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Home My WebLink About04 - Approve Resolution No. 2015-65: Amending Resolution No. 2013-10, the Key & Management Compensation PlanCTY OF F NEWPORT BEACH City Council Staff Report August 11, 2015 Agenda Item No. 4 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dave Kiff, City Manager — (949) 644 -3002, dkiff @newportbeachca.gov PREPARED BY: Terri L. Cassidy, Deputy City Manager /Human Resources Director PHONE: 949 - 644 -3303 TITLE: Approve Resolution No. 2015 -65: Amending Resolution No. 2013 -10, the Key & Management Compensation Plan ABSTRACT: The Key & Management Compensation Plan, adopted via Resolution No. 2013 -10, establishes the wages, benefits, and terms of employment for unrepresented employees in confidential, administrative, managerial and executive level positions, including certain public safety management positions. In consideration of establishing internal equity among like positions in the Community Development Department and following a review of pension contributions and compensation practices for public safety management positions, changes to job classifications, titles and salary alignments are proposed for certain Key and Management positions, as provided under Newport Beach Municipal Code 2.28. RECOMMENDATION: Approve Resolution No. 2015 -65, A Resolution of the City Council of the City of Newport Beach, California, Amending the Key & Management Compensation Plan, as follows: a) Retitle the Deputy Community Development Director to Deputy Community Development Director /Planning and set salary at $11,098.53 - $13,488.80 per month; b) Allocate the Building Manager /Chief Building Official within the Administrative Management subgroup (Deputy Director) with the title Deputy Community Development Director /Building and a salary of $11,098.53 - $13,488.80 per month; and c) Establish a policy to align cost -of- living adjustments and pension contributions for public safety chiefs (including Chiefs /Assistant Chiefs) equal to the adjustment and pension contributions of employees in the safety management bargaining units within their respective department. FUNDING REQUIREMENTS: See financial information in the body of the discussion text. 4 -1 DISCUSSION The Key and Management Group consists of unrepresented employees (excluded from representation by a recognized bargaining unit) in the Confidential (professional staff), Division Management (mid management level), Administrative Management (Deputy Director level), and Executive Management (Department Directors) groups. The Key & Management Compensation Plan, adopted via Resolution No. 2013 -10, establishes wages, benefits, and other terms of employment for employees in these groups. From time to time it is necessary to review classifications and compensation to ensure internal equity is maintained. A review of two key management positions within Community Development indicate the classifications are out of alignment with comparable level positions within the City and adjustments are proposed. The public safety chiefs (Police Chief, Fire Chief, Assistant Police Chief, Assistant Fire Chief, and Assistant Chief, Lifeguard Operations) are Key and Management (K & M) employees, though their pension and certain other limited benefits differ from their non - safety peers. There has been prior discussion as to whether employee pension contributions and salary adjustments for the safety chiefs should be aligned with Key and Management or with their respective safety groups, as they fall within both (executive and safety). To clarify the issue, included in the Resolution is a proposal to formally align pension contributions and cost -of- living adjustments for the safety chiefs to their appropriate police or fire management group. All other benefits would remain tied to the Key and Management Group. The proposed revisions were not contemplated during the budget review process and are recommended at this time to address equity and retention. Additionally, with expiration of both the Newport Beach Police Management Association (PMA) and Newport Beach Fire Management Association (FMA) Memoranda of Understanding (MOU), an opportunity exists to establish a consistent pay practice for the public safety chiefs. Plannina and Buildina Divisions The scope of responsibility (number of staff assigned to the division, size of budget, number and complexity of programs /services, accountability) for the top two management level positions in Community Development (excluding the Director), the Deputy Community Development Director and Building Manager /Chief Building Official, have grown in recent years with the expansion of building and development services and consolidation of certain activities (in FY14 -15, Code Enforcement was reassigned to the Deputy Community Development Director). Both are highly specialized positions responsible for managing multiple programs and services, day -to -day operations of a staff of professionals, and oversee multi - million dollar budgets. A review of classification responsibilities and corresponding salary indicate there has been misalignment with other comparable positions within the City. Additionally, pay compaction exists between the Building Manager /Chief Building Official and the subordinate Principal Engineer position; compensation for Principal Engineer is only 5% below Building Manager /CBO and best practices recommend a minimum 10% salary differential between the two. The recommended changes to the Key and Management Compensation Plan include re- titling the Deputy Community Development Director to recognize the assignment in Planning (new title would be Deputy Community Development Director /Planning) and aligns the salary range with the range for Deputy Finance Director, from $10,817 - $13,147 to $11,098 - $13,488 per month (approximate 2.6% increase). Also proposed is a recommendation to classify the Building Manager /Chief Building Official at the Deputy Director level (Deputy Community Development Director /Building) and allocate the position within the Administrative Management subgroup. To address pay compaction and promote internal equity it is further proposed the salary for Deputy Community Development Director /Building be set equal to Deputy Finance Director, from $10,552 - $12,824 to $11,098 - $13,488 per month (approximate 5.2% increase). Police, Fire Chiefs /Assistant Chiefs In the past, cost -of- living adjustments for public safety chiefs (Police Chief, Fire Chief, Assistant Police Chief, Assistant Fire Chief, Assistant Lifeguard Chief) have been tied to adjustments for employees in the Key and Management Group, while pension contributions have been aligned with their public safety group (i.e.: the Police Chief pays the same for PERS pension benefit as members of the Police Management 4 -2 Association, which is currently a 12.8% pick -up, and one of the highest in Orange County). Having cost -of- living adjustments tied to one group, while pension pick -up is tied to another group, creates inconsistency and the potential for compaction and inequity. It is proposed, after the respective employee association Memorandum of Understanding (MOU) is adopted, the negotiated cost -of- living adjustments and pension contributions would apply to the respective Chief /Assistant Chief. This practice was recently implemented with adoption of the Lifeguard Management Association (LMA) MOU on June 9, 2015. In that process the City Council approved cost -of- living adjustments while requiring additional PERS contributions for the Assistant Chief, Lifeguard Operations the same as LMA, ensuring consistency in pension cost - sharing and continuity and equity in the cost -of- living adjustment. By the conclusion of the contract, LMA members and the Assistant Chief, Lifeguard Operations, will contribute 13.6% of their payroll toward pension. The proposed Resolution amends the Key and Management Compensation Plan to stipulate the adjustments for the other public safety chiefs will be set equal to the adjustments of the safety management employee association within their department (Attachment A, Resolution No. 2015 - _; and Attachment B, Proposed Alignments chart). Other benefits and terms of employment for the City's public safety chiefs will remain tied to the Key and Management Group. The Key and Management Compensation Plan is for the period July 1, 2012 through June 30, 2015. Though the date of term has passed, the pay and benefits for employees in this unrepresented group continue until the City Council adopts a successor Compensation Plan. The attached Resolution modifies classification or compensation for only those positions identified and continues the Plan beyond July 1, 2015. All other elements of the Key and Management Compensation Plan remain unchanged. Under the Newport Beach Municipal Code 2.28 as it pertains to the City's Compensation Plan, and in accordance with PERS regulations, adjustments to salary are recommended by the City Manager and approved by the governing body (i.e.: City Council). If the City Council approves the attached resolution, Human Resources and Finance staff will work to implement changes and notify affected employees. Fiscal Impact: The estimated cost to classify the Building Manager /Chief Building Official as Deputy Community Development Director /Building and set the range for both Deputy Community Development Director positions equal to Deputy Finance Director is $12,060 for the remainder of FY15 -16. The Community Development Department budget includes salary savings and the adjustments can be absorbed in the current budget. There is no cost at this time with the safety chief adjustments recommendation; future impact will be presented at a later date in conjunction with the respective bargaining unit MOU adoption. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Description Attachment A - Resolution Amending the Key and Management Compensation Plan Attachment B - Proposed Alignment for Public Safety Chiefs 4 -3 Attachment A RESOLUTION NO. 2015 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AMENDING THE KEY AND MANAGEMENT COMPENSATION PLAN WHEREAS the City Council of the City of Newport Beach has adopted a Salary Schedule that identifies the position title for every employee position and shows the pay rate for each position; and WHEREAS, on January 22, 2013, the City Council of the City of Newport Beach adopted Resolution No. 2013 -10 entitled "A Resolution of the City Council of the City of Newport Beach Adopting the Key & Management Compensation Plan ", which provided the salary, benefits and employee pension contributions for unrepresented employees in the Key and Management Group for the period July 1, 2012 through June 30, 2015; and WHEREAS, the City Council of the City of Newport Beach desires to modify the Key and Management Compensation Plan to establish pay equity practices; change classification titling; adjust pension contributions for certain positions; and extend the term of the Compensation Plan until a successor Compensation Plan is proposed. NOW, THEREFORE, the City Council of the City of Newport Beach does RESOLVE as follows: Section 1. The Key & Management Compensation Plan shall be amended as follows: a. Compensation, Section A (Salary), shall be amended to add the following text: The salaries for Deputy Director Community Development/Planning and Deputy Director Community Development/Building shall be set equal to Deputy Finance Director at a rate of $11,098 to $13,488 per month. Cost of living adjustments for the Police Chief, Fire Chief, Assistant Police Chief, Assistant Fire Chief, and Assistant Chief Lifeguard Operations, shall be tied to their respective safety management group. Any increases to the management group will be provided to the appropriate Chief /Assistant Chief (e.g.: adjustments to members of the Police Management Association will be applied to the Police Chief and Assistant Chiefs; adjustments to members of the Fire Management Association will be applied to the Fire Chief and Assistant Fire Chiefs) in the same percentage and for the same duration. =I b. Benefits, Section C (Retirement Benefits), Subpart (2) (Employee Contributions) shall be amended to include the following text: Public Safety Employees: effective July 1, 2015, PERS retirement contributions for public safety Key & Management employees, including the Police Chief, Fire Chief, and Assistant Chiefs, will be tied to the retirement contributions of their respective safety management groups and shall be subject to the same percentage contribution and for the same duration. Appendix A shall be amended to include, within the Management - Administrative subgroup, the titles of Deputy Director Community Development/Planning and Deputy Director Community Development/Building. Section 2. The Key and Management Compensation Plan will remain in effect beyond the June 30, 2015 expiration until a successor Compensation Plan is approved by City Council. Section 3. All other provisions of Resolution No. 2013 -10 and the Key Management Compensation Plan not amended herein shall remain in full force and effect. Section 4. The City's Salary Schedules shall be modified so as to be consistent with this Resolution. Section 5. The effective date of this Resolution shall be retroactive to July 1, 2015. Adopted this day of 2015. I:]'1 ATTEST: City Clerk Mayor of the City of Newport Beach 4 -5 Attachment B Proposed Alignment - Safety Chiefs with Safety Management Units 8/11/15 4 -6 Proposed Bargaining Scheduled Bargaining Unit Safety Management Position Unit Alignment for Current PERS Employee PERS Scheduled Salary PERS Pick UpICOLA Contributions Contributions Adjustments (COLA) Police Chief Police Management 12.80% Pending Pending Association negotiations negotiations Assistant Police Chief Fire Chief Fire Management 9.00% Pending Pending Association negotiations negotiations Assistant Fire Chief, Operations Assistant Fire Chief, Life Safety Services Assistant Chief, Lifeguard Lifeguard Management 10.60% 7/16 +1,5% 7/16 +2.5% Operations Association 7/17 +1.5% 7/17 +2.5% (total contribution will be 13.6 %) 8/11/15 4 -6