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Home My WebLink About05 - Total Compensation PhilosophyQ SEW Pp�T CITY OF z NEWPORT BEACH c�<,FORN'P City Council Staff Report November 19, 2024 Agenda Item No. 5 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Barbara J. Salvini, Human Resources Director - 949-644-3300, bsalvini@newportbeachca.gov PREPARED BY: Barbara J. Salvini, Human Resources Director TITLE: Resolution No. 2024-89: Total Compensation Philosophy ABSTRACT: In 2011, the City Council adopted Resolution No. 2011-55, which set forth the Council's philosophy on employee compensation. The resolution provided that the philosophy would be reviewed from time to time to assure it remained relevant and competitive. In September of this year, the City Council formed the Employee Compensation Philosophy Ad Hoc Committee (Committee) to review the philosophy as well as the designated comparator agencies that are used when conducting compensation, pay and benefit surveys. The Committee solicited feedback from the City of Newport Beach's bargaining units and recommend that the City Council revise the existing total compensation philosophy and adjust the comparator agencies used for total compensation survey purposes. RECOMMENDATIONS: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Adopt Resolution No. 2024-89, A Resolution of the City Council of the City of Newport Beach, California, Adopting an Updated Total Compensation Philosophy; and c) Approve Comparator Agencies for the purpose of conducting pay and benefit surveys. DISCUSSION: In June 2011, the City Council adopted Resolution No. 2011-55 which outlined its total compensation philosophy in a manner designed to establish a process to meet changing workplace demands by establishing goals and methodologies that would withstand the test of time. The City Council recognized that the philosophy would need to be periodically reviewed and updated to meet workplace demands. Thus, the Council recently formed the Employee Compensation Philosophy Ad Hoc Committee comprised of Mayor Pro Tern Joe Stapleton and Councilmembers Noah Blom and Lauren Kleiman. The Committee directed City staff to solicit input from the associations on the selection of comparator survey cities. 5-1 Resolution No. 2024-89: Total Compensation Philosophy November 19, 2024 Page 2 After reviewing the information submitted, the Committee narrowed the association agency selections to 11 agencies it feels are the most comparable to the City of Newport Beach. Emphasis was placed on coastal communities, adjacent agencies, and commonality in city services (police, fire, public works, etc.) The new Total Compensation Philosophy outlines the following: • The City of Newport Beach is a premier destination for residents and tourists alike, with an expectation that the employees provide the highest level of service • The City must ensure it has the resources available to recruit, hire and retain the most qualified and capable employees • The City Council is committed to maintaining a competitive compensation package for all employees Following City Council approval of the attached resolution and list of comparator agencies, City staff will incorporate them into future total compensation studies. FISCAL IMPACT: There is no fiscal impact related to this item. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Resolution No. 2024-89 Attachment B — Potential List of Comparator Agencies for Total Compensation Surveys 5-2 ATTACHMENT A Resolution No. 2024-89 5-3 RESOLUTION NO. 2024-89 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ADOPTING AN UPDATED TOTAL COMPENSATION PHILOSOPHY WHEREAS, on June 26, 2001, the City Council of the City of Newport Beach ("City Council") adopted Resolution No. 2001-50, the "Employer -Employee Relations Resolution," pursuant to authority contained in the Meyers-Milias-Brown Act, Government Code 3500, et seq., to promote effective communication and collaborative working relationships with its employees while balancing good management practices; WHEREAS, on June 14, 2011, the City Council adopted Resolution No. 2011- 55, setting forth the City of Newport Beach's ("City") total compensation philosophy ("Total Compensation Philosophy"), which emphasized the City's desire to attract, motivate and retain highly competent, efficient, and effective employees, while maintaining the City's strong financial position; WHEREAS, as stated in Resolution No. 2011-55, the Total Compensation Philosophy should be regularly reviewed to ensure that it meets the needs of the City, the employees, and its residents; WHEREAS, on September 10, 2024, the City Council adopted Resolution No. 2024-69, creating the Employee Compensation Philosophy Committee ("Committee") for the purpose of reviewing and providing recommendations to the entire City Council on the Total Compensation Philosophy; WHEREAS, Newport Beach is a premier place to live and visit, and the expectation is for the highest level of service in every City department; WHEREAS, to maintain a high level of service, the City must be best positioned to recruit, hire and retain the most qualified and capable employees for every necessary job function; WHEREAS, the Committee reviewed the Total Compensation Philosophy, and recommends that the City seek to offer total compensation which is competitive with both public and private sector job markets, as relevant and appropriate for each vacancy based on qualifications and experience, which should include salary, specialty and performance -based pay, leave, professional development, retirement, medical and other benefits; and 5-4 Resolution No. 2024- Page 2 of 3 WHEREAS, the Committee has developed, and recommends the City Council adopt, an updated and revised Total Compensation Philosophy. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council does hereby adopt the following Total Compensation Philosophy: The City shall seek to offer Total Compensation ("Total Compensation") which is competitive with both public and/or private sector job markets, as relevant and/or appropriate for each position. Total Compensation shall include salary, specialty and performance -based pay, leave, professional development, retirement, medical and other benefits not specifically set forth in this section. Section 2: The previous Total Compensation Philosophy adopted by City Council Resolution No. 2011-55 is hereby repealed. Section 3: The recitals provided in this resolution are true and correct and are incorporated into the operative portion of this resolution. Section 4: If any section, subsection, sentence, clause or phrase of this resolution is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 5: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. 5-5 Resolution No. 2024- Page 3 of 3 Section 6: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 1911 day of November, 2024. Will O'Neill Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY TTORNEY'S OFFICE aron C. Harp City Attorney 5-6 ATTACHMENT B Comparator Agencies Recommended by the Compensation Policy Ad Hoc Committee Anaheim Beverly Hills Costa Mesa Huntington Beach Irvine Laguna Beach Manhattan Beach Santa Ana Santa Barbara Santa Monica Torrance Former Agencies Used for City-wide Studies Carlsbad Chula Vista Costa Mesa Fullerton Huntington Beach Irvine Oceanside Orange Santa Ana Santa Monica Torrance 5-7