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Item 4C - Memo ITEM 4C CITY OF SOUTH LAKE MEMORANDUM March 30, 2026 TO: Alison Ortowski, City Manager FROM: Stacey Black, Assistant City Manager/ Sr. Director of Human Resources SUBJECT: Resolution No. 26-010, amending Section 704 — "Vacation Leave" of the City of Southlake Employee Handbook and providing an effective date. Action Requested: The purpose of this item is to seek City Council approval of Resolution No. 26-010, amending Section 704 — "Vacation Leave" of the City of Southlake Employee Handbook to align vacation leave accrual rates with the Fire Department's transition from a 24-hour on / 48-hour off (24/48) shift schedule to a 48-hour on / 96-hour off (48/96) schedule, effective June 20, 2026. Background Information: The City's Employee Handbook contains all personnel policies approved by both the City Council and the City Manager. In accordance with Section 4.14 of the City Charter, the City Council must approve any personnel policies that carry financial implications. The City Manager retains the authority to approve administrative updates or policies without financial impact, provided that City Council is notified of such changes. Effective June 20, 2026, Fire Department shift personnel will transition to a 48/96 shift schedule. This schedule is now the prevailing regional standard among peer fire departments and is designed to enhance firefighter well-being, improve work-life balance, and strengthen the City's ability to recruit and retain highly qualified personnel. The transition does not impact service levels, staffing coverage, or emergency response delivery. Staff is coordinating implementation across payroll, policy, HR systems, and departmental processes to ensure a seamless transition across all affected areas. As part of this transition, fire shift personnel will move from a fifteen (15) day pay cycle to a twelve (12) day pay cycle to align with the operational schedule and Fair Labor Standards Act (FLSA) work period requirements. This change increases the number of pay periods for fire shift personnel from twenty-four (24) to thirty (30) per year. Because vacation leave accrues on a per-pay-period basis, the accrual rate must be recalibrated to reflect the increased number of pay periods. The proposed amendment adjusts the per-pay-period accrual rates for Alison Ortowski, City Manager ITEM 4C March 30, 2026 Page 2 fire shift personnel so that the total annual vacation accrual remains unchanged. This change does not increase the amount of leave employees receive or enhance the benefit. The adjustment is strictly a mathematical recalibration of the per-pay-period accrual rate to ensure consistency under the new pay structure. If not updated, employees would accrue additional vacation leave solely due to the increased number of pay periods, resulting in unintended accruals and associated liability. Because the current policy specifies accrual amounts by pay period as part of the City's benefit framework, a City Council-approved amendment is required to implement this adjustment. The proposed revisions to Section 704 - Vacation Leave are summarized below: • Update the per-pay-period vacation accrual rates for fire shift personnel assigned to the 48/96 schedule to reflect thirty (30) pay periods per year. • Clarify that fire shift personnel on the 48/96 schedule operate on a twelve (12) day pay period cycle. • Maintain all existing eligibility, accrual tiers, and maximum accrual limits as currently adopted by Council. No changes are proposed to civilian employee accrual structures or to the total annual vacation benefit for any employee group. This adjustment applies only to fire shift personnel affected by the schedule change. If approved, the revised policy will take effect June 20, 2026. It will be published in the City's Employee Handbook and communicated to all affected employees. Financial Considerations: This amendment has no financial impact. Annual vacation accruals for fire shift personnel remain unchanged. The per-pay-period accrual rate is being reduced proportionally to offset the increase in pay periods. Strategic Link: • Focus Area: Performance Management and Service Delivery • Corporate Objectives: - L1: Defining and managing a professional workplace culture that supports City values and promotes a positive employee experience. - L3: Attracting, developing & retaining a talented and motivated workforce for lasting world-class performance. Alison Ortowski, City Manager ITEM 4C March 30, 2026 Page 3 Citizen Input/ Board Review: N/A Legal Review: The City Attorney has reviewed the proposed revisions to the Vacation Leave policy. Alternatives: Make changes as desired by City Council. Deny the request and maintain the current approved policy. Supporting Documents: Attachment A: Resolution No. 26-010 Attachment B: Redlined Policy No. 704 — Vacation Leave Staff Recommendation: Staff recommends City Council approval of Resolution No. 26-010, amending Section 704 — "Vacation Leave" of the City of Southlake Employee Handbook and providing an effective date. RESOLUTION NO. 26-010 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, AMENDING SECTION 704 — "VACATION LEAVE" OF THE CITY OF SOUTHLAKE EMPLOYEE HANDBOOK AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Southlake (the "City") previously adopted an Employee Handbook-land WHEREAS, the City wishes to revise Section 704 — "Vacation Leave" to replace Section 704 of the previously adopted Employee Handbook; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, THAT: Section 1. The City of Southlake hereby approves and adopts the following policy that has financial implications, a copy of which is attached as Exhibit "A" and is incorporated into the Employee Handbook: Policy 704 — "Vacation Leave" Section 2. That this resolution is in effect upon passage and adoption by the City Council effective June 20, 2026. PASSED AND APPROVED THIS THE DAY OF , 2026. Shawn McCaskill, Mayor ATTEST: Amy Shelley, City Secretary © CITY OF RESOLUTION NO. 26-010: EXHIBIT A SOUTHLAKE 704 VACATION LEAVE 704.01 Eligibility.All regular full-time employees shall accrue vacation leave; however,vacation leave may not be used until six (6) months of continuous full-time service is completed. Vacation leave does not vest until the completion of twelve months of continuous full-time service. Therefore, vacation leave is forfeited if employment terminates or an employee separates employment for any reason before completing twelve months of continuous full-time service. 704.02 Part-time, Temporary and Seasonal Employees. Part-time, temporary and seasonal employees are not eligible for vacation leave. 704.03 Vacation Leave Accrual.Accrual rates are based on the length of continuous full-time service with the City of Southlake. Vacation leave shall not be advanced. Vacation leave shall not accrue when an employee is on a leave of absence without pay for an entire pay period. An employee is considered to be on a leave of absence without pay when they have exhausted all available paid leave and are not eligible for, or have exhausted, available family medical leave in accordance with Policy No. 207, Family Medical Leave Act. Employees shall move into the next accrual bracket following the first full pay period following completion of the required months of service. 704.03.01 Full-time employees. Full-time employees, except for full-time fire-shift personnel, accrue vacation leave on the City's standard bi-weekly pay cycle consisting of twenty-six (26) pay periods per year. Full-time employees assigned to this pay cycle shall accrue vacation leave at the following rates: Months of Per Pay Period Estimated Maximum Service Accrual Rate Annual Accrual Accrual 0-11 months 3 hours and 5 minutes 2 weeks 240 hours (less than 1 year) (3.08 hours) 12-59 months 4 hours and 38 minutes 3 weeks 240 hours (1-5 years) (4.62 hours) 60-119 months 6 hours and 10 minutes 4 weeks 240 hours (5-10 years) (6.16 hours) 120-239 months 7 hours and 5 minutes (10—20 years) (7.08 hours) 4 weeks, 3 days 240 hours 240+ months 8 hours (20+years) (8 hours) 5 weeks, 1 day 240 hours 704.03.02 Fire Shift Personnel. Fire shift personnel assigned to the 48-hour on/96-hour off (48/96)schedule operate on a twelve (12) day pay period cycle, resulting in thirty Policy No. 704: Vacation Leave Page 1 © CITY OF RESOLUTION NO. 26-010: EXHIBIT A SOUTHLAKE (30) pay periods per calendar year. Full-time fire shift personnel assigned to the 48/96 shift schedule shall accrue vacation leave at the following rates: Months of Per Pay Period Estimated Maximum Service Accrual Rate Annual Accrual Accrual 0-11 months 4 hours 120 hours 360 hours (less than 1 year) (4.0 hours) 12-59 months 6 hours 180 hours 360 hours (1-5 years) (6.0 hours) 60-119 months 8 hours 240 hours 360 hours (5-10 years) (8.0 hours) 120-239 months 8 hours and 48 264 hours 360 hours (10—20 years) minutes(8.8 hours) 240+ months 9 hours and 36 288 hours 360 hours (20+years) minutes(9.6 hours) For the purposes of this policy, a shift for fire shift personnel equals twenty-four (24) consecutive work hours.A tour represents a full forty-eight (48) hour duty cycle consisting of two consecutive 24-hour shifts under the 48/96 schedule. 704.04 Maximum Accrual Allowed. Employees shall not be permitted to accrue more than the specified maximum accrual of vacation leave at any time.Vacation leave shall cease to accrue when an employee's vacation leave balance reaches the maximum accrual allowed. 704.05 Scheduling Vacation. Employees shall schedule vacation in advance with the employee's supervisor or Department Director,who shall give due consideration to the employee's needs and the remaining employees' ability to perform all essential tasks of the department while the employee is on vacation. Vacation requests by Department Directors are subject to the approval of the City Manager or their designee. Vacations shall only be scheduled when workload permits; however, every reasonable effort shall be made to accommodate individual requests. Employees are responsible for ensuring that vacation leave is requested within a reasonable amount of time and confirm they will have adequate leave accruals to cover the requested time off.Supervisors may deny requests for time off when the employee does not have sufficient vacation leave accrual available for the request or when it cannot be accommodated due to business needs. 704.06 Holidays during Vacation. Official holidays occurring during an employee's vacation shall be paid as holiday pay and not considered as vacation leave. 704.07 Vacation Leave during Disciplinary Suspension. An employee on disciplinary suspension forfeits all claims to use vacation leave for the duration of the disciplinary suspension. In no Policy No. 704: Vacation Leave Page 2 CITY OF RESOLUTION NO. 26-010: EXHIBIT A SOUTHLAKE case shall vacation time be granted to an employee during the course of a disciplinary suspension as a means to supplement pay lost as a result of the disciplinary suspension. 704.08 Vacation Payout upon Termination of Employment. Upon termination of service, a regular employee who has completed twelve (12) months of continuous full-time employment shall be paid for any unused vacation time, not to exceed the established maximum accrual balance of 240 hours (360 hours for fire shift personnel). 704.09 Approval and Effective Date. This policy was approved by City Council on April 7, 2026 by Resolution No.26-010 and is effective June 20,2026. It supersedes all previous vacation leave policies. Policy No. 704: Vacation Leave Page 3 CITY OF SOUTHLAKE -- DRAFT I REDLINED -- 704 VACATION LEAVE 704.01 Eligibility.All regular full-time employees shall accrue vacation leave; however,vacation leave may not be used until six (6) months of continuous full-time service is completed. Vacation leave does not vest until the completion of twelve months of continuous full-time service. Therefore, vacation leave is forfeited if employment terminates or an employee separates employment for any reason before completing twelve months of continuous full-time service. 704.02 Part-time, Temporary and Seasonal Employees. Part-time, temporary and seasonal employees are not eligible for vacation leave. 704.03 Vacation Leave Accrual.Accrual rates are based on the length of continuous full-time service with the City of Southlake. Vacation leave shall not be advanced. Vacation leave shall not accrue when an employee is on a leave of absence without pay for an entire pay period. An employee is considered to be on a leave of absence without pay when they have exhausted all available paid leave, and they are not eligible {^.r ^.r have exhausted and are not eligible for, or have exhausted, available family medical leave in accordance with Policy No. 207, Family Medical Leave Act. Employees shall move into the next accrual bracket following the first full pay period following completion of 4ef� the required months of service. 704.03.01 Full-time employees. Full-time employees, except for full-time fire-shift personnel, accrue vacation leave on the City's standard bi-weekly pay cycle consisting of twenty-six (26) pay periods per year. Full-time employees assigned to this pay cycle shall accrue;tee vacation leave at the below-following rates: Months of Per Pay Period Estimated Maximum Accrual Rate(E e� Accrual Service Annual Accrual ARR.-al nib 0-11 months 3 hours and 5 minutes 2 weeks 240 hours (less than 1 year) (2 weekss L( .08 hours) 12-59 months 4 hours and 38 minutes 3 weeks 240 hours (1-5 years) (3 weeks}(4.62 hours) 60-119 months 6 hours and 10 minutes 4 weeks 240 hours (5-10 years) (4 week6jL( .16 hours) 7 hours and 5 minutes 120-239 months (10—20 years) t4 weeks, 4ay-4 7.08 4 weeks, 3 days 240 hours hours 8 hours 240+ months (5��4, 1��L 5 weeks, 1 day 240 hours (20+years) hours Policy No. 704: Vacation Leave Page 1 CITY OF SOUTHLAKE -- DRAFT I REDLINED -- 704.03.02 Fire Shift Personnel. Fire shift personnel assigned to the 48-hour on/96-hour off (48/96)schedule operate on a twelve(12) day pay period cycle, resulting in thirty (30) pay periods per calendar year. Full-time fire shift personnel wee-amen t4e 24 he+F 48 96 shift schedule shall Fe eive accrue vacation leave at the following rates: Per PayPeriod Maximum Months of Estimated Accrual Rate Accrual Service Annual Accrual (Annual Acer ,i nib -5-4 hours 0-11 months (less than 1 year) (4.0 hours){5 120 hours 360 hours &WA ) -7-6 hours 12-59 months (1-5 years) (6.0 hours)-aPA-30 180 hours 360 hours tes(7 5 shifts 4-0-8 hours 60-119 months (5-10 years) (8.0 hours)40 240 hours 360 hours s#iFft-s} 4-1-8 hours and 48 120-239 months (10—20 years) minutes- 8.8 264 hours 360 hours hours)(!! 149 hours and 36 240+months minutes- 9.6 288 hours 360 hours (20+years) hours { tom) For the purposes of this policy, a shift for fire shift personnel equals twenty-four (24) consecutive work hours. A tour represents a full forty-eight (48) hour duty cycle consisting of two consecutive 24-hour shifts under the 48/96 schedule. 704.04 Maximum Accrual Allowed. Employees shall not be permitted to accrue more than the specified maximum accrual of vacation leave at any time.Vacation leave shall cease to accrue when an employee's vacation leave balance reaches the maximum accrual allowed. 704.05 Scheduling Vacation. Employees shall schedule vacation in advance with the employee's supervisor or Department Director,who shall give due consideration to the employee's needs and the remaining employees' ability to perform all essential tasks of the department while the employee is on vacation. Vacation requests by Department Directors are subject to the approval of the City Manager or their designee. Vacations shall only be scheduled when workload permits; however, every reasonable effort shall be made to accommodate Policy No. 704: Vacation Leave Page 2 CITY OF SOUTHLAKE -- DRAFT I REDLINED -- individual requests. Employees are responsible for ensuring that vacation leave is requested within a reasonable amount of time and confirm they will have adequate leave accruals to cover the requested time off. Supervisors may deny requests for time off when the employee does not have sufficient vacation leave accrual available for the request or when it cannot be accommodated due to business needs. 704.06 Holidays during Vacation. Official holidays occurring during an employee's vacation shall be paid as holiday pay and not considered as vacation leave. 704.07 Vacation Leave during Disciplinary Suspension. An employee on disciplinary suspension forfeits all claims to use vacation leave for the duration of the disciplinary suspension. In no case shall vacation time be granted to an employee during the course of a disciplinary suspension as a means to supplement pay lost as a result of the disciplinary suspension. 704.08 Vacation Payout upon Termination of Employment. Upon termination of service, a regular employee who has completed twelve (12) months of continuous full-time employment shall be paid for any unused vacation time,not to exceed the established maximum accrual balance of 240 hours (360 hours for fire shift personnel). 704.09 Approval and Effective Date. This policy was approved by City Council on April 7, 2026 September 2 202 by Resolution No. 26-01021 041 and is effective October 3,202 .1une 20, 2026. It supersedes all previous vacation leave policies. Policy No. 704: Vacation Leave Page 3