After agreeing to push off bonuses during the pandemic, San Carlos employees will receive $2,000 bonuses in November as a gesture of appreciation for work performed during the health crisis that helped keep city services functioning while many other industries shut down or rolled back operations.
“They took a pay cut and they worked harder than they did before. … It’s really neither hero pay or a bonus. It’s actually just a partial restoration of really hard-earned compensation,” Councilmember Ron Collins said during Monday’s council meeting.
San Carlos will be giving 70 employees who worked between March 10, 2020, and March 31, 2021, a $2,000 bonus after the council voted 4-1 in support of the “retribution pay.” In total, the bonuses will cost San Carlos $150,586 from its unassigned fund balance in the General Fund after accounting for Medicare and Social Security.
City employees should expect to receive their bonuses in their Nov. 12 paychecks. To qualify for the funds, employees would have to have worked at least 20 hours a week during that period and would have to have received satisfactory markings on their performance reviews.
Councilmembers, the city manager, city attorney, any employee hired on or after the specified time frame and some part-time employees will not qualify for the bonus.
Collins recommended the council consider an employee bonus in August, inspired by a similar action taken by the city of San Mateo earlier that month. He intended for the pay to show the city’s appreciation for its employees who agreed to push off promised raises while taking on new tasks during the pandemic.
The pandemic pay cuts were the second taken by staff in the past 12 years, Collins noted during the meeting. Employees were previously asked to take cuts during the Great Recession. The most recent cuts, amounting to about $400,000 in staff benefits, paired with $1.2 million in savings from unfilled staffing positions, were aimed at softening the financial blow the city preparing to absorb in response to the crisis.
Economic forecasts now indicate a more positive future for San Carlos, City Manager Jeff Maltbie said. As revenue streams have stabilized in the city, many vacant positions have been filled and additional revenue growth is anticipated, he said.
Efforts to pay down the city’s pension obligations have also saved $800,000 this year, Collins said after speaking with Administrative Services Director Rebecca Mendenhall. Those savings are anticipated to reoccur annually, he said.
“I really don’t think it’s too much to ask — the people that take care of us, they take care of us every day, they take care of the city every day — that they are recognized for that long-term commitment. I just think it’s the right thing to do,” Collins said.
Despite some financial improvements coming to the city, multiple officials noted during the meeting that other staffing concerns remain including recruitment and retention issues. Maltbie reminded the council of the support it shared during a mini-retreat in August for reviewing hiring practices, salary scales and other staff concerns.
With those concerns in mind, Councilmember Adam Rak opted to abstain from the vote to approve the bonuses. He shared his personal appreciation for the work performed by city staff during the pandemic but suggested the city should be taking a more holistic approach to addressing staffing issues.
“I don’t think this accomplishes what needs to happen,” Rak said. “I do think we have fantastic employees who stepped up and did a lot but I don’t think this is the right approach to support them and to address some of the long-term issues we’re having.”
Though the measure ultimately passed, the entire council agreed with Rak’s suggestion to reestablish a Staff Concerns Sub-Committee. Maltbie said he intended to establish the subcommittee next year when the new mayor makes committee assignments.
Vice Mayor Sara McDowell pushed for the action to be taken sooner and the council agreed to discuss the issue during its next meeting Oct. 25.
While acknowledging the pay “recognizes work that went above and beyond in extraordinary circumstances,” McDowell said she would not support additional bonuses if the proper process was not followed. Instead, future bonuses should be discussed during the city’s annual budget cycle or in labor negotiations, she said.
Councilmember John Dugan also questioned why Maltbie opted to not use a performance-based process for the bonuses as typically done in the private and public sector. Defending the measure as proposed, Maltbie said it would be difficult to evaluate an employee’s performance during the crisis given the many ways staff was expected to pivot in their roles.
“It was a really unprecedented, almost unimaginable period of time where our adaptation to change came almost on an hour-by-hour basis,” Maltbie said. “This was just an exceptional period of time in every way. It doesn’t really compare to anything else.”
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