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HomeMy WebLinkAbout04/18/1989, C-4 - APPOINTED OFFICIAL AND MANAGEMENT COMPENSATION PLAN, FIVE-YEAR STRATEGY. *eeting Date: 4/18/89 city or San LUIS OBISPO Item No. / COUNCIL AGENDA REPORT (� FROM: Toby Ross, Assistant City Administrative Officer SUBJECT: Appointed Official and Management Compensation Plan, five-year strategy. CAO RECOMMENDATION:. Approve a resolution which establishes salaries and benefits for Appointed Officials and Certain Management Personnel and supercedes previous resolutions in conflict. GENERAL BACKGROUND: The City of San Luis Obispo recognizes that its most valuable resource is its human resource. The City, historically' has placed a high priority on good employer-employee relationships and fair and adequate compensation at each level of employee service, from part-time personnel to Appointed officials. MANAGEMENT RESOLUTIONS History In 1982, Council approved Resolution No. 4936. This resolution was one of the first attempts toward a comprehensive package for managerial compensation. Explicit in Resolution No. 4936 is the desire for the City to remain competitive with the professional marketplace and to promote merit and performance as the criteria for individual salary determinations. In summary, it -was a significant step in establishing an approach and policies regarding compensation for management positions. In 1986, Appointed Officials were made a separate group (Res. No. 4936) and minor modifications were made in salary ranges for both Appointed Officials and Management. Since 1982, little had been done to either review or update policy or procedures. During summer 1988, the Personnel Director conducted a survey of 11 comparable cities in order to determine how closely management compensation in the City of San Luis Obispo compares to those of similar cities. Those results supported amending the existing appointed official and management compensation plans for the �- 0/ ���H�►�u��IIIfIII�p IIUII MY Of San tins OBISPO COUNCIL AGENDA REPORT remainder of 1988. The Council approved resolutions which provided interim salary and benefit adjustments pending a more comprehensive analysis. In addition, Council reaffirmed its commitment to five-year compensation strategy. In November 1988, the Council approved hiring THC Associates to analyze the existing compensation plan and to develop strategy which will guide appointed officials compensation structure through 1993 . COMPENSATION POLICY 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 or resolution (Section 711) . It establishes the City Council as the appointing authority for three positions (CAO, City Attorney and City Clerk) , and the CAO 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. Association Representation The Employer_Employee Resolution (No. 3405-77) , 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 relations 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. A comparison of salary, health insurance, retirement and miscellaneous benefits of the different employee association agreements is shown as Exhibit "A". Appointed Officials and Management do not belong to any formal association. Existing Management Compensation Policy Existing management compensation policies are stated in Resolution No. 6169 for Appointed Officials and Resolution No. 6121 for Certain Management Personnel. These resolutions were amended in September 1988 to provide for: Salary range increase of 6% effective July 1, 1988 for ����i�i�►IIpIIIIIIIII�h ��N�U city of San LUIS OBISpo COUNCIL AGENDA REPORT Management Employees. * Increase in health benefit funding from $284 to $300 per month effective December 8, 1988. * Annual vacation leave up to 15 days for new managers. THC Report In November of 1988, Council approved the hiring of THC Associates, a human resource management consultant firm to review current Appointed and Management Compensation policies and procedures and to develop a five-year compensation strategy. Results and recommendations of this study are presented in THC's final report which was previously distributed to the City Council and which may be summarized as follows: * The City provides for management salaries withiny5% of the average of the base salary marketplace (except for the CAO which falls 9.5% below) , and for total compensation below average. * Starting in 1990, the Appointed Officials and Management Personnel salary should be adjusted as follows: 1990 = 5% range increase �_. 1991 = 5% range increase 1992 = 4-6% based on a check of the marketplace 1993 = to be adjusted based on the results of 1992 survey * Individual incumbent placement and movement through an assigned salary range should be guided by performance. * The Assistant to the CAO and Assistant City Attorney positions would be more appropriately assigned to the mid-management compensation plan. * The City should consider offering supplemental life insurance (at employee cost) . Recommended Management Compensation Policy The attached resolution incorporates several of the recommendations made by THC. Among those recommendations are an adiusted Appointed Official and Management Salary Schedule, (Res. Exhibit "A") Performance Guidelines, (Res. Exhibit "B") and a Salary Increase Matrix. (Res. Exhibit "C") It should be noted that while THC recommends reducing the salary range for Group V, staff recommends holding it at its current level, as well as aligning the range to correspond with the rest of the schedule. In addition, chances have been made in the management fringe benefit package (Res. Exhibit The Assistant to the CAO (or reclassified position as appropriate) and the Assistant City Attorney positions will be transferred to the mid-management unit administratively. Supplemental life insurance will be addressed as part of a city-wide evaluation of insurance - I ���nn►�u►fulllllllllP���u►i�����h city of San lues oslspo NEGS COUNCIL AGENDA REPORT benefits scheduled for later this year. FISCAL IMPACT The total cost of salary changes, including salary related increases, is approximately $50,000 for fiscal year 1989-90. ALTERNATIVES 1. Council could adopt the recommended resolution establishing a managerial compensation plan for appointed officials and certain management personnel. 2. Council could refuse to adopt the recommended resolution and direct staff to return with recommended changes. 3. Council could maintain the existing management compensation Policy with direction to staff. RECOMMENDATIONS Approve the recommended resolution which establishes salaries and benefits for Appointed Officials and certain management personnel and supercedes previous resolutions in conflict. Attachments: Comparison of Association Agreements City of SLO Review of the Management Compensation Plan Resolution No. � i' I RESOLUTION NO. (1989 SERIES) .A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO ESTABLISHING A MANAGERIAL COMPENSATION PLAN FOR APPOINTED OFFICIALS AND FOR CERTAIN MANAGEMENT PERSONNEL AND SUPERSEDING PREVIOUS RESOLUTIONS IN IN CONFLICT WHEREAS, the City Council desires to establish a comprehensive Appointed Officials and Management Development and Compensation policy; 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 i 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. WHEREAS, consistent with Section 701 of the City Charter, the City Council is the appointing authority for the I 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: 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") is authorized. The salary schedule shall be adjusted as follows: 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 The 1992 and 1993 changes in the salary schedule shall be authorized by Council resolution. r a EXHIBIT "A" APPOINTED OFFICIALS AND MANAGEMENT SALARY SCHEDULE 1989 GROUP MANAGEMENT POSITION SALARY RANGE MIN MID MAX I CAO 5600 6400 7200 II ATTORNEY 4600 5250 5900 POLICE CHIEF FIRE CHIEF COMM.DEVELOPMENT PUBLIC' WORKS UTILITIES DIR ASSISTANT CAO III CITY ENGINEER 4200 4800 5400 FINANCE DIR IV PERSONNEL DIR 3800 4350 4900 RECREATION DIR V CITY CLERK 3300 3800 4300 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 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. Exhibit "B" PERFORMANCE GUIDELINES - First quartile of the salary range: promotional and initial h ri g range and learning curve on the job Second quartile of the salary range: experienced level and aI teral hiring; competent performance of the job after completion of learning/adjustment curve after hire Third artile of the salary range: hiring exceptionally fie'o sIsstently 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: 1st 2nd 3rd 4th Probation (not adequately 0% 0% 0% 0% performed) Fair 2-4 2-3 1-2 0% Competent (expected 5-7 4-6 3-5 2-3 performance level) Highly Competent 8-10 7-8 5-6 3-4 Exceptional 10-12 9-10 7-8 5-6 (To be used in 1989 , 1990, and 1991. May require adjustment in 1992 and 1993 depending on the results of 1992 compensation survey. ) Section 3 . The City Administrative Officer is responsible i U for and shall be held accountable to the Council for the performance and evaluation of subordinate management staff. By the end of April of each year, the City Administrative Officer shall evaluate and determine salary levels for subordinate management and staff. Salary level determinations may be implemented by phases during each (12) month period (April through March) . Section 4 . The salary determination within the approved range for City Engineer shall be jointly determined by the Public Works Director and the City Administrative Officer. Section 5. By the end of April, the City Council shall evaluate and determine salary levels for the Appointed Officials. The salary level determinations may be .implemented by phases during each (12) month period (April through March) . The City i ) Council shall adopt individual employment agreements for Appointed Officials. Section 6 . The City Council is authorized to grant one-time Performance Awards of up to $750 to Appointed Officials. The City Administrative Officer is authorized to grant one-time performance awards of up to $750 to management personnel. Performance Awards may be granted for either exceptional specific performance or sustained outstanding performance . Section 7 . The management fringe benefits attached hereto as Exhibit "D" shall continue through 1993 . The City, shall contribute a maximum of $300 per month through 1990 and $325 per month from 1991 through 1993 , for medical, dental and vision �l coverage. Should the City adopt a salary reduction plan, equivalent amounts will be applied to that plan. The Management Life Insurance and Long Term Disability Insurance shall continue to be directly funded by the City. Managerial employees working less than full time shall have all benefits and fringes pro rata. 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 January 1989. MAYOR RON DUNTN ATTEST: CITY CLERK Pamela Voges APPROVED: PIC Cit} Acimi istrative officer Personnel Dire r ;. --Cit , Actor ey Fi ance. Director 6 EXHIBIT "D" MANAGEMENT FRINGE BENEFITS 1989 - 1993 SECTION A Medical, Dental, Eve Care The City shall establish and maintain medical, dental and eye cart insurance plans for coverage by management. employees and their dependents. Each management employee shall carry medical, eye care, and dental for self. Dependent coverage shall be at the employee's option, however, all eligible dependents must be covered and covered on all plans if dependent coverage is desired. The City reserves the right to choose the method of insuring and plans to he offered. SECTION B Unexoended Frin a Benefit The City shall pay to each management employee as soon as practicable prior to December 31, an annual lump sum payment (subject to appropriate taxation) for the difference between the benefit amounts provided Management employees and any lesser sum expended by the employee for medical, eye care, and dental coverage for the calendar year. SECTION C Life and Disabilitv The City shall provide the following special insurance benefits: I. Long-term disability insurance providing 60% of gross salary to age 65 for any sickness or accident after a 90-day waiting period. 2. $50,000 term life insurance including accidental death and dismemberment. 3. One-half of employee's health insurance premium paid forretiredemployees who elect to remain, members of the City's group health plan. (Medical Plan). This provision will ccasc upon the death of the employee or upon the employee reaching age 65. SECTION D Retirement The City agrees to provide the Public Employees' Retirement System's 2% at age 60 plan to all eligible employees including the amendment permitting conversion of unused sick leave to additional retirement credit, the 1959 survivor's benefit and one year final compensation. The police and fire chiefs shall receive the same retirement benefits as sworn personnel in their department. Effective 7-1-81 the Cite agrees to pay the employee's contribution to P.E.R.S. These amounts paid by the City arc cmp'oycc: contributions and are paid b% the City to satisfy the employee's obligation to contrihutc the current percentage of salary to P.E.R.S. An employee has no option t, receive the contributed amounts dircctly instead of having them paid by the Cit% :o P.E.R.S. on behalf of the employee. It is further understood and agreed that the payment of the employee's P.E.R.S. �; contribution is made subject to I.R.S. approval and reporting procedures. Management Fringe Benefits - 1989-1993 Page 2 ' SECTION E Vacation Vacation leave is governed by Section 2.36.440 of the Municipal Code except that it may be taken after the completion of the sixth calendar month of service since the benefit date. Vacation leave shall be accrued as earned each payroll period up to a maximum of twice the annual accrual rate. However, if the City Administrative Officer determines that a management employee has been unable to take vacation due to the press of City business, the City Administrative Officer may increase the accrual limits or once annually authorize payment for one-half of the excess accumulation up to a maximum of five (5) days. The City Administrative Officer may, within two years of appointing a manager, increase the rate of vacation accrual to a maximum of 15 days per year. SECTION F Administrative Leave Management employees shall accrue eight (8) days (64 hours) of executive leave per calendar year. Management leave shall accrue at the rate of 5.333 hours per month. Commencing January 1, 1987 management employees shall have the option of taking such leave as additional paid leave or receiving cash for up to 64 hours at year end upon the approval of the CAO. SECTION G Holidays ^� Management personnel shall receive 10 fixed + 2 floating holidays per year. SECTION H Sick Leave Sick leave is governed by Section 2.36.420 of the Municipal Code. An employee may take up to two (2) days per year of sick leave if required to be away from the job to personally care for a member of his/her immediate family as defined in Section 2.36.420. This may be extended to five (5) days per year if the family member is part of the employee's household, and to seven (7) days if a household family member is hospitalized and the employee submits written verification of such hospitalization. Upon termination of employment by death or retirement, a percentage of the dollar value of the employee's accumulated sick leave will be paid to the employee, or the designated beneficiary or beneficiaries according to the following schedule: (A) Death - 25% (B) Retirement and actual commencement or PERS benefits: (1) After ten (10) years of continuous employment - 10% (2) After twenty (20) years of continuous employment - 15% SECTION I Workers' Compensation Leave An employee who is absent from duty because of on-the-job injury in accordance with the state workers' compensation law and is not eligible for disability payments paid the difference between his under Labor Code Section 4850 shall be -.J and the amount provided by workers' compensation law during the first ninety (90) business days of such temporary disability absence. Eligibility for workers' compensation leave requires an open workers' compensation claim. C17- / -/d Management Fringe Benefits - 1989-1993 Page 3 SECTION J Vehicle Assignment For those management personnel who require the use of an automobile on a regular 24-hour basis to perform their normal duties, the City will, at City option, provide a City vehicle or an appropriate allowance for the employee's use of a personal automobile. The use of a personal automobile for City business will be eligible for mileage reimbursement in accordance with standard City policy.