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HomeMy WebLinkAboutPersonnel Board - Minutes - 07/08/1999PERSONNEL BOARD MINUTES Budget Issues Meeting July 8,1999 12:00 Noon Council Liaison: Ray Martinez, Mayor Staff Liaison: Rick DeLaCastro, Human Resources Director Telephone: 970/221-6845 Board Chair: Gail Shellberg Telephone: 970/223-6811 Board Members Present: Gail Shellberg, Jim Swails, Valerie Remington City Staff Present: John Fischbach, City Manager, Diane Jones, Deputy City Manager, Doug Smith, Budget Director, Rick DeLaCastro, Human Resources Director Joan Busch, Admin Support Supervisor (Recorder) A meeting of the Personnel Board, City Manager and city staff was held on Thursday, July 8, 1999 in the City Manager's conference room. The purpose of this meeting was to discuss budget policy issues the Personnel Board raised in a letter responding to the City Manager's request for comments on the City's bi-annual budget process. Items Discussed: Budgeting at the Maximum Salary Range & Productivity Savings: Gail Shellberg began the discussion with the city's practice of budgeting employee salaries at the maximum of their salary range. In doing so, there is a surplus of funds which in turn becomes "productivity savings." In addition, because the city budgets at the max, employees then have the expectation of being paid at their maximum salary range. John Fischbach advised that 2/3 of city employees are paid at the maximum range of their salary. Of these, only 200 employees are in the general fund, so budgeting at the max may not seem as big an impact. Some departments need to budget and pay at the max in order to hire and retain employees. Diane Jones provided the history of Productivity Savings. In the early 1990's, departments didn't manage their own budgets. If additional funds were needed for employee reclassifications or other adjustments, the manager would ask the City Manager and the Budget department for the funds. There were many such requests as departments could only meet the payroll for their current situation. Also, there was the rush at year-end to spend funds as the departments would "use it or lose it." The thought was that if the City is paying people to be managers, then they should also manage their budgets. So, Productivity Savings was developed to encourage departments to manage their budgets and, if they could save money in some areas, spend their productivity savings for needed equipment. Personnel Board Budget Meeting July 8, 1999 Page 2 Valerie Remington asked if this procedure would affect labor costs. Doug Smith answered no because the budget only tracks the dollars spent. Doug Smith commented that most of the funding for Productivity Savings is a result of salary savings from unfilled positions and the name is probably mislabeled. Doug also said that Productivity Savings helped fund the pay plan increases for 1999. Further, Doug said that projected budgets for 2000-20001 are not budgeted at the max because of the expense of the new pay plan. Diane Jones explained the 70ei percentile and the city's practice of surveying benchmarked positions. Jim Swails commented that in the private sector, salary surveys are used as a tool and are not used alone to set salary. Jim suggested that to set salaries an organization should look at: turnover rate; where employees are coming from; where employees go when they leave; and salary surveys. In the private sector 2/3 of a company's employees are not at the maximum of the salary range and there are no labor market adjustments. At the city, it's almost automatic for employees to move through the range. Performance Appraisal System Another concern raised by the Board was the lack of performance reviews. John Fischbach stated that the lack of a performance appraisal system is also of concern to him and his top priorities (after getting through the pay plan) are: 1. Performance appraisal system designed and implemented; 2. Employee survey. To implement a performance appraisal system would take buy in from managers and a cultural change within the city organization. John would like the Board's help in making changes that the City could truly implement and would like to keep the dialog going with the Personnel Board to help with improvements. Gail said that the Board, as an advisory group, could help with dialog and would be willing to do so. Valerie Remington commented that in moving to a performance appraisal program that the City will want a consistent training program to instruct employees and managers on the process. It would be best to provide "one clear voice" on the process. Rick DeLaCastro said the first step would be to get the performance appraisal system up and going and then integrate a pay for performance plan. Personnel Board Budget Meeting July 8, 1999 Page 3 Final Comments: John commented that he is impressed with Rick DeLaCastro's efforts in the short time he's been here as H.R. Director. John and Rick agree with the Board's suggestions; the trick is to bring these changes to implementation. Gail announced that the Board's next meeting is July 20, 1999. He also invited the City Manager to attend the Board's regular meetings. John said he would not be at the July meeting, but will follow up with Rick. Meeting adjourned: 1:20 p.m.