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SR-600-002 PERSONNEL:KB:\PERSON\MISC\COUNCIL\STAFFRPT\COUNCI44 Council Meeting: September 24, 2002 Santa Monica, California TO: Mayor and City Council FROM: City Staff SUBJECT: Recommendation to Authorize City Manager to Negotiate and Execute an Agreement with Hay Management Consultants to Provide Classification and Compensation Consulting Services for Municipal Employee Association Classifications INTRODUCTION This report recommends that the City Council authorize the City Manager to negotiate and execute a contract for classification and compensation consulting services from Hay Management Consultants for an amount not to exceed $100,500, half of which will be charged to Fiscal Year 2002-2003 and the other half to Fiscal Year 2003-2004. BACKGROUND The City contracted with Hay Management Consultants for classification and compensation consulting services for management and information technology classifications in 1998. The firm was chosen through a competitive process and was selected based on its range of services and expertise in the area of public sector compensation. DISCUSSION The classification and compensation system developed by Hay Management Consultants reflects a specific methodology developed by Hay. It is the long-term objective of the City to bring all of the City?s classifications under the Hay system. This 1 will result in there being a consistent classification and compensation system that covers all City classifications. The Memorandum of Understanding between the City and the Municipal Employees Association (MEA) provides for a classification and compensation study of all classifications represented by MEA. The MEA classifications will need to be incorporated into the classification system and compensation system that has been established through the methodology used by Hay Management Consultants. It is for this reason that additional consulting services from Hay Management Consultants are necessary. BUDGET/FINANCIAL IMPACT Funds for this year are available in account number 01274.555060. The services will be billed as they are required and are not to exceed $50,000 per fiscal year. Funds for FY2003-04 will be included in the budget at the same amount. RECOMMENDATION It is recommended that the City Council authorize the City manager to negotiate and execute a contract for classification and compensation services from Hay Management Consultants in an amount not to exceed $50,000 for FY2002-03 and $50,000 for FY2003-04. Prepared by: Karen Bancroft, Director of Human Resources 2