HomeMy WebLinkAbout09/06/1994, 4 - APPOINTED OFFICIALS' COMPENSATION PROCESS MEETING DATE:
►IN�I1111IV����III���IIij�IIIIIII city of San WIS OBISPO 9-6-94
COUNCIL AGENDA REPORT ITEM NUMBER:
FROM: John Dunn, City Administrative Officer
SUBJECT: Appointed Officials' Compe tion Process
CAO RECOMMENDATION: By motion, approve the recommended process for
determining appointed officials' compensation
and related benefits
DISCUSSION:
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With changes to the Public Meeting Law (the Ralph M. Brown Act) the City Council has
new limitations on the subjects they can discuss in closed session. This has raised some
questions as to how appointed officials can communicate to the Council their compensation
requests and if they can fully discuss compensation issues in the context of the performance
evaluation as provided for in the City's appointed official evaluation process. These
questions provide the Council with an opportunity to revisit their current practice as well
as explore others that might better meet their needs and those of the appointed officials.
The City Council directed the City Administrative Officer to develop for their consideration
a process for determining appointed officials' compensation. By describing the current
practice, surveying what other cities do, and presenting a number of alternatives, staff is
providing the Council with a framework for decision making on how to determine appointed
officials' compensation.
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For many years, the Council has conducted annual performance evaluations with their
appointed officials, the City Administrative Officer, the City Attorney and the City Clerk.
Salary adjustments, to the degree they were discussed, were part of the evaluation closed
session. Following the closed session, adjustments to salary were finalized by resolution at
the next regular Council meeting. Appointed officials were eligible for the same fringe
benefits, health and life insurance, retirement, etc., as the department heads. Adjustments
for the appointed officials were usually consistent with what department heads received.
In 1988, the City contracted with Sharon Brunner, a human resources consultant, who
developed a five year management compensation strategy that covered appointed officials
and department heads (including the City Engineer). The strategy provided for annual
salary raises which were defined by a matrix which determined the percentage raise for
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COUNCIL AGENDA REPORT
which an individual employee was eligible. The matrix corresponded to guidelines based
on performance, experience and current placement within the salary range.
The Council adopted the plan in 1989 and again contracted with Sharon Brunner who
provided the Council with training and a structure for conducting the performance
evaluations. Since prior years' discussions regarding appointed officials' salary in closed
session had been unstructured without specific guidelines, the Council was interested in
having a well defined framework, linked to performance, to guide them in granting raises.
The matrix provided this and Ms. Brunner's training explained how they could integrate the
evaluation process with the compensation plan in determining salary adjustments.
The evaluation process was designed to enable the Council to develop a balanced and
comprehensive evaluation rating with comments and examples. The rating was developed
with the assistance of a facilitator based on meetings between individual Council members
and the facilitator and a closed session with the entire Council where the "summary
document" was refined.
Prior to sharing the evaluation summary document with the appointed official, the Council
would meet with the Personnel Director to review the matrix and how it worked. The
Council then, alone, would link the performance rating with the appropriate salary increase
based on the matrix. There were no negotiations between the Council and the appointed
officials nor staff since a resolution was in place that established what raises were available
for management, including appointed officials, for the years 1989-93. After the evaluation
sessions between the Council and appointed officials were concluded, the Mayor would
notify the Personnel Director of the salary adjustments that had been decided upon. The
Personnel Director would then prepare the necessary resolutions and staff report that would
formally approve the Council direction.
In May of this year, Council conducted its evaluations of the Appointed Officials and
determined salary adjustments in the same manner as it had for the previous five years.
Even though the management compensation plan had expired, they followed the same
process.
In June, the Council, in closed session,reviewed a successor management compensation plan
that was presented by the City Administrative Officer and the Personnel Director. Staff
provided the Council with a brief explanation of the program as well as answered questions.
This was not a negotiation process but rather the Council providing direction to staff on a
management compensation program that would be acceptable to the Council for adoption
in open session.
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The new program was based on a recent Sharon Brunner evaluation of internal equity and
comparison market data. The program and the development of the fringe benefit plan was
reviewed by the Management Team in the collective in several meetings who by consensus
had endorsed the program. The Council formally adopted the new plan in July that
essentially extended the former program for one year with adjustments to salary ranges and
some enhancements to fringe benefits.
A phone survey was conducted to find out how other cities establish salaries for their
appointed officials. The cities selected represent both local agencies and comparable cities
in terms of demographics, reliance on tourism and/or the presence of a major university.
Arroyo Grande, Atascadero, Paso Robles are the three largest cities in San Luis Obispo
County not including SLO. Lompoc and Santa Maria, although not SLO County cities, are
within the local labor market. The cities of Davis, Monterey, Santa Barbara, Santa Cruz
and Ventura complete the list. A total of ten cities were contacted.
Arroyo Grande
The City Manager is appointed, the City Attorney is contractual and the City Clerk
is elected. The Council determines the City Manager's salary in closed session
without the City Manager present. He will provide the Council with salary data, etc.,
if requested but typically is not involved in salary determinations. The City Clerk's
salary (in addition to a nominal stipend she receives as the elected City Clerk) is
determined in the same way.
Atascadero
The City Manager and part-time City Attorney are appointed by the City Council and
the City Clerk is elected. In determining the City Manager's salary, the City
Attorney serves as intermediary and in effect represents both parties in the closed
session discussion. This is done in conjunction with the performance evaluation.
Since the City Attorney is relatively new, Atascadero has not dealt with salary
adjustments for him yet. However, it is anticipated that the City Manager would sit
in as the City Attorney's intermediary. The elected City Clerk also holds a full time
regular City position, Administrative Secretary, and in that capacity reports to the
City Manager. Her salary is determined through collective bargaining as a regular
non-management city employee.
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WWrwq COUNCIL AGENDA REPORT
Paso Robles
The City Manager is appointed, the City Attorney is contracted and the City Clerk
and Treasurer are elected. (The City Manager is the elected City Clerk.) A recent
ballot measure was put to the voters of Paso Robles to make the City Clerk and City
Treasurer appointive,but it failed. The City Manager's secretary is deputized serving
as the Deputy City Clerk and performs the actual City Clerk functions. The City
Manager meets with the Council annually in December in closed session with the
City Attorney present to discuss his performance contract. All management
employees have performance contracts that spell out specific goals that if
accomplished provide for a predetermined salary increase.
Lompoc
The City Administrator, City Attorney, City Clerk, and City Treasurer are appointed.
Salary discussions between the Council and the appointed officials occur when
evaluations are conducted. The Lompoc Personnel Department has been directed
by Council to conduct a salary survey of the City Clerk and Treasurer positions.
Discussions and decisions about range adjustments scheduled for September 1994 will
be conducted in open session.
Santa Maria
The City Administrator and City Attorney are appointed. The City Clerk is elected
and paid a nominal salary for that function. Compensation is mostly based on her
added role of Director of Records to which the City Administrator has appointed
her. In that capacity, she reports to the City Administrator. They are all part of a
recognized bargaining unit, the Santa Maria Association of City Management
Employees (SMACME) that formally bargains with the City through their
professional negotiator. They receive the same compensation package as
management which includes Department Heads and division managers.
Davis
The City Manager is appointed and. City Attorney is contracted. The City Clerk
function is part of the City Managers'job which was formerly performed by the City
Administrative Secretary and has been recently been established as a new position
that reports to the City Manager. The City Manager negotiates with' the Council
directly in closed session in conjunction with the performance evaluation. No
changes are anticipated in response to Brown Act modifications..
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COUNCIL AGENDA REPORT
Monterey
The City Manager and City Attorney are appointed. The City Clerk function is
assigned to the City Manager who has delegated it to a mid-manager. The Council
conducts annual evaluations that include contract renewals for the appointed officials
which provide for the same salary adjustment as the management employees of the
City. They have a comprehensive management compensation plan that covers all
executive management.
Santa Barbara
The City Administrator and City Attorney are appointed. The City Clerk function
is assigned to the City Administrator and performed by the Chief Deputy Clerk who
reports to the Assistant City Administrator. A sub committee of the Council makes
a recommendation to the entire Council on matters of salary for appointed officials,
after meeting with them. It is dealt with in public session. Santa Barbara has no
formal evaluation process for the City Attorney and City Administrator.
Santa Cruz
The City Manager and City Clerk are appointed; the City Attorney is contracted.
They are considered part of the Executive Management group which is
_unrepresented. Appointed officials receive the same compensation as management
and there are no negotiations between the appointed officials and the Council.
Ventura
The City Manager and City Attorney are appointed. The City Clerk is a position
which reports to the City Manager. The appointed officials negotiate in closed
session with the Council for compensation. Their salaries do not necessarily follow
what other employees receive. Appointed official salaries are established by
resolution following discussion in open session.
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When comparing our current practice with how other cities determine appointed official
salaries, a number of alternatives become apparent.
1 Appointed Official to discuss compensation issues with the Council personally.
When the Council convenes in closed session to conduct the performance evaluation with
the appointed official, the Appointed Official can express to the Council his/her
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compensation request at the conclusion of the evaluation. Compensation can then be a new
subject for full discussion in closed session with the Council.
The City's current management compensation program provides Council with a matrix and
guidelines for compensation determinations, but the Appointed official may want the
Council to consider additional factors or information. At the conclusion of the closed
session, the Council can provide direction to the Personnel Director to return to a regular
meeting with a resolution setting forth the outcome of the closed session discussion. Further
discussion may occur in public session where comments from the public, if any, can be heard
and considered.
According to a Brown Act legal expert with the law firm of Liebert, Frierson and Cassidy,
there is nothing.in the "new" Brown Act to preclude appointed officials from discussing their
compensation directly with Council in closed session. Of course, proper notification
procedures must be closely followed with any final action taken in public session.
2. Appointed official meets with Council sub-committee.
The Santa Barbara model which uses a Council sub-committee approach is an option. A
sub-committee, using current salary data and trends in compensation packages, meets with
the appointed official, discusses salary, and then makes a recommendation to the full
Council in public session. Salary adjustments are then adopted by resolution. This is similar
to the San Luis Obispo approach to Advisory Body appointments.
3. Use a third-par , to "negotiate" appointed official compensation.
Although Santa Maria's management uses a negotiator, this approach is very uncommon to
the cities surveyed. In fact, Sharon Brunner, the city's consultant for management
compensation and appointed officials' evaluations, is not aware of any other city that uses
this approach. Typically, a negotiator or facilitator is associated with formal collective
bargaining which is philosophically in opposition to professional management thinking. It
can set up an adversarial relationship and may inhibit straightforward communication.
Should the Council consider expanding the role of the "facilitator" that is used in appointed
official evaluations to include facilitating a salary discussion between the appointed official
and the Council, it would be important to recognize that the facilitator, in this scenario,
represents the Council. The facilitator would be placed in an awkward position of having
to shift gears to represent one of the Council's appointees. The Atascadero approach of
using one appointed official to represent another, particularly, in the case of the City
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Wv% COUNCIL AGENDA REPORT
Attorney representing the City Manager, seems problematic, since the City Attorney is the
Council's counsel.
Using Bill Avery, the City's negotiator for other employee negotiations, would present
similar problems. He represents the City and the Council in other employment matters for
which he is under contract. Negotiators typically do not "change sides of the table" within
the same organization, i.e., represent employee(s) in an organization where they have
represented the Council.
Therefore, a third-party that would represent the appointed officials in discussions about
compensation would have to be someone unique to this process and who did not have a
conflicting relationship in other roles with the Council. Ideally, it would be necessary to
select an individual who had knowledge of recent salary settlements with other city
employee groups, a familiarity with the management compensation program currently in
place, and some knowledge of the City's fiscal situation so that any recommendations made
would be consistent with the City's current policy, past practice, and ability to pay. That way
the Council would be assured of arriving at an equitable compensation for the appointed
officials within a citywide context.
If the Council chose this alternative, the use of a third party, they would need to further
consider who would select this person, what criteria for selection would be used and how
the individual would be paid, on what basis and with what funding limitations.
4. Continue the current practice.
The current practice is simply one of evaluating the appointed official, translating the
evaluation rating to the matrix and the appropriate percentage increase, and then notifying
staff of the determination. Although performance is fully discussed, what is lacking is an
opportunity for a full discussion about compensation between the Council and the appointed
official. He/she may desire additional feedback about the linkage between salary and
performance or want to express some preferences/desires about compensation, particularly
benefits, such as severance pay, car allowance, etc. The current practice doesn't provide a
systematic opportunity for that dialogue to occur.
`Rec+o-reride�>�:rdcess
The approach for determining appointed official-compensation taken by most cities was one
of direct discussion between the appointed official and the Council, usually within the
context of the evaluation process. The City of San Luis Obispo has an excellent evaluation
process that if expanded to include a full discussion of compensation should meet the needs
of both the Council and the appointed officials. Recent modifications to the Brown Act
were not intended to prevent city councils from having meaningful and confidential
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communication with their appointees on employment matters. If properly noticed,
discussions about compensation with appointed officials can be an appropriate subject for
a closed session.
While other cities have found the sub-committee approach, and in the case of Santa Maria,
the collective bargaining approach,acceptable,communication that is direct and confidential
between the appointed officials and the entire Council is preferable. The City Council of
San Luis Obispo, as evidenced by the structured process used for evaluations, is comfortable
dealing directly with such matters and the appointed officials can only benefit from
communicating straightforwardly and directly with their employers.
Therefore, it is recommended that the City Council expand their current evaluation process
to include discussions about appointed official compensation.
CAO COMMENT
The Council-Manager plan created a unified local governmental system, where the "city
manager" implements the policies of the legislative body, and serves at their pleasure. San
Luis Obispo's Mayor-Council-City Administrative Office system, as created by our City
Charter, is an almost perfect copy of the council-manager system.
What are some of the basics of this system? The City Council, the policy determining body,
represents the community interest and citizen constituents, and makes the fundamental.
community decisions. The CAO acts as a policy advisor and implements the Council's
decisions. The CAO, together with fellow appointed officials, serves at the pleasure of the
City Council. For all practical purposes, despite certain role differences, the Council and
appointed officials are "integrated'; they are one.
Therefore, the City Council must ask itself if it is in the best interest of this unified system
to introduce a practice where one or more of the partners have their own intermediary
between themselves and the Council? Even without intention, such a practice could easily
lead to a disjoining of interests which, instead, should be as closely aligned as possible.
For example, who or what would the intermediary of appointed officials represent most---
the individual 'best interest" of the appointed official or the larger community/organization-
wide interest? These could come into conflict on some future day. If the intermediary's
role is to represent the appointed official, then the interests of that official will be put first.
This could put the employer of the appointed officials, the City Council, in a difficult
position, and upset a 'balance" that usually can, and should, be achieved without
institutionalized representation of this kind.
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COUNCIL AGENDA REPORT
Therefore,I recommend that you proceed very cautiously with any modifications to practices
that have generally worked well over the years; not only in San Luis Obispo, but in most
other cities as well. However, for the past several years, the emphasis, in the
Council/appointed official relationship, has been more on "performance evaluation", and
there has been a perhaps inadequate opportunity for the appointed official to discuss
compensation/benefit matters with the Council directly. The recommendation before you
is intended to restore this opportunity, to make it an explicit and direct conversation, and
to avoid the use of intermediaries as unnecessary and potentially adding "static" to the
system.
CONCURRENCES
The City Attorney and the City Clerk have reviewed this report and have provided input.
Attached are memoranda from them which provide the Council with their perspective.
FISCAL IMPACT
There is no fiscal impact associated with this recommendation.
ATTACHMENTS
Letters from the City Attorney and City Clerk.
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MEMORANDUM
August 26, 1994
TO: City Council
FROM: Jeff Jorgensen, City Attorney
87
SUBJECT: Appointed Officials Compensation Process
Generally speaking I have been well satisfied with the current performance evaluation process.
While there is always room for improvement in any endeavor, I believe the current system sets
up a fair and objective mechanism for determining my compensation, and avoids many of the
problems associated with an ad hoc system based on popularity or politics. It also treats
appointed officials in a manner consistent with other department heads, which is important in
maintaining fairness and morale throughout the organization. If I have any objection, it would
be that the evaluation process and matrix can at times seem overly rigid and formalistic,
particularly if it is presented more or less as a "fait accompli". Therefore, I believe it would
be helpful to build in a little more flexibility for discussion and negotiation prior to a final salary
determination.
Based on the above comments, I would support alternative 1 (the CAO recommendation) as the
preferred option. I think it is extremely important to maintain direct, personal communication
with my employer (i.e. all five members of the City Council). Hopefully that communication
can remain as comfortable, candid, and informal as possible. Therefore, I feel alternative 2, and
especially alternative 3, would be a step backward and run the risk of creating an artificial, ill-
advised, and unnecessary formality between the City Council and its appointed officials.
JJ:kk
c: John Dunn
Diane Gladwell
CITY CLERK
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August 29, 1994
TO: The Honorable City Council
FROM: Diane Gladwell, City Clerk
SUBJECT: Process for Appointed Officials Compensation and Related Benefits
In general, the process proposed by the City Adminstrative Officer is good, and should
resolve some of the communication difficulties inherent in our current system.
Unfortunately,the proposal does not address the hiring process,which is my most significant
concern. To facilitate equitable, consistent treatment of Appointed Officials, I suggest the
Mayor or the Council's neutral designated representative communicate the job offer and any
clarifications of compensation issues to the appointed official candidate. The candidate
should be required submit any additional concerns or suggestions in writing, so the Council
can evaluate them. (In my case, this was primarily handled by the Personnel Director in
verbal conversations; I believe the City Administrative Officer utilized two different
assistants to communicate with Council.)
I have two recommendations to add to the alternative recommended by the CAO:
1. At the conclusion of the closed session, and prior to the Personnel Director
recieving direction from Council, the Council should write their restated, clearly
defined motion and take a vote. This will avoid any confusion or misunderstandings
among Council Members, their appointed officials, and staff.
2. Any proposal that would impact the contract or compensation/benefits of an
Appointed Official be discussed with them prior to public/Council presentation.
Thank you for your consideration of these process clarifications.
C, John Dunn
Diane Gladwell
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