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COMMITTEE OF THE WHOLE - MINUTES - 1/20/2005 COMMITTEE OF THE WHOLE – CITY OF MUSKEGO Approved as MINUTES OF SPECIAL MEETING HELD JANUARY 20, 2005 Corrected Mayor Slocomb called the meeting to order at 7:07 PM. Also present were Aldermen Salentine, Patterson, Borgman, Melcher, and Madden, Deputy Clerk Blenski. Ald. Buckmaster and Schroeder arrived shortly after the meeting was called to order. Those present recited the Pledge of Allegiance. The Mayor stated the meeting was noticed in accordance with the open meeting law. REVIEW MINUTES OF PREVIOUS MEETING Ald. Salentine moved for approval of minutes of meeting held January 13, 2005. Ald. Madden seconded; motion carried. APPROVAL OF AGENDA Ald. Patterson moved to approve agenda. Ald. Borgman seconded; motion carried. NEW BUSINESS Discuss Interim Finance Department Structure Mayor Slocomb recommended that an interim Finance Director be selected. This is the position that the City currently has and there are responsibilities associated with it that have to be carried out by an individual who can act in that capacity in the interim. A supervisor is needed for the department, as well as a contact person for the outside contracted services. In the interim, the Council can review the department structure and determine what changes, if any, will be made. An Interim Position Salary History for the Years 1998 - 2003 was copied and distributed. The Mayor also distributed a Position Description for an Interim Finance Director and reviewed the essential duties and responsibilities. The Mayor reviewed what has been done in the past regarding how interim positions were paid. Using 80% of the midpoint of the vacated position works for employees with few years of service. For those with longevity, using the 80% calculation can actually result in a decrease in compensation. The salary for the Interim Clerk-Treasurer was based on a 50-hour week. Mayor Slocomb reviewed the Proposed Salary - Interim Finance Director sheet. The proposal reflects an annual salary of $78,948.10 for the interim Finance Director. The Mayor stated the salary is based on a 50-hour week as was done with the interim Clerk- Treasurer position. The assumption is that the employee will work at least 10 additional hours during the interim period. Ald. Patterson noted that the difference between the two departments is that the Finance Department will use outside contracted services. The City will realize an increase in the cost of those services. Ald. Buckmaster believes the individual proposed to be the interim Finance Director is already performing the statutory duties of the Comptroller. He would like Virchow Krause to state in writing that the company will provide services to the City that cannot be done internally. The correspondence from Virchow Krause is vague and does not provide a detail of the services to be performed. Ald. Buckmaster stated he would be more comfortable paying the fee increase for those services knowing that when the position is filled, the fees will be reduced. Committee of the Whole Page 2 January 20, 2005 Ald. Melcher asked if some of the duties could go by the wayside. The Mayor stated that some of the duties could be put off. Ms. Gunderson attended the insurance trust meetings and it is not anticipated that the interim Finance Director or consultants will attend those meetings. Ald. Patterson suggested giving the employee a 10% increase and then paying her for the overtime hours. Why automatically base the salary on 50 hours? Ald. Schroeder suggested paying the employee at 90% of the midpoint of the Finance Director’s salary (as of 1/1/2005) since outside consultants will be utilized. This follows similar guidelines with what was done with the interim Clerk-Treasurer. The additional fees that will be paid to the consultants have to be taken into consideration. The annual salary would be approximately $73,000. Ald. Schroeder supports the 1% increase on July 1, 2005 if the position is not filled. Ald. Patterson noted that some of the duties of the Finance Director position would not be done. Ald. Schroeder stated he would like to determine a range. The $73,000 he suggested earlier would be the high end. He suggests a range of $69,276 to $73,000. The $69,276 was determined using the January, 2005 salary of the Finance Director ($83,559) and assuming a 3% increase for Pay for Performance, which then makes the salary $86,066. From that total, he subtracted $16,790, which is the maximum that the City could pay for consulting services. Ald. Schroeder will not consider anything less than $69,276. The Mayor pointed out that the 2005 annual salary for the Accountant position with a 6% increase and 10 hours of overtime would be $71,771. Ald. Schroeder noted that at this point we do not know how many additional hours will be required over 40. Ald. Patterson objects to giving a 40% - 50% increase. The Mayor said there would be a 25% increase in work hours. Ald. Schroeder stated the City budgeted an expense of $86,000 for a financial officer for 2005. If the City pays approximately $17,000 for outside services and an employee can pick up the remaining responsibilities of that position, the individual should be compensated accordingly. Ald. Patterson stated you don’t give a new Department Head the same salary as one who has been here long term and is more experienced. The person may be doing the job but is not as capable. Ald. Schroeder stated that stepping into an interim position is much more stressful and much more difficult than working your way up to a higher level position. There needs to be some compensation for that. The interim position will be short term. If the employee is doing 80% of the duties, why shouldn’t the compensation be at 80%. Ald. Buckmaster agreed with Ald. Schroeder’s position. Ald. Melcher asked what Virchow Krause would be doing for the additional fee. Mayor Slocomb responded the company would do the year-end wrap up for 2004 and finish the audit. If the position is not filled by August when the budget process begins, that will be another story. Ald. Madden Salentine distributed a Virchow Krause payment history, which was discussed. Ald. Madden noted that there was a huge increase from 2001 to 2002 and the rates remained at that level ever since. Committee of the Whole Page 3 January 20, 2005 Ald. Schroeder prefers the option to take the 1/1/2005 salary for the Finance Director position minus the additional cost for outside services. That results in an annual salary of $69,275.77, or $2664 biweekly. That represents a 34% increase. Mayor Slocomb asked if the salary is for a 40 or 50-hour week. Ald. Schroeder stated the position would be exempt. Ald. Madden said that the whole point of a salaried position is that you work until the job gets done whether it’s 40 or 50 hours. Mayor Slocomb said the responsibilities of the position would not be able to get done in 40 hours. Ald. Buckmaster said the Mayor would know if problems occur; they can be addressed later. The goal should be to have the interim position be as short term as possible. Ald. Schroeder stated the employee has to accept the offer. Ald. Schroeder moved to establish an annual salary for the interim Finance Director position at $69,275.77 ($2,664.47 biweekly). This salary would be through June. If the position were still vacant, the interim Finance Director would receive the 1% increase. The Mayor stated the issue will now go to Council. Ald. Madden seconded the motion. Ald. Buckmaster asked if the interim director would have the availability to increase the hours of some part time personnel to provide assistance. Ald. Schroeder stated if the employee accepts the position, the Mayor should monitor the hours performed, with the employee’s assistance. If there is an issue, additional hours should be allowed for part time employees. The interim director would have to discuss this with the Mayor. Motion carried 6 in favor and Patterson voting against. The Committee took a brief recess. Continued Discussion Regarding Finance Department Structure and City Organizational Structure and Possible Creation of New Positions or Revision of Existing Positions The Committee reconvened at 8:40 PM. Ald. Buckmaster noted that the previous Finance Director performed many human resource tasks. The job grew to take on more of those duties than initially anticipated when the position was created. He believes the City needs someone who has a professional perspective on a wide variety of disciplines. Ald. Buckmaster sees a need for more human resources, professional advice on management of those resources, organizational theory, etc. He also sees a need for someone to oversee the finance area. He suggests an Administrator/Financial Officer position, which could be accomplished through many options. Ald. Salentine said she would like to review the best way to use the money budgeted for the position that is now vacant to make the Finance Department function using existing staff. There are many options including making part time employees full time, giving the comptroller duties to the Accountant and moving the human resource duties. She believes this can all be done internally. Ald. Patterson said there are HR duties in the Finance Director job description. Who should be performing these tasks? Mayor Slocomb said the insurance aspect that is performed by the Finance Department deals with the cost claims for health insurance and workers’ compensation. He does not believe those are HR functions. The Finance Director was also involved in position evaluations. The City now only has two people that have knowledge of the system that is in place. Committee of the Whole Page 4 January 20, 2005 Ald. Buckmaster said the job descriptions of represented employees are taken more literally. The job descriptions for nonrepresented employees are more varied. He believes some job descriptions need to be changed and that should be done while discussion takes place regarding the City’s organizational structure. Ald. Schroeder presented two options. The first is the replacement of the existing position. The job description for that position should be reviewed and duties incorporated that are not included. This would be more a Financial Officer/Human Resource position. He does not know if there are individuals qualified to perform the wide range of duties that position would require. Perhaps someone aspiring to be a City Administrator who has the financial qualifications would also have human resource experience. If this option were executed, then the rest of the organization would remain as is. However, he agrees with Ald. Buckmaster that some job descriptions probably need “tweaking.” The second option is a City Administrator/Financial Officer. Ald. Schroeder does not know if this fits the City at this point. He looked at the job description of the existing Finance Director position and also used what he thought she did. He believed she did about 70% financial officer duties including being the Department Head, 20% human resource duties, and about 10% city administration. The second option would require discussing other issues, such as comptroller duties. Ald. Melcher stated Ms. Gunderson was a rare person in that she was personable while performing her accounting skills. If human resource is combined with business administration, it may be difficult to find someone. Ald. Melcher favors a City Administrator position and asked if an MBA would be required. Ald. Schroeder stated his two options are really more closely related than he initially thought. The way the City proceeds depends on what we are ready for. Mayor Slocomb said the issue with a City Administrator has not been if the position is needed, it has been one of funding. Ald. Schroeder said the option is being discussed because now we have an opportunity to move in that direction. The Mayor said typically city administrators have a strong financial background but do not act as finance directors. Where there is a city administrator, there usually is also a finance director. Ald. Schroeder stated there might be a select group of individuals who would qualify to do both. Ald. Salentine said we are not a small town any more. We need continuity. Now may be the time to prepare for the departure of long-term employees that possess a great deal of City history. The Mayor noted that there is higher turnover of city administrators than that of mayors. Ald. Patterson said there is turnover of administrators because they are in it for their pocketbook. They are there to protect themselves and their jobs. Their loyalty is to themselves. The City has hired good, strong department heads that have provided continuity. His idea is to create another department head position that could perform some of the varied duties as discussed. This person would not be running everything as an administrator but would support what each department needs and how the Mayor could help accomplish that. Ald. Schroeder said that sounds like a city administrator. Ald. Patterson said a city administrator takes control and runs the City. Committee of the Whole Page 5 January 20, 2005 Ald. Schroeder does not agree with Ald. Patterson’s perception of city administrators. People often accept promotions to move up; it is not always strictly for their pocketbook. He stated that a city administrator is supposed to oversee the department heads; there has to be some control. However, the person does not micromanage. Ald. Patterson said his comments were based on his personal experiences. Ald. Buckmaster said he is looking at a city administrator to help educate staff, the Council members and the Mayor on theories and options involving process improvement. Improvements could be suggested outside of the political arena. He believes if a city administrator continuously moved around, it would affect his/her reputation. Ald. Schroeder believes the City could replace the finance director and through the hiring process recruit someone that could potentially be a city administrator candidate, which would include emphasis on HR. Advertise and try to select what is needed now but during the process have future goals in mind. Ald. Madden stated she sees two different ways to handle the situation. She believes many of the duties outlined in the job description of the finance director are now being performed by other people in the department. The HR duties could be moved. On the other hand, she also sees a benefit to a city administrator. She would like to see a job description for a city administrator and salary ranges. That could help the Council determine which direction to take. Ald. Schroeder said he would really like to see a Financial Officer/Human Resource person. That may be impossible to find. He asked why some of the HR duties are performed by the Finance Department. Mayor Slocomb said the City can only have one set of files pursuant to HIPPA. All the personnel records, which include compensation, payroll and workers’ comp information, are located in the Finance Department. The other issue is health insurance, which took on a huge focus from a cost standpoint. Ald. Schroeder said that leads him to believe people today who are educated in the field of human resources must also have more financial training. There are so many human resource issues that have financial ramifications. Ald. Melcher said his background is in human systems and organizational development. The City should consider a person that looks not only at the personnel system but also the general organization. Ald. Schroeder requested a variety of job descriptions for a City Administrator, a City Administrator/Financial Officer, a Human Resource Manager, and a Human Resource/Financial Officer. Cathie Anderson should be the central contact for any information the alderman would like to see. Ald. Schroeder requested as information is obtained it be distributed. He also would like to hear any ideas or information that staff might have. As aldermen, we are not full time employees. We are not here to see what occurs 40 hours per week. Ald. Schroeder said there is nothing worse than a decision made at the top with no input from the people that will have to carry it out. An e-mail to employees could be sent out. Ald. Madden commented who would be better to suggest how the Finance Department should be structured but the interim Finance Director. The Council can review that information and then talk to staff. Committee of the Whole Page 6 January 20, 2005 Ald. Schroeder believes if the aldermen have the information they request prior to the meeting, a decision could be made at the next Committee of the Whole. Mayor Slocomb reviewed what the aldermen have requested. They will e-mail Cathie Anderson with any proposals, requests, etc. The information should then be disseminated as soon as possible. It was determined that if an additional COW meeting was needed, it would be held on Thursday, February 20 17. Discussion of Virchow Krause & Company Correspondence Regarding Estimated Fees for Financial Services Ald. Buckmaster did receive a response to his inquiry but he still does not know what Finance Director duties the company will perform that will cost 20% more. He does believe that there is a timeframe when going out for quotes for financial services validates the price the City is paying. Ald. Buckmaster requested a note go out to Virchow Krause asking for more detail regarding what duties the company will perform in the absence of the Finance Director. Some aldermen believe additional services may not be needed. COMMUNICATIONS AND MISCELLANEOUS BUSINESS Ald. Salentine noted that the 2/25/2005 Finance Committee meeting would start at 6:30 and requested all the aldermen try to arrive by 6:45. It is preferred that all the aldermen be present for continued discussion on the credit card policy and hear the presentation from Ehlers & Associates. Ald. Buckmaster moved to adjourn at 9:59 PM. Ald. Salentine seconded; motion carried. Respectfully submitted, Jill Blenski, CMC Deputy Clerk