Personal Expense Compensation is intended to be an optional stipend for those council members
it as a way to partially offset the economic loss they incur as a
and the Mayor who wish to accept
result of serving on the council. A payment of $800 per month for council members and for the Mayor
is recommended to be an annual option available.
WHEREAS, the 2010 committee has made their
recommendations as delineated in Exhibit "B".
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL
GEORGETOWN, TEXAS THAT
OF THE CITY OF
Section 1. The meeting at which this ordinance was approved was in all things conducted in
compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551.
Section 2. That Sections 2.16.010 and 2.16.020 of the Code of Ordinances is herein
amended as denoted in Exhibit «C,,:
Section 3. That a Sample form for the Statement of Expenses or Lost Income is attached
as Exhibit «p„
Section 4. If any provision of this ordinance or application thereof to any person or
circumstance shall be held invalid, such invalidity shall not affect the other provisions, or application
thereof, of this Ordinance which can be given effect without the invalid provision or application, and to
this end the provisions of this ordinance are hereby declared to be severable.
Section 5. The Mayor is hereby authorized to sign this Ordinance and the City Secretary to
attest. This ordinance shall become effective on June 1, 2010 in accordance with the provisions of the
Charter of the City of Georgetown.
PASSED AND APPROVED ON FIRST READING on the day of _ 20100
PASSED AND APPROVED ON SECOND READING on the day of or 1 2010.
ATTEST: THE CI -Y OF GEORG TOW
%# V
_ sica HamilVo n,
City Secretary
APPR VED Ar0004
S TO FORM:
Mark Sokolow,
City Attorney
4
George G. Garver,
Mayor
EXHIBIT "A"
AGENDA ITEM COVER SHEET
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A Report to Georgetown City Council
By the
Council Compensation Committee
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The Council Compensation Committee was charged as per the City Charter with
reviewing. "the salaries of the Mayor and Council members, and making
recommendations regarding those salaries"(Sec. 2.15 Home Rule' Charter), The
committee believes that appropriate compensation is an important aspect of council
service. However, we are also unanimous in our belief that council service should be
driven by a sense of public service, not an expectation that full compensation for either
time or trouble 'can or should be expected.
In making our recommendations, we have reviewed the current y
compensation system,
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il compensation in Georgetown, and examined comparative
looked at the history of Counc
compensation data from .other cities in the area. We have also asked the city attorney, the
tax accountant for city's accounting firm, and the city manager to review our proposals
from a legal, finance, and operational (respectively) point of view.
In order to avoid some of the `ambiguity that vve found in the current compensation plan,
we will use some key terminology as defined below.
A) "Compensation" designates any payment to a council member by the
city. This is a broad term that encompasses both salary and expenses.
B) ``Salary" is the term used for payment for services rendered.
C) ".Supplemental compensation" refers to payments by the city to council
members for lost income -and/or documented expenses.
D) "host income" refers -to wages, salary, billable hours or business
Income. that a person does not received because of time spent during
normal working hours on city business.
E) "Wages" refers to hourly pay, salary, billable hours or income from a
business that is one's primary livelihood.
F) "Expenses" refers to documented out of pocket payments for activities
connected with service on the Council.
Our review of the recommendations - and the Council's action - from 2008 did not
question the total maximum amounts that were recommended: $300 as a base salary for
all council members ($450for the Mayor), and an additional, optional $800. Our first
recommendation will be that the $00/$450 monthly salaries be continued, and that an
optional supplemental compensation in an amount up to $800 be continued. The former
should be clearly identified as a salary far services performed and be aid automaticall
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to all members of council and the mayor.
This salary payment conforms to previous payment programs for Council. The
committee finds that the other portion of current council compensation, $800/month, is
not clearly defined in the previous: recommendations. We believe its use should be
clarified and modified. We are in no way questioning the honesty or integrity of the
process as it has been applied the past two years.. Our point is that the current system can
lead to differing plausible interpretations. In going forward a clearer understanding of this
supplemental. compensation payment is needed so that everyone is operating in the same
manner. We believe this will maintain equity in reporting within the city's operations and
help provide the citizens with the transparency they deserve.
There is a persistent ambiguity embedded in the description of this supplemental
compensation. The broad justification for this payment centers on the importance of
opening service on council to a broader spectrum of citizens. The payment was described
in 2008. as a `.:`personal expense .compensation" to "partially offset the economic loss they
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incur. But is this because of lost income,. payment for out of4pocket expenses, or a little
of both? A second issue the committee felt it needed to address was the lack of
transparency involved in these $800 payments. No reporting or documentation is required
for the, payments, yet these payments are meant to be in response to specific economic
losses that result from service on Council. We believe that the citizens have a right to
know what specific kinds of _economic losses are being supported by city tax dollars and
how those loses are calculated. We also affirm the importance of council members
following the same rules as other. city employees when it comes to reimbursement for
expenses.
An `alternative to having differing interpretations of the 2008 recommendations, and as a
way to deal with the. -issue, the committee -considered simply eliminatin g pp the supplemental
compensation payment. However, we decided against this approach because of the 2008
committee's overarching rationale for providing .this option that it encourages broader
participation in council service because it eliminates, or, at least partially mitigates, the
loss of income that may deter some, citizens from considering service. The 2008
recommendations stated "The City Council should strive to have members re resentin
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the full spectrum of citizens of Georgetown, and candidates for these offices should not
be unduly inhibited from serving by the expenses of the office or by the financial
-sacrifices they snake while performing city duties." Our recommendations are designed to
maintain this important objective.
We also considered whether or not the supplemental compensation simply could sim be
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folded into the $300/$450 salary, That would'.elirninate paperwork and be
straightforward. We cannot recommend this approach because it does not address the
goal of increasing participation, and it ignores the question of accountabilitY and the need
for transparency. In addition it would,place Georgetown's salaries for council service
well beyond the ..range of similar cities:
The following recommendations are designed to establish a system for council
compensation, which clearly identifies two different types of compensation available to
council members and the mayor .and differentiates between how they : should be treated.
As mentioned above, our first recommendation is that the $300 a monthpaY mentAo
council members ($450 to the mayor) be..co.ntinued, and that it be clearly identified as a
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salary for services rendered. Until 2008, this payment was consistently identified as
"salary" or "compensation." These terms are reasonably clear. However, "base
operational expense" is not clear. We recommend that the $300/$450a ment be clearly
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identified as salary for services rendered. If a council member wishes topay some out of
pocket expenses out of his/her salary, he or she is free to do so.. That decision is strictly
between that person and the IRS. Council should not cloud the matter by g inferrin that
this payment is somehow for unspecified expenses. It is sim 1 a salary for serving,
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Second, we recommend that the $800 monthlysupplemental. com compensation remain p a n as an
optional payment, but that $800 be a cap on monthlypayments not an automatic
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We have already alluded to the fact that the committee is pleased . withand sup oras the
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effort in the 200.8 committee's report to provide a financial basis that encourag es council
membership for the full spectrum of our citizens. This payment recognizes that. some
individuals may be reluctant to run for a council seat because the would lose wages
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when called on to carry out council business Burin their normal working hours.
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However., the committee finds that the phrase used to describe this possibility, "economic
loss," does not make this apparent.
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Hence, our third recommendation is that council members may be compensated u to
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additional $800 a month for two distinct forms. of financial loss: loss of income because
of engagement in city business during normal al hours • and out of ocket expen
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incurred as a result of carrying out one's responsibility as an elected official. Adopting
this recommendation will affirm the appropriateness of o en_ing potential council l service
to a larger group of our citizens, commit to transparency for the voters in this area of
council policy decision making, make the payment of expenses accountable and affirm
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that council follows the same reporting and documentation rules as other citY employees.
em to ees.
We did consider restricting this supplemental compensation only to a for lost income,
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That could have been the intent in .the 2008 recommendation, but we are not sure, We
decided not to restrict the use in this way, however, and to - -out
include reimbursement for o
of pocket expenses as part of supplemental compensation. We believe that -a council
member who does incur expenses in the process of serving on council should be able to
e at east partially reimbursed for. those. expenses without adverse tax consequences. IRS
regulations allow deductions for business: ex only h those. enses to the extent to whic
expenses exceed 2% of one's adjusted gross income.
Fourth, since the supplemental compensation is a variable amount de pending o
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and time spent on city affairs, requests .for reimbursement are to be made on
a monthly
basis...,...For eXpens.es.the...do.cumentation._.re .uirements will_
q be the same_as for. -other city
employees. Since a council member and the mayor are ultimatel responsible to the
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citizens, his/her signature on an appropriatel documented expense ense reimbursement
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request...i's su ficzent authorization for payment. Compensation for Jost wages will be
based on a simple,- signed written request i..entif in. the number of workday hours s
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on city business .and the reimbursement rate appropriate for the requestor. This
reimbursement along with the base salary is subject to federal income tax.
Fifth and finally we have heard, although in an informal way, that there may be council
members who are interested in shielding some of their compensation from federal income
tax by utilizing various city benefit programs. The committee. has no objections to
exploring this alternative in the future but does not recommend such action at.thls time.
Any .such. future study, however, should start with the reco 'tion that a council
member's participation in any benefit. program should not increase direct costs to the city,
Even without council benefits .becoming an added cost to the cihoweverbene
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extension is a complex issue. It should be deferred until an adequate study can be done of
comparable policies in other similar cities and until. the city's and the nation's economic
climate is more fully recovered. It also would require a careful educational program for
the city's citizens because it would be natural. for a benefits extension to be viewed as the
extension of an entitlement that could be regarded with suspicion b some voters.
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Respectfully submitted,
will Mo
B en Oliver, Chair
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kickikWiesner
April 5, 2010
EXHIBIT "c"
Sec. 2.16.010 BASE SALARY
(A) The Mayor shall receive a Base Salary of $450 per month.
(B) The Mayor Pro Tem shall receive a Base Salary of $300 per month.
(C) The Council members shall receive a Base Salary of $300 per month.
Sec. 2.16.020 SUPPLEMENTAL COMPENSATION
The Mayor, Mayor Pro Tem and each Council member may at their discretion also
receive supplemental compensation up to $800 per month for reimbursement of
expenses or for reimbursement of lost income during one's normal working hours as a
result of preparation for or for attendance at committees, council meetings or for other
city business.
(A) An itemized statement of expenses or lost income ("Exhibit D") shall be required
to be filed monthly with the City Finance Department. The statement will include
a listing of monthly expenses and lost income related to the Council member's
service to the City. The signed statement from the Council member will be
sufficient authorization for such payment up to $800 per month. This payment is
considered taxable income, and the council member shall be responsible for
keeping the backup documentation.
(B) In the event the Council member has reimbursable receipts, for items such as
phone expenses or meal expense, as well as, for documented mileage per IRS
guidelines, those expenses will be reimbursed by the City as non-taxable
expense reimbursement to the Council member and will not be included in the
reimbursement in Section (A). The City will retain copies of all non-taxable
expense reimbursements and the supporting documentation.
(C) The total about of monthly reimbursement from items (A) and (B) cannot exceed
$800 per month.
(D) In addition to those sums, the City will also pay the actual expenses for Council
members to attend training sessions, conferences or seminars sponsored or
affiliated with the Texas Municipal League, as well as other opportunities that are
directly approved by the City Council. Reimbursements will be made in
accordance with the City's Travel Policy.
SAMPLE FORM
EXHIBIT "D"
CITY COUNCIL MEMBER STATEMENT OF
XPENSES OR LOST INCOME
For the month of , 20_, 1 hereby certify that I have th
expenses or lost income;
I. EXPENSES:
(a) Phone Expense:
(b) miles at I.R.S. rate:
(c) Home office expense for
aside for City business,
area set
e following
(d) Other expenses: **
Please itemize:
"These items can be reimbursed non-taxable per IRS guidelines when detail receipts are
provided to the City.
LOST INCOME:
(e) Lost income: $
(Hourly rate X Hours spent...
TOTAL REIMBURSEMENT $
In no case can the amount of reimbursement exceed $800 per month.
Signed on the day of , 20