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HomeMy WebLinkAbout1998-07-07; City Council; 14532; Landscape Plancheck ConsultantC-LTY OF CARLSBAD - AGENDA BILL =ITLE’ RATIFICATION OF EXTENSION AND AMENDMENT NO. 2 TO AGREEMENT BETWEEN THE CITY OF CARLSBAD AND WATSON WYATT & COMPANY IECOMMENDED ACTION: Adopt Resolution No. 98 ratifying the extension and amendment of the agreement between the City of Carlsbad and Watson Wyatt & Company to expand the scope of work as previously provided and to be provided in the future. ITEM EXPLANATION: Among the City Council’s top priorities for 1997 was the development of a Performance Management & Compensation Program for management employees. The Council’s intent was to have a system which: Rewards high performance Links pay to performance 0 Is market driven Is a unique system for managers, separate and distinct from the bargaining units Gives the City Council control over bottom line costs and flexibility to adjust to 0 Makes good business sense different economic situations Watson Wyatt was selected as the qualified consulting firm with specific expertise in developing and implementing performance-based compensation systems. The initial scope of work included: overall project planning and management; review of the existing management compensation and benefits plan; further development of the existing performance appraisal system; development of a linkage between the pay and performance systems; development of a communications strategy to introduce the revised systems to management employees; and implementation planning and training for affected employees. After completing a comprehensive review of the City’s existing performance appraisal and compensation systems, the scope of the work was expanded in order to more fully address the City Council’s objectives and its requests that specific work be conducted by the consultant. In Amendment No. 1 to the agreement, the City and the Contractor increased the scope of work in several aspects of the initial agreement listed above and per the City Council’s request. This included a market survey of both the salary and major benefits of equivalent management positions in ten other municipalities and the recommendation that, due to the magnitude of these systems changes, that the training aspect of the initial agreement be expanded and completed under a separate contract. It is now further recommended that Council ratify Amendment No. 2 which extends and amends the agreement between the City of Carlsbad and Watson Wyatt & Company to expand the scope of work as previously provided and to be provided in the future. This increased scope of work, as requested by the City Council and the Leadership Team, c includes: the completion of the design, development and implementation of an entirely new Performance Management System; the completion of the design, development and implementation of an entirely new Compensation System for management employees, including the development of a market driven salary structure; and additional meetings to allow for the comprehensive review of the proposed new system by the City Council and the Leadership Team. Given the magnitude of the changes that were being recommended, the scope of work was also increased per the Council to provide: more comprehensive planning for the implementation of the entirely new performance-based compensation system; the development and implementation of a thorough communication plan to introduce the new systems to all affected employees; and extensive communication strategies and materials, which were developed for presentation to the media and for public awareness of the new program. In addition to the increased scope of work outlined above, the consultant provided supplementary professional expertise to the City Council during its extensive and comprehensive review of the proposed new systems. The scope of this work involved the thorough analysis of the City of Carlsbad's proposed perfomance-based compensation plan relative to a plan recently introduced by the County of San Diego. Additionally, per the original proposal, the consultant charges 5% for administrative expenses and charges out-of-pocket expenses (travel, express mail, etc.) at cost and the total expenses for this project are estimated at approximately 10% of professional fees. FISCAL IMPACT: The cost of the expanded scope of work as previously provided and outlined herein is $105,000. Funds have been identified in the FY 1997/98 Human Resources Department budget to cover this cost. EXHIBIT: 1. Resolution No. 9 8 *dl I ! 1( 1' 1; 1: 1L 1: 1E 17 la 19 20 21 22 23 24 25 26 27 20 RESOLUTION NO. 98-21 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, RATIFYING THE EXTENSION AND AMENDMENT NO. 2 TO THE AGREEMENT BETWEEN THE CITY OF CARLSBAD AND WATSON WYATT & COMPANY WHEREAS, the City Council has directed that there be a performance based compensation system; and WHEREAS, the City Council has directed staff and the consultant, Watson Wyatt 2% Company, to design and develop a Performance Management & Compensation System which: 0 0 0 0 Rewards high performance Links pay to performance Is market driven Is a unique system for managers, separate and distinct from the bargaining units Gives the City Council control over bottom line costs and flexibility to adjust to different economic situations Makes good business sense; and WHEREAS, the City and Contractor desire to extend the term of the agreement dated February 24, 1997 for a period ending February 28,1999 with an option to extend the contract for three (3) additional one (1) year periods; and WHEREAS, the initial agreement, dated February 24,1997 identified a scope of work which included: overall project planning and management; a review of the existing 3 I ! 1( 1' 1; 1: 1L 15 16 17 la 19 20 21 22 23 24 25 26 27 20 Management Compensation and Benefits plan; further development of the performance appraisal system; development of the linkage of pay and performance systems; development of a communication strategy to introduce the revised systems to the management employees; and implementation planning and training for affected employees; and WHEREAS, in Amendment No. 1 to the agreement, dated January 8,1998 the City and Contractor increased the scope of work in several aspects of the initial agreement listed above and per the City Council's request, a market survey of the salary and benefits of equivalent management positions in ten other municipalities was added; and due to the increases in the scope of work, staff recommended that the training aspect of the initial agreement be expanded and completed under a separate contract; and WHEREAS, given the magnitude of the changes that were being recommended, the Contractor has already provided services as requested beyond the scope of both the original contract and Amendment No. 1, per the Council and the Leadership Team, in the areas of: design, development and implementation of entirely new Performance Management and Compensation systems, including the development of a market drive salary structure; additional meetings to allow for the comprehensive review of the proposed new system by the City Council and the Leadership Team; more comprehensive planning for the implementation of the entirely new performance-based compensation system; the development and implementation of a thorough communications plan to introduce the new system to all affected employees; extensive communications strategies and materials developed for presentation to the media and for public awareness of the new program; 1 i < 4 c 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 supplementary professional expertise in conducting a thorough analysis of the City of Carlsbad’s proposed performance-based compensation plan relative to a plan recently introduced by the County of San Diego. WHEREAS, per the original proposal, the consultant charges 5% for administrative expenses and charges out-of pocket expenses (travel, express mail, etc.) at cost and the total expenses for this project are estimated at approximately 10% of professional fees; and WHEREAS, funds were not appropriated for the additional scope of work, and a supplemental scope of work and fee schedule have been negotiated and agreed to between the parties hereto, as shown in the attached Extension and Amendment No. 2 to the Agreement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad as follows: 1. That the above recitations are true and correct. 2. That funds are available in the Human Resources Department FY 1997198 budget to pay for the cost of the expanded scope of work as previously provided and to be provided in the future as described herein. Ill Ill Ill Ill Ill 1 1 1, 1: 16 l! 14 1; It 1$ 2c 21 22 23 24 25 26 27 28 1 2 3 4 5 6 7 0 9 0 1 2 3 4 5 5 7 3 3 1 1 ! 1 3. That the Mayor of the City of Carlsbad is authorized to sign the contract between the City of Carlsbad and Watson Wyatt & Company. PASSRED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad, California, on the 27th day of January , 1998, by the following votes, to wit: AYES: Council Members Lewis, Finnila, Nygaard, Kulchin, and Hall ATTEST: n ALETHA L. &lUTEkRANZ, City derk 6 EXTENSION AND AMENDMENT NO. 2 TO AGREEMENT This Amendment is entered into and effective as of the 19 day of January , 1998, amending the agreement dated February 24, 1997 by and between the CITY OF CARLSBAD, a municipal corporation, hereinafter referred to as "City", and WATSON WYATT & COMPANY, hereinafter referred to as, "Contractor" for developing and implementing a revised performance-based management compensation plan. RECITALS WHEREAS, the City and Contractor desire to extend the term of the agreement dated February 24, 1997 for a period ending February 28,1999 with an option to extend the contract for three (3) additional one (1) year periods; and WHEREAS, the initial agreement, dated February 24, 1997 identified a scope of work which included overall project planning and management, a review of the current . Management Compensation and Benefits plan, development of the performance appraisal system, development of the linkage of pay and performance systems, development of a communication strategy to introduce the new systems to the management employees, and implementation planning and training for affected employees; and WHEREAS, in Amendment No. 1 to the agreement, dated January 8, 1998 the City and Contractor increased the scope of work in several aspects of the initial agreement listed above and per the City Council's request, a market survey of the 10122197 4i salary and benefits of equivalent management positions in ten other municipalities was added; and due to the increases in the scope of work, staff recommended that the training aspect of the initial agreement be expanded and completed under a separate contract; and WHEREAS, Contractor has already provided services as requested beyond the scope of both the original contract and Amendment No. 1 in the areas of overall project planning and management, redesign of the current Compensation and Benefits plan, development of the linkage between compensation and performance systems, and design, development, and delivery of a communication strategy to introduce the new systems to City management employees. WHEREAS, per City Council and Leadership Team request, several additional meetings were held to conduct comprehensive reviews of the proposed program, extensive communication strategies and materials were developed for presentation to . the media and for public awareness of the program, and more extensive implementation planning was conducted. WHEREAS, per the original proposal, the consultant charges 5% for administrative expenses and charges out-of pocket expenses (travel, express mail, etc.) at cost and the total expenses for this project are estimated at approximately 10% of professional fees; and WHEREAS, funds were not appropriated for the additional scope of work, and a supplemental scope of work and fee schedule have been negotiated and agreed to between the parties hereto, as shown on Exhibit "A" Scope of Services and Fees; 10/22/97 I' NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein, City and Contractor hereby agree as follows: 1. The term of the agreement shall end on February 28, .I999 with an option to extend the.contract for three (3) additional one (1) year periods. 2. Contractor shall provide services as outlined on attached Exhibit "A". 3. City shall pay Contractor for all work outlined in Exhibit "A", on a time and materials basis not-to-exceed $230,000 (which consists of original contract of $1 00,000, Amendment No. 1 of $25,000, and $105,000 covered by this Amendment.) Contractor shall provide City on a monthly basis copies of invoices sufficiently detailed. to include hours .performed, hourly ,rates, and related activities and costs for approval by City. 4. All other provisions of the aforementioned agreement entered into on February 24, 1997, by and between City and Contractor shall remain in full force and effect. 5. All requisite insurance policies to be maintained by the Contractor shall include coverage for the amended assignment and scope of work for the extension period. 10/22/97 Acknowledged and Accepted: CONTRACTOR: Watson Wvatt Worldwide By: (sign Me) Paul Mee, Vice President (print namekitle) By: (sign here) (print namekitle) ATTEST: City Clerk (Proper notarial acknowledgment of execution by Contractor must be attached.) (President or vice-president and secretary or assistant secretary must sign for corporations. If only one officer signs, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering that officer to bind the corporation.) APPROVED AS TO FORM: RONALD R. BALL City Attorney =fhptAy City .Attorney 1- A84 P- 10/22/97 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No. 5907 On ~ANUARV 1~~1998 before me, MA~DA C-T~RLCH. NOTARQ~BUCJ I personally appeared PAUL V. MEE r dpersonally known to me - OR - fl to be the person($) whose name($) is/- DATE NAME, TITLE OF OFFICER. E.G., .JANE DOE, NOTARY PUBLIC" NAME(S) OF SIGNER(S) subscribed to the within instrument and ac- knowledged to me that he/mexecuted the same in his/- authorized capacityw, and that by hislbe##e+ signaturem on the instrument the personw, or the entity upon behalf of which the person(.@ acted, executed the instrument. WITNESS my hand and official seal. tu'dcc O.?A,+k 1 SIGNATURE OF NOTARY OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT 0 PARTNER(S) LIMITED 0 GENERAL 5 U ATTORNEY-IN-FACT NUMBER OF PAGES TRUSTEE(S) [7 GUARDIANKONSERVATOR 0 OTHER: JANUARY 19,1997 DATE OF DOCUMENT AIe+ha is kmnL SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) SIGNER(S) OTHER THAN NAMED ABOVE 01993 NATIONAL NOTARY ASSOCIATION 8236 Rernrnet Ave., P.O. Box 7184 Canoga Park, CA 91309-7184 li WATSON WYATT & COMPANY CERTIFICATE OF ASSISTANT SECRETARY I, James S. Minogue, 111, Assistant Secretary of Watson Wyatt & Company, a Delaware corporation (the “Company”), do hereby certify that: 1. I am the duly elected, qualified and acting Assistant Secretary of the Company; 2. The resolutions attached hereto as Exhibit A are true and complete copies of the resolutions duly adopted at a meeting of the Board of Directors of the Company on November 22, 1996, and such resolutions are in full force and effect as of the date hereof. 3. Pursuant to such resolutions Paul V. Mee, Vice President and Western Regional Manager has been delegated the authority to bind the Company and is authorized to execute an agreement for the provision of consulting services to the City of Carlsbad, California. IN WITNESS WHEREOF, I have hereunto set my hand and have affixed the corporate seal as of the 28th day of January, 1997. ~ Ja es S. inogue, I11 [SEAL) \\ A sistant Secretary f A RESOLVED, that the President and Chief Executive Officer, the Executive Vice President and Chief Operating Officer, the Vice President and Chief Financial Officer, the General Counsel, and any Regional Manager are hereby authorized and empowered in the name and on behalf of the Company to execute and deliver any contracts (including confidentiality agreements, engagement letter agreements and software license agreements) to provide professional services (in the case of Regional Managers, within said Regional Manager's respective jurisdiction) to clients; FURTHER RESOLVED, that the Regional Managers and the Executive Vice President and Chief Operating Officer are hereby authorized to redelegate, in their discretion, to Managing Consultants, NationallGlobal Practice Directors, regional or local practice directors, account managers or other senior consultants the authority to execute and deliver any contracts (including confidentiality agreements, engagement letter agreements and software license agreements) to provide professional services to clients serviced by the respective office or practice, provided however, that any such agreement pursuant to which the aggregate fees anticipated to be received by the Company will be greater than US$l,OOO,OOO shall also require the signature of the Regional Manager; and g:\corp\seccert\forms\asstsety.doc Exhibit A With approval of this contract, the City Council will be authorizing the Human Resources Department to continue with the design and implementation of this project. The total increase in cost is approximately $105,000. The original estimated cost of this project was $100,000. Amendment No. 1 increased 'the cost of this project by $25,000. The revised estimated costs inclusive of the increased scope of work in this Amendment are shown below. Performance Management and Compensation Program 2"d Amended Scope of Work and Fee Schedule Project Management $ 16,500 Audit Current Compensation Plan Develop Performance Appraisal System Develop Management Pay Plan Develop Communication Strategy Market Analysis of Salary and Benefits Implementation Planning Additional Council and Leadership Team Meetings Additional Communication Design and Materials Project expenses Total $ 14,500 $ 36,000 $ 19,500 $ 7,500 $ 21,500 $ 18,500 $ 45,000 $ 31,500 $ 19,500 $230,000 The Council funded the original $100, 000 of this program through a transfer of funds from the General Contingency Fund to the Human Resources Department miscellaneous professional services account. The City Manager allowed for the transfer of $25,000 from the Human Resources Department organizational development account to the Human Resources Department miscellaneous professional services account to fund Amendment No. 1 to the agreement. Funds are currently available within the Human Resources Department Fiscal Year 1997/1998 budget to cover the remaining $1 05,000 expense proposed above. . February 2, 1998 Watson Wyatt Worldwide Attn: Luellen Lucid 15303 Ventura Blvd., Suite 700 Sherman Oaks, CA 91403 RE: AGREEMENT - DEVELOPMENT OF PERFORMANCE MANAGEMENT & COMPENSATION PROGRAM Enclosed for your records please find a copy of City Council Agenda Bill No. 14532 that went before Council on January 27, 1998. Attached to this Agenda Bill are Council Resolution No. 98-21 which approved Amendment No. 2 to the existing agreement your company has with the City of Carlsbad, and a copy of Amendment No. 2. If you have any questions concerning Council's actions, please call the City Clerk's Office at (760) 434-2808. If you have specific questions or concerns regarding the actual agreement, please call Mrs. Ann Cheverton, the Director of Human Resources, at (760) 434-2852. - KATHLEEN D. SHOUP Sr. Office Specialist 1200 Carlsbad Village Drive - Carlsbad, California 92008-1 989 - (760) 434-2808 @