Memorandum

City of Lawrence

Department of Administrative Services

TO:	Frank Reeb
FROM:	Lori Carnahan
C:	Mike Wildgen, Debbie Van Saun, Dave Corliss, Ron Hall
Date:	November 17, 2004
RE:	Longevity Compensation, December 2004

Near the end of each fiscal year the City Commission considers whether or not to pay a one-time Longevity payment to full-time regular employees who have completed five or more full and continuous years of full-time regular employment as of January 1 of the current fiscal year.  This payment is considered a discretionary pay item for employees to be paid in December of any year it is approved for payment. 

The amount of the payment is determined by the number of complete years of service on December 31 of the current year multiplied by a predetermined amount of money for each month of service.  For 2004, the total amount of longevity payments, if approved, is $333,903.96.  There are budgeted funds available to cover this amount. 

Parameters for Payment of Longevity Compensation

1. It is a discretionary payment considered by the City Commission each year.

2. If (“When” in IAFF MOU) approved, Longevity payments:
1. Will commence January 1 of the year following the fifth (5^th) year of employment.

(2004 full-time regular employees with a service date of 1-1-2000 or earlier)

2. Be issued by a special paycheck in December.

(2004: December 23 , 2004)

3. Credited for all whole years completed as of December 31 at the established rate multiplied by the number of years of consecutive service with the City of Lawrence.

(2004: The established rate of $4.00 per month x 12 months = $48/year of service)

3. Periods of Military leave will not constitute a break in consecutive service, as long as the employee returns to work immediately after discharge.

(2004: Three employees were called to active duty for various periods throughout the year)

4. If Longevity is approved for payment, any employee who retires or is approved for long term disability during the current fiscal year shall receive Longevity Compensation at a pro-rated basis according to the following parameters:
1. 1/12 for each month worked in the current year multiplied by number of years of service multiplied by the annual rate as determined by 2c.

5. Employees, who voluntarily terminate employment, are separated by the City, die, or leave City employment for any reason other than KPERS/KP&F retirement or approved long term disability during the year, are not eligible to receive longevity.

6. If longevity is issued, the following will apply to the checks received:
1. All required federal and state deductions including

i. Income tax withholding

ii. KPERS and KP&F contributions (including double and triple deductions)

2. Garnishments and Tax Levies currently in force

Procedure for Consideration and Payment

1. Administrative Services review MOUs and other documents to determine recommended pay level, develop list of retirees, those approved for disability and other necessary parameters.
2. Information Systems run a list of employees, retirees, those approved for disability and payment amounts based on the information provided from Administrative Services.
3. List is reviewed by Administrative Services and final amount submitted to City Commission for Consideration.
4. If approved, it is processed as a separate payroll to be paid on the Friday that falls between the 2^nd to last and last payday in the current payroll year. 

2004 Information

• 2004 Longevity Compensation:                                        $ 333,903.96
• Preferred date for City Commission to consider:                November 30 , 2004
• Last date for City Commission to consider payment:         December 14 , 2004
• Date payroll process must begin to make timely payment:December 15 , 2004
• Date of Longevity payment (if approved):               December 23 , 2004

History of Longevity Payment

While the longevity payment program has existed for a longer period of time, the history of the program since 1997 is provided in the following table:

Date Paid	Amount Pd/Mo	Amount Pd/Year	Latest Date of Service Eligible	Cap on years of Service	# of Emp Rec Pmt	Amount Increase	Percent Increase	Total Amount Paid	Amount Increase	Percent Increase
12/19/97	$3.50	$42	1/1/93	25	410	Unknown	Unknown	$229,120.43	Unknown	Unknown
12/18/98	$3.50	$42	1/1/94	25	412	2	0.4%	$232,809.57	$3,689.14	1.6%
12/17/99	$3.50	$42	1/1/95	25	417	5	1.2%	$237,854.92	$5,045.35	2.1%
12/15/00	$4.00	$48	1/1/96	25	424	7	1.7%	$279,507.96	$41,653.04	17.5%
12/14/01	$4.00	$48	1/1/97	None	431	7	1.7%	$294,583.80	$15,075.84	5.4%
12/13/02	$4.00	$48	1/1/98	None	449	18	4.2%	$300,859.89	$6,276.09	2.1%
12/12/03	$4.00	$48	1/1/99	None	472	23	5.1%	$319,135,93	$18,276.04	6.1%
12/23/04	$4.00	$48	1/1/00	None	482	10	2.1%	$333,903.96	$14,768.03	4.6%