Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Supervisor Warren Slocum, District 4
Supervisor Dave Pine, District 1
Subject: Ordinance Establishing Compensation for Members of the Board of Supervisors
RECOMMENDATION:
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Introduction of an ordinance adding new Section 2.71.240 to Chapter 2.71 of Title 2 of the San Mateo County Ordinance Code establishing the compensation of the Members of the Board of Supervisors, increasing their annual base salary to an amount equal to 80% of the annual salary of the Superior Court Judge, State of California, and providing them an employer-paid deferred compensation benefit; and waive reading of the ordinance in its entirety.
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BACKGROUND:
The County Charter allows the Board of Supervisors (Board) to change the compensation of Supervisors by ordinance, provided however that a Supervisor’s compensation shall not increase during the term of office for which they were elected, above the percentage of increase in the costs of living.
Apart from these cost-of-living increases, the salary of the Board has not been reviewed or adjusted since July 2005, with the adoption of Ordinance 04274. At that time, the compensation was increased by 10% in order to bring Supervisor salaries up to an amount that approximated the average for five immediate Bay Area counties. After the change in compensation, the ordinance provided for an annual adjustment to the salary by the cost-of-living formula provided for in the County Charter.
DISCUSSION:
A. Salary and Benefits Survey
This year, the County’s Human Resources Department was requested to review the Board’s salary and other compensation in relation to the County’s labor market comparators. The counties surveyed included Alameda, Contra Costa, Marin, San Francisco, Santa Clara, and Sonoma, which is consistent with the guidelines established in the County’s Classification and Compensation Guideline outlining the County’s pay philosophy when proposing compensation changes.
In addition to reviewing total compensation, the Human Resources Department also gathered information on how the comparator agencies set the salary of their respective board members.
The Human Resources Department found that, with the exception of San Francisco, all other comparator counties have ordinances that set their board member salaries as a percentage of the annual salary of a Superior Court Judge in the State of California. Alameda and Santa Clara Counties set their board member salary at 80%, while the other three counties range from 60% to 75%. (Board member salaries in San Francisco are reviewed and set every 5 years by the Civil Service Commission.) The survey also revealed that four of the six counties surveyed provide their board members employer-paid contribution to deferred compensation.
As of July 1, 2024 the annual salary for a Superior Court Judge in the State of California is $244,727, 80% of which is $195,782. If the salary were to be adjusted now, the Board’s salary would be adjusted to this annual rate.
B. Proposed Ordinance
Thus, this Ordinance proposes the following:
• Effective January 4, 2027, establishes the base salary of the Supervisors representing Districts 2 and 3 at 80% of the annual salary of the Superior Court Judge, State of California as it existed on December 1, 2026;
• Effective January 8, 2029, establishes the base salary of the Supervisors representing Districts 1, 4, and 5 at the then existing salary of the Supervisors representing Districts 2 and 3;
• Continues to require that, pursuant to the County Charter, Board salaries are reviewed before January 1 of each year to determine whether there has been an increase in the cost of living using the formula provided in the County Charter, and provide an adjustment to Supervisor salaries, accordingly;
• Provides each Supervisor an employer-paid deferred compensation contribution in the amount equivalent to four percent (4%) of their base salary. The contribution shall be deposited each pay period to a 401(a) Plan. The percentage of base pay contribution rate is intended as a guideline for the contribution and does not guarantee a specific amount of contribution. All contributions must be subject to applicable limitations imposed by State and Federal law, including limitations on the amount of employer contributions, as set forth under the Public Employees’ Pension Reform Act (PEPRA) and Internal Revenue Codes. For Supervisors representing Districts 2 and 3, the aforementioned employer-paid contribution will begin on January 4, 2027. For Supervisors representing Districts 1, 4, and 5, the aforementioned employer-paid contribution will begin on January 8, 2029.
These changes to Supervisors’ compensation are being proposed to align the County’s pay-setting strategy and other benefits with neighboring jurisdictions. Furthermore, the salary adjustment would alleviate salary compaction between the Board’s salary and highest-level staff.
C. Financial Impact on County’s Retirement System
Government Code Section 31515.5 requires the County to provide the estimated financial impact that proposed benefit changes or salary increases for current employees would have on the funding status of SamCERA‘s retirement fund, the County’s retirement system.
As reflected in the attached letter from SamCERA’s actuary, Milliman, the changes reflected in this amendment that are in addition to the assumed annual salary increases of affected current employees, increases the Actuarial Accrued Liability (AAL) by approximately $56,000. While the Unfunded Actuarial Accrued Liability (UAAL) of SamCERA will be higher by this amount, the funded ratio, rounded to the nearest one basis point, will be unchanged.
Milliman’s assessment is an approximate based on salaries of current Board Members who may not be impacted by these changes. Because none of the changes will take effect during the current term of office for any of the current Board members or either of the incoming board members’ first term, it is unknown who will occupy each respective District seat when the compensation changes take place. Future members are expected to have compensation higher than the maximum pensionable compensation includable under Plan 7 upon joining SamCERA and as a result any increase in their compensation will not cause an increase in their pension benefits, nor on the AAL of SamCERA. If future members are in Plans 1 through 5, then as stated in the actuary’s evaluation, the impact of these increases to their salaries could be higher than initially estimated.
FISCAL IMPACT:
Consistent with County Charter provisions, the newly established salary and deferred compensation would apply to the Supervisors representing District 2 and District 3 on the first pay period in January 2027. The changes will apply to the Supervisors representing District 1, District 4, and District 5 on the first pay period in January 2029. There would be an increase in salary and benefits cost for the second half of fiscal year 2027-2028 for two Supervisorial districts (District 2 and District 3), with additional impact on the second half of fiscal year 2029-2030 when the Ordinance becomes effective to the three remaining Supervisorial districts. The full impact of changes will not be realized until the second half of fiscal year 2030-2031.