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Consultant - 2007 - Comprehensive Classification/Compensation Study - 11/28/2007 AGREEMENT This AGREEMENT, made as of this ~ day of January, 2008, by and between THE MERCER GROUP, INC. and THE CITY OF EAGLE, IDAHO. WITNESSETH: WHEREAS, The City of Eagle, Idaho, (hereinafter referred to as the "City") has made a request for proposal to hire a human resources consulting firm to conduct a compensation and classification study for the City, and WHEREAS, The Mercer Group, Inc. (hereinafter referred to as "Mercer") has submitted a proposal in response to the City's request; and WHEREAS, the City has selected Mercer's proposal as the proposal which best meets its needs and the City desires to hire Mercer to conduct the City's compensation and classification study; and WHEREAS, Mercer desires to assist the City in conducting the City's compensation and classification study. NOW THEREFORE, in consideration of the following mutual covenants and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged by all parties hereto, Mercer and the City hereby agree as follows: 1. Mercer agrees to provide services and support to the City in the conduct of the City's compensation and classification study. Mercer agrees to conduct the City's project in accordance with scope of services outlined in its Proposal to the City dated November 28, 2007, in response to the City's request for a proposal. Mercer's proposal is incorporated by reference and thus made a part of this Agreement. 2. The City agrees to compensate Mercer for its services in the amount of $22,250 for professional services and expenses. 3. The City and Mercer both agree that this Agreement shall be governed by the laws of the State ofIdaho. Agreement, Continued: 4. The City and Mercer both agree that in the event that any dispute arises between the parties, the complaining party shall promptly notify the other of the dispute in writing. Each party shall respond to the other party in writing within ten (10) working days of receipt of such notice. 5. The City and Mercer both agree that any amendments to this Agreement shall be made in writing, and executed by both parties. No proposed amendment which is not in writing and executed by both parties shall effect the terms of this Agreement. 6. The parties shall have the right at the convenience of either party to terminate this Agreement following ten (10) days written notice to the affected party. Should either party terminate this Agreement the City shall only be obligated to pay Mercer for those services already provided. THE CITY OF EAGLE, IDAHO BY: ;. Mayor Phil Bandy THE MERCER GROUP, INC. BY:'td!fJ:;e~M Phillip G. Robertson Senior Vice President CITY OF EAGLE, IDAHO Proposal Fora Comprehensive Classification and Compensation Study November 28, 2007 THE MERCER GROUP, INC. 5579 B Chamblee-Dunwoody Suite 511 Atlanta, GA 30338 770-551-0403 FAX 770-399-9749 Raleigh Office: Mr. Phillip Robertson 3443 Highway 39 North Louisburg, North Carolina 27549 919-496-2080 FAX 919-496-7995 MercerNC@aol.com Corporate Headquarters: I. TEAM ORGANIZATION ABOUT THE MERCER GROUP. INC. The Mercer Group, Inc. will be the sole firm providing all services as described in this proposal. This proposal has been made without collusion with any other person or entity. The Mercer Group, Inc. is a management consulting firm incorporated in the State of Georgia and operating nationwide. Founded by James L. Mercer, a long-term public management consultant, The Mercer Group, Inc., provides management consulting services to state and local governments, special districts, and private sector clients. The company's services include: . Compensation and classification studies; . Executive recruitment; . Organization and operations analysis; . Productivity improvement; . Strategic planning; . Management systems; . Organization development and training; . Privatization; . Policy studies; . Budget evaluation services; and . General management consulting. Mr. Mercer started his own firm in 1981 and, in 1984, merged it with another consulting firm, Wolfe & Associates, Inc. On June 1, 1986, Mr. Mercer acquired the Human Resource and Organizational Consulting Practice of Wolfe & Associates, Inc. This acquisition formed the basis for Mercer, Slavin & Nevins, Inc. He sold his interest in Mercer, Slavin & Nevins, Inc. early in 1990 and founded The Mercer Group, Inc. Mr. Mercer is the Chief Executive Officer of our firm and can be contacted at our corporate headquarters as follows: James L. Mercer, President The Mercer Group, Inc. 5579 B Chamblee-Dunwoody Road, Suite 511 Atlanta, Georgia 30338 Telephone: (770) 551-0403; FAX: (770) 399-9749 Federal Tax ID No.: 58-1877068 Web site address: http://www.mercergroupinc.com Comprehensive Compensation and Classifieation Study The Men-er (,iroup, Inc. . November 28. 2007 Page 1 City of}Jagle. Idaho In addition to the corporate headquarters The Mercer Group, Inc. has branch offices in: . Dallas, Texas . Greeley, Colorado . Lansing, Michigan . Phoenix, Arizona . Raleigh, North Carolina . Sacramento, California . Santa Fe, New Mexico . Washington, DC . Winter Haven, Florida Business Model The Mercer Group, Inc. is a Consortium Model firm, with a core of key staff members supplemented by associated independent consultants and specialty firms. The consortium members work together regularly and have long personal and professional relationships. This business model allows us to: ., Staff each engagement with precisely the right mix of consulting professionals, who have the specific managerial, functional, and technical skills needed to fully satisfy the project objectives. ., Eliminate pressure to assign salaried staff who may be available, but lack the experience or capabilities necessary to be effective and efficient in serving our clients. ., Offer competitive rates for very senior consultants due to our reduced administrative and overhead costs. LISTING OF WORKING OFFICE This project will be conducted by the Raleigh, North Carolina branch. The Raleigh branch is staffed by Senior Vice President Phillip Robertson, Vice-President Kay Culbertson Robertson, and Randy Davis. The Raleigh office specializes in Compensation and Classification Studies. The staff has over 25 years experience. The Raleigh branch can be contacted as follows: Phillip G. Robertson Senior Vice President The Mercer Group, Inc. 3443 Highway 39 North Louisburg, North Carolina 27549 Telephone: (919) 496-2080; FAX: (919) 496-7995 E-mail address:MercerNC@aol.com Comprehensive Compensation and Classification Study '1'he Mercer (..troup. Inc. . November 28. 2007 Page 2 City of Eagle. Idaho There are not any past, on-going or potential conflicts of interest which the consultants may have as a result of performing work for this project. The Mercer Group, Inc. has not divulged, discussed or compared our proposal with other proposers and has not colluded with any other proposer or parties to a proposal whatsoever. Further, Phillip Robertson has full authority to sign this proposal on behalf of The Mercer Group, Inc. Project Team The team we are proposing for the project includes our most experienced consultants. The Principal in Charge of the project will be James L. Mercer. Mr. Mercer is President of our firm. He is a Certified Management Consultant and has extensive experience in all phases of management consulting including compensation, classification, and performance appraisal. Mr. Mercer will be available if needed to assist in this project. The Proiect Manager will be Phillip Robertson, Senior Vice President of our firm. He possesses extensive knowledge of all phases of compensation and classification and all areas of local government management. He will be responsible for assuring the quality of our work, the adherence to expected schedules and the delivery of our work products. The Vice-President supporting Mr. Robertson will be Kay Robertson. Mrs. Robertson has extensive compensation and classification experience in both the public and private sectors. Randy Davis is The Mercer Group's FLSA and FMLA expert. Resumes for each of our team members are included in this section. James L. Mercer. President Mr. Mercer holds a Master of Business Administration degree from the University of Nevada, Reno, and a Bachelor of Science degree in Industrial Management from the same institution. He has also received a Certificate in Municipal Administration from the University of North Carolina at Chapel Hill, and is a graduate of the Executive Development Program at Cornell University. Mr. Mercer has more than 26 years experience in management consulting. He has authored three books, co-authored three books, and has written more than 250 articles on various phases of public management. His experience covers the following functional areas: compensation and classification, organization analysis, management systems, productivity improvement, seminars/training, public sector executive search, strategic planning, and general consulting. Examples of Mr. Mercer's experience in each of these functional areas are listed below: Compensation and Classification Comprehensive Compensation and Cla~sification Study '1'he Mercer (,iroUI). Inc. . November 28,2007 Page 3 City of Eagle, Idaho . Principal consultant on a project for the Town of Jackson, Wyoming to conduct compensation and classification study, update job descriptions, update personnel rules and regulations, and develop a performance-based employee evaluation system. . Overall direction of a compensation and classification studies for the Decatur and Springfield, Illinois Housing Authorities. . Overall direction of a compensation and classification study for the City of Auburn, Maine. . Consultant on a compensation and classification study for the City of Petersburg, Virginia. . Overall project direction for a very large compensation and classification study of the Jefferson County, Alabama Personnel Board which includes all jurisdictions in Jefferson County, Alabama including the City of Birmingham. . Overall direction and consultant for a compensation and classification study for the City of Morristown, Tennessee. . Overall direction and consultant for compensation and classification study and a performance-based employee evaluation system for the City of Berkeley, Missouri. . Overall direction for a compensation and classification study for the City of Del Rio, Texas. . Overall direction of a pay- for-performance system development project for the City of Atlanta. . Overall direction of an executive compensation system for Dekalb County, Georgia's three-campus, 20,000 student Community College. . Reviewed executive compensation program for the City of Corpus Christi, Texas. . Reviewed the compensation and classification and benefits systems of Conyers and Rockdale County, Georgia. . Reviewed the compensation and classification systems, retirement systems, and employee benefits programs for the Cities of Miamisburg and West Carrollton, Ohio, and for Miami Township, Ohio. . Reviewed the compensation and classification systems, retirement programs, and employee benefits programs for the City of Atlanta, Fulton County, and all of the jurisdictions in Fulton City, Georgia. . Reviewed the compensation and classification systems, the retirement systems, and employee benefits programs for Austin and Travis City, Texas. . Overall Director of a compensation and classification system for Ouachita Parish, Louisiana Library. COmI)rehensive Compensation and Classification Study The Mercer (,iroup. Inc. . November 28. 2007 Page 4 City ofEagie, Idaho Mr. Mercer personally worked with Dr. Rensis Likert, considered by many to be the "father of participative management," on the design of data collection instrumentation (using Likert's survey research instruments) to compare 27 test and 27 control medium-sized local governments across the country on the issues of receptivity to new technology and innovation. This experiment formed the basis for the current national local government database in this area. Prior to forming The Mercer Group, Mr. Mercer was President of Mercer, Slavin, & Nevins, Inc. and a Regional Vice President of Wolfe & Associates, Inc., with which he previously merged his own local government consulting firm, James Mercer & Associates, Inc. He has also been Director of Government Consulting Services in the southeastern and southwestern regions of the United States for Coopers & Lybrand. He has been a National Program Director with Public Technology, Inc., and served as Assistant Mayor of Raleigh, North Carolina. This was preceded by ten years of private sector and university faculty and staff experience. Mr. Mercer is a frequ- ent featured speaker, organizer and panelist at local government conferences, professional, and civic clubs, etc., on issues of productivity improvement, management, office automation, entrepreneurship, etc. Mr. Mercer has received many honors, including the prestigious George C. Franklin Memorial Award from the North Carolina League of Municipalities for Excellence in Public Administration and election to Beta Gamma Sigma, the national honor society in business and administration. He has also served on several private and public Boards, including the University of Nevada Foundation, the School of Business Advisory Board at California Polytechnic State University in San Luis Obispo, and the Public Administration Program at the University of South Carolina. Mr. Mercer has been quoted in The New York Times, Forbes, Public Management, American City and County, and many other national and local publications. His professional affiliations include: . International City/County Management Association; . American Society for Public Administration; . Institute of Industrial Engineers (past Chapter President); . The Technology Transfer Society (Board of Directors - 5 terms); and . International Association of Quality Circles. Comprchensive Compensation and Classification Study Thc Mercer (,iroup. Inc. . November 28, 2007 Page 5 City of Eagle, Idaho Phillip Robertson. Senior Vice-President 3443 Hwy. 39 North Louisburg, North Carolina 27549 Office telephone: 919-496-2080 Cellular telephone: 919-349-7239 Fax: 919-496-7995 Mr. Robertson has 30 years experience in the public sector. . Classification and compensation studies for Hernando County, Florida; The Housing Authority of Covington, Kentucky; the City of East Point, Georgia; Martin County, Florida; Ouachita Parish, Louisiana, Public Library; the City of Monmouth, Oregon; the City of Monroe, Georgia; the City of Peachtree City, Georgia; the Development Authority of Peachtree City, Georgia; Pitt County, North Carolina; Okaloosa County, Florida; Okaloosa County Detention Center; Martin County Sheriffs Office; Henderson, Nevada; the Town of Berlin, Connecticut; Choctawhatchee Electric Cooperative in Defuniak Springs, Florida; the City of Duncan, Oklahoma; Calcasieu Parish Public Library System; the City of Colonial Heights, Virginia; Nye County, Nevada; Decatur Illinois Housing Authority; Rochester Hills, MI; Garden City, Georgia; Glastonbury, Connecticut; the City of La Porte, Texas; Kitty Hawk, North Carolina, Town of Holly Springs, North Carolina; Sun 'N Lake of Sebring Improvement District; Okaloosa Gas District; City of Sunny Isles Beach, Florida; City of Frankfort, Kentucky; Peachtree City Tourism Association; the City of Sioux City, Iowa; the City of Glen Heights, Texas; the city of Daytona Beach, Florida; the City of Jacksonville, Florida; the City ofOsawatomie, Kansas; Gordon College in Barnesville, Georgia; Assisted Housing Risk Management Association, Iowa League of Cities; Peachtree City Water and Sewerage Authority; Minturn, Colorado; Loma Linda, California; Public Agency Risk Sharing Authority of California, Sacramento; City of Hercules, California; City of Mooresville, North Carolina; and Salt River Landfill, Scottsdale, AZ. . Former Management Information Services Director for the North Carolina Division of Employment and Training. . Extensive experience in organizational analysis at the local and state government levels . Former Personnel Manager for a Division of the North Carolina State Government. . Former Assistant Mayor for Clayton, North Carolina. . Extensive experience in Grant Management at the Federal, State, and Local levels. . Extensive experience and expertise with information systems management at the Federal, State, and Local levels. Mr. Robertson has a MA in Public Administration from Appalachian State University in Boone, North Carolina and BA in History from Wake Forest University in Winston-Salem, North Carolina. He has also done doctoral work at North Carolina State University in Raleigh, North Carolina. Comprehensive Compensation and Classification Study The Mcrcer (,iroUI), Inc. . November 28.2007 Page 6 City of Eagle, Idaho Kav Robertson, Vice-President - Raleieh Area Office Mrs. Robertson is a Vice President with the Mercer Group specializing in compensation and classification studies, organizational analysis, and performance evaluation systems. Mrs. Robertson has been with The Mercer Group, Inc. since 1997. She worked for seven years in the banking industry filling every position in branch banking, including branch manager. Her employers were SouthTrust Bank in Atlanta, Georgia, and NationsBank in Fayetteville, North Carolina. Her consulting project experience includes; . Classification and compensation studies for Hernando County, Florida; The Housing Authority of Covington, Kentucky; the City of East Point, Georgia; Martin County, Florida; Ouachita Parish, Louisiana, Public Library; the City of Monmouth, Oregon; the City of Monroe, Georgia; the City of Peachtree City, Georgia; the Development Authority of Peachtree City, Georgia; Pitt County, North Carolina; Okaloosa County, Florida; Okaloosa County Detention Center; Martin County Sheriffs Office; Henderson, Nevada; the Town of Berlin, Connecticut; Choctawhatchee Electric Cooperative in Defuniak Springs, Florida; the City of Duncan, Oklahoma; Ca1casieu Parish Public Library System; the City of Colonial Heights, Virginia; Nye County, Nevada; Decatur Illinois Housing Authority; Rochester Hills, MI; Garden City, Georgia; Glastonbury, Connecticut; the City of La Porte, Texas; Kitty Hawk, North Carolina, Town of Holly Springs, North Carolina; Sun 'N Lake of Sebring Improvement District; Okaloosa Gas District; City of Sunny Isles Beach, Florida; City of Frankfort, Kentucky; Peachtree City Tourism Association; the City of Sioux City, Iowa; the City of Glen Heights, Texas; the city of Daytona Beach, Florida; the City of Jacksonville, Florida; the City ofOsawatomie, Kansas; Gordon College in Barnesville, Georgia; Assisted Housing Risk Management Association, Iowa League of Cities; Peachtree City Water and Sewerage Authority; Minturn, Colorado; Loma Linda, California; Public Agency Risk Sharing Authority of California, Sacramento; City of Hercules, California; City of Mooresville, North Carolina; and Salt River Landfill, Scottsdale, AZ. . Management assessments, human resources hiring systems, supervisory training, and team building seminars for private business and state governments. . Customer service training for state government employees involved in welfare reform projects. . Career counseling assessments and training for welfare recipients. Mrs. Robertson has a BA in Marketing with a minor in Finance from Texas A&M University. ComI)rehensive Compensation and Classification Study Thc Mercer (,iroUI), Inc. . November 28. 2007 Page 7 City of Eagle. Idaho RANDY DAVIS-Atlanta, Geore:ia Mr. Davis retired in 2000 from the U.S. Department of Labor; Wage and Hour Division and currently works as a consultant and provides support to The Mercer Group, Inc. He worked the last eleven years as Branch Chief for Fair Labor Standards in the Atlanta Region which included eight Southeastern states. He also worked sixteen years as an Investigator, eleven with the Wage and Hour Division and five with Internal Revenue Service. As Branch Chiefhis responsibilities included speaking to employer groups, training investigators and providing interpretations ofthe various laws, regulations and enforcement policies to the investigators and supervisors. His areas of expertise include the Fair Labor Standards Act (minimum wage, overtime, exemptions, child labor), the Family and Medical Leave Act, the Employee Polygraph Protection Act, the wage garnishment provisions of the C.C.P.A., the Migrant and Seasonal Agricultural Worker's Protection Act and various immigration laws including those related to H-IB, H-2A and H-2B temporary foreign workers. Mr. Davis has a Bachelors of Business Administration from the University of Louisville. Comprehensive Compensation and CIIL~sification Study '1'he Men-er Hroup. Inc. . November 28, 2007 Page 8 City of Eagle, Idaho II. EXPERIENCE REFERENCES The Mercer Group, Inc. has been conducting compensation and classification studies since its inception in 1990. Phillip Robertson has been the manager of over 90% of all Mercer Group Compensation and Classification Studies for the past 9 years. The references below are for classification and compensation studies similar to the proposed project. All of the projects listed below were conducted by The Mercer Group, Inc. including staff proposed for this project and managed by a member of this team. Ms. Erika Phillips, Human Resources Director Town of Holly Springs 128 South Main Street Holly Springs, NC 27540 919-557-3911 Compensation and Classification Study completed 2004. Comprehensive update to the study in 2007. Mr. Jamie Justice Town Manager Town of Mooresville, North Carolina 413 North Main Street Mooresville, N.C. 28115 Compensation Study for Public Safety Employees 2007 (ongoing) Ms. Barbara Dupre' Director of Human Resources Hernando County, Florida 20 North Main Street, Room 364 Brooksville, FL 34601 352-754-4013 FAX: 352-754-4025 Compensation and Classification Study for Board of County Commissioners, Supervisor of Elections, Property Appraiser, Tax Collector and Clerk of Court. The original project was completed in 1998 and fully updated in 2002. We continue to provide services for Hernando County. Mr. Don Tomlin Chairman of the Board Assisted Housing Risk Management Association Rantoul, Illinois 309-342-8129 x 214 Compensation and Classification and Organizational Study AHRMA is a risk management pool serving housing authorities in Iowa, Illinois, and Nebraska. Comprehensive ComIlCnsation and Classification Study The Men-er (..troup, Inc. . November 28,2007 Page 9 City ofEagie, Idaho Paul Eckert, Mayor Bridey Hayes, Human Resources Director Sioux City, Iowa 712-279-6175 Compensation and Classification Study Mrs. Kay Godwin Human Resources Manager Okaloosa County Human Resources Department 601B North Pearl Street Crestview, Florida 32536 850-689-5870 FAX: 850-689-5889 Compensation and Classification Study for Board of County Commissioners and Supervisor of Elections. The original project was completed in 2000. The Mercer Group maintained the system for the county through 2004. Ms. Leigh Grantham Vice President, Marketing and Human Resources Choctawhatchee Electric Cooperative Defuniak Springs, FL 850-892-2111 Classification and Compensation Study The original project was completed in 2000. A comprehensive update was conducted in 2004. We continue to provide update services. Mr. Tom Acquaro, Human Resources Director City of Sunny Isles Beach 18070 Collins Avenue Sunny Isles Beach, Florida 33160 305-947-0606 Compensation and Classification Study completed 2005. Mr. Jose Lozano, CEO Okaloosa Gas District Valparaiso, Florida 850-729-4840 Compensation and Classification Study Staffing Analysis The original Study was completed in 2003. We continue to provide update services. Comprehensive ComllCnsation and Classification Study The Mercer (..troup. Inc. . November 28. 2007 Page 10 City of Eagle. Idaho Mrs. Jane Miller Administrative Services Director The City of Peachtree City Peachtree City, Georgia 770-487 -7657 Classification and Compensation Study completed 2001. Additional references and experience can be provided upon request. III. PROJECT PURPOSE, SCOPE, AND EXPECTATIONS A. Purpose of Study: The primary purposes of the classification and compensation study are to: · Recognize changes in position duties and responsibilities which have resulted from workforce productivity, technological enhancements or advances, and organizational changes; · Respond to and reflect changing market conditions as they affect salary range designations for various classes of positions; · Ensure equity and consistency among similarly classified positions. . Facilitate final decisions on matters of classification and compensation policy, procedure, and implementation of study recommendations. B. Primary Study Objectives: . Ensure that salaries for permanent employees included in the study are competitive with comparable public and private sector employers in the relevant labor market. · Ensure that the internal equity of all positions included in the study is appropriate. Based on the project scope the deliverables will include but not be limited to: 1. Recommend base salary ranges that are competitive with the external market and equitable with comparable internal jobs. 2. Interview all covered positions for employees having submitted job description Comprchensive Compensation and Classification Study "he Mercer (,iroup, Inc. . November 28,2007 Page 11 City of}Jagle, Idaho questionnaires to verify accuracy and completeness of the questionnaire. 3. Work closely with the employees, and management. 4. Recommend a classification structure that allows for compliance with the Fair Labor Standards Act (FLSA) revisions. 5. Recommend an effective, highly flexible and easily administered and maintained system. 6. Provide a plan and a schedule for implementation. 7. Make presentations as needed. The specific results ofthe Comprehensive Compensation and Classification study are displayed in Exhibit I. Comprehensive ComllCnsation and Cla.~sification Study The Mercer (,iroup, Inc. . November 28, 2007 Page 12 City or Eagle. Idaho EXHIBIT I RESULTS OF JOB EVALUATION: · Classification standards for all classes and levels proposed; · FLSA designation for exempt or non-exempt status for each position; · Allocation of each position to an appropriate classification to ensure internal equity; and RESULTS OF PAY/COMPENSATION EVALUATION: · Development of comprehensive market survey instrument for continued use by the organization; · Development of appropriate salary guidelines; · Assignment of appropriate salary range to each classification; and · Development of written guidelines of the total system. RESULTS OF IMPLEMENTATION RECOMMENDATIONS: · Facilitate final policy, procedure, and implementation decisions. Comprchensive Compensation and Cla.~sification Study The Men-er (,iroup, Inc. . November 2S, 2007 P~e 13 City of Eagle, Idaho IV. PROJECT APPROACH The Mercer Group, Inc. believes that the Comprehensive Compensation Study must have extensive client participation. Our experience has shown that successful assignments are characterized by: · A mutual understanding between the client and the consultant staff of the objectives, study process, timing, and end products of the study; · A thorough understanding of the current situation by the consultants before proceeding with detailed analysis; · Providing opportunities for participation and input by staff; and · A thorough review of draft reports with the Mayor and/or designee(s). Our work plan includes provision for each of the items listed above. The specific participation of officials and staff is described as follows: Mayor- The Mayor is the principal client for the project. Principal client will receive a thorough briefing and description ofthe study process and methodology. At the end ofthe study, the principal client will receive a briefing on all findings and recommendations as well as briefings throughout the process as appropriate. It is important that the principal client be involved in the key policy issues to ensure the overall effectiveness of the resulting classification and compensa- tion systems to meet the needs of the organization. Employees - All employees whose positions are included in the study must feel that they have a role in the process and that their input is both sought and welcomed. That role and input will be introduced and explained by a thorough and accurate initial presentation about the project. Employees then will be asked to complete position questionnaires and will be given opportunities to be involved further in the process through interviews, job audits (when necessary), and appeal procedures. The Mercer Group, Inc. approach to a Comprehensive Compensation Study stresses participation at all levels. The result will be a new system that is truly developed by those who must live with it. Work Program and Schedule In order to meet the client's specific objectives for this project, we have developed a work plan consisting of four (4) phases and six (6) steps, as follows: COmI)rchensive ComllCnsation and Classification Study The Me~-er (,iroup, Inc. . November 28. 2007 Page 14 City of Eagle. Idaho Phase I STEP 1. Orientation Because of the significance of a comprehensive compensation study, a clear understanding of and agreement to the work plan is critical. We will begin the project by meeting with the Mayor and whomever else he/she designates to clarify the following issues: . Specific issues regarding the current classification and pay structure(s); . Specific issues regarding individual Departments and Divisions; . Understanding of the objectives for the systems; . Review of The Mercer Group, Inc. classification and analysis methodology, including specific forms such as the position questionnaire; . Policies regarding review and employee appeal of recommendations; · Begin development of a list of organizations for the "market analysis," including public and private employers; and . Implementation strategy for results of the study. At the orientation, we will also obtain information on current practices. We will then provide the initial communication to employees through group meetings, written explanations, or both, depending on the needs of the organization. The Mercer Group, Inc. prefers to meet with employee groups to review the process and how the employees are going to be asked to participate. Comprehensive Compensation Studies can produce anxiety with employees. We have found that open discussions with employees at the beginning of the study helps employees understand what to expect from us and what we are going to ask of them. It also allows employees the opportunity to voice any concerns or questions and meet the consultants. During orientation we generally provide our contact information to employees and encourage them to contact us at any point during the process if they have questions or concerns. Phase II STEP 2. Job Analysis and Classification Process The job analysis classification portion of the study will begin with the distribution of Position Questionnaires to all employees. The Position Questionnaire is typically distributed and reviewed during the Employee Group Orientation meetings. The Position Questionnaire is important to Comprehensive Compensation Study process because the information obtained Comprehensive Compensation and Classifieation Study 'rhe Men-er (..troup. Inc. . November 28,2007 Page 15 City of Eagle. Idaho becomes the basis for: The classification system; The development of "benchmark" positions. Because the questionnaire is important, we will review and edit our questionnaire with management to ensure its appropriateness. Upon receipt of the questionnaires, we will interview all employees to confirm and clarify the information. Employees who have the same job title and agree that they are performing the same job duties can interview as group. Employees who have the same job title and do NOT agree that they are performing the same job duties will be interviewed separately. It may be that at the end of the study we recommend that these positions remain in the same classification or the duties and responsibilities may be such that a separate classification is recommended. If we do not allow employees to choose if they want to interview together or separately it greatly undermines the results of the study and the employee "buy in". Interviews generally take 20 minutes for individuals and 40 minutes for groups. During the interview the consultant will review the submitted questionnaire with the employee and as clarification questions. This is also an opportunity to employees who communicate more effectively in an oral format the opportunity to discuss their position with the consultant. Upon completion of the position questionnaire and interview process, we will analyze classifications by the duties and responsibilities. As a result of the questionnaire and interview process, we normally obtain information regarding organizational and personnel issues outside of the scope of this project. We will provide an informal report to the principal client covering those issues which appear to be significant, if desired. To develop the proper classifications and provide internal equity, we will use The Mercer Group Factor Evaluation System (FES). Such systems are used to provide numerical rankings for classifications and positions. A detailed description of our job measurement methodology is included as Exhibit II. During the classification process, we will address the issues of parity among departments, appropriate titles, consolidation of classifications, creation of new classifications and logical career ladders. After the completion of the interviews and the application of the FES, the consultants will meet with the Mayor and whomever else he designates to review the preliminary factoring for the positions. Comprehensive Compensation and Classification Study The Mercer (,iroup, Inc. . November 28.2007 Page 16 City of Eagle, Idaho After the recommendations have been approved, copies of the recommended class specifications, and title changes should be provided to incumbents for review. Should an employee feel that his/her recommended classification is inaccurate, an appeal may be made to the Appeals Committee. The make-up ofthe Appeals Committee will be established at project orientation. We will recommend a methodology to make the process fair and non-threatening to the individual employees. Comprchensive Compensation and Classification Study The Mercer (..troup, Inc. . November 28,2007 Page 17 City of Eagle. Idaho EXHIBIT II THE MERCER GROUP, INC. FACTOR EVALUATION SYSTEM OVERVIEW Each functional position will be analyzed and assigned a level for all 10 factors outlined below. In cases where employees hold the same position title but are of the opinion that their duties are materially different, separate interviews and factoring will be done. FACTOR 1. KNOWLEDGE REQUIRED BY THE POSITION Factor I measures the nature and extent of information or facts which the worker must understand to do acceptable work (e.g. steps, procedures, practices, rules, policies, theories principle, and concepts) and the nature and extent of the skills needed to apply that knowledge. To be used as a basis for selecting a level under this factor, a knowledge must be required and applied. FACTOR 2. SUPERVISORY CONTROLS "Supervisory controls" covers the nature and extent of direct or indirect controls exercised by the supervisor, the employee's responsibility, and the review of completed work. Controls are exercised by the supervisor in the way the assignments are made, instructions are given to the employee, priorities and deadlines are set, and objectives and boundaries are defined. Responsibility of the employee depends upon the extent to which the employee is expected to develop the sequence and timing of various aspects of the work, to modify or recommend modification of instructions, and to participate in establishing priorities and defining objectives. The degree of review of completed work depends upon the nature and extent of the review (close and detailed review of each phase of the assignment, detailed review of the finished assignment, spot-check of finished work for accuracy, or review only for adherence to policy). FACTOR 3. SUPERVISION EXERCISED Factor 3 measures the knowledge that may be required to supervise or manage small or specialized organizational units, mid-level divisions, and major operations within the total organization or the entire organization. FACTOR 4. GUIDELINES This factor covers the nature of guideline and the judgment needed to apply them. Guides may include manuals, established policies and procedures, engineering handbooks or the organization's personnel manual. The guidelines may be related to the specific occupation rather than organizational. For instance, a CPA may work under specific guidelines imposed by the profession rather than the organization. Individual jobs in different occupations vary in the specificity, application and availability of guidelines for performance of assignments. Consequently, the constraints and judgmental demand placed upon employees also vary. For example, the existence of specific instructions, procedures and policies may limit the opportunity of the employee to make or recommend decisions or actions. In the absence of procedures or under broadly stated objectives, employees in some occupations may use considerable judgment in researching literature and developing new methods. COml)rchensive Compensation and Classification Study 'I'he Mercer (,iroup. Inc. . November 28,2007 Page 18 City of Eagle, Idaho FACTOR 5. COMPLEXITY This factor covers the nature, number, variety, and intricacy of tasks, steps, processes or methods in the work performed; the difficulty in identifying what needs 0 be done; and the difficulty and originality involved in performing the work. FACTOR 6. SCOPE AND EFFECT Scope and effect covers the relationship between the nature of the work, i.e. the purpose, breadth and the depth of the assignments and the effect of the work products or services both within and outside the organization. Effect measures such things as whether the work output facilitates the work of others, provides timely services of a personal nature, or impacts on the adequacy of decisions. FACTOR 7. PERSONAL CONTACTS This factor includes face-to-face contacts and telephone and radio dialogue with persons not in the supervisory chain. Levels described under this factor are based on what is required to make the initial contact, the difficulty of the communicating with those contacted, and the setting in which the contact takes place. Above the lowest level, points should be credited under this factor only for contacts which are essential for successful performance of the work and which have a demonstrable impact on the difficulty and responsibility of the work performed. The relationship of Factors 7 and 8 presumes that the same contacts will be evaluated for both factors. Therefore, use the personal contact which serves as the basis for the level selected for Factor 8 as the basis for selecting a level for Factor 7. FACTOR 8. PURPOSE OF CONTACTS Purpose of personal contact range from factual exchanges of information to situations involving significant or controversial issues and differing view points, goals or objectives. The personal contacts which as the basis for the level selected for this factor must be the same as the contact which are the basis for the level selected in Factor 7. FACTOR 9. PHYSICAL DEMANDS The "Physical Demands" factor includes physical characteristics and abilities (e.g. agility and dexterity requirements) and the physical exertion involved in the work (e.g. stooping, bending, climbing, walking, or running). To some extent the frequency or intensity of physical exertion must be considered, e.g. is the exertion continuous or on an infrequent basis. FACTOR 10 WORK ENVIRONMENT The "Work Environment" factor considers the risks and discomfort in the employee's physical surroundings or the nature of the work assigned and the safety regulations required. Although the use of safety precautions can practically eliminate a certain danger or discomfort, such situation typically place additional demands upon the employee in carrying out safety regulations or wearing protective equipment. Comprchensive Compensation and Cla.~sification Study '1'he Men-er (,iroup, Inc. . November 28. 2007 Page 19 City of Eagle, Idaho Phase III STEP 3. Market Analvsis Using the specifications developed through the questionnaire/interview process, we will work with the organization to select a representative number of positions to be used as "benchmarks" for a market comparison survey. The survey instrument will be developed as part of our assessment and understanding of the needs of the organization. We recommend that a broad base of private and public organizations be used. Through meetings with management we will work together to identify the organizations to be included in this survey. The survey instrument will be customized for the organization and left with you for continued use in maintaining the system. All information will be analyzed by The Mercer Group, Inc. and a detailed report will be prepared regarding the responses. This analysis and report will be done on Excel spreadsheets and provided to you with training on how to update the spreadsheets in maintaining the system. We recommend that the market analysis survey be repeated in its entirety at least once every two years with parts of it used more often. We will provide the organization with the instrument and training in the analysis of data. Using the market research data, a set of specific recommendations regarding the level of Compensation for all classes will be developed. In this part of the study, we will: Provide pay levels for all classes; Provide recommendations on policy decisions such as range widths, new-hire level guidelines, and mechanisms for slotting; and Provide alternative implementation strategies for the system, including the cost of each alternative. Phase IV STEP 4. FLSA Analysis Once classifications Gobs) are identified for the new system each position will be reviewed and analyzed for the appropriate FLSA designation of Exempt or Non-Exempt. The Mercer Group FLSA Expert is Randy Davis. Mr. Davis retired in 2000 from the U.S. Department of Labor; Wage and Hour Division and has been working with The Mercer Group, as a consultant and provides support expertise in the area of FLSA. He worked the last eleven years as Branch Chief for Fair Labor Standards in the Atlanta Region which included eight Southeastern states. Mr. Davis been using his contacts at DOL to ensure a thorough understanding of new changes to Comprchensive Compensation and Classification Study 'I'he Men-er Hroup. Inc. . November 28,2007 Page 20 City of Eagle, Idaho FLSA not only from a legislative standpoint but from the people that will be enforcing these changes. Mr. Davis has the resources to research any questions or concerns there may be regarding FLSA designations. STEP 5: Training and System Maintenance Training will be provided for all appropriate personnel in the administration ofthe new classification and compensation systems, including: · The Factor Evaluation System for classification of new positions and reclassifications as they occur; · The market survey instrument for continued update of the salary system; and . Implementation procedures. We provide telephone consultation for one year following the study. Many of our clients keep us on contract following the first year to assistance as needed. We provide this assistance on at an hourly rate. STEP 6. Reporting and Documentation Throughout the project The Mercer Group, Inc. will provide the organization with written or oral updates. Specifically, we will provide: Status reports at each step of the process; Special reports when policy decisions need to be made; Classification specification; Preliminary final report for review by appropriate officials; and; Final report. We will also make a presentation of findings and recommendations to management, staff and the governing board, as necessary. Comprehensive Compensation and Classification Study 'I'he Mercer (,iroup, Inc. . November 28.2007 Page 21 City of Eagle, Idaho v. PROJECT SCHEDULE We suggest a 90-day project schedule. This schedule allows for sufficient time for employee interviews and detailed review of findings prior to final report. If needed, this time schedule may be shortened; all attempts will be made to complete the project in less time. Orientation will begin within two weeks of award of contract. Project Steps STEP 1. Orientation STEP 2. Job Analysis/ Job Audit Classification Process STEP 3. Market Analysis STEP 4. System Development, FLSA STEP 5. Training STEP 6. Draft Report Final Report Months +-------+-------+-------+-------+ 1 2 3 4 +-------+-------+-------+------- 1+++ I I 1 I I I I I ++++++++++++ I I I I +++++++++++++ 1 I I 1 ++++++++++++++ I I I I I I I I I 1++++++++ I I I I I I I +++ I I I 1 I I ++++++ I I 1 I I I +++++ I I +-------+-------+-------+-------+ Follow-up telephone assistance will be provided for one year following completion of the project. Comprehensivc Compensation and Classification Study The Mcrcer (,irouI), Inc. . November 28.2007 Page 22 City of Eagle, Idaho VI. PRICE PROPOSAL AND METHOD OF PAYMENT The not-to-exceed total cost of the Comprehensive Compensation Study for the City of Eagle will be $22,250. This price includes all direct and indirect expenses associated with the project. Our customary payment schedule includes partial payments tied to verifiable completion of selected phases of the project. The payment schedule listed below is what we would recommend for this project; however, it is not a condition of our acceptance of this contract. At completion of initial site work and Orientation: 25% of contract amount At completion of employee interviews, selection of benchmarks, and identification of comparables: 25% of contract amount At presentation of Final Report: 50% of contract amount The City of Eagle's cost for The Mercer Group, Inc. for services rendered under this agreement will not exceed the agreed upon price unless an increase is authorized in writing by the City. We will comply with all applicable laws, rules and regulations of federal, state and local government entities. Our ability to carry out the work required will be drawn greatly from our past experience in providing similar services to others, and we expect to continue such work in the future. We will, to the degree possible, preserve the confidential nature of any information received from you or developed during the work in accordance with our professional standards. Comprehensive Compensation and Classification Study The Mercer (,iroup, Ine. . November 28. 2007 Page 23 City of Eagle. Idaho We assure you that we will devote our best efforts to carrying out the engagement. The results obtained, our recommendations and any written material provided by us will represent our best judgment based on the information available to us. Our liability, if any, will not be greater than the amount paid to us for the services rendered. This proposal constitutes the agreement between us. It cannot be modified except in writing by both parties. Our agreement will be interpreted according to the laws of the State of Idaho. VII. AFFIRMATIVE ACTION STATEMENT It is the policy of The Mercer Group, Inc., to assure equal opportunity based on ability and fitness for all employees or applicants considered for our client organizations regardless of race, color, religion, sex, age, marital or veteran's status, national origin, or the presence of any sensory, mental or physical disability. Such policy shall apply, but not be limited to, hiring, placement, job classification, transfer or promotion, demotion, recruitment, advertising or solicitation for employment, rates of payor other forms of compensation, selection for training, career development, layoff or termination. This policy shall be disseminated to clients, subcontractors, suppliers and prospective applicants. The intent of this policy will apply to internal operations, recruitment and consulting activities conducted by our firm. COml)rehensive ComIlCnsation and Classification Study The Mercer (,iroup, Inc. . November 28,2007 Page 24 City of Eagle. Idaho The Mercer Groll , Inc. Consultants to Management 3443 Highway 39 North Louisburg, North Carolina 27549 (919) 496-2080 FAX (919) 496-7995 November 28, 2007 Mr. Ron Baker City of Eagle, Idaho Dear Mr. Baker Our proposal is for a Comprehensive Compensation Study for the City of Eagle. Our experience has shown that good compensation studies are a combination of sound technical processes and an understanding of human nature. Our approach is sensitive to this in several ways. For instance, our position evaluation system uses a factor evaluation system that is industry standard and is sufficiently straightforward (transparent) so that how the process works and how factor scores and total scores for a position are derived is easily explainable and easily understood by employees, supervisors, and the executive board. We provide orientation sessions for all employees so that they understand the methodology of the study and how their positions will be evaluated, thus reducing anxiety. We will meet with every employee to discuss his/her questionnaire answers and get clarification. We provide an appeals process for any employee who feels that his/her position has been classified incorrectly. We work closely with you and your management team throughout the process to assure that you are informed and that there are no "surprises." We rely on you and your management team to help assure that recommendations from the study do not create a disconnect with the political realities of the Organization. We welcome the opportunity to discuss our proposal in person or teleconference. This proposal is valid for 120 days from the date of receipt. We abide by all applicable rules of federal, state, and local entities. We thank you for this opportunity and look forward to working with you on this project. If you have any questions, please contact me at 919-496-2080. Sincerely, ~. V ff}.. ;/:r;;;/lhh....( ,()hlfJix'- v/ 'lMA7:1 Phillip G. Robertson