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4.d - Personnel and Salary Committee Protecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum T o: Board of Directors From: Scott Carroll , General Manager Date: September 9 , 2013 Subject: Personnel and Salary Committee Summary The Board dire cted staff to place this item on the agenda for discussion. Attached is a proposed policy drafted by the Board that would establish a Personnel and Salary Committee. S ta ff Recommendation That the Board of Directors give directions to staff. A nalysis Adopting the attached policy, as it ’s currently written, would drastically change the District’s personnel polic ies and regulations and will set precedent like no other local government . The following are a list of concerns regarding the attached policy. 1. The proposed committee would be involved in reviewing and approving staff’s performance evaluation. Board members getting involved in staff performance evaluations, in addition to the General Manager’s performance evaluation, contradict the Di strict’s Operations Code Section 3.02.010, which states: “The General Manager’s duties shall also include acting as the Personnel Officer, whereby he will hire and fire, develop classification plans, adopt organization charts, and perform other duties re lated to personnel matters.” In addition, the proposed committee would contradict Section 9.4.B of the District’s Employee Handbook, which was adopted by the Board of Directors on June 28 , 2012, which states: Board of Directors Septembe r 9, 2013 Page 2 of 5 “The General Manager and Personnel Manager sh all evaluate employee performance annually on all employees in written format.” Performance evaluations are administrative procedures that provide formal feedback to the employees through written and oral communications and discussions . It is part of the day -to -day operations of an organization. In the District’s current form of government, the General Manager serves as chief administrative officer that is responsible for overseeing the day -to -day operations and carries out Board policies. The Board is t he legislative and policy making body. The Board focuses on the organizations goals, major projects and such long term considerations as capital improvement, budgets, and strategic planning. According to CSDA’s Leadership Academy Module 4, Boards Role in Human Resources, there should be no direct intervention by a board member into a personnel issue. The Board’s role in personnel is that of a “policy maker”. Attached are handouts from the academy regarding the Board’s role in human resources. On a side note, four out five Board members are scheduled to attend the CSDA Leadership Academy in November 2013 where you will learn more about the Boards role in human resources. 2. The proposed committee would review and recommend compensation levels to the Boa rd of Directors as it pertains to salaries, benefits, and bonuses. New salary ranges, changes in benefits and bonuses (Reward Ideas Program) are already presented to the Board at your regular Board meetings and it can be presented at study sessions as wel l. In fact, the Board approved a classification and salary survey of all District personnel to be conducted in 2014. However, if the intent of the proposed committee is to approve merit step increases for staff’s performance evaluation then again this wou ld contradict Operations Code Section 3.02.010 and Section 9.4.B.4 of the Employee Handbook, which states: “The General Manager is responsible for final approvals for all District merit increases .” 3. The proposed committee would act as a direct liaison between the General Manager, staff and the Board of Directors. This would contradict the General Manager/Board of Directors form of government and the employment contract the District has with its general manager because the proposed committee would prohi bit the general manager from effectively perform ing personnel functions and duties that are required of the manager as specified by the District’s ordinances, rules and regulations. 4. The proposed committee would assist the general manager with person nel reviews, which will be permanent personnel and at six months for probationary personnel. Personnel reviews or performance evaluations are considered confidential, with the exception of the general manager, so discussing such reviews in an open Board of Directors Septembe r 9, 2013 Page 3 of 5 public meeting, as the proposed committee is suggesting would be violating privacy laws. 5. The proposed committee would develop and modify evaluation guidelines, assessment materials and assessment criteria with General Manager and appropriate District staff . You might recall, that developing performance evaluation guidelines was a strategic goal in 2010 (Strategic Goal No. 6.3, Redesign employee performance evaluation forms ). This goal was achieved when the new guidelines were p resented to the Board on Jul y 22, 2010 and the guidelines were reviewed again by t he Board on October 25, 2012 . Like in the past, a ny new performance evaluation guidelines will be presented to the Board of Directors for review and approval. 6. In the event any District staff member has filed a complaint pertaining to his/her job performance or feels that they have been wronged in any manner by the District they shall have the right to petition the Personnel and Salary Committee for a hearing and a complete review of the action taken against them. According to the District’s Employee Handbook, Section 9.4.B.3, all District employees hired after July 1, 2004 are at -will employees. An at -will employee is defined as an employee serving at the pleasure of the appointing authority who can be separated from employment for no cause. At will employees do not have vested rights to their jobs, which give them the right to due process including hearings. The language identified in Number 6 above will completely change that. In addition, s taff believes the committee will experience an increase in hearing request. For instance, an employee that received a 3% merit salary increase may believe he/she have been wronged and deserve a 5% merit salary increase. The Personnel and Salary Committee pol icy, as written, would allow an employee to request a hearing to seek an increase in his/her salary. Furthermore, poor and/or average performance evaluations are not grounds to file grievances. If employees disagree with their performance evaluation or di sagrees with a comment made by his/her supervisor than the employee has the opportunity to comment or prepare a written statement that will be part of the evaluation and filed away in the employees personnel file. This is standard operating procedures for organizations. The District has adopted grievance procedures in its Employee Handbook. Section 14.4 describes the four step process to resolve employee grievances. The last step in the grievance procedure is with the General Manager which he/she sha ll render the final decision to the employee. It is standard operating pr ocedures for the chief administrative officer, not the elected bodies, to resolve grievances, especially to at - will employees. Suggestion If the Board truly wants to establish a com mittee to discuss personnel matters than I suggest establishing a committee like the one used at the Orange County Sanitation District (OCSD) called, Administration Committee. Board of Directors Septembe r 9, 2013 Page 4 of 5 OCSD’s Administration Committee (Finance, Human Resources and information Techn ology) focuses on business matters pertaining to budget, finance, administration, and human resources. However, for human resources the committee does not discuss performance evaluations, salary increases, grievances, or conduct personnel hearings. They discuss personnel related matters like the topics below that were discussed by the committee this past year. • Workers Compensation Update – May 8, 2013 • Retirement Program Update – May 8, 2013 • Contract for temporary employment services ($364,000) – April 1 0, 2013 • Benefits Renewal Costs – April 10, 2013 • Personnel Policy Updates – March 13, 2013 • Succession Planning – November 14, 2012 • Workforce Development – November 10, 2012 • Benefits Program – June 13, 2012 In addition, Mesa Water District has an Executive Committee that di scusses personnel matters in open and sometimes closed meeting setting s . The committee does discuss employee disciplinary procedures in closed session because as mentioned above, performance evaluations are considered confidential and Mes a Water employees are vested employees that have Skelly rights (due process protections on the job, as determined by the California Supreme Court ). At -will employees, like District employees, do not have Skelly rights. The following are some personnel to pics discussed by the Executive Committee in years past. • Implementing Pre -Tax CalPERS Employee Contributions • Workers’ Compensation Claims Update • Revised Fair Political Practices Commission Gift Regulations • Directors Retirement Plan Options It should be mentioned that personnel related topics can be discussed at the Board of Directors Study Sessions. The proposed committee setup has two Board members serving the committee while the remaining three Board members can attend the meeting, but cannot activel y participate in the meeting or the District would be in violation of the Brown Act. This was how previous District committees were set up, but the Board chose to replace the committee process with study sessions to allow all Board members to participate. Strategic Plan Element & Goal This item complies with the objective and strategy of Strategic Element 5.0, Administrative Management , which states the following: 5.0 Administrative Management Objective: To create, maintain and implement policies and pr ocedures to ensure sound management of the District. Board of Directors Septembe r 9, 2013 Page 5 of 5 Strategy: We will conduct periodic reviews, refine and implement policies and procedures, and assure the General Manager has the direction and tools necessary for successful District operations Lega l Review District Counsel has reviewed the Draft policy establishing the Personnel and Salary Committee and will provide his comments at the study session. Financial Review None at this time; however, if the Board approves establishing a hearing for staff members to file grievances District Counsel and/or the District’s legal personnel representative, Liebert Cassidy Whitmore, will need to attend the hearings. The District will incur legal cost for preparation of grievance hearings and attending said hear ings. The exact cost is unknown at this time. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the September 9 , 201 3 Board of Directors Study Session at District Headquarters and on District’s website. Alternative Actions 1. Direct staff to report back with more information. Attachment A: Draft Personnel and Salary Committee Policy B: Handouts from CSDA Leadership Academy, What is the Board Role in HR? DRAFT - COSTA MESA SANITARY DISTRICT PERSONNEL AND SALARY COMMITTEE Objective: The function of the Costa Mesa Sanitary District's proposed Personnel and Salary Committee is to assist in the evaluation of the performance of District staff. To revi ew and recommend compensation levels to the Board of Directors as it pertains to salaries, benefits, and bonuses (when applicable). Personnel and Salary Committee shall act as a direct liaison between General Manager, staff and Board of Directors. Organi zation: Personnel and Salary Committee shall be made -up of two (2) members of the elected Board of Directors with the Vice - Chairperson of the Board serving as Committee Chair. The recommended make -up of the Committee is restricted due to legal considerat ions and constraints. The Committee shall handle all major personnel issues and shall make recommendation to the elected Board of Directors. Personnel and Salary Committee Shall Be Responsible For: Acting as direct lisison between District's General Man ager, staff and other elected Directors; Assisting General Manager with Personnel reviews which will be conducted on a yearly basis (minimum) for all permanment personnel and at six (6) months for probationary personnel; Developing and modi fying evaluation guidelines, assessment materials and assessement criteria with General Manager and appropriate District staff; - DRAFT - Costa Mesa Sanitary Direct - Personnel and Salary Committee Page Number Two Work directly with General Man ager and/or appropriate District staff in recommending staff compensation including salary levels, benefits and (if applicable) bonuses; Assist General Manager in providing Personnel and Salary information as requested by Chairperson of the Board of Dire ctors and/or other elected Board Members; In the event any District staff member has filed a complaint pertaining the his or her job performance or feels that they have been wronged in any manner by the District they shall have the right to petition the Pe rsonnel and Salary Committee for a hearing and a complete review of the action taken against them. After review by Committee a written decision of the Committee shall be provided to the employee. However, any employee who wishes to have their concerns revi ewed by the Committee must first exhaust all remedies with both their supervisor and the General Manager. At all times Chain of Command must be strictly adherred to. Committee Meeting Times and Place: Committee Chairperson shall maintain regularly schedu led meetings of the Committee. Meetings shall be held at least on a monthly basis and shall be conducted in Board Room of the District. All meetings shall be posted pursuant to applicable laws. Agenda's shall be forwarded to all interested parties inclu ding District staff. However, all personnel reviews and/or disciplinary hearings shall be conducted in private as prescribed by applicable laws.