REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Amending the City’s Salary Resolution to (1) Add and Update Certain Benefits for Pay Plan Category F Classifications (Unclassified Department Directors), and (2) Make Clarifying Changes and Updates to Certain Provisions
Report
BACKGROUND
Unclassified department directors (Pay Plan Category F) are at-will employees appointed by the City Manager. These employees are not organized and do not negotiate changes as a group to their wages, hours, or other terms and conditions of employment.
In September 2017 (RTC No. 17-0872), Council adopted a compensation philosophy for Pay Plan Category F classifications. Under this compensation philosophy, salary ranges for Pay Plan Category F classifications are linked to increases received by the Public Safety Manager Association (PSMA). Subsequent salary range adjustments for Pay Plan Category F classifications were made based on this compensation philosophy.
The actions outlined in this Report to Council address benefits and compensation philosophy changes for Pay Plan Category F employees, and clarify and update certain general provisions in the Salary Resolution for all City employees.
EXISTING POLICY
Council Policy 7.3.1 Legislative Management - Goals and Policies, Goal 7.3D: Maintain a quality workforce, consistent with state and federal laws, City Charter, and adopted policies in order to assure that City services are provided in an effective, efficient, and high-quality manner.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
Changes to Pay Plan Category F
In January 2026, the Human Resources Department completed a compensation study of non-sworn management classifications, including classifications represented by the Sunnyvale Management Association (SMA), and unrepresented classified and unclassified management classifications (unrepresented management). The study compared these classifications with those in comparable cities in the region and resulted in salary adjustments for some classifications, which the City Council approved in September 2026 (RTC No. 26-0736).
In addition to the market salary adjustments, management units received the following across-the-board salary increases in July 2026:
• PSMA: 4.45%
• SMA and unrepresented management: 3.5%
Accordingly, PSMA, SMA, and unrepresented management received across-the-board salary increases and/or market adjustments in FY 2026/27, while no salary range adjustment has been made for Department Directors. This report does not recommend salary range adjustments or cost of living pay adjustments for Pay Plan Category F. Instead, it recommends benefit changes for Pay Plan Category F in lieu of salary range adjustments, which is a lower cost alternative. The proposed changes are intended to ensure that the City’s executive compensation and benefits remain competitive and responsive to evolving organizational needs while remaining fiscally responsible. This change reflects a shift toward considering market factors, similar to the recent non-sworn management compensation study, rather than automatically linking increases to bargaining unit increases.
The proposed amendments to the City’s Salary Resolution introduce the following benefit enhancements for Pay Plan Category F:
• Effective October 25, 2026: A new Executive Leave bank of 40 hours per year to address the unique demands placed on executive leadership, such as frequent evening and weekend commitments, meetings, and events;
• Effective November 1, 2026: An increase in the automobile allowance from $450 to $720 per month for Pay Plan Category F employees and from $650 to $920 for the Director of NOVA Workforce Services to reflect higher fuel costs and expanded travel requirements; and
• Effective November 1, 2026: An increase in the mobile phone allowance from $40 to $125 per month to align with prevailing market rates for executive-level cellular plans.
Clarifying Changes and Updates to Certain Provisions in the Salary Resolution
In addition, the proposal includes minor language clarifications and policy clean-up to keep the Salary Resolution current and internally consistent. A summary of these additional changes follows:
• Section 5.100 Uniform - Eliminating the entire section because the information is duplicative of the respective Memorandum of Understanding.
• Section 7.115 Differential Pay - Correcting the terminology to accurately describe the content of the section.
• Section 7.160 Demotion - Incorporating provisions from the Administrative Policy Manual and adding clarifying language regarding pay-rate placement following a demotion.
FISCAL IMPACT
These changes to Category F employee benefits are equivalent to approximately a 3% increase in base salary costs. These costs will be absorbed into the FY 2026/27 Adopted Budget and incorporated in future budget cycles. This represents a cost savings from the prior compensation practice which would have increased base salary range by 4.5%.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Adopt a Resolution Amending the City’s Salary Resolution to (1) Add and Update Certain Benefits for Pay Plan Category F Classifications (Unclassified Department Directors), and (2) Make Clarifying Changes and Updates to Certain Provisions
2. Do Not Adopt a Resolution Amending the City’s Salary Resolution to (1) Add and Update Certain Benefits for Pay Plan Category F Classifications (Unclassified Department Directors), and (2) Make Clarifying Changes and Updates to Certain Provisions
3. Provide Alternative Direction to Staff
STAFF RECOMMENDATION
Recommendation
Alternative 1: Adopt a Resolution Amending the City’s Salary Resolution to (1) Update the Benefits for Pay Plan Category F Classifications (Unclassified Department Directors), and (2) Make Clarifying Changes and Updates to Certain Provisions.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
_X_ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Prepared by: Vienne Choi, Principal Human Resources
Reviewed by: Heather Ruiz, Director, Human Resources
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Draft Salary Resolution