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HomeMy WebLinkAbout01-14-04 Admin Com. MinutesDublin City Council ADMINISTRATIVE COMMITTEE January 14, 2004 ATTENDANCE Committee Members: Tom McCash, Chair, Cathy Boring, Mike Keenan Staff Members: Jane Brautigam, David Harding, Renee Telfer, Mary Kay Ruwette, Michele Hoyle, Melody Kennedy, Linda Glick Mr. McCash called the meeting to order at 6:50 p.m. in Council Chambers. He noted that the discussion topic is Ordinance 01-04, Amending Certain Sections of the City's Compensation Plan, which Council has referred to the Administrative Committee for review. Mr. Harding, Director of Human Resources, will provide background on the subject. Mr. Harding stated that he and the City Manager met with Ms. Grigsby to discuss some of the benefits that this ordinance proposed for part-time employees. Consequently, an amendment to the ordinance is proposed, deleting many of the proposed benefits but retaining the paid time off benefit. Permanent, part-time employees would receive 32 paid time off hours annually. This concept was borrowed from the City of Westerville, which provides the same benefit. Mr. Keenan inquired if the City's permanent part-time employees have not previously received paid time off. Mr. Harding responded that the only benefit they presently receive is holiday pay, and only if they are normally scheduled to work that day. Mr. Keenan inquired if most of them are on a regular schedule. Mr. Harding confirmed that they are. Mr. Keenan stated that in his office, part-time employees are considered very valuable to the organization. One advantage is that it is not necessary to pay some of the benefits to part-time employees that full-time employees receive. Their part-time employees are eligible for paid time off consistent with their normal working schedule — if they work a 3 -day week, they receive 3 days off with pay. Mrs. Boring inquired if the part-time employee could carry over this time to the neat year. Mr. Harding responded that they could not carry over unused time. Mr. Keenan stated that he is surprised that the City has never given any vacation to permanent, part- time employees. He would not have any part-time employees if he were to do that. They are provided both vacation and sick leave within his organization. Mr. Harding stated that there was concern that the amount of leave originally proposed could translate into a large amount of time off, which could impact the other employees in a work unit. Administrative Committee January 14, 2004 Page 2 Ms. Brautigam stated that her original assumption was that most employees who are part-time would be employees who had not worked for the City for along time. The permanent part-time position was one that they could enter and leave easily in one's career. However, she was informed that many of the permanent part -tine employees have 20 years of service, either with Dublin or including prior service. Mrs. Boring stated that the benefit of the part-time work schedule is that the employee does not need personal leave; they already have days off that can be scheduled around their hours of work. Mr. Keenan stated that the cover letter also mentions medical benefits for part-time employees. Mr. Harding stated that such benefits are not proposed by this ordinance. Mr. McCash suggested that the City is self-insured -- why not provide that to the permanent part- time employees? Mr. Harding responded that the City could provide it, but it has not traditionally done so. It is a benefit that some cities provide to part-time employees. Mr. Keenan stated that the City cannot discriminate. If the City provides health benefits to full-time employees, it must do the same for part-time employees; the caveat is that they must work a minimum of 25 hours to qualify for group medical benefits. It may be possible to class discriminate, though; and perhaps the part-time employment could be identified as a separate class. Ms. Brautigam stated that staff is due to report back to this committee soon with an update on the City's health benefits. That question will be researched and included in that report. Mr. McCash stated that the City has both seasonal and permanent part-time employees. The health benefit would be for those with permanent status. Ms. Brautigam stated that this group consists of only seven employees. Mr. Harding stated that the City has had 5 — 7 permanent part-time employees during the last 10-15 years. He does not expect the number to grow. Mrs. Boring stated that permanent part-time employees probably do not expect medical benefits. Typically, they are covered in some other manner. Mr. Harding stated that times and practices are changing. Today, employers must provide more in the areas of flexible work place and benefits. Mr. McCash stated that his position is that if the City does not provide health insurance to at least the permanent part-time employees, that Council members should also not be eligible for the coverage. Administrative Committee January 14, 2004 Page 3 Mr. Keenan stated that although the minimum hours to qualify for group coverage are typically 25 hours, the City is self-insured. It may be able to do what it wants. Council should probably establish that minimum. These employees often have several years with the City. They want to continue to work for the City but no longer want a five-day work schedule. Ms. Brautigam agreed. The aging "boomer" generation does not necessarily want to retire, but they are interested in cutting back the number of work hours. Mr. Keenan noted that the value to the employer is that employee can do in three days what a new employee would take five days to accomplish. Mrs. Boring stated that the City's past philosophy placed part-time positions in the budget for a reason, and they should remain as they have been. Mr. Keenan stated that the City would save money if it provides a viable workplace with fewer hours. The City retains a valuable employee with much experience who can accomplish a full week's work in three days. He believes that it is very important that the organization encourage capable, experienced employees to stay. Mr. Harding stated that the work force is changing, and the boomer generation will be a very viable segment of that workforce. They will be interested in flexibility in hours. An hourly rate may no longer satisfy the part-time employee. Other benefits, such as medical benefits, may also be necessary. Mr. McCash agreed. Because the City is self-insured, it would not necessarily cost anything other than actual claims. Mr. Keenan stated that the City should be doing that. The question is whether the City can class discriminate. Can a class be set up for part-time employees? Mr. Harding stated that it might be necessary to offer the same plan as offered to full-time employees. Mr. McCash stated that it might be possible to limit the benefit to single coverage, not family coverage. Mrs. Boring stated that the primary reason she objects to this proposal is only recently Council was informed that it was necessary to modify the medical plan for full-time employees, which impacted the employees financially. Those employees have now, in effect, had a pay cut. How does Council explain to them that the City now wants to extend health coverage where it traditionally did not occur? In addition, the attempt to placate the employees with performance bonuses for a very few employees doesn't offset the negative impact of change in medical benefits. She suggests that Council return the health coverage to its previous status and not add the performance bonuses. The employees would much prefer that. Administrative Committee January 14, 2004 Page 4 Mr. Harding explained the philosophy of the performance bonus. The City has had a performance bonus in place for department and division heads since 1995 or 1996. The reasoning behind that was department and division heads have a high level of accountability and a disproportionate share of responsibility. The performance bonus provides a way to continue to reward and motivate those employees when they are "topped out' in their pay grade. However, when non -management employees are "topped out," there is no financial recognition for their performance. Therefore, the proposal is to also provide the opportunity for a performance bonus for other employees who are at the top of their pay grade. It would not be factored into the base wage. Mr. Keenan inquired if there is an arbitrary increase in base wages from year to year. If so, is it inflation driven, flat, or a step increase within the pay grade? Ms. Brautigam stated that the only increase is a merit increase. Each year, employees have an evaluation and are rated by point factor. In the past, that increase ranged from 0% to 5%; she now proposes to change that to 4%. Mr. Keenan inquired if an employee could receive a poor evaluation and still move up a step within a grade due to time of service. Ms. Brautigam responded they could not. There is no time and service increase, only merit. Mr. Keenan inquired if an employee is hired with a salary at the top of the range, could that employee receive increases? Mr. Harding stated they cannot. Mrs. Boring inquired what the average pay raise is. Mr. Harding responded that in the past, for non-union personnel the average raise was 4.0 - 4.5% Mrs. Boring stated that if performance bonuses are given to those employees at the top of their range, what is the reason for having a cap on the range? They will automatically receive the increase the same as if the cap was not there. Bonuses should not be an annual increase for employees who are topped out. They should be given to employees, regardless of where they are within their pay grade, for outstanding performance. They should be recommended by the City Manager to Council and approved by Council. Mr. McCash and Mr. Keenan indicated that Council would not want to become involved in that process. Mr. McCash noted that the performance bonuses are not automatic. Mr. Harding agreed. The bonuses would be given to those who are rated as very effective. Mr. Keenan inquired if performance bonuses are only for those employees who are maxed out and rated as very effective — how many are at the top of their ranges? Administrative Committee January 14, 2004 Page 5 Mr. Harding stated that 35 employees are in that position. Mrs. Boring inquired how often pay ranges are adjusted. Mr. Harding stated that occurs biennially. Mr. Keenan asked if the managers receive four percent in a performance bonus. Mr. Harding stated that currently, managers receive 5%, 7.5% or 10%. Mr. Keenan inquired if those rates would be eliminated and everyone, including management, would be limited to the 4% bonus. Ms. Telfer confirmed that is so. Mrs. Boring stated that she believes the management performance bonus originated with an attempt to retain former Development Director, Terry Foegler. Mr. Harding agreed that it occurred at that time, but that was not the only reason for it. A vehicle for recognition was needed. Mrs. Boring stated that the Foegler retention was the event that triggered the action. She suspects that the event that triggers this present discussion of employee performance bonuses is that with the recent change in employee benefits, there have been complaints from those employees who are maxed out. They are ineligible for an increase, and now their cost of health insurance has increased. They have, in effect, received a demotion. Her recommendation would be to return the health insurance to its previous status and forego the subsequent "fixes." Mr. Harding responded that was not the reason the change has been proposed. Mr. Keenan stated that currently this recognition tool is used for managers, but it would be fair to use it across the board. Mr. McCash stated that the City of Dublin employees are expected to provide above average, excellent service to the Dublin community. When employees have outstanding performance, the City should recognize it. Mrs. Boring stated that if the employee is over qualified for their current position, perhaps they should pursue qualifications for a higher position. Mr. McCash stated that being maxed out is not a sign of over qualification; it is a sign of having performed their job. Mrs. Boring inquired if there are any other cities who provide an employee performance bonus. Administrative Committee January 14, 2004 Page 6 Mr. Harding responded that a survey of that question was not conducted. Other organizations in the public sector do provide performance bonuses, but he is does not know how their programs are structured. He is aware that some cities provide the performance bonus in addition to the employee's merit increase. However, the current recommendation is only for a bonus to occur if the employee does not have the opportunity for a merit increase. Mr. McCash noted that the City of Dublin does not provide an annual cost of living increase, as many cities give. Therefore, the merit increase is, basically, a cost of living increase for the City's employees, but the employees at the top of their ranges receive nothing to offset the constant increase in cost of living. Considering the inflation factors, those employees are essentially losing income in the City's current process. Mr. Harding stated that the comp plan is reviewed and increased biennially. Mr. McCash noted that the cost of living/inflation factors increase approximately 3% annually; the biennial adjustment does not begin to cover that. Mrs. Boring stated that perhaps the City should also be considering cost of living increases for its employees. Mr. Harding stated the City would not want to give automatic annual increases. Mr. Keenan stated that the merit increase is a better idea In the past, the increases have been up to 5%, and the average has been 4.0 — 4.5%. Have any employees received 1 — 2%? Mr. Harding stated that there have been afew. Two received nothing, and one of those was terminated. Ms. Brautigam stated that she is not satisfied with the performance evaluation system, and it will be changed over the next three years. She doesn't like the fact that so many have been receiving an above average increase. Managers do not want to believe their employees are average. There needs to be a cultural shift in how evaluations are given. Mr. Keenan stated there is the 180 or 360 degree concept. Mr. Harding responded that the 360 evaluation is a concept the City will be using eventually. Ms. Brautigam stated that when Council conducts her evaluation this year, they would have the advantage of using the 360. She noted that the reason for the performance bonuses is that the City has top performers at the top of their pay ranges. Every year their performance is rated as excellent, yet they receive nothing for their performance; it is demoralizing. Mr. Keenan stated that Dublin has trained quite a few people who have then moved on. Administrative Committee January 14, 2004 Page 7 Mrs. Boring inquired what is the motivation/opportunity to achieve higher pay grades. If 35 employees are topped out now, what is the opportunity for promotion? What does the City do to encourage employees to improve themselves? Ms. Brautigam stated that the City has a tuition reimbursement program and will soon be offering a significant amount of in-house training. Mrs. Boring stated the employee would not want to commit to that education, if there really is no opportunity for promotion. Ms. Brautigam stated that moving to a new range would include a 10-15 percent salary increase. One of the changes being made within the division is to create a career path for employees. Mr. Keenan stated that the City should be training its managers of the future. Ms. Brautigam stated that the City is trying to create middle tier positions between the worker and management staff to allow for stepping -stones to higher positions. Mr. Harding stated that there is a concept now of "pay for learning" -- as the employee learns more, they become more valuable to the organization. The City will attempt to design the compensation system to value and compensate the employee for that learning. Pay increases will be based upon what the employee has learned and applied to the job as opposed to a performance evaluation that may recognize behavioral traits such as communication skills and attitude. The truly high - performing organization of the future will compensate employees based upon their growth, development and learning efforts. Mrs. Boring inquired if is intended that the same percent for the performance bonus would be available equally to all employees, division heads and department heads. Mr. Harding stated that it would be applied equally to all. Mrs. Boring stated that the Committee has reached a consensus of agreement on Section 7. Mr. McCash inquired about proposed title changes. He suggested that "Network Architect' should be amended. Due to licensing issues, "architect' is not permitted. There was a recent case in which the licensing board temporarily shut down the business of a "web architect," due to their use of the title of "architect." Mr. Harding will ask Mr. Husenitza to amend the title. Mrs. Boring stated that other grade 4 positions may believe they, too, should be reclassified similar to the administrative assistant. Mr. Harding stated that at times jobs have been under valued or have evolved. The job is not rated according to the volume of work handled by that position, but by 7 compensable factors, each of which has several levels. If an evaluation shows a certain number of points are accumulated within Administrative Committee January 14, 2004 Page 8 those factors, the grade of the job is changed. The system is based upon level of responsibility, complexity, and difficulty. Jobs within the City of Dublin evolve at a faster rate than many other organizations because the City changes frequently. Each year, some of the jobs are changed. Mr. Keenan inquired if pay grade changes require Council review. Mr. Harding stated that they do. Mrs. Boring inquired if the supervisor then, after the grade is changed, evaluates the employee at a higher level of expectation. Ms. Telfer stated that HR incorporates the job audit information into an updated job description. Ms. Ruwette stated that the individual was likely performing the increased or higher degree of difficulty tasks before the pay grade was changed. Mrs. Boring inquired how a supervisor receives training to conduct performance evaluations. Ms. Telfer stated that in the past external training programs were used. Mr. Harding stated that he does performance evaluation training in house. Mr. McCash stated that an individual who has moved into a management position has learned along the way to be a manager, including the ability to evaluate performance. Mrs. Boring stated that her concern with raising pay grades is that it be understood the performance should match that increased level of responsibility. Mr. Harding stated that the criteria for evaluating a job are different from the criteria for evaluating performance. How well the person executes the new job duties is evaluated with the performance evaluation criteria. Ms. Ruwette stated that the pay grade changes are not made in isolation from the supervisor. The supervisor is well aware of the pay grade change or the creation of a position within the division. Usually, they have initiated the request, and they must be in agreement with the job description developed by HR. In establishing the new job description, HR interviews all the related people — the employee, the supervisor, and the division head. The supervisor has been a part of the process, is well aware of all the facts, and will perform subsequent evaluations accordingly. Mrs. Boring inquired if the new positions or pay grade changes proposed with Ordinance 01-04 have included the participation of the supervisors of the respective divisions. Ms. Ruwette confirmed that they have. Mr. Keenan inquired if the group medical discussion would occur at a later date. Administrative Committee January 14, 2004 Page 9 Mr. McCash confirmed that it would. Sick Leave Conversion Mr. Harding stated that, currently, under the existing ordinance, an employee who qualifies for retirement and has had a minimum of 10 years of service with the City may cash out 1/3 of their sick leave, up to 540 hours. Mr. Keenan inquired if the City accrues that amount and maintains it on the balance sheet as a liability. Mr. Harding responded that the City does. Mr. Harding stated that it is also proposed that upon resignation, if the employee is in good standing and has at least 1,280 hours of sick leave, 1/3 up to a maximum of 500 hours may be converted to cash. The reason this is proposed is that surveys have shown that Dublin is only one of two cities that does not provide this. It became a significant issue in the last Police contract negotiation. The comparables were so strong that Dublin had no negotiating power not to provide the option. Consequently, it is recommended that the option also be provided to non-union personnel. Mr. Keenan stated there are some mechanisms to take the cashed in sick leave and roll it into a fund with no tax consequences until it is used. Recent law permits employees to use the fund to pay insurance premiums, deductibles, etc., pre-tax, similar to a 125. It can also be used for prescriptions, Lasik surgery, orthodontic work, etc. That may be something the City would want to explore. Mr. Harding agreed that the City would definitely want to explore that potential. Mr. Keenan stated that he has 20 employees and has a 125, as does the Fire Department. Mr. Harding stated that will be part of the strategic review of the City's medical benefits. The higher out-of-pocket maximums with health insurance could be offset with this type of fund. Mrs. Boring inquired if an employee has worked 20 years for the City, wouldn't they be eligible for retirement? Ms. Telfer stated that with PERS, the minimum years of service is 25 years and age 55 to retire, or retire at any age with a minimum of 30 years. Mr. McCash stated that it is a minimum of 20 years of service for the Police department. Mr. Harding stated that retirement at age 60 is possible with a minimum of 5 years. Mr. Harding stated that their survey also indicated that many cities also provide the option for annual conversion of sick time, and this was negotiated with both labor agreements. Consequently, it is recommended that this option be extended to non-union employees. It is proposed that if an employee has 720 hours in their sick leave bank at the end of the first pay period in December, and Administrative Committee January 14, 2004 Page 10 they have used not more than 40 hours of sick time over the past 12 months, they may convert no more than 48 hours of their sick leave at the rate of 2 to 1. It is an incentive not to use more than 40 hours of sick leave in a year. Mrs. Boring inquired if the City is providing excessive sick leave. Mr. Harding stated that the City does have a generous sick leave program — 144 hours of leave/year, but the City does not have a short-term disability program. Mr. Keenan stated that this is structured to cover the dread disease occurrences. Mrs. Boring stated that employees are allowed to donate sick leave to another employee. Will this discourage that option? Ms. Telfer stated that she did not believe it would because of the requirement for a minimum of 720 hours. Mr. Keenan stated that they could roll up to a max of 540. Ms. Hoyle stated that this would take the long-term liability off the books. Mrs. Boring inquired if this mirrors what is provided in the union contract. Mr. Harding responded that it is similar. The contract allows 40 hours to be converted. A little additional incentive was provided for non-union employees. Mr. Keenan stated that he provides less hours of sick leave in his office, but cashes at 100% any unused hours. This is an incentive not to use the hours. Mrs. Boring inquired if this is an accounting nightmare. Ms. Glick stated that it is all addressed in the system set-up. Ms. Hoyle stated that not many people would be impacted. Ms. Telfer stated that an employee would have to be with the City five years and not have used one hour of sick time to be eligible for the conversion program. Four Percent Adiustment to the Ranges Mr. Harding stated that Section 4 provides for an adjustment of four percent to all the pay ranges -- 4% increase of the minimum and 4% increase of the maximum. That is based on the marketplace, through the salary survey that was conducted, but also on the CPI data. The Bureau of Labor Statistics website provides CPI data on the cost of living increase. The City has not updated its ranges since January 2002. Those employees who were at the top of their ranges have lost income due to inflation. The CPI shows the increase over 2002 was 2.1 and the increase in 2003 was 1.9 through November. The two total 4%, so that is the basis for adjusting the range 4%. They Administrative Committee January 14, 2004 Page 11 analyzed the new wage structure against the salary survey that was taken to ensure that it was reasonable. The adjusted pay ranges will now be competitive with the marketplace. Mrs. Boring inquired about a case where two employees were hired at the same rate of pay last year and are equally capable employees. The first was hired at the minimum wage last January and received a 3.5% increase with their annual evaluation this month. The second was hired in June and will receive the 4% increase with the adoption of this ordinance. How does the City address that inequity? Mr. Harding stated that the City provides equity adjustments to correct those types of situations. HR constantly monitors this. Temporary Pav Supplement Mr. Harding stated that recently, there were some circumstances that caused this to be reevaluated When an interim appointment to a division or department head position occurs, there may be times when giving the interim employee more than a 10% pay supplement is justified. Mr. Keenan stated that the Fire Department does this for firefighters, but it is effective immediately, not only in the case where the job duties are performed for five days. Ms. Telfer stated that if the City employee assumes job duties outside their class, they receive either a 10% pay increase or the minimum of the division/department pay grade for the job they are doing, whichever is greater. Mr. Keenan inquired what the economic impact to the organization would be? Ms. Telfer stated that it happens only intermittently. Mr. McCash suggested that the policy be amended to provide the supplement after 10 days of assuming the higher job responsibilities, reimbursement to be retroactive at the discretion of the City Manager. Ms. Brautigam suggested that, rather than making the pay supplement retroactive, a bonus of $500 or $750 be given. Mr. McCash stated that in the situation that occurred last year — someone stepped into the Community Relations Director's job during the largest City event of the year -- a significant increase in job duties and responsibilities, the City Manager would waive the 10 -day limitation to authorize the compensation to be effective immediately. General coverage of another employee's job duties would be subject to the 10 -day interval. Mr. Harding stated that the 5 -day timeframe was originally adopted to be consistent with the provisions of the police contract. However, the police contract no longer has the interval; the increase in pay for performing a supervisor's duties is effective immediately. He has no objection to the 10 -day limitation, but hopes the change would not cause a parity issue between union and non-union employees. Administrative Committee January 14, 2004 Page 12 Mrs. Boring inquired if three people have been designated to do one supervisor's job, do all three receive the 10% increase? Mr. Harding confirmed that they each receive a portion of it. Although this occurs infrequently, i1 is occurring now in the Planning Department. There are three individuals that are temporarily performing the duties of Interim Planning Director. None of those individuals are receiving 10%, but the total pay supplement does total more than 10%. Mr. McCash stated that review of the proposed ordinance amendments is completed. The second reading/public hearing of amended Ordinance 01-04 will be scheduled on the Monday, February 2nd Council agenda. The meeting was adjourned at 9:30 p.m. Clerk of Council