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HomeMy WebLinkAboutMemo - Mail Packet - 6/20/2023 - Materials For June 20 Council Compensation Committee Meeting Human Resources Department 215 N. Mason, 2nd Floor Fort Collins, CO 80522 970.221.6535 Date: June 12, 2023 To: Mayor and City Councilmembers From: Teresa Roche, Human Resources CC: Kelly DiMartino, City Manager RE: Materials for June 20 Council Compensation Committee Meeting ____________________________________________________________________________ I hope all are well. Attached to this memo are the following: • The agenda for the Tuesday, June 20, 3:30 pm to 4:30 pm hybrid meeting of the Council Compensation Committee.. • The draft minutes from the December 19, 2022, Compensation Committee meeting. • Slides from Innovest on the Retirement Market Analysis. You will note that the meeting topic on Tuesday is previewing the Innovest market analysis for retirement plans for the Council-appointed employees. The Council requested this analysis in late 2022 for more accuracy in the data and peer comparisons. Tuesday’s preview will guide us on whether more work is needed before the 2023 analysis is complete. If you have any questions, please let me know. TR Human Resources 215 N. Mason Street Fort Collins, CO 80522 970.221.6535 AGENDA Compensation Policy Committee June 20, 2023, 3:30 p.m. MDT Hybrid Zoom Meeting +1 720 928 9299 Call In Meeting ID: 924 6972 2781 https://fcgov.zoom.us/j/92469722781 The Councilmembers on the Committee will be meeting in person in a small conference room at City Hall so they may attend a Council function immediately following the Committee meeting. The staff liaison to the Committee, Teresa Roche, will join them in the conference room. Due to the size limitations of the room, all other staff members, consultants and members of the public are asked to join via Zoom. The conference room A/V system and Zoom session will be launched 15 minutes prior to the start of the meeting as the Councilmembers are arriving. Committee Members: Councilmember Susan Gutowsky, District 1 Councilmember Julie Pignataro, District 2, Chair Councilmember Shirley Peel, District 4 City Staff Members: Teresa Roche, Human Resources Executive Carrie Daggett, City Attorney Kelley Vodden, Director, Compensation, Benefits and Wellbeing Gretchen Schiager, Executive Administrative Assistant • Call Meeting to Order • Approve Minutes from December 19, 2022 • Discussion Items: o Innovest Market Analysis for Council Appointed Employee Retirement • Adjournment Next Scheduled Meeting: August 21 There are three or more members of the City Council that will likely attend this meeting. Formal action may be taken by the Committee at this meeting, and the discussion of public business will occur. Therefore, the meeting is open to the public. Past Meeting Topics • December 2021: Committee Identifies 2022 Schedule of Topics and Meeting Cadence • January 2022: Highlights from Child Care Benefits Exploration Study • February 2022: Discuss updated analysis on Council Pay and Benefits • March 2022: Review of the performance management process for Council appointed employees • April 2022: Review updated Council pay and benefits analysis • May 2022: Cost of Living Analysis • July 2022 Performance Management Process • August 2022: Performance Management Process Continued • October 2022: Final Plan for Annual Evaluation and Market Analysis • December 2022: Debrief Annual Evaluation Process, Plan for 2023 2023 Meeting Topics • Retirement analysis for Council- Appointed Employees • Equitable compensation practices • Hourly employee leave benefits • Impact of Council pay increase on interested candidates • High-performing cities selection process Bike Rack Issues • Council onboarding 2023 This information is available in Spanish or other language at no cost to a person who would like this information translated to or communicated in Spanish or other language. Please call 416-4254 or email titlesix@fcgov.com to make a request for information in other languages. Esta información está disponible en español u otro idioma, sin costo para la persona que le gustaría esta información traducida o comunicada en español u otro idioma. Favor llame al 416-4254 o envíe un correo electrónico a titlesix@fcgov.com para solicitar información en otros idiomas. Auxiliary aids and services are available for persons with disabilities. TTY: Please use 711 to call 970.416.4254. Compensation Policy Committee December 19, 2022, 3:30 – 4:30 p.m. Meeting Minutes Members in attendance: Councilmember Susan Gutowsky, Councilmember Shirley Peel, Councilmember Julie Pignataro Staff in attendance: Teresa Roche, Human Resources Executive; Jenny Lopez-Filkins, City Attorney; Kelley Vodden, Director of Compensation, Benefits and Wellbeing; Rupa Venkatesh, Assistant City Manager; Gretchen Schiager, Executive Administrative Assistant The Compensation Policy Committee meeting was held virtually on December 19, 2022, through a Zoom webinar. Agenda • Call Meeting to Order • Approve Minutes from October 17, 2022 • Discussion Items: o Debrief the Annual Evaluation Process o Overview of December 20 Consent Item o A Year in Review and 2023 Plan for Committee • Adjournment Councilmember Pignataro called the meeting to order at 3:32 p.m. Councilmember Gutowsky motioned to approve the October 17, 2022, minutes. Councilmember Peel seconded the motion. The minutes were approved unanimously. Debrief the Annual Evaluation Process Ms. Roche reviewed changes made to the process this year and asked for feedback. Overall, the Committee liked the process and appreciated the opportunity to meet with the consultants in advance. They had confidence in the expertise of the consultants (ILG Strategic Services) and felt they were good facilitators. They said the interviews with the consultants complemented the online survey and did not seem duplicative. The questions were open-ended and not leading. They commented that the summaries were accurate and were compiled fairly and objectively. They saw value in having the perspectives of the employee, their direct reports, and the Council. They appreciated that all three employees had the same questions and that the discussions were in- depth and insightful. The Council and direct reports seemed to be aligned, which was affirming. In one case, the members mentioned a glitch with a misinterpretation of the survey. Ms. Roche will clarify the instructions next time. The members appreciated having the market analysis to inform salary decisions and liked the process for the salary ordinances. Having no discussion from the dais was a positive change. Ms. Roche acknowledged the absence of reliable retirement data but said she would work with an external partner to perform an in-depth analysis to enable a more accurate comparison in the future. A member pointed out that the City Attorney's salary is in the 10th percentile nationally and expressed concern about the impact that might have on future recruitment. There was a question about whether raises were based on market or performance. Ms. Roche explained that the market dictates the salary range, and performance determines where in the range the salary should fall. Ms. Roche summarized the feedback, saying it was a solid process with the right consultants, and going forward with them will make next year easier. She reported receiving feedback from two employees that the process was solid and the summary was thorough and constructive. The mayor also provided positive feedback on the process and the consultants. Ms. Roche asked whether the members thought they had sufficient time to consider their decisions after receiving the data and during the executive session, and they said it was adequate. Councilmember Pignataro thanked Ms. Roche for all her work throughout the process. Overview of December 20 Consent Item Ms. Vodden explained that the purpose of the Nationwide resolution is to restate the adoption agreements and align our procedures with our governing documents. A recent internal audit revealed discrepancies between City policy and the Nationwide governing documents resulting from our transition to Nationwide. This resolution is an administrative cleanup and has no budgetary impact. The Year in Review Ms. Roche reviewed the Committee's accomplishments since being formed last year. The highlights included: • The Committee was the first to hear the highlights from the childcare benefits exploration study. • The Committee shaped the market analysis on Council pay and benefits in February, and the ballot passed in November. • The Committee initiated changes to the performance management system that was implemented for this year's annual evaluation process. • The Committee reviewed the cost of living analysis, which was used as context for the City's 2023-2024 budget. • The Committee's discussions last December and January focused on Council support, ultimately shaping Rupa and Sarah's roles. Councilmember Pignataro recognized these accomplishments and shared her appreciation for Staff support. 2023 Plan for the Committee The members and Ms. Roche compiled a list of what they would like to work on in the coming year: • Understand how high-performing peer cities were chosen and consider whether changes are needed in the process or the list. • Look for opportunities to work with the Equity Office on compensation practices. • Follow the impact of the Council pay increase on the field of candidates. • Weigh in on the retirement analysis for direct reports. • Provide comments on plans to close the gap between FAMLI and benefits for hourly employees. • Schedule meetings every two months beginning in February, but only meet when needed. Consider the timing of decisions that need to be made. Councilmember Gutowsky praised Rupa for bringing her finesse to significant issues like Library Park and thanked her for being part of the Council team. Next Meeting: February (TBD) The meeting was adjourned at 4:30 p.m. City of Fort Collins Benchmark of Retirement Plan Contributions and Benefits Project Presented by Innovest Portfolio Solutions June 2023 © 2023 Innovest Portfolio Solutions, LLC 2 Helpful Retirement Term References •Defined Contribution Retirement Plan –allows employees to contribute and invest in funds and other securities over time to save for retirement •Defined Benefit Retirement Plan –also known as a Pension, provides a promise to pay a specified payment amount in retirement •Social Security Component –it’s important to not that not all public entities pay into social security. Some plans may be designed to be a social security replacement plan •Retiree Health Component –entities may offer Retiree Health Reimbursement Accounts, Retirement Heath Savings Plans, or Post-Employment Health Plans, designed to provide assistance with medical expenses, funded by the employer during employment •Eligibility –an employer may set parameters around when a participant can start in a plan. If eligibility is anything other than Immediate, than there are certain requirements to be met before entry. •Vesting Schedule –dollars contributed by the employee are always 100% owned by the participant. Employer contributed dollars (sometimes referred to as a Match) may require a certain amount of time to pass before a participant fully owns those assets. If the vesting is anything other than 100% immediate, then there is a waiting period before the participant owns, and thus, is allowed to move, those assets. © 2023 Innovest Portfolio Solutions, LLC 3 Observations & Takeaways •Define Goals-Are we looking at Total Inputs or Retirement Readiness of Employee? •Hard to Benchmark-as the Retirement benefits structure vary widely from each entity. •The National Cities have a very different structure than the Colorado entities (Most are Defined Benefit focused). •Most Colorado Plans require an Employee contribution into 401. •Total Contributions into Retirement for FC Execs are 28% (Including 401, 457 Match, and Social Security) •Half of the Colorado plans do not have an executive plan separate from the General Employees’ plan © 2023 Innovest Portfolio Solutions, LLC 4 Local Entity Specific Plan Plan Type Employer % Employee % Social Security Defined Benefit Available Retiree Healthcare Eligibility Match Vesting Schedule (Years) Salary Year of Last Increase Annual/ Retention Bonus Fort Collins, CO Exec. Plan 401a 10%0%Yes No No Immediate 3%Immediate $305,325 2022 Arvada, CO Exec. Match 401a 11%8%No No Yes Immediate Exec ~ $25,000 Immediate $260,000 2022 Aurora, CO Exec. Plan 401a 10%10%Yes No $244/mo Immediate ~$15,000 3 $269,402 2021 $26,940 Boulder, CO Exec. Plan*401a 14%8%No No No Immediate No 5 $290,000 2022 Broomfield, CO No 401a 6%6%Yes No/ Frozen Yes Immediate No 5 $267,738 2022 Colorado Springs, CO Exec. Plan*401a 8%8%Yes No Yes Immediate No 5 N/A Denver, CO No DB 18%8.45%Yes DERP No Immediate N/A 5 N/A Greeley, CO No 401k 6%4%Yes No No Immediate 2%5 $260,740 2022 Lakewood, CO No 401a 13%11%No No Yes Immediate No 5 $280,259 2022 Larimer County, CO No 401a 8%8%Yes No Yes Immediate No 5 $245,000 2022 Littleton, CO Exec. Match 401a 8%5%Yes No No Immediate ~$11,250 5 Longmont, CO**No 401a 5%6%No Yes Yes Immediate No 3 $289,176 2022 $60,000 Loveland, CO No 401a 9%3%Yes No No 6 months No 3 $217,587 2022 Thornton, CO Exec. Plan 401a 8%12.6%Yes No Yes Immediate 1%5 $290,000 2021 $2,424 Westminster, CO No 401a 11.25%11%No No Part of 401h Immediate No 5 $240,890 2022 Colorado PERA No DB Public Entity Comparisons -City Manager Italics are cities with a strong mayor-council form of government. * Can choose between/either the Statewide Defined Benefit Plan or the Executive 401a Plan. **Longmont Retention Bonus of $40k given if employed end of 2023 and $20k given if employed end of 2024. © 2023 Innovest Portfolio Solutions, LLC 5 National Entity Specific Plan Plan Type Employer % Employee % Social Security Defined Benefit Available Retiree Healthcare Eligibility Match Vesting Schedule (Years) Salary Year of Last Increase Annual/ Retention Bonus Mesa, AZ Exec. Plan 401a Max 0%Yes Yes Yes-20 years Immediate $8,000 Immediate $310,670 Unknown Ann Arbor, MI Yes 401a 15%7.5%Yes No Yes Immediate No 3 $257,178 Unknown Anaheim, CA Exec. Plan 401a 5%5%No Yes Yes Immediate No Immediate $291,000 2021 $5,596 Asheville, NC State DB 12.1%6%Yes Yes No Immediate No 5 $242,694 Unknown Greensboro, NC State DB 12.1%6%Yes Yes No Immediate No 5 $280,000 2022 Hayward, CA Exec. Plan 401a 6%0%No Yes No Immediate No Immediate $299,655 2021 $35,418 Oklahoma City, OK Exec. Plan 401a 8%8%No Yes Yes Immediate No Immediate $268,224 2022 Palo Alto, CA Yes 401a 75% of Max 0%No Yes Yes Immediate No 5 $366,680 2021 $34,533 Sacramento, CA Exec. Plan 401a 10%0%No Yes Yes Immediate No Immediate $386,502 2021 $67,707 Santa Monica, CA Exec. Plan 401a 5%5%No Yes No Immediate No Immediate $340,000 2022 Savannah, GA Tallahassee, FL Exec. Plan 401k 5%Elective No Yes No Immediate Deferred Match Immediate $247,561 2022 Durham, NC State DB 12.1%6%Yes Yes No Immediate No 5 $270,001 Unknown Irving, TX Exec. Plan 401a 5%5%No Yes No Immediate DROP Immediate $302,713 Unknown Wilmington, NC State DB 12.1%6%Yes Yes No Immediate No 5 $211,912 Unknown Plano, TX Exec. Plan 401a 5%5%No Yes Yes Immediate No Immediate $333,709 Unknown Austin, TX DB 12%10%No Yes Yes Immediate DROP 5 $380,393 2022 Eugene, OR Exec. Plan DB 5%5%No Yes No Immediate No Immediate $218,000 2020 Naperville, IL Exec. Plan 401a $20,000 0%Yes Yes No Immediate No Immediate $204,091 Unknown Public Entity Comparisons-City Manager © 2023 Innovest Portfolio Solutions, LLC 6 Local Entity Specific Plan Plan Type Employer % Employee % Social Security Defined Benefit Available Retiree Healthcare Eligibility Match Vesting Schedule (Years) Salary Year of Last Increase Annual/ Retention Bonus Fort Collins, CO Exec. Plan 401a 10%0%Yes No No Immediate 4.5%Immediate $222,244 2022 Arvada, CO Exec. Match 401a 11%8%No No Yes Immediate Exec ~ $25,000 Immediate $212,000 2022 $9,528 Aurora, CO Exec. Plan 401a 10%10%Yes No $244/mo Immediate ~$15,000 3 $183,935 2020 $18,393 Boulder, CO Exec. Plan*401a 14%8%No No No Immediate No 5 $245,000 2022 Broomfield, CO No 401a 6%6%Yes No/ Frozen Yes Immediate No 5 $224,099 2022 Colorado Springs, CO Exec. Plan*401a 8%8%Yes No Yes Immediate No 5 Denver, CO No DB 18%8.45%Yes DERP No Immediate N/A 5 $216,061 Greeley, CO No 401k 6%4%Yes No No Immediate 2%5 $235,112 2022 Lakewood, CO No 401a 13%11%No No Yes Immediate No 5 $218,400 2022 Larimer County, CO No 401a 8%8%Yes No Yes Immediate No 5 $208,197 2022 Littleton, CO Exec. Match 401a 8%5%Yes No No Immediate ~$11,250 5 Longmont, CO**No 401a 5%6%No Yes Yes Immediate No 3 $245,503 2022 $45,000 Loveland, CO No 401a 9%3%Yes No No 6 months No 3 $190,008 2022 Thornton, CO Exec. Plan 401a 7.6%7.6%Yes No Yes Immediate 1%5 $222,255 2022 Westminster, CO No 401a 11.25%11%No No Part of 401h Immediate No 5 $238,960 2022 Colorado PERA No DB Public Entity Comparisons -City Attorney Italics are cities with strong mayor-council form of government. * Can choose between/either the Statewide Defined Benefit Plan or the Executive 401a Plan **Longmont Retention Bonus of $30k given if employed end of 2023 and $15k given if employed end of 2024. © 2023 Innovest Portfolio Solutions, LLC 7 National Entity Specific Plan Plan Type Employer % Employee % Social Security Defined Benefit Available Retiree Healthcare Eligibility Match Vesting Schedule (Years) Salary Year of Last Increase Annual/ Retention Bonus Mesa, AZ Exec. Plan 401a 11%11%Yes Yes Yes-20 years Immediate $9,000 Immediate $245,709 Unknown Ann Arbor, MI Yes 401a 15%7.5%No Yes Yes Immediate No 5 $166,074 Unknown Anaheim, CA Exec. Plan 401a 5%5%No Yes Yes Immediate No Immediate $274,662 2021 $7,800 Asheville, NC State DB 12.1%6%Yes Yes No Immediate No 5 $204,084 2022 Greensboro, NC State DB 12.1%6%Yes Yes No Immediate No 5 $213,283 2022 Hayward, CA Exec. Plan 401a 6%0%No Yes No Immediate No Immediate $239,450 2021 Oklahoma City, OK Exec. Plan 401a 8%8%No Yes Yes Immediate No Immediate $215,982 2022 Palo Alto, CA Yes 401a 25% of Max 0%No Yes Yes Immediate No 5 $322,817 2021 $18,316 Sacramento, CA Exec. Plan 401a 10%0%No Yes Yes Immediate No Immediate $312,488 2021 Santa Monica, CA Exec. Plan 401a 5%5%No Yes No Immediate No Immediate $320,136 2022 Savannah, GA Immediate Tallahassee, FL Exec. Plan 401k 5%Elective No Yes No Immediate Deferred Match Immediate $225,640 2022 Durham, NC State DB 12.1%6%Yes Yes No Immediate No 5 $223,890 Unknown Irving, TX Exec. Plan 401a 11%6%Yes Yes No Immediate DROP Immediate $256,797 Unknown Wilmington, NC State DB 12.1%6%No Yes No Immediate No 5 $127,096 Unknown Plano, TX Exec. Plan 401a 5%0%No Yes Yes Immediate DROP Immediate $234,936 2020 Public Entity Comparisons-City Attorney © 2023 Innovest Portfolio Solutions, LLC 8 Local Entity Specific Plan Plan Type Employer % Employee % Social Security Defined Benefit Available Retiree Healthcare Eligibility Match Vesting Schedule (Years) Salary Year of Last Increase Annual/ Retention Bonus Fort Collins, CO Exec. Plan 401a 10%0%Yes No No Immediate 3%Immediate $185,000 2022 Arvada, CO Exec. Match 401a 11%8%No No Yes Immediate Exec ~ $25,000 Immediate $190,000 2022 Aurora, CO Exec. Plan 401a 10%10%Yes No $244/mo Immediate ~$15,000 3 $183,935 2021 $18,393 Boulder, CO Exec. Plan*401a 14%8%No No No Immediate No 5 $179,419 2022 Broomfield, CO No 401a 6%6%Yes No/Frozen Yes Immediate No 5 $173,057 2022 Colorado Springs, CO Exec. Plan*401a 8%8%Yes No Yes Immediate No 5 Denver, CO No DB 18%8.45%Yes DERP No Immediate N/A 5 $191,445 Unknown Greeley, CO No 401k 6%4%Yes No No Immediate 2%5 $184,309 2022 Lakewood, CO No 401a 13%11%No No Yes Immediate No 5 Larimer County, CO No 401a 8%8%Yes No Yes Immediate No 5 Littleton, CO Exec. Match 401a 8%5%Yes No No Immediate No 5 Longmont, CO No 401a 5%6%No Yes Yes Immediate No 3 $175,431 2022 Loveland, CO No 401a 9%3%Yes No No 6 months No 3 $161,641 2022 Thornton, CO Exec. Plan 401a 7.6%6%Yes No Yes Immediate 1%5 $194,940 2023 Westminster, CO No 401a 11.25%11%No No Part of 401h Immediate No 5 $177,675 2022 Colorado PERA No DB Public Entity Comparisons –Chief Judge *Can choose between/ either the Statewide Defined Benefit Plan or the Executive 401a Plan. © 2023 Innovest Portfolio Solutions, LLC 9 Takeaways & Next Steps •Need to decide what the main focus is: Inputs (Total retirement contributions) versus Outputs (Retirement readiness) •Consider increasing both Employer and Employee Mandated contributions •Could possibly create a separate plan for the executives in addition to the current plan structure •Could possibly add a Retiree Healthcare plan for this employee group