1999-11-19 City Manager NotesCity of Southlake, Texas
f MEMORANDUM
November 19, 1999
TO: Honorable Mayor and Members of City Council
FROM: Billy Campbell, City Manager
SUBJECT: CM Notes
• Note the attached letter from Justin Johnson with Arthur Andersen. Recall that I
asked Mr. Johnson to review the methodology used in developing the pay plan
adjustments. Mr. Johnson reports that the steps we followed are a valid process for
determining pay plan adjustments, and they are in agreement with the methodology
we used. He also made suggestions that I believe should be followed. We will
work those suggestions into our process. Please review his report and if you have
any questions call me.
We will be meeting with all employees in December to explain the process used in
developing the plan and inform them that with the last pay check in December a
notice will be provided to let each of them know how they will be affected by the
new pay plan.
• Ron Harper and I met with an attorney and a representative of the property owned
by Neill/Gunn (685 West Dove Road) concerning the easement we need to obtain
for the SH 114 ROW. We felt it was a very productive meeting. There is no
interest of the property owners in selling the tract in question. What they are
offering is a reduction in price from $50,000 to $40,000, they would like for us to
dedicate the old Shady Oaks roadway (we would have dedicated half of it anyway),
and they will provide us any and all waivers of harm or damage caused by the
purchasing of the new right-of-way. We have not had an opportunity to pass this
information on to our attorneys but will do so. We feel that unless there is a legal
w
Honorable Mayor and Members of City Council
CM Notes
November 19, 1999
Page 2 of 5
glitch we will pursue this avenue as authorized by Council during executive session.
To clarify it is staff's recollection that we were to negotiate with the property
owners to a cash amount set by Council or, as a final option, proceed with the
partial purchase with hold harmless documents. Contact me if you have any
questions.
• The City's current bank depository contract will expire on February 1, 2000. In
order to obtain optimum depository services, staff will be sending proposals to area
banks both inside and outside the City limits. Legislation requires that Council
formally state in writing, its intent to solicit and consider proposals for depository
services outside the corporate limits of the City. Sharen Elam has prepared a
resolution for Council's approval at the next meeting on December 7' permitting
the City to consider accepting proposals from financial institutions outside the City
limits. On December 8`'', staff will be sending Request for Proposal forms to
financial institutions to solicit proposals for depository services. Our current
contract provides for an extension period not to exceed ninety (90) days and staff
has requested for a sixty (60) day extension to April 1, 2000. With the holidays
approaching, city staff does not want to jeopardize any potential financial
institutions not proposing due to the time restraints that would be required to have
the process completed in sufficient time to award a new contract prior to February
1, 2000.
• Note the attached proposed resolution from the Town of Trophy Club urging the
City of Southlake to resolve the issue pertaining to the closing of T.W. King Road.
• Update on Director of Planning Recruitment. Brochures and advertisements were
reviewed by staff this week and the O'ldani Group has begun the placement of these
advertisements in publications and on web sites which should start appearing the
I
Honorable Mayor and Members of City Council
CM Notes
November 19, 1999
Page 3 of 5
week of November 22. The deadline for resumes is December 31, 1999, and the
O'ldani Group should have a list of ranked applicants to the City by Mid -January.
After the ranked list has been received, I will start interviews and final selections.
• David Palmer requested a meeting for late this afternoon with Councilmember
Edmondson and I concerning the Shops of Southlake. He stated that he wanted to
work with the City and its residents. Several options were discussed and a future
meeting will be scheduled.
• Sharen Elam met with James Schiele, Carroll I.S.D. Business Manager, to discuss
C.I.S.D.'s financial projection and plans to ensure that the City and the District are
working together as a team to better serve the community. The District has a
monthly Finance Committee meeting and Sharen is now on the list of attendees,
therefore; she will receive the monthly packet of material.
• There will be an informational meeting regarding Pioneer Concrete on Wednesday,
December 1 at 6:00 p.m. at the City Council Chambers. This will be an
opportunity to inform the SPIN 9e and 9w representatives about the issues
surrounding Pioneer Concrete. No date has been given regarding the appeal with
the TNRCC, but we will keep you informed when a date has been set. Please join
us if you are interested in attending this meeting.
• Community Services Events.
❖ Holiday in the Park. The Parks and Recreation division will host the annual
"Holiday in the Park" at Southlake Town Square on Saturday, December 4,
from 6:00 p.m.-9:00 p.m. This will be lighting of the Holiday Tree, and will
include music, arts and crafts, horse drawn wagon rides, and Santa Claus.
Honorable Mayor and Members of City Council
CM Notes
November 19, 1999
Page 4 of 5
Note that Southlake Town Square is hosting an inaugural holiday lighting
ceremony tomorrow, Saturday, November 20. The event will feature the
lighting of the buildings and the park, except for the holiday tree. Southlake
Town Square, Inc. is also sponsoring a fireworks show as part of the event.
You may have noticed that lights have been on in the park for about a week, but
this was part of the lighting installation and testing. The lights had been left on
all night a few nights, but staff has corrected that problem with Town Square
staff.
❖ Keep Southlake Beautiful accomplishments. KSB took part in Texas Recycles
Day on Saturday, November 13 at Home Depot with promotions and
educational demonstrations. They have also been active in recruiting more
adopt -a -street groups, and formed a Habitat Keepers program at Carroll Junior
High School. This group recently planted wildflowers on the east side of the
school.
❖ Southlake Youth Action Commission (SYAC). SYAC is meeting the first and
third Wednesday of each month, with one meeting geared towards community
service participation, and the other dedicated to the Youth in Government
program. Community service activities have included participation in a Habitat
for Humanity project, benefit for Ronald McDonald House, City's Adopt -A -
Street litter pick-up program, and a clothing drive with the Tarrant County Bar
Association. Preparations continue in Youth in Government education, with a
goal of hosting a mock City Council meeting in early 2000.
7
Honorable Mayor and Members of City Council
CM Notes
November 19, 1999
Page 5 of 5
• Southlake Department of Public Safety is a "drop-off' location for the Tarrant Area
food Bank. All food will be located in the entry lobby and will be picked up by
either volunteers from Coors, Coca-Cola, U.S. Air Force Reserve Security
Squadron, or a Tarrant Area Food Bank truck.
• Also enclosed is an excerpt from the City's newsletter that will be in the next
edition mailed to residents (and possibly appear in the Southlake Journal)
concerning the Teen Center. Hopefully this will help alleviate any
misunderstandings about the Teen Center. Councilmembers Edmondson and DuPre
worked with James Kunke on the article.
C
C-A + ....Cl .�� j� i.J :!1^ _c�cC5 TJ "C i 742_:239e . Da 't
ARTH U R
ANDERSEN
Novernber;, 1999
-
� IMain scee!
1 L: Mr. Billy Campbell 6ailas ix rzrzz-
Cit-✓ Manager :; 1 ..42 3300
lvls. Lauren Safranek, Human Resources Directo-
City of Southlake
l✓-om: 'vir- Justin W. Johnson
Arthur Andersen L
i
Re: Compensation Program, Assessment
Introduction
Arthur Andersen was engaged by the City of Southlake, Texas to review the
organization's proposed compensation program for the 1999-2000 fiscal year. This
4W Program assessment included the completion of the following tasks:
Review the market sur>ey methodology, data and results to ensure the validity
of that process;
' Review the current pay plan and the adjustments recommended to the City
Council,
Review the implementation strategy proposed for January 1, 2000.
This memorandum summarizes the results of our assessment and presents our
recommendations to the City for updating its compensation, program at the beginning
of the coming calendar year.
Findings & Recommendations
As indicated by the City's proposed pay plan adjustments for FY 1999_20M, the results
of the market analysis are the most consequential consideration in determining how the
pay levels should be revised (as opposed to interndl equity considerations). Given the
competitiveness of the job market, and the strength of the economy both nationally as
214 741 3525 TC 98174242 .E
A
(W
.ARTHUR
ANDERSEN
Billy Campbel'
Ms. Lauren, IS;;afrane t
City of Soutnlake
Page 2
well as within the DFW area, emphasizing external competitiveness when
determining compensation plan adjustments is generally a valid, appropriate process in
these current circurnstances. Most employers in the itiietroplex are experiencing great
difficulties recruiting and retaining employees, especially in line level positions, such as
those in customer service, maintenance, clerical and technical jobs. As a result, pay
levels for these types of jobs have been increasing more rapidly than would be typical ir.
a ess robust economy, and organizations are having difficulty keeping up with these
increases. To compensate, employers are finding they must be more sensitive to
changes in the external market and adjust their pay structures accordingly.
Additionally, organizations are finding they must be more flexible in negotiating pall -
rates with potential emmplovees during the recruitment process.
While the internal value of jobs (as determined by the City's point factor job evaluation
system) remain an important consideration within the context of establishing pay levels
for jobs, this consideration is not as critical in present terms as are market
competitiveness issues. Therefore, while the City should not abandon its job evaluation
Process at the current time, until the market becomes less volatile, rather than valuing
internal equity and market competitiveness equally (as was the case when the original
Pay structure was developed by Ralph Andersen & Associates using the point factor
process), the City should base its pay plan updates predominantly upon the results of
the external market survey analysis conducted by the Human Resources Director.
This process resulted in the computation of the 75Lh percentile (the City's targeted
competitive position within the market) of actual salaries for the positions surveyed,
and the comparison of Southlake's current salaries to these market results. These
results were then used to determine the pay grade recommendation for each job
position within the City's pay structure, although some attempt was made to maintain
similar groupings of jobs within grade assignments based upon the original pay
structure set up by Ralph Andersen & Associates. The steps followed are a valid
process for determining pay plan adjustments and we are in agreement with this
methodology in light of the City's need and objective to be a market leader in order to
recruit and retain quality employees.
Additionally, in our opinion, the manner with which the positions were slotted into the
pay grades is an appropriate representation of the comparative results of the survey.
Because of the City is taking a market Ieader position (that is, targeting the 75th
percentile), the majority of the pay grade assignments represent higher amounts than
r
214 741 9525 rL %174242-3356
P.04ZOc
4W Mr. Billy Campbell
,�:'s. Lauren. Safranek
-ity of Southiare
Pagc 3
ARTHUR
ANDERSEN
current gradings. However, once the City has established itself at the level being
targeted, the budgetary amount to fund adjustments necessary to maintain this
competitive position will be considerably Iess on an annual basis. So while the funding
dedicated to adjust the pay plan this year is relatively significant, this allocation should
be proportionately less in coming years (unless all or the majority of the agencies the
City compares itself to increase their pay plans by a disproportionately higher amount
than Southlake, which is extremely unlikely).
Given that the market is such a critical factor in determining appropriate compensation
levels for the City's job positions, we recommend the following guidelines for the City
as it updates its plan from year to year:
The City should maintain a set list of agencies which represent the "official"
peer/competitor market for Southlake. These organizations should be
recommended by the City Manager, and then reviewed and approved by the City
Council as a policy decision. As we understand the City's current goal, the targeted
market position for its pay plan is the 73th percentile. This target is only meaningful
if the group of organizations against which the City compares its pay plan from year
to year remains the same_ If the agencies change, in effect, the definition of what is
the 75tb percentile will also change, and the City's attempt to reach this target will be
invalidated.
Additionally, the City should define a list of job classes which are to be included in
the salary survey every year and are defined as the "benchmarks" for the City's pay
plan_ These classes should be positions which are:
Representative of all different job families within the organization (clerical,
public safety, maintenance, etc.);
Al Representative of all different levels of jobs within the organization (entry,
journey, supervisory, etc.); and
Typically found in other municipal organizations (i.e., are not unique to the City
of Southlake, such as Public Safety Officer, and therefore can be sufficiently
matched within the market).
,c,, 9 9 13:19 F;) �* 55-�4 -
214 741 9525 TO 98174242398
?5. - 26,
4r fir. Billy Campbell
1,ts. 7 auren Safrarek
City of Southlake
i age 4
ARTHUR
ANDERSEN
Typically, if an organization surveys approximately 33'% of its total job classes each
year, the results should be a valid indication of the overall competitive strength of its
pay program. However, we recommend that as long as the market remains as
competitive as it currently is, the City should establish a set number of benchmarks
based upon this 33% guideline, which are used as the core positions included ir, the
survey every year, and then add to this core list enough jobs to represent a o oup of
50%-606% of the total number of job titles in the pay program. This additional
sample of positions should be revised each year to rotate through all of the other
jobs in the pay structure besides those in the core benchmark group.
The City used actual salary data to determine its competitive position compared to
the market this year (that is, the City compared its own salary rates to that which the
employees within each Job title at the other cities in the survey are actually paid, as
opposed to what the level of their pay range is). This comparative process is
especially relevant and appropriate in today's market because studies in recent years
have shown that actual pay rates are increasing at a more rapid pace than pay range
increases. Therefore, the City has a truer picture of the current external value of the
positions surveyed by reviewing the actual pay rates, than if it had only considered
pay range data. We recommend continuing to emphasize an actual salary
comparison process in the survey, at least until the market becomes less volatile,
In future years, the City should begin to "age" the market survey data it collects to
represent presumed pay plan adjustments to be made by the organizations included
in the survey. This type of aging process is usually done by multiplying the targeted
market computation up by a set percentage based upon average salary increases
seen in recent years_ For instance, in a survey conducted by the American
Compensation Association, the average salary increases for the Southwest region of
the U.S. have been around 4.3% in recent years. This percentage could be applied to
the 731h percentile computations determined by the City's Human Resources
Director to project an assumed increase to the pay plans of those cities included in
Southlake's market survey. This type of process results in a truer representation of
market conditions on the date an organization is set to adjust its pay plan (in the
City's case, typically at the beginning of the fiscal year), rather than on the date the
survey is conducted, which is often months prior to the day the new pay plan goes
into effect.
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ARTHUR
Mr. Billy Camt�rell
Ms. Lauren Safranek
City of Southlake
Page 5
As another means of reacting to market conditions, the City should ensure that
managers, directors, and other personnel involved in hiring decisions have flexibility to
negotiate with potential employees on starting rates, at least up to the mid -point of the
pay grades. if a manager can justify that an employee is worth more than the minimum
rate set for a job within the pay structure (either because the employee is currently
making more than the City's starling rate, has significant relevant experience, or brings
other valuable skills to the organization, etc.). By allowing more flexibility to hire
employees at rates above the range minimum, the City does not place itself in a position
where it has to adjust its ranges up to react to every recruiting issue. Employers often
create probicros for themselves when they continually adjust their ranges up in a
volatile market because when the market begins to correct and slow down, the external
value of positions drops, and the organization finds itself in a position where it needs to
lower its range levels, which is usually a fairly difficult proposition, considering
employee morale, etc.
As indicated throughout this memorandum, we are in agreement with the process and
results of the compensation program updates for the City of Southlake. Our review of
the market survey analysis indicate that the process was conducted in a valid manner.
Additionally, the pay program adjustments recommended to the City's pay plan as a
result of the survey are reflective of the type of increase required to move the City from
its current position within the market, to that level being targeted by the organization.
** TOTAL PAGE.E6 **
Phone:
Re:
Town of Tro(�P✓x.!^f.Y Club
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11
• TOWN OF TROPHY CLUB, TEXAS
PROCL .NL-kTIOti NO. 1999-
A PROCL ANLATION OF THE TOWNT COi.:ti CrL OF THE TOWN O
TROPHY CLUB, TEXASENCOURAGING THE CITY OF SOL:THLAKE
TO ALLOW T.W. KING ROAD TO RELNIA N OPEN; ENCOURAGING
THE CITY OF SOL-rHLAKE TO RESOLVE ALL OUTSTANDL\ G
ISSUES PERTAM- NG TO T.W, IQNG ROAD; PROVIDfNG A-N
E FFE CTn'E DATE
WT3ERE o �;t is empowered =der of t:7e Taxis Luca;
Gove:^tmznt "ode to adopt anordinanca cr rule- that is for t: a good Tow z, govarrmert of the
WHEREAS, T.W. King Road is Used by the residents of the T o,,vn of Trophy
Club to access eastbound State Highway I.4;
WHEREAS, t'-- C103ure of T.W. King Road'h'oUid presen. 3 subs:a�tia; ;a;ds ,ic
to : e residents of tie To xu of Trophy Club and su.-ourdi g corzun=.i.2., tics; and
�I7EREA.S, it is in the best i.:teresi of theresidents of the Town of Trophy Club
3rd roundir.; corri,-,unities that the City of Southla:{e A ozc di4i3erti,+ to ea;t:;e a
. speedy resolution to the issues surrounding T.W. King Road,
NOW, THEREFORE, BE IT PROCLAIMED BY THE TOW`r COi,'`r'CIL
OF THE TO)" OF TROPHY CLUB, TEXAS:
Secti.or, ?. That the Tow;. Council encourages the City of Sig �:ha:ce to alio,.v
T W. King Road to reMai.Z open so as to prolide access to eastbound S►,ate lli`hway
Section :. That the Town Council encourages the City of Soutl,.lake to :esolve
the ou►sta.'tding issues pertai7:ing to T.W. King Road in 3 timely manner; and
Section 3. That this proclamation shall take effect from and apex its date of
Oassage in accordance with law.
PASSED AND APPROVED by the Town Council of the To-anof T mphy C"ab.
Texas t:^.is _ Lay of , 1999.
TOW`' OF TROPHY CLUB, TEXAS _ PROCLAMATIO't
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