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Home My WebLink About07/19/1994, 8 - MANAGEMENT COMPENSATION �II��NIIIIIIIIIII:IIIIIII� 1" MEETING DATE::;?-/9 cityo san lues osispo COUNCIL AGENDA REPORT ITEM NUMBER: FROM: John Dunn, City Administrative Office PREPARED BY: Ann Slate, Personnel Director '- SUBJECT: Management Compensation CAO RECOMMENDATION: Adopt a resolution establishing a management compensation plan for Department Heads and Appointed Officials DISCUSSION: Background: The City Council adopted a five year strategy for management compensation in 1989. The Managerial Compensation Plan expired in April of this year and Council is now being asked to consider .a new plan that provides adjustment to management compensation covering the year from April, 1994 to April, 1995. In October of 1993, the City Council authorized a consultant study to analyze the existing management classifications and to develop recommendations for a management classification/compensation structure. That study was completed in April of 1994. All top management positions, including those of the Appointed Officials, were evaluated using appropriate factors and measures. Concurrent with the consultant's work, City staff surveyed the external market place for comparable compensation data. By blending the consultant and staff work, appropriate internal rankings were determined as well as suggested salary range adjustments. The results of the study were reviewed by Council and have been incorporated into the proposed plan. In accordance with City policy, staff has developed recommendations for a proposed management compensation plan that replaces the system that expired in April. The recommendations are based upon the consultant study and consistent with the direction Council has provided the City Administrative Officer previously in closed session. Discussions in closed session on May 19, 1994 relative to management compensation adjustments for the coming year also included a request by Council that staff develop a longer range compensation strategy that would define adjustments in the future. That is something staff is working on and will be bringing back in the coming year prior to the expiration of the one year plan currently under consideration. O ii��►�H��IIIIIII�P��►�I�UIU city of San Luis OBlspo 00 A COUNCIL AGENDA REPORT Page 2 The Management Compensation Plan Range Adjustment: As per the recommendations contained in the consultant study, the management salary ranges should be adjusted. Consistent with our past practice and what is prevalent in other public agencies, the various positions should be clustered as i follows: I GROUP MANAGEMENT POSITION SALARY RANGE I City Administrative Officer $6629-8597 i II City Attorney $5746-7440 I I III Assistant City Administrative Officer $5409-6974 Community Development Director Finance Director Fire Chief Police Chief Public Works Director Utilities Director IV City Engineer $4837-6215 Parks and Recreation Director Personnel Director V City Clerk $4160-5404 Adjustments to the salary ranges have no effect on the individual managers' salaries. The proposed range for the City Attorney is higher than that suggested in the consultant report. Since the criteria used in the report to rank management positions do not fully relate to the responsibilities of a City Attorney nor recognize the significant pay inequities when compared to the public and private marketplace, the proposed range has been adjusted upward by the same percentage as the CAD's range. -2 i,►N��bIII�Vllllllllli° Ilplll MY Of San LUIS OBISp0 GiN COUNCIL AGENDA REPORT page 3 Salary Adiustment: The Managerial Compensation Plan originally adopted in 1989 as modified in 1992 provides for 1-4% salary increases for competent to highly competent performance. Management voluntarily deferred their 1-4% raises for 1992 and 1993 in response to the budget crisis so have not received any salary increases since 1991 . In recognition of the leadership role they assumed by deferring over 8% in salary and consistent with the compensation adjustments for other employee groups, salary increases for management should be given as per the matrix, 1-4% based on performance. Health Insurance Contribution: No adjustment to the health insurance contribution is recommended. i Deferred Compensation: The City currently offers a voluntary deferred compensation program. Many of the cities surveyed provide their managers with a contribution toward deferred compensation ranging from the full amount allowed by the IRS or $7500 per year (approximately 9% of salary) to various monthly amounts of 1 .5-3% of salary. It is proposed that the City contribute 1 .5% into the deferred compensation program for Department Heads and Appointed Officials. These funds are not available until retirement age when withdrawals without penalties are permissible. Long Term Disability: Management employees are currently eligible for a city paid long term disability plan. The plan is out-of-date and provides a benefit that would not adequately cover an employee were he or she disabled and unable to work for a period of time. A revised long term disability plan is proposed that reduces the qualifying period from 90 to 30 days and increases the amount of monthly payment from a maximum of $2,233 per month to approximately 70% of regular monthly salary. Administrative Leave: Management employees currently receive 64 hours of Administrative Leave per year. Since Department Heads routinely work many hours above the standard 40 hour work week and the time demands on Department heads due to the many night meetings and heavy workloads exceed those required of other City employees, an increase of 16 hours (an additional two days per year) is proposed. Mid-management employees received an additional 8 hours in January 1994. In addition, Mid-Management and General Employees receive 13 holidays per year whereas Management receives 12. -3 "��i�►►►IV►lillll�l� ��1111 city of San tins osIspo COUNCIL AGENDA REPORT page 4 SUMMARY: The proposed Management Compensation Plan has been designed to establish levels of pay and benefits which reflect appropriate relationships among classifications in the City service which is required by the City's Municipal Code Section 2.36.130. The Municipal Code further states that the compensation plan should be consistent with the goals of adequately compensating employees for their work and maintaining the City's ability to attract and retain qualified applicants. I Management employees demonstrated strong leadership by voluntarily foregoing the salary increases scheduled in the last two years of their five year compensation agreement. This plan recognizes their initiative and contribution and makes some progress in restoring the proper differentials between management and the employees they supervise. i FISCAL IMPACT: The total cost of the Management Compensation Plan is estimated to be $66,000. Funding is available in existing budgets. i ATTACHMENT: : i Resolution G:MCI RESOLUTION NO. (1994 SERIES) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO REVISING A MANAGEMENT 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 WHEREAS, the appointing authority is responsible for the selection, evaluation and the level of compensation for the appointed employee. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: O �'s Resolution No. (1994 Series) Page 2 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 shall be established. APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE 1994 GROUP MANAGEMENT POSITION SALARY RANGE I City Administrative Officer $6629-8597 II City Attorney $5746-7440 III Assistant City Administrative Officer $5409-6974 Community Development Director Finance Director Fire Chief Police Chief Public Works Director Utilities Director IV City Engineer $4837-6215 Parks and Recreation Director Personnel Director V City Clerk $4160-5404 � -d Resolution No. (1994 Series) Page 3 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 and salary increase matrix. Such 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. PERFORMANCE GUIDELINES First quartile of the salary range: promotional and initial hiring range and learning curve on the job Second auartile of the salary range: experienced level and lateral hiring; competent performance of the job after completion of learning/adjustment curve after hire Third auartile of the salary range: hiring exceptionally qualified; consistently competent performance over time Fourth ouartile of the salary range: exceptional performance over time; strives to excel in numerous areas SALARY INCREASE MATRIX Performance Status: Quartile: 2nd 3rd 4th Probation (not adequately performed) 0% 0% 0% 0% Fair 0-2 0-1 0% 0% Competent (expected performance level) 3-5 2-4 1-3 0-1 Highly Competent 3-6 4-5 3-4 2-3 Exceptional 8-9 7-8 5-6 3-4 ,� 7 Resolution No. (1994 Series) Page 4 Section 3. The City shall continue to provide employees in those . classifications listed in Section 1 certain fringe benefits including: a. A contribution for health insurance premiums as provided through PEMHCA of $400 per month. b. A contribution of 1 .5% of salary into a deferred compensation plan. C. Long Term Disability Insurance with a qualifying period of 30 days and a maximum monthly benefit of $5,500 per month. d. Administrative leave of 80 hours per year. All other benefits currently available to the above referenced employees to remain in effect. Section 4. City staff shall develop a longer range comprehensive management compensation plan to be presented to Council for their approval prior to April 1, 1995. 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 July 1994. Resolution No. (1994 Series) Page 5 MAYOR PEG PINARD ATTEST: DIANE GLADWELL, CITY CLERK APPROVED AS TO FORM: G. JOR SE , CITY ATTORNEY 39&MGT-RES $ -9