HomeMy WebLinkAbout09/20/1988, C-4 - APPOINTED OFFICIALS COMPENSATION PLAN 1988-89 MANAGEMENT COMPENSATION PLAN 1988-89 Previous staff report f 9/13/88 meeting.
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'�ii ►1�►� I�pPa �l city of San lues OBISpo SeptNemG ber 20, 198
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COUNCIL AGENDA REPORT �Tzy-
FROM: Ann Crossey, Personnel Director
SUEUECT: Appointed Officials Compensation Plan 1988-89
Management Compensation Plan 1988-89
CAO RECOMMENDATION: Adopt resolution amending the Appointed Officials Compensation Plan,
Resolution No. 6169 (1987 Series), for Certain Appointed Officials.
B) Adopt resolution amending the Managerial Compensation Plan, Resolution
- No. 6121 (1986 Series), for Certain Management Personnel.
C) Reaffirm five-year compensation strategy including consultant
assistance.
BACKGROUND: The attached resolutions reflect the written recommendation presented to Council
dated August 15th concerning management compensation for those exempt employees
designated as members of the management team. (See attachments.) The
resolutions are amendments to the Managerial Compensation Plan adopted originally
in 1982 and modified in subsequent years.
Briefly, the proposed changes to the previous resolutions are as follows:
- Increase the salary ranges for all Management Employees and Appointed
Officials by 6% effective July 1, 1988.
- Total salary increases for all appointed and management employees commencing
July 1, 1988 shall not exceed 6% of current compensation for the group of
positions, with specific increases for the individual positions to be determined
by the Council or the City Administrative Officer in accordance with Resolutions
No. 6169 and 6121. Other salary related expenses would increase accordingly.
- Increase the health benefit funding from $284 to $300 per month effective
December 8, 1988.
- Authorize the City Administrative Officer the option to increase a management
employee's annual vacation accrual by up to 3 days during the first two years of
employment effective July 1, 1988.
All other benefits and rights included in the Appointed Officials Compensation
Plan, Resolution No. 6169 and the Managerial Compensation Plan, Resolution
No. 6121 shall remain in effect.
Additionally, since the original strategy of having an outside consultant review
the current Appointed and Management Compensation policies and procedures prior
to developing a fivr year compensation structure could not be completed in a
timely manner, Council is asked to reaffirm the hiring of a consultant and the
construction of a five year compensation structure to commence in January, 1989.
FISCAL IMPACT:
The total cost of salary changes during the fiscal year, including salary related
increases, is approximately $59,000 for the fiscal year 1988-89.
The cost of hiring an outside consultant is approximately $5,000.
el-Ll- /
►���i�i�►►�I�II��p ���l�► city of San tuts OBISPO
Mii% COUNCIL AGENDA REPORT P 2
SUBJECT: Appointed Officials Compensation Plan 1988-89
Management Compensation Plan 1988-89
RECOMMENDATION:
Adopt resolutions adjusting salary ranges and salaries and increasing the health
benefit funding for Management Employees.
Approve the hiring of consultant to assist staff in developing a five year
compensation structure.
RESOLUTION NO. (1988 SERIES)
A RESOLUTION OF THE COUNCIL, OF THE CI'T'Y OF SAN
LTLS OBISPO AMENDING RESOLUTION NO. 6120 BY
AWUS'T'M THE SALARY RANGES, SK ARIES AND FMAM
EENEFTr FUNDING OF CE I IN MANAGEMENT PERSONNEL
BE IT RESOLVED by the Qxmcil of the City of San Luis Obispo as
follows:
Section 1. The following open-range Management Persanmel Schedule
(Table "A") for fiscal year 1988-89 is authorized.
TABLE "A"
NANA� SALARY SCHEDULE - FISCAL YEAR 1988-1989 ``
Group Management Positions Salary Rarxxe 1988/89
A Public Works Director 41664 - 51512
Ccmmnmity Development Director
Assistant CAO
Fire Chief
Police Chief
B City Engineer 4,134 - 4,982
Utilities Director
Finance Director
C Perscrmel Director 3,604 - 41452
Recreation Director
D Assistant City Attorney 3,604 - 4,240
E Assistant to the CAO 2,544 - 31392
Section 5. ADD: Effective December 1, 1988, the City shall
contribute $300.00 a month for medical, dental and vision and life
coverage.
Section 6. ADD: Total salary increases for all employees in groups A
through E c mmemi g July 1, 1988 shall not exceed 6% of current
compensation for the group of positions, with specific increases for
individual positions to be determined by the City Adodrd strative Officer.
Resolution No. (1988 Series)
Page 2
EdUbit A, Section E. ADD: Effective July 1, 1988, the City
;*+{motive Officer may authorize an increase of
up to 3 days annual
accrual of vacation leave during a management employee's first two years
of employment.
On motion of seoonied
by ,
and on the following roll 0311 vote:
AYES:
NOES:
ABSEM
the foregoing Resolution was passed and adopted this day of
September, 1988.
Mayor Ron Damn
ATIESP:
City Clerk, Pamela Voges
* * * * * * * * * *
C - y- �
Resolution No. (1988 series)
Page 3
APPROVED:
City ative Officer
jCityA.
Finance Director
aloya
Persainal Director
RESOL MCK NO. (1988 SEAS)
A RESOLUTION OF MM COUNCIL OF THE CITY OF SAN
LUIS OBISFO AMENDING RESOLUTION NO. 6169 EZ
AR7UbMM THE SALARY RANGES, SMARIEa AND BEAIM
BENEFIT FUNDING OF CEEB APponiTED OFFICIALS
BE IT FWOU`7ED by the Cm=il of the City of San Luis Obispo as
follaas:
Section 1. The following open-range Appointed Officials Salary
Schedule (Table "A") for fiscal year 1988-89 is authorized.
TABLE "An
AMIN!= OFFICIALS SALARY S(IEWLE FISCAL YEAR 1988-1989
Gig
Appointed official Positions Salary Rarxm 1988/8Q
I City Administrative Officer 51194 - 61572
II City Attorney 41664 - 51936
III City Clerk 3,074 - 4,240
Section 5. ADD: Effective December 1, 1988, the City shall
contribute $300.00 a month for medical, dental and vision and life
coverage.
Sd!bticn 6. ADD: Total salary increases for all ertg3lcyees in grMlps I
thresh III ding July 1, 1988 shall not aweed 6% of current
compensation for the group of positions, with specific bxz eases for
individual positions to be determined by the City Council.
Resolution No. (1988 Series)
Page 2
On motion of seomxW
by
and on the following roll call vote:
AYES:
NOES:
ABSFNr•
the foregoing Resolution was passed arra adopted this day of .�
September, 1988. `
Mayor Ron Damn
ATi'FST:
City Clerk, Pamela Voges
APPROVED:
City tive Officer ,
City A
Firlance Director
awta L��- n ---
Plersmiel Director
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city of sAn luis oBispo
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�.;wi== u.W OF 990 Palm Street/Post Office Box 8100 San Luis Obispo, CA 93403-8100
0 ffeL
August 15, 1988
MEMORANDUM
TO: City Council
FROM: John Dun
SUBJECT: Manag Lpensation
Attached is the recommendation of Ann Crossey for management compensation
and, for background, my memo of approximately 6 months ago on the same
subject.
At base, the purpose for an appropriate compensation plan, management or
otherwise, is to attract the type .of people we desire to our organization
and to retain our quality employees.
Since I 've been here we have recruited and selected for two department
heads, the Police Chief and the Finance Director. Though both employees
were very impressed with the City and had a high desire to come here, it
was necessary to hire both of them at beginning salaries which were less
than the salaries they were receiving in their former positions. They
both came essentially on my promise of a good faith effort to work with
the Council to make their salaries competitive in the future.
While I am confident that our management salary structure has no glaring
deficiencies, I am equally concerned that it is in need of some "fine
tuning" review.
JD:rs
Attachment
TO: The City Council
FROM: John Dunn, CAO
SUBJECT: Suggested re a ion of compensation policy for
Managerial Positions
As an aftermath of the recent performance evaluations of the City Attorney and
City Clerk, I understand that several Council members expressed a concern with
reexamining compensation policy and practices for the appointed officials.
An effective managerial compensation plan is imperative for the following
reasons:
• We are a labor intensive "service" organization which relies on people to
successfully accomplish goals,
• While all our employees are valued and important, it is the managerial staff
that is held accountable for policy implementation and organizational effectiveness;
We must provide superior leadership if we expect our departments to reach
the levels of productivity and quality that we strive to attain; and
• If we expect to attract and retain superior managers, we must provide
competitive, appropriate compensation. Our expectations of their performance must
be matched by a willingness to compensate at a equal level,
During the past six months I have been involved in the recruitment process for
new management team members and have spent some time reviewing our compensation
policies and current salaries. I am concerned that our current salaries for some
management team members are low and.are causing problems with recruitment.
I concur with Council that this area needs to be addressed and appreciate your
concerns.
I have gradually accumulated an overall impression during my first seven
months in San Luis Obispo, that the City has genuinely attempted to be fair and
competitive in its salary offerings, at all levels within the organization.
Obviously a proper consideration of the local job market must be fully considered
when determining what is "fair". Another general impression is that there may be
some department head (and other) positions which may be less than properly
compensated given the levels of responsibility and accountability and the importance
of their work to the well-being of the organization and the citizens.
Subject: Suggested reexamination of compensation policy for Managerial Positions
Page 2
We can conservatively hypothesize a 50 or 60% change in the make-up of the
Management Team within a ten-year period. It is to the City's advantage to both
attract and retain the best, and that is the overriding purpose of our merit
personnel system. As a small but important contribution to this end, I would
suggest that we consider conducting a Management Team compensation analysis,
basically to determine if key people are properly compensated or if there should be
adjustments in the way they are compensated. It is highly desirable to conduct such
a reexamination every four to seven years, because it is quite possible to 'drift
away" from the statewide job market, into which our Management Team members fall.
I anticipate that a substantial amount of this task could be done in-house,
but that it might be desirable to have an experienced and objective outside
specialist assemble the final report and recommendations so as to give the study the
highest objectivity and credibility.
I will plan to pursue this subject in forthcoming discussions with
Councilmembers, to obtain your thoughts and ideas on this concern.
JD:mp
C - y- 10
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R2 ' j r _ 990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403-8100
MEMORANDUM
August 9, 1988
TO: John Dunn, CAO
FROM: Ann Crossey, Personnel Director
RE: Request for Formal Review of Management Compensation Policy
In 1982 we implemented a Management Compensation Schedule. It was a significant
step in establishing a procedural approach and policies regarding compensation for
the management positions. It was a good beginning. Unfortunately, we have done
very little since then to review and update either the procedures or policies. The
appointed officials were made a separate group in 1986 and some minor modifications
in salary ranges were instituted. Frankly, both plans are beginning to look like
patched retreads. I think we need to consider a new set. During the past several
years the management team, the appointed officials, and many members of the City
Council have suggested that we should conduct a formal review of our management
compensation policies and practices to insure that our plan achieves desired results
and is consistent with policies. We have discussed using an outside management
consulting firm to work closely with Council and staff. For the reasons enumerated
below I believe this type of study is both worthwhile doing and timely. Also, the
management team and appointed officials have routinely been granted reviews and
increases for July in late fall. This has been due primarily to the summer workload
and vacation schedules. Therefore, I also suggest that we change the review dates
to a calendar year basis.
The management compensation plan should be reviewed and a new plan implemented
for the follow reasons:
1. The salary schedules do not meet the stated policy objectives in the plan.
Council's intent has consistently been that we should remain competitive with
the marketplace. Using those cities which we have successfully gotten five out
of our six labor groups to agree to use for compensation comparisons, our
management compensation, using survey results for four positions (Public Works
Director, Police Chief, Finance Director and Personnel Director) indicates that
at our top salary (total compensation included) is below the top salary
currently paid in the other jurisdictions by 9% on average. Using actual
salaries paid in comparisons we are closer to 16% below the average paid.
For appointed officials range comparisons are not very meaningful. Most
organizations pay flat rates for both the CAO and City Attorney positions.
Using our top of the range to compare against we are competitive for the
attorney position but using actual paid we are below by 8.6%. For the CAO
positions using our top of the range to compare we are below by 8.8% and if we
use actual paid comparisons we are below by 20%. The Clerk's position has few
firm comparisons but deleting those which appear lesser in overall duties and
responsibilities we are competitive at the top of the range; again, if we
compare actual salaries paid we are below by 12%.
August 9, 1988
Page 2
These are not insurmountable problems, nor do I recommend we blindly adjust
all management ranges based on a small survey. However, as has been clear
for the last four years, movement within the range needs to be addressed for
both appointed and department head members. The ranges should be, generally
speaking, competitive with the agreed upon cities.
2. During the last three management recruitments it became evident that our
ability to be competitive was lacking. Both new department heads who joined
as promotions, took significant compensation cuts. In both cases we
indicated we were working from a Management Compensation Plan that was soon
to be reviewed.
3. We have recently negotiated five year contracts with our general unit,
our mid-management unit, our police mid management unit, and are negotiating
with the battalion chiefs for a similar agreement. We found the mid
management pay across the board to be lower in comparison than the rank and
file for the agreed upon survey cities. We knew this, its why the managers
wanted out of their units, they kept getting further behind. With the long
term advantage of these contracts we can better establish a management
compensation plan that is consistent with these other agreements.
Recommendation:
.I have available all the compensation data for the survey cities. I've attached
the statistics for the Finance Director as an example. We used the appointed three
positions plus four management positions as an adequate sampling of management
positions to use to gather external information. In addition to the actual salary
data which I earlier described, I ran some comparisons on internal alignments for
each city. I've attached this for your information.
Could you see if Council is willing to consider the recommendations below for
action in September. This would give us until January to construct a long term
plan consistent with our other agreements.
1. Have Council adopt a resolution approving a 6% across the board increase
in all Management and Appointed ranges and salaries effective I July 88,
increasing benefit funding from $284 to 5300 per month effective 12/88,
increase administrative leave from 64 hours to 80 hours. Lastly, we need to
provide authority for the CAO to approve, (Council would do this for
appointed positions) within range increases as deemed appropriate based on
current within range placement and performance in any long term compensation
plan.
2. Request the staff to review Appointed and Management Compensation
policies and procedures, review with Council to determine if outside
consultation is desired and construct a five year Compensation structure
commencing January 1, 1988.
C - �I �12
August 9, 1988
Page 3
3. Confirm that Council, in fact, desires us to develop a long term
management compensation policy as we have with the other groups.
This would allow us to take action on the July 1 increases while taking the
necessary time to address the longer term issues. The raises would not place
anyone in a position of being overpaid. Both timely raises and an in-depth
analysis are in order. The major reason I recommend an outside firm be employed to
assist us is I feel competent but awkward recommending compensation policies for
the management team of which I am a member without an independent review by or a
reputable firm. I believe Council is supportive of this action. You suggested
this approach in the earlier memo to City Council. (Attached)
AC:slt
Attachments:
Management Compensation Comparisons
Management Compensation Survey - Finance Director
Memo to Council from CAO
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