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HomeMy WebLinkAbout04/21_1/1992, C-7 - MANAGEMENT COMPENSATION PLAN gE city of San L-IS OBISpO MApr;1'F: 1992 COUNCIL AGENDA REPORT ITEM NUMBER: FROM: Ann McPike, Director of Personnel(O SUBJECT: Management Compensation Plan CAO RECOMMENDATIONS: Adopt a resolution that: (1) Increases the salary ranges for certain management positions but decreases actual pay increases possible for 1992-93; (2) Entitles management employees to convert a floating holiday to a fixed holiday to observe Martin Luther King Day. DISCUSSION In light of current fiscal limitations and statewide trends that point to salary increases that are lower than what has been the City's past practice, it is recommended that the salary increase matrix that guides individual salary placement for management based on performance be scaled back to provide for salary increases not to exceed 4% for highly competent performance. In addition, the salary schedule will be adjusted by 4%, with an additional 6% for the City Attorney salary range, to maintain competitive management salary ranges for recruitment and retention purposes. One of the floating holidays currently afforded management employees will be converted to a fixed holiday to observe Martin Luther King Day. This will occur in conjunction with all other City employees also observing this holiday similarly. Background The Charter of the City of San Luis Obispo states that compensation of all City officials and employees shall be by salary and shall be fixed by ordinance (Section 711). It establishes the City Council as the appointing authority for three positions (CAO, City Attorney and City Clerk), and the CAO as the appointing authority for all other management positions. The Compensation Plan is designed to establish levels of pay and benefits which reflect upon appropriate relationships among classifications in the City service. (Municipal Code of San Luis Obispo 2.36.130). The Municipal Code further states that the compensation plan should be consistent with the goals of adequately compensating employees (officials) for their work and maintaining the City's ability to attract and retain qualified applicants. The Employer-Employee Resolution (No. 6620, 1989 Series) establishes the framework for relations between the City and its employees. A key factor of the resolution allows for the formation of employee organizations for the purpose of representing employees in their employment relationship with the City. Currently, six employee associations represent the interests of employees to the City: General, Mid-Management, Police, Fire, Fire Battalion Chiefs and the Police Staff Officers. Appointed Officials and Management do not belong to any formal association. Existing management compensation policies are stated in Resolution No. 6604 (1989 Series). That resolution established a five year strategy for compensating the Management Team and includes a comprehensive benefit package, annual increases to the salary ranges and pay-for- performance policies. The 1989 resolution provided for adjustments to the salary range schedule as follows: �11IIU city of san 1. s osispo _ 101111 A COUNCIL AGENDA REPORT 1990 - 5% range increase 1991 - 5% range increase 1992 - 4-6% increase based on compensation survey conducted in January 1992 1993 - to be adjusted based on the results of 1992 survey i The compensation plan requires that the 1992 and 1993 changes in the salary schedule shall be authorized by Council resolution. A salary survey for management positions was conducted j in January of this year using the same eleven comparable cities the other employee groups in the City use. These are: Davis Chico Redding Monterey Napa Santa Cruz Lompoc Pleasanton Santa Maria Salinas San Clemente i The survey indicated that on an average San Luis Obispo management compensation falls 2.3% below the average of the comparable cities. The salary for City Attorney, however, was 10% below the average, the most significant disparity found in the survey. I Recommended Adjustments to the Compensation Policy The attached resolution includes the following recommendations based upon the survey: ■ The salary schedule should be adjusted by 4%, with the range for the City Attorney receiving an additional 6% adjustment. (See: Exhibit A of the attached Resolution) ■ The Salary Increase Matrix that guides the Council and CAO in determining the performance pay for those management personnel that they evaluate should be scaled back so that individual salary increases for competent and highly competent employees in the top half of the salary range will be 1-4%. (See: Exhibit C of the attached Resolution). Currently, all Appointed Officials and Management employees are eligible for raises within that range. It is important to understand that although the salary ranges will be adjusted by 4%, individual j sWl rX increases are based solely on performance pursuant to the salary matrix guidelines. By scaling back the matrix, a 4% increase becomes the absolute maximum adjustment any individual management employee may receive in 1992-93, assuming highly competent performance. In actual practice, some employees may receive the 4% increase and others will receive something less. The recommended scaling back of the matrix has come forward at the initiative of and with the support of the Management Team in recognition of the current economic times. By adjusting the schedule of salary ranges to the minimum level provided in Resolution 6604, the City will be able to maintain competitive salary ranges for recruitment and retention purposes. Should the economic condition of the nation, state and City improve within the next year, the matrix can be realigned to its original configuration that more adequately recognizes and rewards competent performance. Again, any adjustments to the matrix or salary schedule will be based upon a salary survey, labor market analysis and approval by the Council. By way 2 �������►�►►��►ii11111111i►'► l��lll city of sant s oBispo COUNCIL AGENDA REPORT of comparison, long-term agreements with the other employee associations generally provide for 7% increases per year for the next two years. These increases are in addition to step increases (generally 5%) for which employees in these groups are also eligible. Attachment A outlines those increases. The 1989 Resolution does not provide for adjustments to the benefit package other than the salary adjustments discussed above. However, as a point of information, the salary survey revealed that at $325 per month, the health insurance amount for the Management Team is significantly lower that the average of $442 per month of the comparable cities. With the current indemnity plan (Blue Shield) premium for family coverage at $637.04 per month, increases in premiums will continue to erode take-home salaries for management employees. j Over $300 per month of salary is going toward the payment of health insurance premiums for the majority of management personnel. Martin Luther King Day Although the 1989 resolution does not explicitly provide for any other adjustments to the management compensation plan, it is recommended that one of the floating holidays that management currently receives be converted to a fixed holiday celebrating Martin Luther King Day. Currently, that holiday is recognized as a state and federal holiday, with the County and local school district observing it as well. This recommendation would not take effect until all other employee groups agree to adjust their holiday benefit through meet and confer so that there is citywide consistency of holidays. Staff believes that this is a holiday which should be recognized by the City. ALTERNATIVES i 1. Council could refuse to adopt the recommended resolution and direct staff to return with recommended changes. 2. Council could maintain the existing management compensation policy with direction to staff. FISCAL IMPACT i Assuming that performance based salary increases average 3% during 1992-93, the proposed compensation plan will cost approximately $32,000 annually. Attachments: Resolution No. Exhibit A Appointed Officials and Management Salary Schedule Exhibit B Performance Guidelines Exhibit C Salary Increase Matrix Attachment A: Approved Salary Increases for City Employees j I 3 RESOLUTION NO. 0 992 SERIES) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO REVISING A MANAGERIAL COMPENSATION PLAN FOR APPOINTED OFFICIALS AND FOR CERTAIN MANAGEMENT PERSONNEL AND SUPERSEDING PREVIOUS RESOLUTIONS IN CONFLICT WHEREAS, the City Council established a comprehensive Appointed Officials and Management Development and Compensation policy in 1989; and WHEREAS, the Council is committed to a comprehensive policy that strengthens the recruitment and retention of well qualified and effective appointed officials and management personnel; and WHEREAS, the Council desires to maintain an Appointed Officials and Management Compensation Plan which is consistent with other compensation plans; and WHEREAS, the Council is committed to a compensation plan which reflects the differences between duties, responsibilities and job.requirements; and WHEREAS, the Council determines that merit and performance shall be the basis for Appointed Official and Management compensation; and WHEREAS, consistent with Section 701 of the City Charter, the City Council is the appointing authority for the City Administrative Officer, City Attorney and the City Clerk (Appointed Officials), and the City Administrative Officer is the Appointing Authority for Management positions; and d' T Resolution No. 0992 Series) Page 2 WHEREAS, the appointing authority is responsible for the selection, evaluation and the level of compensation for the appointed employee; and WHEREAS, the City Council agreed to adjust the open-range Appointed Officials and Management Personnel Salary Schedule (Exhibit A) in 1992 based on a comprehensive survey. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: Section 1 . An Appointed Official and Managerial salary plan is an important component of a comprehensive compensation policy. In order to remain competitive with the professional marketplace and promote merit and performance as the criteria for individual salary determinations, the following open-range Appointed Officials and Management Personnel Salary Schedule (Exhibit A) shall be increased 4%. The City Attorney range shall be increased by an additional 6%. Any adjustment to the salary schedule in 1993 shall be authorized by Council resolution. Resolution No. (1992 Series) Page 3 EXHIBIT "A" APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE 1992 GROUP MANAGEMENT POSITION SALARY RANGE MIN MID MAX I C.A.O. 6422 7339 8254 II ATTORNEY 5577 6366 7154 III POLICE CHIEF 5273 6018 6764 FIRE CHIEF COMMUNITY DEVELOPMENT DIRECTOR PUBLIC WORKS DIRECTOR UTILITIES DIRECTOR ASSISTANT C.A.O. IV CITY ENGINEER 4815 5503 6192 FINANCE DIRECTOR V PERSONNEL DIRECTOR 4358 4987 5620 RECREATION DIRECTOR VI CITY CLERK 3784 4358 4931 Section 2. The Appointing Authority, or City Administrative Officer shall determine compensation within the designated range, after evaluating performance using professional compensation principles and the following guidelines (Exhibit "B") and salary increase matrix (Exhibit "C"). Such Resolution No. 0992 Series) Page 4 determination shall reflect merit and performance as the standard and basis for managerial compensation. In addition, the appointing authority may reduce compensation if performance is unsatisfactory. The salary increase Matrix is hereby scaled back to provide for 1-4% salary increases for competent to highly competent performance as follows: EXHIBIT "B" PERFORMANCE GUIDELINES First quartile of the salary range: promotional and initial hiring range and learning curve on the job Second quartile of the salary range: experienced level and lateral hiring; competent performance of the job after completion of learning/adjustment curve after hire Third quartile of the salary range: hiring exceptionally qualified; consistently i competent performance over time Fourth quartile of the salary range: exceptional performance over time; strives to excel in numerous areas EXHIBIT "C" SALARY INCREASE MATRIX* Performance Status: Quartile: 1-8 2nd 3rd 4th Probation (not adequately 0% 0% 0% 0% performed) Fair 0-2 0-1 0% 0% Competent (expected 3-5 2-4 1-3 0-1 performance level) Highly Competent 3-6 4-5 3-4 2-3 Exceptional 8-9 7-8 5-6 3-4 * FOR 1992, NO MANAGEMENT TEAM EMPLOYEES FALL INTO ANY OF THE CATEGORIES WHICH WOULD PROVIDE FOR MORE THAN A 4% INCREASE. 7�'7- Resolution No. (1992 Series) Page 5 Section 3. One of the two floating holidays assigned to Appointed Officials and Management Personnel shall be converted to a fixed holiday to observe Martin Luther King Day. This shall become effective when all other employee groups in the City observe this holiday similarly. On motion of seconded by , and on the following role call vote: AYES: NOES: ABSENT: the foregoing resolution was passed and adopted this day of April 1992. MAYOR Ron Dunin ATTEST: CITY CLERK Pamela Voges APPROVED: i dministrative Officer Personnel Director &n' &j 3 lot- "'Pryruo 1,4 Ci�ttorney Finance Dire for Attachment A APPROVED SALARY INCREASES FOR CITY EMPLOYEES Association 1/92 7/92 1/93 7/93 1/94 Police 3% 4% 3% Police Staff Officers 3% 4% 3% Fire 4% 4% 3% 4% 3% Mid-Management 3% 0-7% Confidential 6% Battalion Chiefs 3% 4% 3% General Employees 3% MEETING *yp AGENDA DATE - ITEM # April 20, 1992 MEMORANDUM TO: MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: JOHN DUNN, CITY ADMINISTRATIVE OFFICER FROM: ANN McPIKE, PERSONNEL DIRECTOR SUBJECT: MANAGEMENT COMPENSATION' Attached please find a chart that represents the total compensation of the City's management salary ranges. These are presented in response to a request from Councilmember Pinard who is seeking additional information about tomorrow night's consent agenda item on Management Compensation. Let me know if any further data is required. Thank you. I cor-:-;7 o: ❑ c-a ::ti or. ❑ I uncil 0 CDD D.R. ur -o ❑ FX DL^•.. x�A 'O 0 FIRS C F1F Cl P-01 011R. 1Q CL?;K n'- ❑ T V r ii.EC:! !,4".iT.Tct;.r [I .�LDI E 0 E 11 1u"$ F, D • �0 FCr�7 r T2 t •" —'LLCM, APR 2 0 1992 CITY CLERK SAN LUIS OBISPO,CA MANAGEMENT COMPENSATION 4/20/92 TITLE SALARY PERS AMOUNT PERS AMOUNT INSURANCE TOTAL LOW HIGH EMPLOYER EMPLOYEE ` AMOUNT COMP"" CITY ADMIN. OFFICER 6175 - 7937 600.20 555.59 325.00 9417.79 CITY ATTORNEY 5070 - 6504 491.83 455.28 325.00 7776.11 CITY CLERK 3638 - 4741 358.51 331.87 325.00 5756.38 FINANCE DIRECTOR 4630 - 5954 450.24 416.78 325.00 7146.02 COMM. DEV. DIRECTOR 5070 - 6504 491.83 455.28 325.00 7776.11 PUBLIC WORKS DIRECTOR 5070 - 6504 491.83 455.28 325.00 7776.11 UTILITIES DIRECTOR 5070 - 6504 491.83 455.28 325.00 7776.11 RECREATION DIRECTOR 4190 - 5404 408.65 378.28 325.00 6515.93 CITY ENGINEER 4630 - 5954 450.24 416.78 325.00 7146.02 ASST. C.A.O. 5070 - 6504 491.83 455.28 325.00 7776.11 POLICE CHIEF 5070 - 6504 1113.22 585.36 325.00 8527.58 FIRE CHIEF 5070 - 6504 1113.22 585.36 325.00 8527.58 PERSONNEL DIRECTOR 4190 - 5404 408.65 378.28 325.00 6515.93 Employees' contribution to PERS is paid by the City. Total Compensation is calculated at the top end of the salary range: Currently, no management position is paid at the top end of the range. It has not been City practice to release actual salaries of individual employees.