October 18, 2005

SUBJECT: Amendment to the Classification Plan:  Revised Job Specifications for Human Resources Manager for the Department of Human Resources and Approval of Budget Modification No. 9

REPORT IN BRIEF

This report recommends approval of changes in the specifications for the classification of Human Resources Manager to allow the implementation of a management reorganization of the Department of Human Resources.  The reorganization establishes responsibility with three Human Resources Managers to provide administrative leadership in the major functional areas of the Department.

This report also recommends approval of Budget Modification No. 9 for Fiscal Year 2005/2006 in the amount of $74,833 to fund the projected salary and benefit increases associated with the management reorganization.  The reorganization will include the replacement of the Risk and Insurance Manager position with a Human Resources Manager at no additional cost, and will add Human Resources Manager for a new functional area for the remaining half of the fiscal year, at a cost of $74,833.  On a one year basis, funds are available in the General Fund 20-Year RAP.  A comprehensive analysis of the remaining management staffing and the development of the Department’s strategic plan, currently underway, will need to be completed in order to fully identify the long term impact on the General Fund and the Employee Benefits Fund.  The new Human Resources Manager will oversee a new Employee Relations/Employee Development unit within the department.  This unit will assist the Director with a variety of employee relations programs including: citywide staff development and training, providing advice to managers and supervisors on discipline/grievance issues, developing and implementing performance audits and evaluations and providing technical expertise and support in labor negotiations. The third Human Resources management position (currently in existence) will oversee Recruitment and Selection activities.

BACKGROUND

Staff is recommending a revised management structure in the Human Resources Department to ensure improved administration of the diverse functions of the department.  It is proposed that the current job specification of Human Resources Manager be revised to enable three equal level managers to supervise and administer the following area of responsibilities:

1. Recruitment and Classification:  This division manager will be responsible for recruitment, testing, and selection processes; administration of the compensation and classification plans, and all workforce planning and management issues.  The division manager position (Human Resources Manager) is currently vacant and is filled on a provisional basis by a current Human Resources staff member.

2. Benefits Administration:  This new division manager will be responsible for the management of all city employee benefit programs including health, disability, retirement, leaves, safety, and will coordinate workers’ compensation administration.  The Pay and Benefits Supervisor and the Risk and Insurance Manager (this position is currently vacant and is filled on a temporary basis) are currently managing the functions of this division.

3. Employee Relations/Employee Development:  This new division manager will be responsible for a variety of employee relations programs and policies, including assisting the Director with labor relations, coordinating citywide training programs, advising departments on grievance and disciplinary issues, coordinating investigations, and managing the performance evaluation process.  The current Senior Management Analyst position has handled part of these proposed duties but several duties have not been a focus of the Department in the past few years.

The Risk Management functions associated with the administration and management of liability claims and the purchasing of various insurance policies and programs will not be handled by one of the Human Resources divisions as currently proposed.  Those functions will transfer to the City Attorney’s Office upon the hiring of the new Human Resources Managers.  While the administrative function is to be reassigned to the City Attorney’s Office, the management of risk will continue to be a citywide team effort with the Finance Department (Purchasing Division), Public Works Department (Property Management Division) and Human Resources Department continuing to be the key players.  The placement of Risk Management in the City Attorney’s Office will more effectively coordinate the management of city contracts, ensuring compliance with insurance certificate requirements, management of claims administration, and providing a more consistent oversight of outside counsel for suits against the city.  Staff will return to the Council, at a later date, regarding the budgetary impact to the liability fund as a result of this transfer.

A comparison of the Human Resources management structure is as follows:

Current Management Staff	Recommended Management Staff
1 - Human Resources Manager	3 - Human Resources Manager
1 - Human Resources Supervisor	1 – Human Resources Supervisor
1 – Senior Management Analyst	1 – Senior Management Analyst
1 - Risk and Insurance Manager

Following the hiring of the Human Resources Managers, a comprehensive analysis of the remaining management staffing will occur to determine appropriate classification levels.  This analysis may result in classification changes to the remaining management positions in the Department, however, given the planned citywide human issues that need to be addressed, it is anticipated the number of overall positions within the department will continue as budgeted.

EXISTING POLICY

7.3 Legislative Management Sub-Element

Goal 7.3D:  Maintain a quality workforce consistent with laws, the charter, and adopted policies in order to assure that City services are provided in an effective manner.

Policy 7.3D.1:  Maintain a recruitment and selection process that ensures a highly competent workforce.

Policy 7.3D.2:  Strive to develop a workforce that reflects the composition of the community labor force.

Policy 7.3D.3:  Train and develop employees to enhance job performance.

DISCUSSION

The Human Resources Department is facing a significant number of challenges in the next few years. Currently the Department is preparing a strategic plan that will outline short and long-term objectives. It is anticipated that the strategic plan will be used as a work plan to provide areas of needed improvement in a variety of Human Resources programs and procedures.  Among those challenges that will need to be addressed in the very near future are the following:

• Many citywide human resources policies, procedures, and rules have not been reviewed or revised in over 20 years.  A thorough review and rewrite is necessary to streamline procedures, processes, and to ensure a more customer-friendly department.  In addition, some of the current rules are out of legal compliance, are complicated, and are not well understood by most employees. This review and rewrite of policies and the development of new procedures will be a substantial work effort that will involve all aspects of human resources administration.  
• Citywide organizational development and training has not existed for a number of years.  It is essential that the City engage programs to ensure supervisory, management and leadership training so those employees have the necessary skills and tools to effectively manage the workplace and their employees.
• Benefit costs (health and workers’ compensation) continue to increase, and effective administration and management of those programs is necessary.
• The city’s workforce is aging and succession planning will become critical in the next few years.  It will be particularly important to train existing staff to be prepared to fill the numerous management and supervisory vacancies anticipated in the near future. 

It is essential that the Human Resources Department have an effective management structure and team to meet these upcoming citywide challenges.  As previously stated, it is possible future staffing revisions will be necessary; however, staff does not anticipate any additional changes until after the selection of the new Human Resources Managers and further evaluation.

FISCAL IMPACT

The management reorganization requires additional funding of $74,833 for the remainder of Fiscal Year 2005/2006 and $149,665 on an annual basis.  For Fiscal Year 2005/2006, funds are available in the General Fund 20-Year RAP.  As discussed earlier, a comprehensive analysis of the remaining management staffing and the development of the Department’s strategic plan will need to be completed in order to fully identify the long term impact on the General Fund and the Employee Benefits Fund. 

BUDGET MODIFICATION NO. 9 FISCAL YEAR 2005/2006
	Current	Increase/(Decrease)	Revised
General Fund
Expenditures:
Program 753 – Personnel Services	$1,471,847	$74,833	$1,546,680
Reserves:
20 Year RAP	$34,902,467	($74,833)	$34,827,634

 

CONCLUSION

Council approval to revise the job specifications for the classification of Human Resources Manager, and approval of the budget modification, will facilitate the immediate reorganization of the management structure of the Department of Human Resources.

PUBLIC CONTACT

Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.

ALTERNATIVES

1. Approve the revisions to the classification specifications of Human Resources Manager, and approve Budget Modification No. 9.

2. Approve the revisions to the classification specifications of Human Resources Manager, but do not approve Budget Modification No.9.

3. Do not approve the revisions to the classification specifications of Human Resources Manager, and do not approve Budget Modification No. 9.

RECOMMENDATION

Staff recommends Alternative 1; Approve the revisions to the classification specifications of Human Resources Manager, and approve Budget Modification No. 9. 

Prepared by:
Erwin Young, Director of Human Resources 

Reviewed by:
Mary Bradley, Director of Finance 

Approved by: 

Amy Chan

City Manager

Attachment
A. Classification Specification:  Human Resources Manager
B. Current and Proposed Human Resources Management Organizational Chart (pdf)
C. Resolution to Amend the Classification Plan