Report 2011-131 Recommendation 9 Responses

Report 2011-131: City of Vernon: Although Reform Is Ongoing, Past Poor Decision Making Threatens Its Financial Stability (Release Date: June 2012)

Recommendation #9 To: Vernon, City of

To ensure that it develops complete and appropriate personnel policies and procedures, the new human resources director should ensure that the city's policies and procedures include, at a minimum, an improved methodology for and analysis of future salary surveys, ensuring that they are performed by staff or a consultant with experience and expertise in the area of salary surveys.

Annual Follow-Up Agency Response From October 2016

Vernon has prioritized its efforts to establish a consistent, equitable evaluation of employee classification and compensation. The Human Resources (HR) Department has developed procedures that are to be utilized in each instance when a salary survey is conducted. This process is to be overseen by the HR Director who is required to be knowledgeable in the area of classification and compensation analyses. Vernon's salary survey methodology has been designed to: 1) Allow for an objective, comprehensive, analysis of respective markets; 2) Ensure that salary placements are in alignment with the City's Salary Plan Administration policy which prescribes that salaries be placed at the 75th percentile of the applicable labor market; and 3) Consider other factors such as internal equity to maintain the integrity of the internal classification and compensation structure.

Salary Plan maintenance is the responsibility of the HR Director. However, at its sole discretion, the City may hire a consultant with expertise in the area of salary surveys if deemed important to evaluate a third party analysis. Language within Section 3 of the Salary Plan Administration Policy II-3 was updated to reflect this option. In the event that a third party consultant is contracted to conduct a salary survey, it is expected that a similar methodology will be employed by the firm. The HR Director will confer with the consultant to determine the most viable course of action and inform City Council if the salary survey practice will deviate from the normal procedures established by the City's HR Department.

On July 19, 2016, the City Council approved the HR Department's most recent amended and restated Citywide Fringe Benefits and Salary Resolution to reflect updates to classification and compensation (amongst other fringe benefit changes) after conducting its biennial salary survey of all employee groups using the same methodology.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From October 2015

The following language will be added to Compensation Policy II-3, Section 3 - Plan Maintenance and presented to the City Council at its November 3, 2015 meeting for adoption:

"However, the City at its sole discretion may hire a consultant with experience and expertise in the area of salary surveys to conduct a classification and/or compensation study. To ensure internal pay equity and citywide pay comparisons, the salary survey methodology approved by the City Council for employee groups shall be the same methodology used when conducting salary surveys for the executive and management groups.

3b. Prevailing rates of pay based upon the approved comparable labor market survey."

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From July 2014

On September 17, 2013, the City Council adopted Personnel Policy II-1: Classification Plan Administration and Personnel Policy II-3: Salary Plan Administration. The Director of Human Resources has primary responsibility for the maintenance and application of both plans, including the preparation of recommended revisions/updates for consideration by the City Administrator and/or City Council. The Classification Plan Administration Policy identifies the various class series within the City and requires, at minimum, a triennial review of each series. The application of the Plan must be reviewed each fiscal year to verify and ensure the adequacy of job descriptions, the proper allocation of jobs to appropriate salary ranges, the proper classification and compensation of employees, and the reflection of any significant changes in comparison to the labor market. More frequent reviews may be conducted as recommended or directed by the City Administrator. The City Council will review any recommended revisions or updates to the Classification and/or Salary Plans as part of the budget process each year, or more frequently as necessary. Such recommendations, and Council consideration thereof, shall be based on competitive market conditions, the Citys ability to pay, and applicable collective bargaining agreements. Copies of the referenced policies are included.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

The policies that the city references do not address our recommendation, specifically, they do not include "an improved methodology for and analysis of future salary surveys, ensuring that they are performed by staff or a consultant with experience and expertise in the area of salary surveys."

1-Year Agency Response

On May 13, 2013, through an open and competitive RFP process, the City engaged Public Sector Personnel Consultants (PSPC) to conduct a Citywide Classification and Compensation Study of all active City classifications (approximately 158), including executives. PSPC has more than thirty (30) years of experience in conducting classification and compensation studies, specializing in human resources for public employers. The President of PSPC, Matthew Weatherly, possesses over fifteen (15) years of human resources management experience and has personally conducted over 150 classification and compensation projects with more than 75 cities nationwide. On June 11, 2013, PSPC held informational meetings with all City employees, including executives, to begin the study. PSPC has also recommended the comparator cities to be used for the compensation portion of the study based on criteria approved by the City Council. The proposed comparator cities have been provided to all City Department Heads and recognized bargaining units for review, comment, and discussion. Additionally, proposed classification and compensation policies have been distributed to all six recognized bargaining units in accordance with the meet and confer process, and will subsequently be presented to City Council for adoption. Said policies define the procedures that will be established to maintain the City's Classification and Compensation Plan. Consistent with said policies, the HR Director will be responsible for conducting future salary surveys on a triennial basis using the comparator cities established through the 2013 Classification and Compensation Study.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

The city provided its proposed classification plan administration guidelines, which it intends to present to the city council for approval in September 2013. The proposed guidelines indicate that the human resources director is responsible for maintenance of the classification plan and the plan will be reviewed continually each fiscal year. The plan identifies classifications by series such as department heads and assistants, accounting, police, fire, and indicates that each series will be reviewed at least once every three years. This status of this recommendation will be partially implemented until the city council approves the classification plan administration guidelines.

6-Month Agency Response

In January 2013, the city council approved a resolution instructing the city administrator to issue a Request for Proposals (RFP) for classification and compensation study.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

The city's RFP does not address the method the consultant should use for the compensation study.

60-Day Agency Response

Although the city indicated that its recently appointed human resources director will review and recommend improvements to personnel policies and procedures, the city did not specifically respond to our recommendations, elaborate on any plans to improve its policies and procedures, or give a time frame for completion. (See 2013-406, p. 191)

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2011-131

Agency responses received after June 2013 are posted verbatim.