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noted that the Grand Jury's report did not focus on the Town's level of pension but on other institutions with an enhanced level plan. He recommended that the Town consider paying social security in addition to the pension. CLOSED PUBLIC COMMENT MOTION SECONDED AND CARRIED: Moved by Mordo, seconded by Larsen and passed unanimously to eliminate the step formula for merit pay increases and to replace the process with a salary range for each position. Council discussed the formation of the Council subcommittee that would be tasked with reviewing staff compensation and the inclusion of a consultant to advise the committee. City Manager Cahill suggested that the Council consider the option of providing management with a goal and afford him the opportunity to meet that benchmark. He felt it was important for management(City Manager)to be included in the review process. OPENED PUBLIC COMMENT Karen Lemes, resident, provided Council with a report that focused on the current economy in Silicon Valley and its effect on lower and middle class incomes. She noted that the Town had a very small staff(21 employees) and encouraged the Council to treat them well because it would benefit the wealthy people who reside in Los Altos Hills. CLOSED PUBLIC COMMENT MOTION SECONDED AND CARRIED: Moved by Mordo, seconded by Larsen and passed unanimously to form a Council subcommittee consisting of Mordo, Larsen, and the City Manager to review employee compensation and benefits. Council consensus was to engage consultants on an as needed basis to address specific questions. The subcommittee would return to Council with their recommendations. MOTION SECONDED AND CARRIED: Moved by Kerr, seconded by Mordo and passed unanimously to authorize management to establish a Pension Contingency Reserve of$700,000 over 10 years utilizing the $70,000 annual pension expense savings. Councilmember Warshawsky noted that the Town's employee costs and"fiscal house" were a complete anomaly to the rest of the state and were in excellent condition. NEW BUSINESS 16. Consideration of Ordinance Amending Title II, Chapter 6 of the Los Altos Hills Municipal Code deleting the Appendix and amending Sections 2-6.03 and 2-6.10 and approving a Resolution updating Los Altos Hills "Designated Officials and Employees with Disclosure Obligations" (Staff: K. Jost) City Clerk Karen Jost introduced the item to Council. She provided an overview of her staff report. The Political Reform Act requires every local government agency to review 7 Approved City Council Regular Meeting Minutes October 21,2010