HomeMy WebLinkAboutStaff Report 6852
City of Palo Alto (ID # 6852)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 5/2/2016
City of Palo Alto Page 1
Summary Title: Approval Contract Amendment for CAO Evaluations
Title: Approval of Amendment Number One to Contract Number C15159225
in the Amount of $60,000 with Municipal Resource Group for Council
Appointed Officers Evaluations to add Services and Increase the Total
Amount Not-to-Exceed From $123,000 to $183,000
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that City Council adopt Amendment One to Contract C15159225 with
Municipal Resources Group (MRG) to add $50,000 to Year 1, $5,000 to Year 2, and $5,000 to
Year 3 for annual Council Appointed Officers (CAO) performance evaluations for a new not to
exceed amount of $183,000 through June 15, 2018. Staff also recommends a transfer of
$20,000 from the City Council contingency account to the City Council Department Budget to
provide funding, in addition to $30,000 from the Council department budget, for the costs
associated with these activities.
Background
On June 15, 2015 Council approved Contract C15159225 with Municipal Resources Group to
conduct evaluations for the City Manager, City Attorney, City Auditor, and City Clerk. The scope
of services authorized MRG to prepare a questionnaire, conduct interviews, prepare reports,
facilitate discussions, prepare summaries and review options for compensation.
Prior to the contract with MRG, Council used the services of Sherry Lund & Associates. That
firm’s service dated back to 2008 with the contract ending on June 30, 2015. On June 15, 2015,
Council, based on recommendations from the CAO Committee, entered into a three-year
contract with MRG.
Discussion
As noted in previous staff reports, CAO performance evaluation are a critical tool for assessing
employee performance and ensuring that staff is meeting City Council priorities and objectives.
Due to the facilitation needs amongst nine City Council members, four CAO’s, and the CAO
Committee, the use of an outside consultant has increased efficiency and saved the City costs.
City of Palo Alto Page 2
When the original agreement with MRG was negotiated it was anticipated that tools,
methodology and the approach MRG uses in other jurisdictions would be used with the City of
Palo Alto. As MRG began work with City Council and the Council Appointed Officers, a more
tailored approach was desired including development and administration of a customized
Direct Report Questionnaire which included qualitative feedback. This approach required
development of the questionnaire, extensive meetings with key stakeholders and
administration and analysis of qualitative comments and feedback. In addition, when MRG
originally submitted their proposal to facilitate the evaluations it had not anticipated
conducting a compensation review. Further, due to delays in the start of the initial contract
with MRG, much of the evaluation process fell during the preplanned City Council summer
break causing additional time to schedule meetings with all City Council members. As a result of
the unanticipated work and the addition of compensation review the proposed amendments
are required during the three year agreement.
Resource Impact
Partial funding of $30,000 is available in the City Council department budget. The remaining
$20,000 for Year 1, if approved by Council, will be transferred from the City Council
Contingency. Year 2 and Year 3 costs will be appropriated as part the Fiscal Year 2017 and 2018
annual budget process.
Attachments:
Contract C15159225 Amendment No. 1 with MRG (PDF)
1 Revision April 28, 2014
AMENDMENT NO. 1 TO CONTRACT NO. C15159225
BETWEEN THE CITY OF PALO ALTO AND
MUNICIPAL RESOURCE GROUP, LLC FOR PROFESSIONAL SERVICES
This Amendment No. 1 to Contract No. C15159225 (“Contract”) is entered into
April 18, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal
corporation (“CITY”), and MUNICIPAL RESOURCE GROUP, LLC, a California Limited Liability
Company, located at 675 Hartz Avenue, Suite 300, Danville, California, 94526 ("CONSULTANT").
R E C I T A L S
A. The Contract was entered into between the parties for the provision of the
development of a performance evaluation process and to conduct evaluations for four Council
appointed officials.
B. CITY intends to increase compensation from $123,000.00 by $60,000.00 to
$183,000.00 for continuation and addition of services per Exhibit “A” Scope of Services.
C. The parties wish to amend the Contract.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1. Section 4 COMPENSATION is hereby amended to read as follows:
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Services described in Exhibit “A”, including both payment
for professional services and reimbursable expenses, shall not exceed One Hundred Eighty Three
Thousand Dollars ($183,000.00). The applicable rates and schedule of payment are set out at Exhibit
“C-1”, entitled “RATE SCHEDULE,” which is attached to and made a part of this Agreement.
Additional Services, if any, shall be authorized in accordance with and subject to the provisions of
Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed
without the prior written authorization of CITY. Additional Services shall mean any work that is
determined by CITY to be necessary for the proper completion of the Project, but which is not
included within the Scope of Services described at Exhibit “A”.
SECTION 2. The following exhibit(s) to the Contract is/are hereby amended to read
as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference:
a. Exhibit “A” entitled “SCOPE OF SERVICES”.
b. Exhibit “C” entitled “COMPENSATION”.
DocuSign Envelope ID: 7B490F6F-9B1A-449C-9CA8-6A77E84B325C
2 Revision April 28, 2014
SECTION 3. Except as herein modified, all other provisions of the Contract,
including any exhibits and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly authorized representatives
executed this Amendment on the date first above written.
CITY OF PALO ALTO
APPROVED AS TO FORM:
MUNICIPAL RESOURCE GROUP, LLC
Attachments:
EXHIBIT “A” SCOPE OF SERVICES
EXHIBIT "C" COMPENSATION
DocuSign Envelope ID: 7B490F6F-9B1A-449C-9CA8-6A77E84B325C
Partner
3 Revision April 28, 2014
EXHIBIT “A”
SCOPE OF SERVICES
Project Introduction:
The City of Palo Alto is seeking to engage a consultant working directly for the City Council to
facilitate the annual performance evaluations and compensation adjustment process for its four
Council appointed officials (CAO’s), City Manager, City Attorney, City Clerk and City Auditor.
Project Background:
The City Manager, City Clerk, City Attorney and City Auditor are appointed directly by the City
Council and, as such, are reviewed by the City Council on an annual basis in accordance with their
individual employment agreements. Such review is necessary in order for Council members to
ensure the efficiency of the appointed offices, to provide general feedback on their performance, to
set goals for the coming year, and to identify areas of improvement. It is also necessary to review
compensation to ensure that the positions are paid appropriately in comparison to the market and
their performances.
Scope of Work:
A. Preparation of Questionnaire:
Working with the Council CAO Committee (four members of the City Council) and the CAO’s,
Consultant will prepare a questionnaire to be used for interviews. The questionnaires will be
distributed to Council Members to fill out a week in advance of their scheduled interview/meeting
with the Consultant. The questionnaires shall be designed to be a tool to summarize Council
Members’ estimation of the CAO’s attainment of specific goals, as well as their performance in
general areas such as communication; key relationships between the CAO and the Council, staff,
public, CITY committees and commissions and other government agencies; as appropriate; specific
work priorities such as budget, public relations, program management and employee relations; as
well as general comment on the CAO’s performance of their duties.
B. Conduct Interviews, Prepare Report, Facilitate Discussion, Prepare Summary:
CONSULTANT will interview each of the (9) Council Members individually, using the interview
questionnaire to gather input and evaluation of CAO performance. CONSULTANT will also
interview each CAO to gather their estimation of their performance, achievements and ability to meet
their established goals and performance objectives. CONSULTANT will consolidate information
from all interviews and prepare a written evaluation/report, which will first be reviewed with the
Council CAO Committee and then presented to the entire Council in closed session. After
presentation of the evaluation/reports, CONSULTANT will facilitate Council discussion of the
results of the interviews and input. CONSULTANT will then facilitate discussion of the evaluation
report between each CAO and the Council.
C. Review Options for Compensation:
DocuSign Envelope ID: 7B490F6F-9B1A-449C-9CA8-6A77E84B325C
4 Revision April 28, 2014
Prior to conducting the above performance evaluations, the CONSULTANT will research salary
survey information and comparisons with salaries in surrounding agencies for each of the CAO
positions and review survey results with the CITY’s Human Resource Director. The CONSULTANT
will use this information to work with the Council CAO Committee on compensation options to be
proposed to the Council and CAO’s.
After facilitating the performance evaluation meetings with the Council, CONSULTANT will meet
with each CAO to de-brief on Council discussion, and to discuss compensation considerations. The
Council CAO Committee will make its salary adjustment recommendations to the full Council. The
CONSULTANT will be available as a resource at the meeting with the full Council. The
CONSULTANT will also be available as a resource for the Council CAO Committee in its
negotiations with individual CAO’s.
The CONSULTANT will prepare a complete file for each of the evaluations, including
compensation recommendations and actions, for the permanent CITY record.
AMENDMENT NO. 1
CONSULTANT to provide the following services:
- Create customized Direct Report Questionnaire to include qualitative feedback
- Conduct additional meetings with key stakeholders and administer and analyze qualitative
questionnaire
- Conduct compensation review/study each year of the contract
DocuSign Envelope ID: 7B490F6F-9B1A-449C-9CA8-6A77E84B325C
5 Revision April 28, 2014
EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed in
accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule
below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1
up to the not to exceed budget amount for each task set forth below.
The compensation to be paid to CONSULTANT under this Agreement for all services described in
Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $183,000.00.
CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this
amount. Any work performed or expenses incurred for which payment would result in a total
exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY.
CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The
CITY’s project manager may approve in writing the transfer of budget amounts between any of the
tasks or categories listed below provided the total compensation for Basic Services, including
reimbursable expenses, does not exceed $183,000.00.
BUDGET SCHEDULE NOT TO EXCEED AMOUNT
Task 1
(Year 1) $90,000.00
City Manager, City Clerk, City Auditor
& City Attorney Performance Evaluation
Task 2
(Year 2) $45,000.00
City Manager, City Clerk, City Auditor
& City Attorney Performance Evaluation
Task 3
(Year 3) $45,000.00
City Manager, City Clerk, City Auditor
& City Attorney Performance Evaluation
Sub-total Basic Services $180,000.00
Reimbursable Expenses $3,000.00
DocuSign Envelope ID: 7B490F6F-9B1A-449C-9CA8-6A77E84B325C
6 Revision April 28, 2014
Total Basic Services and Reimbursable expenses $183,000.00
Maximum Total Compensation $183,000.00
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are included within
the scope of payment for services and are not reimbursable expenses. CITY shall reimburse
CONSULTANT for the following reimbursable expenses at cost. Expenses for which
CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed
at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses
for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile transmission
and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup information. Any
expense anticipated to be more than $500.00 shall be approved in advance by the CITY’s project
manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written authorization from
the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed
written proposal including a description of the scope of services, schedule, level of effort, and
CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such
services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and
maximum compensation shall be negotiated and agreed to in writing by the CITY’s project
manager and CONSULTANT prior to commencement of the services. Payment for additional
services is subject to all requirements and restrictions in this Agreement
DocuSign Envelope ID: 7B490F6F-9B1A-449C-9CA8-6A77E84B325C