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HomeMy WebLinkAboutCC RESO 99-199RESOLUTION NO. 99-199 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY APPROVING THE MANAGERIAL COMPENSATION PLAN AND THE MANAGEMENT COMPENSATION PLAN SUPPLEMENT, AND IMPLEMENTING THE PLAN FOR FISCAL YEARS 1999-2002 FOR EXECUTIVE AND MANAGEMENT PERSONNEL WHEREAS, the City Manager has presented the City Council with certain recommendations regarding Executive and Management Employees' salary band adjustments and employee benefits; and WHEREAS, the City Council has determined that the recommended compensation plan, together with any required modifications, should be implemented. NOW, THEREFORE, BE IT RESOLVED as follows: Section 1: The City's compensation philosophy is to establish and maintain a compensation structure based on market place norms and internal alignment. Section 2: The Management Compensation Plan and its compensation survey component is to be updated periodically with recommended revisions proposed by the City Manager to. the City Council as necessary. Section 3: In implementing changes to Managerial Compensation, the City shall adhere to the June 22, 1981 Managerial Compensation Plan and the September 30, 1999 Management Compensation Plan -Supplement (Exhibits "A" and "B", respectively). Each document is attached to this resolution and is adopted by reference. Section 4: The City's goal is to be "at market" by June 30, 2002, and to maintain this position using this Plan in future years. Section 5: The compensation and benefit plan for Executive and Management personnel is hereby approved effective at the start of the first pay period in Fiscal Year 1999- 2000, as shown in Exhibit "C". Section 6: The City Manager is hereby directed to reflect said compensation plan in the Final Budget for Fiscal Year 1999-2002. -- Signature Page to Follow -- Resolution No. 99-199 December 14, 1999 Page Two PASSED and ADOPTED this 14th day of December, 1999. George H. aters, Mayor ATTEST: H Mich 1 R. Dal ityClerk APPROVED AS TO FORM: rGeorge H. Eiser, III. City Attorney City of National City Office of the City Manager 1243 National City Boulevard, National City, Ca. 92050 (714) 477-1181 Tom G. McCabe —City Manager Ronald L. Ballard —Assistant City Manager June 22, 1981 TO : Honorable Mayor and City Council FROM : City Manager SUBJECT : MANAGERIAL COMPENSATION PLAN BACKGROUND The concept that a compensation plan exists for the purpose of attract- ing, motivating and retaining the most qualified employees is as true for managerial level positions as it is for those members of the general employee groups. To achieve this concept, the compensation plan must be competitive with related positions in the labor market while also maintaining internal consistency and relationships. Although the primary tenets for a compensation plan apply to both groups, it is a great deal more difficult to develop and justify appropriate pay ranges for managerial positions. For single position classes at the managerial level, there are many times no unequivocally comparable. positions in the local or, for that matter, in the overall labor market. Comparisons with other jurisdictions always run the risk of comparing unlike positions because of faulty information or misunderstandings based on the informal organization structure of an agency, undetected differences in the economic climate of an area, varied departmental functions and incumbent responsibilities, and other fiscal or political factors. Another important difference is that in many managerial positions, the particular individual in the position structures the quality of the job performance. An executive may merely fill his position and make a minimal effort by.reacting solely to those situations absolutely requiring his decision. On the other hand, he may react with a high degree of effective decision making and initiative in setting goals, organizing, planning and generally contributing to an improved level of service and efficiency. Actually, executives in similar type positions in comparable jurisdictions may in fact perform greatly different functions and possess varying degrees of responsibility and authority. Managerial positions in any organization are the most difficult and yet the most important jobs for which to establish equitable compensation. EXHIBIT A Honorable Mayor and City Council 1981 page 2 OVERVIEW The new approach toward managerial compensation which was instituted last year should now be formalized to place upon management the responsibility for allocating its resources in the most effective manner. Management is held accountable foroverall organizational proficiency and consequently must havediscretion to allot managerial compensation in a way that will develop efficiency and effectiveness in accomplishing objectives. Attracting and retaining experienced, highly qualified professionals is critical to a stable organization. Since management is charged with this accountability, it must be in control of the resources needed to accomplish the task. CONSIDERATIONS VERTICAL RELATIONSHIPS Vertical relationships within the departmental structure and occupa- tional field must be considered. This should be accomplished based on the premise that the individual responsible for the success or failure of a department should receive a salary which is significantly higher than an assistant or subordinate who normally is responsible only for the day-to-day functions of a section or particular grouping of duties. Executive positions with the ultimate responsibility for planning, coordinating and final results should be evaluated in relation to those positions whose primary responsibilities are confined to the more narrow limits of specific operations. INTERNAL COMPARISONS To provide for an internal comparison between the City's managerial classes, positions must be evaluated in relation to specific factors common to each. Administrative Responsibility - The responsibility level of an execu- tive position is normally directly affected by the size of the department, the budget, the type of programs managed, and the variety of staff under the individual's jurisdiction. The scope andlevel of this factor has a direct bearing on the position as the signifi- cance of an executive's actions and the consequence of errors generally increase with greater responsibility. Policy Making - Many executive positions are directly concerned with the determination of policy within their functional areas. Others may be more concerned with the application of established policies, pro- cedures and standards. Those positions which are concerned with originating or reviewing policies usually act in a professional capacity and a great deal of reliance is placed on their experience and trained judgment. Further differentiation is possible when it is recognized that some policy applications are merely concerned with intangible things while others are concerned with decisions that directly affect or restrict the actions and rights of citizens. Honorable Mayor and City Council page 3 Interdepartmental Relationships - Although most executive positions have some relationships with other City departments, many, especially staff positions, become concerned with all or the majority of City-wide departmental operations. Still other positions have the responsibility for program inter -relationships which require coordination with other agencies and adds to the variety and complexity of their jobs. Public Relations - The frequency and character of the executive's personal contacts with the community, individuals and various interest groups are of critical importance. The contacts may extend from pro- viding necessary services to justifying and defending a program and winning support for a recommended course of action. Depending on pro- gram responsibilities, different levels of social understanding and competence is required. Professional Skills and Knowledge - Executive positions vary in their requirements for education, experience and specialized training. The scope and degree of professional training and necessary specialized knowledge must be considered in relation to performing the duties of the position and recruiting successfully in the open market should a vacancy occur. Labor Market Factors Compensation data collected through a survey process based upon similar positions in comparable public agencies should also be consid- ered. The basic purpose of reviewing compensation data from this type source is to provide current information as one aspect of determining equitable salaries and benefits. It should not be regarded as an exacting or foolproof approach in light of the difficulty in obtaining information which is unquestionably comparable. All of the above considerations are important in developing sound recommendations which will result in an executive compensation plan that provides for the following objectives: o To be competitive with current trends in compensation provided to individuals occupying comparable level managerial positions in other agencies. o To reflect thelevel of overall program or departmental responsi- bility that is characteristic of managerial level positions. o To offer compensation which is commensurate with actual job performance. o To provide motivation for greater accomplishment in achieving program or departmental goals within available resources. o To recognize extraordinary performance and exceptional contri- bution to departmental and overall agency programs and goals. Honorable Mayor and City Council page 4 RECOMMENDATIONS Establish a salary plan which will provide for equitable compensation of managerial positions, maintenance of a consistentrelationship among executive salaries and those of subordinate positions, and afford greater mobility for the application of compensation in con- junction with an emphasis in motivation. Following are specific recommendations: 1. That the City Manager be responsible for determining the level of compensation for managerial positions. That a separate Salary Schedule for executive positions and mid -management positions be established. (See Attachments 1 & 2.) That the schedule include Salary Bands with only a minimum and maximum limit. The bands to be based on an analysis of appropriate Management Compensation Surveys, but also be designed to accommodate internal factor considerations in recognizing the differences in performance among individuals and the amount of growth anddevelopment that can occur in such positions. 2. That the City Manager be authorized to make appointments at any dollar amount within the designated Salary Band. This flexibility is desirable in order to secure the services of well qualified individuals when an executive position vacancy occurs. 3. That compensation for executive and mid -management positions be reviewed at least annually by the City Manager and adjust- ments in terms of an advancement or reduction within the Salary Band be made when appropriate. For maximum benefit, reviews and adjustments are to be accomplished as the need is recognized. Evaluations and adjustments be made based on the performance of the individual, productivity factors, management objectives and effectiveness in carrying out pro- grams and policies. 4. That compensation of executive and mid -management positions not be based merely on an individual's total length of service nor be automatic. 5. That a minimal salary maintained to provide vertical relationship 6. That the City Manager recommend Salary Band pensation programs. TGM:jbf attachments differential of fifteen percent be executive positions an appropriate to their subordinates. annually review and, if appropriate, adjustments and revisions to the com- City of National City City Manager's Office Management Compensation Plan (MCP)' September 30, 1999 A. Introduction - The purpose of this document is to provide a set of guidelines, which the City will use to determine compensation for members of the Management Team. In June of 1981, the City adopted a "Managerial Compensation Plan." That Plan discussed the differences between managers and members of represented labor and developed a method for compensating managers. The concepts identified in that Plan are applicable today and, in point of fact, were used by National City until the economic downturn of 1990-1991, as the basis for managerial pay. Originally adopted June, 1981. Last revision, June 1990. EXIIIBIT B 092399MgmtComp.doc Page 1 10/28/99 The 1999 MCP builds on the 1981, program by providing more specific guidance on how compensation is to be determined; on what the City's goals are, and; on how to attain those goals. In implementing this program, the following guidelines will be considered based upon the financial capacity of the City. The MCP is not a static Plan. Elements of the Plan will need to be tuned and we obviously have significant ground to cover to achieve our goals. This first year's implementation of the MCP may be different from a future years'. The MCP should be looked at as evolutionary. Each year, the pay and benefit structure is to be reviewed to ensure that salaries and benefits for management employees in the City of National City remain competitive with salaries paid by other local agencies. Management Team members are not represented by a labor group. As such, there is no "contract" and many of the business practices which we use to compensate labor groups are not applicable to the Management Team. Salaries in the Management Team2 are established in the "band" system. The band starting and ending points are set wide apart and 2 Exceptions being the City Clerk, City Manager and City Attorney whose salaries are fixed at a single point as determined by the City Council. 092399tv1gmtComp.doc Page 2 10/28/99 are keyed to the labor market and to internal relationships in order to attract and retain quality employees. Movement through the band is determined solely by the City Manager (unlike represented labor where movement between steps is geared to longevity and satisfactory performance.) In the band system, advancement is based upon performance as evaluated by the City Manager. B. Definition - The MCP covers all members of the Management and Executive teams. As full time executive positions appointed by the City Council, the City Manager and City Attorney will have their compensation and benefits established directly by the City Council. Many of the concepts contained in this Plan will be useful in that deliberative process. As elected officials, the City Clerk and the City Treasurer will have their compensation and benefits established directly by the City Council. C. Compensation Philosophy - The City's compensation philosophy is to establish and maintain a compensation structure based on market place norms (What do cities we compete with pay?) and internal alignment (How do we compensate one manager vs. another and that manager vs. his or her subordinate?). Structures and ranges will be reviewed and updated as necessary based on an evaluation of the City's ability to pay, market place survey data and internal alignment. D. Management's Role - Managers and Executives in this organization directly implement Council policy. They ensure that day-to-day 092399MgmtComp.doc Page 3 10/28/99 municipal operations are executed smoothly, efficiently, within the law and economically. They lead their respective organizational units and manage significant programs. The consequence of error attributable to these employees is significantly different from other municipal employees. When Managers and Executives leave the municipal service they often take significant and hard -to -replace corporate history with them. Pay practices, and in this case the MCP, should acknowledge these differences. E. Management Representation - Members of the Management and Executive teams are currently not represented in matters of employee compensation by any organized group. Under state public employee labor laws they are entitled to such formal representation, if they so choose. It is to the City's advantage to maintain a productive, informal and trusting relationship with the Management and Executive teams. We want to enhance their involvement in contributing to municipal operations. We want to acknowledge their decision not to seek representation. We want to remember that these are the employees that, given a job action by any of the other represented groups, would continue to perform their jobs. F. Fiscally Prudent Rule - The MCP shall ensure that it will not jeopardize the financial condition of the City. G. Attract & Retain Quality Employees - The City's MCP should ensure that the City has the ability to attract and retain the quality of person 092399MgmtComp.doc Page 4 10/28/99 the City needs to implement the City's programs and the City Council's policies. H. Labor Market a. In the early stages of the implementation of this MCP, the City will define its labor market to include cities within San Diego County. Excluded from statistical calculations will be: the County of San Diego, San Diego City, and whichever city reports the lowest compensation for any given classification. This will serve to flatten the data so that our compensation is not directly tied to the super agencies (City and County) nor to the least competitive agency. b. In future years we will return to our former practice of looking at labor markets based on where we are drawing our applications. (This is one of the practices National City lost during the economic downturn of the 1990's.) In addition, we will look at cities with comparable populations and comparable municipal services in an expanded labor market? c. This City has a history of paying its Management & Executive personnel in the top group of cities within San Diego County. Time 3 The original 1981 Plan did identify "benchmark" cities, which were selected by the City Council to be comparable to National City. Compensation was then set off of those benchmarks. Although the selection of those benchmarks is today outdated, a return to this practice in the future would ensure a higher degree of comparability in the data. 092399MgmtComp.doc Page 5 10/28/99 and the recession have dropped the City's competitive position considerably. I. Competitive Position a. If fiscally prudent, it is the City's objective to compensate Management and Executive employees at rates about at the middle of the labor market as measured by the mean. This will be called "at market." b. In order to address unique and classification -specific compensation issues, it may be necessary from time to time to look beyond the normal labor market data or beyond the middle of the labor market as measured by the mean. In these cases, the City Manager will present the circumstances to the City Council for consideration. c. The City's goal is to be "at market" by June 30, 2002. d. To prevent a collapse of the Plan and a return to the slide in Management salaries that occurred in the early 1990's, the MCP and its compensation survey component need to be updated annually with recommended adjustments proposed by the City Manager to the City Council as necessary. e. Once approved by City Council, adjustments to the Management salary and benefit structure, the MCP, do not result in any salary increases for individual management employees, but simply adjust 092399MgmtComp.doc Page 6 10/28/99 the entire structure (bands and benefits) based on labor market data. J. Measurement of Competitive Position - It is the City's goal to move toward a total compensation model of evaluating competitive position for the Management and Executive Groups. When managers leave other cities to come here and visa versa, they evaluate their current benefit structure and that of the other agency. We compete for personnel and lose personnel based not only on salary but also on benefits. In the early years of implementing this MCP, we will attempt to look at the significant benefits like car allowance and cafeteria plans, which are generally well understood, documented and comparable from agency to agency. As time passes we will attempt to expand the definition to include other benefits, which other agencies pay or for which we pay. In a number of cases the lack of good reporting data on these other benefits may hamper their inclusion in our analysis. In any case, the goal remains to look at whom we compete with and what we pay in comparison. The more complete the picture, the better the analysis. Changes in how we define total compensation and in how we collect and apply survey data will be reviewed with the City Council. K. Internal Alignment - Consideration will be given to both labor market survey data and internal relationships (alignment) in establishing management salary bands. When establishing internal relationships 092399MgmtComp.doc Page 7 10/28/99 consideration will be given to the appropriate differential between superior and subordinate as well as the relationship between classes. L. Mix of Base Salary, Total Cash & Benefits - The City's practice is to provide a mix of base salary, total cash and benefits that is generally competitive with the labor market. When evaluating benefits, the City will consider both the cost and the content of the benefits. M. Pay Administration a. The City will continue to use a Performance Based Pay concept for Management and Executive personnel. b. Individual compensation adjustments within the salary band will be made consistent with the City's Performance Based Pay concept. c. Any salary compensation increases granted under this program are based on performance. N. Implementation a. Based on the market survey, to achieve the goals outlined in this Plan, for the three-year period ending June 30, 2002, the City Manager is authorized to increase the top of certain bands by no more than 30%. b. The City Manager shall be limited to band increases of no more than 10% in any of the three fiscal years. c. A position -specific document will be presented to the City Council showing market data and the City Manager's recommended changes including proposed changes to the benefit program. 092399MgmtComp.doc Page 8 10/28/99 MANAGEMENT COMPENSATION PLAN FOR FISCAL YEARS 1999-2000, 2000-2001 & 2001-2002 The City Council of National City hereby re -affirms the Management Compensation Plan adopted by the City Council of 1981 (attached) and updated in 1999 (attached). This plans provides a pay -for - performance method in determining actual salaries for Executives and Managers and a method of establishing broad salary bands based on the market average of similar or competing agencies. To this end, effective at the start of the Fiscal Years 1999-2000, 2000-2001 and 2001-2002, the salary bands and benefits for the following positions will be adjusted as designated below. However, the actual salary within the band of each employee in these positions will be determined individually by the City Manager based on pay -for -performance factors. 1. Executives and Management Employees a) Salary Bands: POSITION TITLE ADJUSTMENTS TO TOP OF BAND FY 1999-2000 FY 2000-2001 FY 2001-2002 Assistant City Manager 6% 6% 5% Police Chief 9% 9% 8% Fire Chief 7% 7% 6% City Engineer 3% 3% 3% Director of Finance 7% 6% 6% Director of Planning 8% 8% 7% Director of Public Works (Vacant) 8% 8% 8% Director of Bldg & Safety (Vacant) 5% 0% 0% Director of Parks & Recreation 6% 6% 6% City Librarian 5% 5% 5% Director of Personnel 10% 10% 10% Sr Assistant City Attomey 5% 4% 4% Police Captain 9% 9% 9% Battalion Chief 6% 5% 5% Principal Civil Engineer 7% 7% 6% Deputy PW Director 6% 5% 5% Principal Planner 5% 5% 4% Purchasing Agent 5% 5% 5% Financial Services Officer 10% 10% 10% Risk Manager 9% 9% 9% Mgmt Info Systems Manager 10% 10% 10% Plan Check Engineer 5% 0% 0% Principal Librarian 9% 9% 9% Police Support Services Manager 0% 0% 0% Senior Accountant 8% 8% 8% Equipment Maint Supervisor 10% 10% 10% Facilities Maint Supervisor 6% 5% 5% Park Superintendent 10% 10% 10% Wastewater Supervisor 6% 5% 5% Street Maint Supervisor 6% 5% 5% Management Analyst II 10% 10% 10% EXHIBIT C Page -2- Management Compensation Plan FY 1999-2000, 2000-2001 & 2001-2002 b) Benefits Cafeteria Benefit for all above listed positions will increase to $500/month. All other benefits will remain unchanged. 2. City Manager a) Salary Fiscal Year 1999-2000: Increase of 8% of total salary Fiscal Year 2000-2001: Increase of 8% of total salary Fiscal Year 2001-2002: Increase of 8% of total salary b) Benefits City to pay $600/month for cafeteria plan. 3. City Attorney a) Salary Fiscal Year 1999-2000: Increase of 2.5% of total salary Fiscal Year 2000-2001: Increase of 3% of total salary Fiscal Year 2001-2002: Increase of 3% of total salary b) Benefits City to pay $250/month for car allowance, plus $550/month for cafeteria plan.