PLEASANTON -- The City Council, fresh on the heels of receiving sunny budget projections, has voted to make a one-time payment to staff managers that will cost the city $183,000 this year.
Forty-two managers will receive a payment equal to 3 percent of their annual salaries, said Emily Wagner, Pleasanton's director of finance. The managers' average annual salary is $128,000, said Wagner.
The decision came two weeks after Wagner projected a balanced $164 million budget and increases in general fund revenue. The funding for the expenditure will come from the city's general fund in the 2012-13 budget.
Not included in the payment were City Manager Nelson Fialho and City Attorney Jonathan Lowell, who have not received a raise since 2007.
"We were ending the fiscal year with a surplus," Fialho said. "So we decided to acknowledge the (managers') efforts over the previous year, for their accomplishments and for their customer service to the community."
Officials have said their frugal spending approach is a key reason why Pleasanton is emerging from the recession with stronger finances than other cities. City officials said the payment to employees already earning six figures does not contradict that philosophy.
"It's a one-time payment, not a salary increase," Wagner said. "The difference is that a salary hike is permanent and increases your benefits. A one-time payment is not subject to your retirement benefits."
From 2008 to 2012, no managers received a raise, Fialho said. By 2009, Pleasanton's managers had begun contributing 8 percent of their paychecks toward their retirement programs, a portion of their salary formerly paid by the city, according to a city staff report.
"Those were essentially pay cuts," Fialho said.
The belt-tightening stopped in September, when some managers received a 2 percent raise based on standout performance. The five-member council unanimously approved the one-time payment to managers June 18.
The council last month also approved salary hikes in the city's three-year contract with nonmanagement employees, whose average annual salary is about $75,000.
While the deal gives those 217 workers a 7 percent raise from 2013-2015, it also reduces their retirement plan benefits and holiday hours. The net savings to the city will be $383,000 per year -- about $1.15 million over the life of the agreement, Wagner said.
Have any employees complained about managers receiving a bump in compensation, while it appears nonmanagers were given a deal that has some givebacks?
"No, they haven't because we haven't asked nonmanagers to do anything that managers didn't do first," Fialho said. "Managers were the first ones out of the gate to assume pension costs. This one-time payment is fair and consistent with our philosophy of having managers lead by example."
Contact Chris De Benedetti at 510-353-7011. Follow him at Twitter.com/cdebenedetti.