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benefits shall continue at the then current rate. B. The parties agree that the City may, at its sole discretion, alter its payroll practices to eliminate the salary and wage step increases system as set forth in its current payroll matrix, Exhibit "A" to this Agreement, and replace them with an equivalent percentage system. For example, a five (5) salary rate range increase would not be computed as set forth on the current matrix, but would instead be exactly 2.5 %, rounded up to or down to the nearest penny. This system would apply to all salary increases as set forth in this Agreement, including Article IV (" Salaries "), Article V ( "Assignment and Other Special Pay Additives ") and Exhibit "A ". There shall be no negative consequences to any represented employee by such conversion. C. The City agrees, during the term of this Agreement, to maintain thirty -four (34) salary rate ranges (17 %) between the classes of Police Captain and Police Lieutenant. 4.4 Application of Basic Compensation Plan. All employees working in classifications of employment covered by this Agreement shall be compensated at a monthly rate, as set forth in Exhibit "B ". 4.5 Beginning Rates. An employee appointed to one of the designated sworn (CalPERS "Safety ") classifications of employment listed in this Agreement may be placed by the appointing authority at Step "A," Step "B," or Step "C" within the applicable rate range in the schedule to which the class has been allocated by Resolution of the City, provided that such employee shall be assigned such salary step upon the commencement of his or her service in said classification and such assignment having once been made shall remain in effect until the said employee shall be entitled to advance to the next salary step in accordance with the further provisions of the Article. An employee appointed to one of the designated non -sworn (CaIPERS "Miscellaneous ") classifications of employment listed in this Agreement may be placed by the appointing authority at Step "AA," Step "A," Step "B," or Step "C," within the applicable salary rate range as provided above. 4.6 Service. The word "service" as used in this Agreement shall be deemed to mean continuous, full -time service in the classification in which the employee is being considered for salary advancement, service in a higher classification or service in a classification allocated to the same salary rate range and having generally similar duties and requirements. Employees hired after the first (1") working day of the month shall not be credited with "time in service" for that month when determining the length of service required for salary step advancement. A lapse of service by an employee for a period of time longer than ten (10) calendar days by reason of resignation, quit, or discharge, shall serve to eliminate the accumulated length of service time of such employee for the purpose of this Agreement and any such employee reentering the service of the City shall be considered as a new employee, 25F -9