Item 4E - Memo ITEM 4E
CITY OF
SOUTH LAKE
MEMORANDUM
October 13, 2026
TO: Alison Ortowski, City Manager
FROM: Stacey Black, Assistant City Manager/ Sr. Director of Human Resources
SUBJECT: Resolution No. 26-038, 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. 26-038, amending Section 704 — "Vacation Leave" of the City of
Southlake Employee Handbook to increase the maximum amount of
vacation leave employees may accrue, effective January 1, 2027.
Background
Information: The City's Employee Handbook contains personnel policies approved
by the City Council and City Manager. In accordance with Section 4.14
of the City Charter, the City Council must approve personnel policies
that carry financial implications. The City Manager retains authority to
approve administrative updates or policies without financial impact,
provided the City Council is notified of such changes.
Vacation leave is an important component of the City's overall employee
benefits program and supports employee well-being, work-life balance,
and the City's ability to attract and retain a highly qualified, high-
performing workforce. During development and presentation of the FY
2027 Proposed Budget, staff discussed increasing the
maximum vacation accrual limits as part of the City's broader
employee benefits strategy. The proposed change also responds
directly to feedback received through the 2025 Employee Benefits
Survey, where increasing the vacation accrual cap was identified
as a high-priority benefit enhancement.
Under the current policy, regular full-time employees may accrue up to
240 hours of vacation leave, while full-time fire-shift personnel may
accrue up to 360 hours. Once an employee reaches the applicable
maximum, additional vacation leave stops accruing until the employee
uses sufficient leave to bring the balance below the maximum.
The proposed revisions provide employees with additional flexibility to
manage and retain accrued vacation leave by increasing the maximum
accrual limits. The increases provide an additional 40 hours of accrual
capacity for regular full-time employees and an additional 60 hours for
Alison Ortowski, City Manager ITEM 4E
October 13, 2026
Page 2
fire-shift personnel, maintaining the existing proportional relationship
between the two employee groups.
Under the revised policy:
• The maximum vacation accrual for regular full-time employees will
increase from 240 hours to 280 hours.
• The maximum vacation accrual for full-time fire-shift personnel will
increase from 360 hours to 420 hours.
• Existing vacation accrual rates and annual vacation benefits will
remain unchanged.
• The maximum amount of vacation leave eligible for payout upon
separation will remain unchanged at 240 hours for regular full-time
employees and 360 hours for fire-shift personnel.
Maintaining the existing payout limits allows employees additional
flexibility to accumulate and use vacation leave during active
employment while preserving the City's current limits on vacation payout
at separation. The additional accrual capacity is intended to provide
employees greater flexibility when workload, staffing, scheduling, or
other circumstances make it difficult to use accrued leave before
reaching the maximum.
As of October 9, 2026, 97 of the City's 356 full-time employees, or
approximately 27%, had vacation leave balances within 40 hours of
their applicable maximum accrual limit. This indicates that a
meaningful portion of the workforce is approaching the current
limits and could benefit from additional flexibility in managing
vacation leave.
In addition to increasing the maximum vacation accrual limits,
the proposed amendment includes several revisions to clarify how
vacation leave is used and paid when an employee separates
from City employment.
• Vacation Use Prior to Separation. Under the revised policy,
employees generally may not use vacation leave during the fourteen
(14) calendar days before a voluntary separation or use vacation
leave to extend their employment. This provision is intended to
prevent employees from using vacation leave immediately before
separation to avoid forfeiting hours that exceed the maximum payout
limit. Exceptions may be approved by the Department Director, in
consultation with Human Resources. The restriction also applies to
fire-shift personnel and does not affect employees' rights to legally
protected leave or reasonable accommodations.
Alison Ortowski, City Manager ITEM 4E
October 13, 2026
Page 3
• Vacation Payout and Reemployment. Employees who separate from
City employment will receive payment for eligible unused vacation
leave, up to the existing payout limits of 240 hours for regular full-
time employees and 360 hours for fire-shift personnel. Any vacation
hours above these limits will be forfeited at separation. If an
employee is subsequently rehired, previously accrued vacation leave
will not be restored, and the employee will begin with a zero vacation
balance. Vacation accrual rates will be based on service from the
most recent date of hire.
• Implementation. The increased vacation accrual limits will take effect
January 1, 2027. Employees will be eligible to begin accruing
vacation under the policy limits at that time. Vacation hours that were
not earned because an employee had reached the previous
maximum will not be credited retroactively.
If approved, the revised policy will supersede the existing Vacation
Leave policy and be incorporated into the City's Employee Handbook
effective January 1, 2027.
Financial
Considerations: The proposed change does not increase employees' annual vacation
accrual rates or the maximum amount of vacation leave payable upon
separation. The maximum payout remains 240 hours for regular full-time
employees and 360 hours for fire-shift personnel. Vacation leave
accrued above those limits is forfeited upon separation and is not
restored upon subsequent reemployment.
While employees will have the ability to maintain higher vacation
balances during employment, the proposed amendment does not
increase the City's maximum cash payout obligation upon separation.
Strategic Link:
• Focus Area: Performance Management and Service Delivery
• Corporate Objectives:
- L3: Attracting, developing & retaining a talented and motivated
workforce for lasting world-class performance.
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.
Alison Ortowski, City Manager ITEM 4E
October 13, 2026
Page 4
Supporting
Documents:
Attachment A: Resolution No. 26-038
Attachment B: Redlined Policy No. 704 — Vacation Leave
Staff
Recommendation: Staff recommends City Council approval of Resolution No. 26-038,
amending Section 704 — "Vacation Leave" of the City of Southlake
Employee Handbook and providing an effective date of January 1, 2027.
RESOLUTION NO. 26-038
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; and
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"
Section2. That this resolution is in effect upon passage and adoption by the City
Council, effective January 1, 2027.
PASSED AND APPROVED THIS THE DAY OF
, 2026.
Shawn McCaskill, Mayor
ATTEST:
Amy Shelley, City Secretary
CITY OF
SOUTHLAKE
704 VACATION LEAVE
704.01 Eligibility. All regular full-time employees shall accrue vacation leave; however, employees
may not use vacation leave until six (6) months of continuous full-time service is completed.
Vacation leave is not eligible for payout until the employee completes twelve (12) months of
continuous full-time service. Accordingly, an employee who separates from employment
before completing twelve (12) months of continuous full-time service shall forfeit all accrued
vacation leave. Any payout following completion of twelve (12) months remains subject to
the limits established in Section 704.08.
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 beginning with the first full pay period
after completing 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 280 hours
(less than 1 year) (3.08 hours)
12-59 months 4 hours and 38 minutes
3 weeks 280 hours
(1-5 years) (4.62 hours)
60-119 months 6 hours and 10 minutes
4 weeks 280 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 280 hours
240+ months 8 hours
(20+years) (8 hours) 5 weeks, 1 day 280 hours
_]
Policy No. 704: Vacation Leave Page 1
CITY OF
SOUTHLAKE
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 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 420 hours
(less than 1 year) (4.0 hours)
12-59 months 6 hours
180 hours 420 hours
(1-5 years) (6.0 hours)
60-119 months 8 hours
240 hours 420 hours
(5-10 years) (8.0 hours)
120-239 months 8 hours and 48
264 hours 420 hours
(10—20 years) minutes (8.8 hours)
240+ months 9 hours and 36
288 hours 420 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. Full-time employees, except for full-time fire shift personnel,
may accrue a maximum of 280 hours of vacation leave. Full-time fire shift personnel may
accrue a maximum of 420 hours. If a scheduled accrual would cause an employee's balance
to exceed the applicable maximum, only the amount necessary to reach that maximum
shall be credited. Vacation leave shall cease to accrue when an employee's vacation leave
balance reaches the applicable maximum and shall resume when the balance falls
below the maximum.
The increased maximum accrual limits apply prospectively beginning January 1, 2027.
Vacation leave not accrued before that date because an employee had reached the prior
maximum shall not be credited retroactively.
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 requesting vacation leave within a
reasonable amount of time and confirming that they have sufficient accrued leave to cover
Policy No. 704: Vacation Leave Page 2
CITY OF
SOUTHLAKE
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 the request
cannot be accommodated due to business needs.
704.05.01 Vacation Leave Priorto Separation. Except as provided below,vacation leave may
not be used during the fourteen (14) calendar days immediately preceding an
employee's voluntary separation from employment and may not be used to
extend the effective date of separation. Any vacation leave previously approved
for this period shall be canceled unless an exception is approved in writing by the
Department Director, in consultation with Human Resources.
For fire-shift personnel, this restriction applies to every scheduled twenty-four
(24) hour shift, tour, or portion thereof occurring within the fourteen (14)
calendar days immediately preceding the effective separation date.
This restriction does not limit an employee's right to take leave or receive a
reasonable accommodation required by applicable federal, state, or local law.
Any absence during this period that may qualify under the Family and Medical
Leave Act, Americans with Disabilities Act, or another applicable law shall be
referred to Human Resources for review and administration. Legally protected
leave does not extend the employee's effective separation date unless required
by law or approved in writing by the City Manager or designee.
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 Separation from Employment. Upon separation from employment, a
regular full-time employee who has completed twelve (12) months of continuous full-time
employment shall be paid for any unused vacation time, not to exceed 240 hours. For full-
time fire-shift personnel, payment shall not exceed 360 hours. Vacation leave may not be
used immediately before separation to avoid or increase the applicable payout limit. Any
accrued and unused vacation leave exceeding the applicable payout limit shall be forfeited
upon separation from employment, shall have no cash or leave value after separation, and
shall not be carried forward or restored if the employee is subsequently reemployed by the
City.
704.09 Reemployment.An employee who is reemployed by the City following a break in service shall
begin employment with a zero vacation leave balance. Vacation leave previously paid or
forfeited upon separation shall not be restored. The employee shall accrue vacation leave
Policy No. 704: Vacation Leave Page 3
CITY OF
SOUTHLAKE
based on continuous full-time service beginning with the most recent date of hire, unless
another City policy expressly provides credit for prior service.Any credit for prior service used
to determine the employee's accrual rate does not restore previously paid or forfeited
vacation leave.
704.10 Approval and Effective Date. This policy was approved by City Council on October 20, 2026
by Resolution No. 26-038 and is effective January 1, 2027. It supersedes all previous vacation
leave policies.
Policy No. 704: Vacation Leave Page 4
CITY OF
SOUTHLAKE -- DRAFT I REDLINED --
704 VACATION LEAVE
704.01 Eligibility. All regular full-time employees shall accrue vacation leave; however, employees
may not use vacation leave may not be ed until six (6) months of continuous full-time
service is completed. Vacation leave is not eligible for payout until the employee completes
twelve (12) months of continuous full-time service.Accordingly, an employee who separates
from employment before completing twelve(12) months of continuous full-time service shall
forfeit all accrued vacation leave. Any payout following completion of twelve (12) months
remains subject to the limits established in Section 704.08."_r_*i^^ le-ave does Ret veSt until
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 fellewing thebeginning with the first full
pay period following eempletieRafter completing 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
(less than 1 year) (3.08 hours) 2 weeks 240 280 hours
12-59 months 4 hours and 38 minutes
(1-5 years) (4.62 hours) 3 weeks �40 280 hours
60-119 months 6 hours and 10 minutes
(5-10 years) (6.16 hours) 4 weeks 2-40 280 hours
120-239 months 7 hours and 5 minutes
(10—20 years) (7.08 hours) 4 weeks, 3 days 2-40 280 hours
240+months 8 hours 5 weeks, 1 day -240 280 hours
Policy No. 704: Vacation Leave Page 1
CITY OF
SOUTHLAKE -- DRAFT I REDLINED --
(20+years) (8 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
(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
(less than 1 year) (4.0 hours) 120 hours 360420 hours
12-59 months 6 hours
(1-5 years) (6.0 hours) 180 hours 360420 hours
60-119 months 8 hours
(5-10 years) (8.0 hours) 240 hours 360420 hours
120-239 months 8 hours and 48
264 hours 360420 hours
(10-20 years) minutes(8.8 hours)
240+months 9 hours and 36
(20+years) minutes(9.6 hours) 288 hours 360420 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. Full-time €employees, except for full-time fire shift personnel,
may accrue a maximum of 280 hours of vacation leave. Full-time fire shift personnel may
accrue a maximum of 420 hours. If a scheduled accrual would cause an employee's balance
to exceed the applicable maximum, only the amount necessary to reach that maximum shall
be credited. shall-net be peFmitted to-acsFue more than the specified uceff-H-c l of
,.-,t;,,n leave at aRy time.Vacation leave shall cease to accrue when an employee's vacation
leave balance reaches the applicable maximum and shall resume when the
balance falls below the maximum.
The increased maximum accrual limits apply prospectively beginning January 1, 2027.
Vacation leave not accrued before that date because an employee had reached the prior
maximum shall not be credited retroactively.
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
Policy No. 704: Vacation Leave Page 2
CITY OF
SOUTHLAKE -- DRAFT I REDLINED --
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 requesting vacation leave within a
reasonable amount of time and confirming that they have sufficient accrued leave to cover
the requested time off.€mpleyees are—respens+b,le fer ensuring that vaeatien leave is
Fecluested within -;; rP;;,;Am;;h1P amApt Af tamp ;;nd GeRfiFM they �Agill Wave -ad-equate leave
ffWais 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#the request cannot be accommodated due to business needs.
704.05.01 Vacation Leave Prior to Separation. Except as provided below,vacation leave may
not be used during the fourteen (14) calendar days immediately preceding an
employee's voluntary separation from employment and may not be used to
extend the effective date of separation. Any vacation leave previously approved
for this period shall be canceled unless an exception is approved by the
Department Director, in consultation with Human Resources.
For fire-shift personnel, this restriction applies to every scheduled twenty-four
(24) hour shift, tour, or portion thereof occurring within the fourteen (14)
calendar days immediately preceding the effective separation date.
This restriction does not limit an employee's right to take leave or receive a
reasonable accommodation required by applicable federal, state, or local law.
Any absence during this period that may qualify under the Family and Medical
Leave Act, Americans with Disabilities Act, or another applicable law shall be
referred to Human Resources for review and administration. Legally protected
leave does not extend the employee's effective separation date unless required
by law or approved in writing by the City Manager or designee.
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 Separation from:Ferm*RRNQR of Employment. Upon separation from
employment*^rmunatwe^ of service a regular full-time employee who has completed twelve
(12) months of continuous full-time employment shall be paid for any unused vacation time,
not to exceed *"^ ^S*a"Im.-hec-1ffl_a ,' ".,I.,^ ^ ^f 240 hours. For full-time fire-shift
personnel, payment shall not exceed 360 hours. Any ^d r,* ^^ 1p;pg^ ^exeeedong thIn
e
ble Payout lonq*t shall -he ferfeite.J and shall Ret be paid upen of ., .,I.,.,., ent (36
heur_f^.r fire shift persen ^" Vacation leave may not be used immediately before separation
Policy No. 704: Vacation Leave Page 3
CITY OF
SOUTHLAKE -- DRAFT I REDLINED --
to avoid or increase the applicable payout limit. Any accrued and unused vacation leave
exceeding the applicable payout limit shall be forfeited upon separation from employment,
shall have no cash or leave value after separation,and shall not be carried forward or restored
if the employee is subsequently reemployed by the City.
704.09 Reemployment.An employee who is reemployed by the City following a break in service shall
begin employment with a zero vacation leave balance. Vacation leave previously paid or
forfeited upon separation shall not be restored. The employee shall accrue vacation leave
based on continuous full-time service beginning with the most recent date of hire, unless
another City policy expressly provides credit for prior service.Any credit for prior service used
to determine the employee's accrual rate does not restore previously paid or forfeited
vacation leave.
704.0-910 Approval and Effective Date. This policy was approved by City Council on April , 2026
October 20, 2026 by Resolution No. xx-xxx26 010 and is effective January 1, 2027A+ne-24,
2026. It supersedes all previous vacation leave policies.
Policy No. 704: Vacation Leave Page 4