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HomeMy WebLinkAboutStaff Report 3619 CITY OF PALO ALTO OFFICE OF THE CITY CLERK March 18, 2013 The Honorable City Council Palo Alto, California Recommendation from the Council Appointed Officers Committee to Exercise an Option to Extend for One Year a Consulting Contract with Sherry L. Lund Associates for a Total Cost Not to Exceed $49,350 for; 1) Consulting Services related to the 2012-2013 Annual Performance Reviews for Four Council Appointed Officers for a Total Cost Not to Exceed $32,300; 2) Solicitation of Staff Feedback Related to Performance Evaluations for a Total Cost Not to Exceed $9,500; and 3) Mid-year Performance Review Updates for a Total Cost Not to Exceed $7,550 Recommendation: The CAO Committee recommends that Council: 1) Exercise an Option to Extend for One Year for Consulting Services related to the 2012-2013 Annual Performance Reviews for Four Council Appointed Officers for a Total Cost Not to Exceed $32,300; 2) Solicitation of Staff Feedback Related to Performance Evaluations for a Total Cost Not to Exceed $9,500; and 3) Mid-year Performance Review Updates for a Total Cost Not to Exceed $7,550, and 4) Use Council Contingency Funds for the unbudgeted amount of $7,000. Discussion On March 6, 2013 the Council Appointed Officers (CAO) Committee met with Sherry Lund to discuss Council exercising the option to extend her contract for one year. Ms. Lund provided three components for review and consideration by the Committee. The first component was the Annual Evaluation Proposal that would begin in April and include the CAO’s thought process concerning their self-evaluation, input on their concerns, and feedback regarding each other. Council would receive the information and provide feedback to Ms. Lund during the annual review. Ms. Lund will be present during the final review between each CAO and the Council. This work would be performed for a total cost not to exceed $32,300. Page 2 This year the annual Evaluation Proposal reflected a five (5%) percent increase in the fee from last year. The fee had remained constant for the past five years. Ms. Lund had also included an additional 10 hours ($2,500) for compensation-related work and meetings that might be required. If this work is not performed the City will not be charged for it. The only change to the process itself is to formalize that Ms. Lund will be collecting feedback from Council through the interview process that was used last year rather than the questionnaires that had been used in past years. The change proved to be more efficient and effective for the final two reviews last year. The CAO Committee on a 4-0 vote approved this component. The second component was a proposal by Ms. Lund for gathering Staff feedback regarding the CAO’s. The purpose of this additional component is to provide better input to the internal leadership portion of the performance review. Ms. Lund stated that choosing a methodology to get feedback from staff is critical to achieve a quality outcome. A written survey is the simplest and most inexpensive way to gather feedback, but it has a high potential for abuse and is problematic in a variety of ways. Conducting interviews overcomes most of the disadvantages of written surveys. An experienced interviewer can assess the context of the comments. Ms. Lund felt that clearly conducting interviews is a superior solution from a methodology perspective. However, Ms. Lund’s initial proposal to keep costs down was a hybrid approach of surveys combined with spot check interviews. The Committee after speaking with Ms. Lund felt that given the minimal increase in cost to do it right warranted the small increase in cost of $2,500. Ms. Lund will now personally interview all 30 direct reports of the CAO’s rather than use a survey. The CAO Committee on a 4-0 vote approved the solicitation of staff feedback through the interview process for a total cost not to exceed $9,500. The third component is a mid-year check-in; which will typically occur in the December timeframe. The CAO Committee agreed to approve a mid-year performance evaluation for all CAO’s for a total cost not to exceed $7,550. This is a change from last year as the City Clerk did not have a mid-year review last year. The CAO Committee on a 4-0 vote approved recommending to the City council that all four CAO’s have a mid-year performance review for a total cost not to exceed $7,500. ATTACHMENTS:  Sherry Lund Amendment No. One (PDF)  Sherry Lund cover letter to CAO Committee (DOCX)  CAO Annual Evaluation Process 2012-13 (DOCX)  Sherry Lund CAO Staff Feedback Revised 3-7-13 (DOCX) Page 3  Sherry Lund CAO Mid-year Update Discussions (DOCX)  March 6, 2013 CAO Meeting Minutes (DOC) Department Head: Donna Grider, City Clerk Page 4 1 Revision July 25, 2012 AMENDMENT NO. 1 TO CONTRACT NO. S12145456 BETWEEN THE CITY OF PALO ALTO AND SHERRY L. LUND ASSOCIATES This Amendment No. 1 to Contract No. S12145456 (“Contract”) is entered into March , 2013, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SHERRY L. LUND ASSOCIATES, a sole Proprietor, located at 247 La Cuesta Drive, Portola Valley, CA 94028 (“CONSULTANT”). R E C I T A L S: WHEREAS, the Contract was entered into between the parties for the provision of performance evaluation services for Council Appointed Officers (CAOs); and WHEREAS, the parties wish to amend the Contract to exercise the first option to extend for one year and make other changes described herein; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2 is hereby amended to read as follows: “SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through June 30, 2014 with the option to extend the Agreement for one (1), one-year extension, unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 2. Section 4 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 for year one shall not exceed Thirty Eight Thousand Five Hundred and Fifty Dollars ($38,550.00) and for year two shall not exceed Forty Nine Thousand Three Hundred Fifty Dollars ($49,350.00), assuming that no cancellation/rescheduling of fees due to CITY’s missing project milestones would apply. In the event Additional Services are authorized the total compensation for services and reimbursable expenses for year one shall not exceed Forty Two Thousand Four Hundred and Five Dollars ($42,405.00) and for year two shall not exceed Fifty One Thousand Eight Hundred Fifty Dollars ($51,850.00). Additional Services, as defined in Exhibit C, 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 prior written authorization of CITY. Additional Services 2 Revision July 25, 2012 shall mean any work that is determined by CITY to be necessary, but which is not included within the Scope of Services described in Exhibit “A”.” SECTION 3. 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 “B” entitled “SCHEDULE OF PERFORMANCE.” c. Exhibit “C” entitled “COMPENSATION”. SECTION 4. 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 ____________________________ Purchasing Manager APPROVED AS TO FORM: _____________________________ Senior Asst. City Attorney SHERRY L. LUND ASSOCIATES By:___________________________ Name:_________________________ Title:________________________ Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT "C": COMPENSATION 3 Revision July 25, 2012 Year One 04/24/2012 to 06/30/2013 EXHIBIT “A” SCOPE OF SERVICES 1. PROJECT ELEMENT #1: CAO Annual Performance Evaluations (June/July Timeframe) Phase I – Preparation for Review Session Consultant:  Works with internal liaison to develop contract and schedule project meetings and milestones.  Solicits CAO self-evaluations, reviews them and provides feedback and advice.  Assures CAO questions are clarified and raised with Council.  Prepares and distributes binders to Council, including instructions, CAO self- evaluations and blank evaluation hard copies. Distributes soft copies of forms on the same day.  Reviews Council evaluation feedback; meets with each Council member in person or by phone to refine and clarify written feedback prior to performance review session.  Compiles written comments and numerical feedback from Council and develops a written evaluation summary for each CAO. Prepares and sends confidential hardcopy packet with this information prior to each CAO review session.  Prepares information for closed review sessions that enable Council members to focus their discussion efficiently. Phase II – Performance Review Session Consultant:  Provides facilitation and technical assistance as needed during closed session Council performance review meetings with each CAO. Phase III - Post-Session Wrap-Up Consultant:  Documents agreed-upon unified Council feedback for written reviews.  Meets with each CAO to debrief evaluation meetings.  Prepares final evaluation file copies and obtains necessary signatures. Copies are given to CAO Committee Chair for filing and to each individual CAO. Final action on Council agenda is scheduled with Liaison.  Follows up with CAO Chair to debrief and solicit any additional process improvements. 4 Revision July 25, 2012 2. PROJECT ELEMENT #2: Mid-Year Check-In Performance Discussions (Nov./Dec. Timeframe) The Mid-Year is a simpler, more streamlined process than the annual review, and it has a different purpose. Mid-Year discussions allow CAOs and Council to do four things: 1) Provide answers to CAOs’ performance-based questions from the entire Council; 2) Address any misalignments in expectations; 3) Discuss goals that require mutual involvement and participation; and 4) Address emergent issues. They allow Council to more actively support and manage performance rather than letting a goal potentially drift for an entire year. Consultant:  Gathers feedback from CAOs and Council Members in advance.  Creates a summary of key issues for discussion and distributes it to Council and CAOs in advance.  Facilitates closed session meetings.  Provides post-meeting summaries. 3. PROJECT ELEMENT #3: Staff Member Input for CAO Annual Performance Reviews 1. Interview CAOs to get their context and input for employee feedback (e.g., who, if anyone, is on a performance plan, any other circumstances I should know about. 2. Attend a meeting of each CAO with those being surveyed to introduce myself, describe what we are doing and why. Input will be gathered from the direct reports of the City Manager (12), the City Attorney (9), and the City Auditor (6). In the latter two cases, all employees in the department are also all direct reports. I would also gather input from all 4 employees in the City Clerk’s office. They are not all direct reports, but the small numbers make it essential to include everyone in order to preserve anonymity. 3. Collect written feedback through a combination of a few (probably 5-6) simple written survey questions. I will make some brief follow-up phone calls to explore resulting questions that may arise in the written feedback, and to gather more examples to clarify patterns of comments. Staff feedback will be anonymous to CAOs and to Council but not to the Consultant. Council members will receive a brief (1-3 pages) summary to inform their annual review feedback to CAOs. Due to the highly confidential nature of this assignment, I personally perform all work on this contract. 5 Revision July 25, 2012 4. CITY OF PALO ALTO (Client) Responsibilities In order to support the success of the project and to stay within quoted costs, Client agrees to:  Assure involved parties a) are available for one-on-one and group meetings; and b) complete evaluations on time in order to meet project milestones.  Identify a project manager/internal liaison who can schedule appointments and provide support in getting evaluation items on Council agendas.  Provide an efficient and coordinated contracting process through a single liaison.  Provide meeting space and A-V equipment required.  Commit to a professional and respectful process. 6 Revision July 25, 2012 Year Two 04/24/2013 to 06/30/2014 EXHIBIT “A” SCOPE OF SERVICES 1. PROJECT ELEMENT #1: CAO Annual Performance Evaluations (April-August Timeframe) Phase I – Preparation for Review Session Consultant:  Works with internal liaison to schedule project meetings and milestones.  Solicits CAO self-evaluations, reviews them and provides feedback and advice.  Works with CAOs and Council, as needed to refine performance measures.  Assures CAO questions are clarified and raised with Council  Prepares and distributes binders to Council, including instructions, CAO self- evaluations, blank evaluation, and staff feedback summary in hard copy. Distributes soft copies of forms on the same day.  Meets with each Council member by phone or in person to collect evaluation feedback on each CAO.  Compiles written comments and numerical feedback from Council and develops a written evaluation summary for each CAO. Prepares and sends confidential soft copy and hard copy packet and with this information prior to each CAO review session.  Prepares information for closed review sessions which enables Councilmembers to focus their discussion efficiently. Phase II – Performance Review Session Consultant:  Provides facilitation and technical assistance during closed session Council performance review meetings, and performance goal-setting with each CAO.  Documents agreed-upon unified Council feedback for written reviews and goals. 7 Revision July 25, 2012 Phase III – Post-Session Wrap-Up Consultant:  Meets with CAOs to debrief evaluation meetings.  Prepares final evaluation file copies and obtains necessary signatures. Copies are given to CAO Committee Chair for filing and to each individual CAO. Final action on Council agenda is scheduled with City Liaison.  As needed, meets with CAO Chair and/or Committee members to get additional feedback and/or refine future process. Phase IV – Compensation Analysis, Discussions and Potential Action Consultant:  Provides guidance and format to City HR staff member, who collects competitive compensation data and formats it as requested by Consultant.  Analyzes results and works with CAO Chair to prepare for closed session discussions.  Documents decisions. CAO Chair works with internal staff to agendize compensation items for Council meetings and to prepare any resulting changes in contracts.  Performs other compensation-related tasks as requested by CAO Chair or Council. 2. PROJECT ELEMENT #2: Mid-Year CAO Check-In Performance Updates (Nov./Dec. Timeframe) Phase I – Advance Preparation for Discussions Consultant:  Interviews each Councilmember for 45-60 minutes to gather update feedback on the four CAOs, including a) whether CAO is on track with goals/objectives, b) whether Councilmember wishes to make any changes/course corrections in Councilmember expectations or CAO performance, and c) whether 8 Revision July 25, 2012 Councilmember wishes to provide other feedback  Interviews each CAO for 30 minutes to see if there are questions or issues they would like to raise with the Council  Summarize Council feedback and CAO questions and prepare agendas and materials for closed sessions to support efficient and effective discussion Phase II – Closed Session Performance Check-in Discussions Consultant:  Meets with Council in closed session to agree on update feedback  Meets with Council and each CAO for feedback and discussion Phase III – Wrap Up Consultant:  Documents agreed-upon Council feedback  Answers follow-up questions with CAOs  Refines process for future, as requested by Council 3. PROJECT ELEMENT #3: Staff Member Input for CAO Annual Performance Reviews Consultant:  Attends each CAO’s staff meeting to introduce self, explain purpose of soliciting feedback and process  One-on-one with each CAO, listen to CAO’s perspective and weigh context  For Attorney, Auditor and Clerk – Ask staff members to respond in writing to 4-6 targeted questions that require comments. Read comments and follow-up with brief phone interviews.  For Manager – Conduct individual interviews of approximately one-hour in length  Summarize final feedback and include it in Council’s feedback package 9 Revision July 25, 2012  Provide follow-up consulting as requested 4. CITY OF PALO ALTO (Client) Responsibilities In order to support the success of the project and to stay within quoted costs, Client agrees to:  Assure involved parties a) are available for one-on-one and group meetings; and b) complete evaluations on time in order to meet project milestones.  Identify an internal liaison that can schedule appointments and provide support in getting evaluation items on Council agendas.  Provide meeting space and A-V equipment required.  Commit to a professional and respectful process 10 Revision July 25, 2012 Year One 04/24/2012 to 06/30/2013 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete milestones within the number of days/ weeks as mutually agreed upon by both the CONSULTANT and CITY. A specific schedule will be determined based on the scheduling demands of the City Council and the Council Appointed Officers. The time to complete each milestone may be increased or decreased by mutual agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work within 2 weeks of receipt of the notice to proceed. PROJECT ELEMENT #1: Note: Important Council Deadlines are in Bold Face Closed Session Council Meetings are in Bold Face Italics Mon., May 14 City Manager and City Attorney final self-evaluation due to Sherry Wed., May 16 Binders and blank evaluation package (instructions, eval form, last year’s review, contract) for City Manager and City Attorney go to Council for completion Thurs., June 11 City Clerk and City Auditor final self-evaluation due to Sherry Wed., June 13 Blank evaluation package for City Clerk and City Auditor goes to Council for completion Thurs., June 14 CC evaluations of City Manager are due to Consultant (completed between May 13 and June 14) Thurs., June 21 CC evaluation City Attorney are due to Consultant (completed between May 18 and June 21) Tues. July 3 Council receives feedback summaries for City Manager and City Attorney (for reading prior to July 11 and July 12 closed sessions). 11 Revision July 25, 2012 Wed., July 11 5 p.m. Closed Session Review of City Manager Thurs.,July 12 5 p.m. Closed Session Review of City Clerk and City Attorney Thurs. Aug. 9 CC evaluations of City Clerk and City Auditor are due to Consultant (completed between June 13 and – Aug. 9, which provides the option to complete before the Council’s meeting break or after the break is underway) Friday, Aug. 24 Council receives summary of City Clerk and City Auditor feedback (for reading prior to Aug. 29 and 30 closed sessions) Wed., Aug. 29 5 p.m. Closed Session Review of City Clerk Thurs., Aug. 30 5 p.m. Closed Session Review of City Auditor By Mon., Sept. 10 Obtain signatures on reviews before Council meeting for filing in order to complete process PROJECT ELEMENT #2:  Nov. (dates TBD) – Gather feedback from CAOs and Council for Mid-Year Performance Discussions  Dec. (dates TBD) – Facilitate Mid-Year Performance Discussions PROJECT ELEMENT #3:  By April 12: Interview CAOs  By April 12: Attend Meeting Of Each CAO  By April 27: Collect Written Feedback  By May 13 for City Manager and City Attorney  By June 16 for City Clerk and City Auditor: Provide Council Members With Brief Summary of Results to be included in the evaluation package they receive, asking them for feedback on each CAO 12 Revision July 25, 2012 Year Two 04/24/2013 to 06/30/2014 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services in Project Elements #1, #2 and #3 so as to complete milestones within the number of days/weeks as mutually agreed upon by both CONSULTANT and CITY. A specific schedule will be determined based on the scheduling demands of the City Council and the Council Appointed Officers. The time to complete each milestone may be increased or decreased by mutual agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of this Agreement. CONSULTANT shall propose a detailed schedule of work for Project Elements #1, #2 and #3 within 2 weeks of receipt of the notice to proceed, subject to Council approval. 13 Revision July 25, 2012 Year One 04/24/2012 to 06/30/2013 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 for each task. 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 $38,550.00. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, either due to expanded scope or due to the CITY’S not meeting project milestones, the maximum compensation shall not exceed $42,405.00. 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 14 Revision July 25, 2012 Services, including reimbursable expenses, does not exceed $38,550.00 and the total compensation for Additional Services does not exceed $42,405.00. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $26,000.00 PROJECT ELEMENT #1: Task 2 $6,550.00 PROJECT ELEMENT #2: Task 3 $6,000.00 PROJECT ELEMENT #3: Sub-total Basic Services $38,550.00 Reimbursable Expenses $0.00 Total Basic Services and Reimbursable expenses $38,550.00 Additional Services (Not to Exceed) $3,855.00 Maximum Total Compensation $42,405.00 15 Revision July 25, 2012 CANCELLATION/RESCHEDULING POLICY Cancellation/Rescheduling Policy: There is no charge made if an onsite consulting date can be mutually rescheduled by Client and Consultant within 3 weeks of the original date; if the session cannot be rescheduled during this time frame, the cancellation schedule applies. (For example: If a consulting date has been set for June 1st, the mutually agreed upon rescheduled date must fall between June 2-22nd. A rescheduled date later than June 22nd would incur a cancellation/rescheduling fee as indicated below). Fees for cancellation (or rescheduling as previously described) for any reason are applied on the following schedule, which reflects both advance preparation and exclusive holding of a date for a client: 6 weeks in advance - 25% fee; 5 weeks in advance - 50% fee; 4 weeks in advance - 100% fee. A cancellation fee also applies to individual appointments missed without 24 hours notice based on an hourly rate of $250 per hour multiplied by the number of hours scheduled for the missed appointment. Expenses will be charged according to their cost accrued at time of cancellation. 16 Revision July 25, 2012 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: None 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 $0.00 shall be approved in advance by the CITY’s project manager. 17 Revision July 25, 2012 ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced authorization from the CITY’s project manager or council member direction. The parties recognize that on occasion the CONSULTANT may be directed to immediately perform Additional Services and in such cases it is not possible to obtain a written proposal in advance. However, when timing permits before performing Additional Services, 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: 1. Re-work that results from City Council members, officials, or City staff not performing their responsibilities as set forth in Exhibit A, Paragraph 4 in a timely fashion (thus requiring re-work in order to complete the project); 2. Meetings missed without 24 hours notice; and 3. Additional scope of services not covered in Exhibit A. 18 Revision July 25, 2012 Year Two 04/24/2013 to 06/30/2014 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 for each task. 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 $49,350.00. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, either due to expanded scope or due to the CITY’S not meeting project milestones, the maximum compensation shall not exceed $51,850.00. 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 19 Revision July 25, 2012 between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $49,350.00 and the total compensation for Additional Services does not exceed $51,850.00. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $32,300.00 PROJECT ELEMENT #1: Task 2 $7,550.00 PROJECT ELEMENT #2: Task 3 $9,500.00 PROJECT ELEMENT #3: Sub-total Basic Services $49,350.00 Reimbursable Expenses $0.00 Total Basic Services and Reimbursable expenses $49,350.00 Additional Services (Not to Exceed) $2,500.00 Maximum Total Compensation $51,850.00 20 Revision July 25, 2012 CANCELLATION/RESCHEDULING POLICY Cancellation/Rescheduling Policy: There is no charge made if an onsite consulting date can be mutually rescheduled by Client and Consultant within 3 weeks of the original date; if the session cannot be rescheduled during this time frame, the cancellation schedule applies. (For example: If a consulting date has been set for June 1st, the mutually agreed upon rescheduled date must fall between June 2-22nd. A rescheduled date later than June 22nd would incur a cancellation/rescheduling fee as indicated below). Fees for cancellation (or rescheduling as previously described) for any reason are applied on the following schedule, which reflects both advance preparation and exclusive holding of a date for a client: 6 weeks in advance - 25% fee; 5 weeks in advance - 50% fee; 4 weeks in advance - 100% fee. A cancellation fee also applies to individual appointments missed without 24 hours notice based on an hourly rate of $250 per hour multiplied by the number of hours scheduled for the missed appointment. Expenses will be charged according to their cost accrued at time of cancellation. 21 Revision July 25, 2012 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: None 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 $0.00 shall be approved in advance by the CITY’s project manager. 22 Revision July 25, 2012 ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced authorization from the CITY’s project manager or council member direction. The parties recognize that on occasion the CONSULTANT may be directed to immediately perform Additional Services and in such cases it is not possible to obtain a written proposal in advance. However, when timing permits before performing Additional Services, 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 Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: 1. Re-work that results from City Council members, officials, or City staff not performing their responsibilities as set forth in Exhibit A, Paragraph 4 in a timely fashion (thus requiring re-work in order to complete the project); 2. Meetings missed without 24 hours notice; and 3. Additional scope of services not covered in Exhibit A. 247 La Cuesta Drive Portola Valley, CA 94028 (650) 619-5500 fax (650) 561-8414 sherrylund@aol.com February 25, 2013 Mayor Greg Scharff Chairperson, Council/CAO Committee City of Palo Alto City Council 250 Hamilton Avenue Palo Alto, CA 94301 Dear Mayor Scharff-- I am attaching three proposals for the CAO annual performance management process. I am submitting these separately to allow the CAO Committee and/or Council to consider each component without delaying decisions on the others. I would highlight the following changes:  This year, the annual evaluation proposal reflects a 5% increase, for the first time in the last 5 years of consulting on that process. There is also up to 10 hours or $2,500 included this year for compensation-related work and meetings that may be required. The only change to the process itself is the collection of feedback through interviews rather than questionnaires. This change proved to be more efficient and effective for the final two reviews last year.  The staff feedback component was included for the first time last year. There is an addition of up to 4 hours or $1,000 for any follow-up work that may be required. The mid-year update discussions cost remains the same. Please let me know if there is additional information I can provide. I will be attending the CAO meeting on March 6 to respond to any questions from the CAO Committee. Thank you for your assistance and best regards, Sherry Lund Principal 247 La Cuesta Drive Portola Valley, CA 94028 (650) 619-5500 fax (650) 561-8414 sherrylund@aol.com February 23, 2013 Mayor Greg Scharff Chairperson, Council/CAO Committee City of Palo Alto City Council 250 Hamilton Avenue Palo Alto, CA 94301 Dear Mayor Scharff: Following is a proposal for the annual CAO performance review process. It includes the project description, timeline, benefits, project phases, tasks and consultant responsibilities, client responsibilities, project cost and assumptions, consultant qualifications, and next steps for the Council’s consideration. I am submitting separate proposals for gathering input from CAO staff members and mid-year performance update discussions for ease of Council’s consideration of each individual component of Council’s performance management process. Project Description The four CAOs control the major financial and human resources in executing the Council’s vision and priorities. Performance evaluation is an important opportunity for CAOs to get Council’s unified feedback on the past year. More importantly, it is the only opportunity to get unified feedback about expectations of performance going forward. Focus, clarity and alignment are critical to deploying financial and human capital efficiently and effectively; they are particularly critical when resources are limited. At the end of FY 2012-2013, the City Council will be evaluating the performance of four Council Appointed Officers (CAOs). I propose a similar evaluation process to that used in FY 2011-2012, with one change. That is to collect all Council feedback through interviews. Doing so has proven to be a more time-efficient method and requires less follow-up than written questionnaires. Timeline Last year, Council considered alternate timeframes for conducting annual CAO performance reviews and concluded that they wish to keep the review process on the same schedule. This means that the process would be completed by the end of July, or before the Council goes on Sherry L. Lund Associates Proposal: 2012-2013 CAO Annual Review Process Page 2 its annual meeting break. I suggest that, to make the process as easy on Council as possible during a busy time, the work kicks off in early to mid-May. Starting then means that a contract would need to be initiated by mid-April. Benefits The primary benefits I bring to the process are as follows: 1. The ability to leverage Council’s time to best use. Council has a exceptionally heavy work load with major budgetary and other issues in front of you. 2. Knowledge of your Council objectives, your unique City culture, your CAOs, plus technical expertise in executive evaluation and work with Councils and Boards. 3. The ability to be efficient in helping Council deliver a quality process and outcomes. 4. Assurance of a safe, professional, and mutually respectful environment for review discussions/feedback. I serve as an advocate for all points of view being heard within a professional and respectful environment. I can work flexibly with you to make any changes in the process that you may desire within the framework of maintaining a quality process. Project Phases, Tasks, and Consultant Responsibilities In addition to the specific project steps listed below, I, as Consultant, prepare for all meetings and communications; serve as project manager; and assure a sound methodology for the review process as a whole. The following performance evaluation project steps correspond to the last three years’ process: Phase I – Preparation for Review Session In this phase, Consultant:  Works with internal liaison to schedule project meetings and milestones.  Solicits CAO self-evaluations, reviews them and provides feedback and advice.  Works with CAOs and Council, as needed, to refine performance measures.  Assures CAO questions are clarified and raised with Council.  Prepares and distributes binders to Council, including instructions, CAO self- evaluations, blank evaluation, and, if elected, staff feedback summary in hard copy. Distributes soft copies of forms on the same day.  Meets with each Council member by phone or in person to collect evaluation feedback on each CAO.  Compiles written comments and numerical feedback from Council and develops a written evaluation summary for each CAO. Prepares and sends confidential soft copy and hard copy packet and with this information prior to each CAO review session.  Prepares information for closed review sessions which enables Councilmembers to focus their discussion efficiently. Sherry L. Lund Associates Proposal: 2012-2013 CAO Annual Review Process Page 3 Phase II – Performance Review Session In this phase, Consultant:  Provides facilitation and technical assistance during closed session Council performance review meetings, and performance goal-setting with each CAO.  Documents agreed-upon unified Council feedback for written reviews and goals. Phase III - Post-Session Wrap-Up In this phase, Consultant:  Meets with CAOs to debrief evaluation meetings.  Prepares final evaluation file copies and obtains necessary signatures. Copies are given to CAO Committee Chair for filing and to each individual CAO. Final action on Council agenda is scheduled with City Liaison.  As needed, meets with CAO Chair and/or Committee members to get additional feedback and/or refine future process. Phase IV - Compensation Analysis, Discussions and Potential Action Timing of compensation discussions in the process is driven by CAO and Council schedules. These discussions may either occur between Phase II and III or after Phase III. In this phase, Consultant:  Provides guidance and format to City HR staff member, who collect competitive compensation data and formats it as requested by Consultant.  Analyzes results and works with CAO Chair to prepare for closed session discussions.  Documents decisions. CAO Chair works with internal staff to agendize compensation items for Council meetings and to prepare any resulting changes in contracts.  Performs any other task required. Client Responsibilities In order to support the success of the project, Client agrees to:  Assure involved parties a) are available for one-on-one and group meetings; and b) complete evaluations on time in order to meet project milestones.  Identify an internal liaison that can schedule appointments and provide support in getting evaluation items on Council agendas.  Provide meeting space and A-V equipment required.  Commit to a professional and respectful process. Sherry L. Lund Associates Proposal: 2012-2013 CAO Annual Review Process Page 4 Project Cost and Assumptions Annual Evaluation Cycle - The CAO annual evaluation process can be completed for a project fee not to exceed $ 32,300.00, which includes expenses and includes the following: o $ 27,300.00 - $ 29,800.00 - Annual evaluations for the four CAOs. The higher number in the range includes up to 10 hours or $ 2,500 for possible client-driven additional services. These may include meetings cancelled without notice; additional work or re-work resulting from Council or City staff not performing their responsibilities in a timely fashion; and meeting client requests for out of scope services. o Up to 10 hours or $ 2,500.00 estimated for compensation-related work. Additional work required would be billed at $250/hour. This quotation is based on the work as previously described and cannot be unbundled without re-quotation. Options for gathering feedback from the CAO Direct Reports and for Mid-Year Check-In Discussions are addressed in separate proposals in order to facilitate Council’s individual consideration of each component. Cost Assumptions - The following assumptions have been considered in pricing this proposal:  There will be compensation analysis and discussion work required this year. Competitive data will be gathered and formatted by City HR staff, with Consultant specifying what is needed.  Meetings missed without 24 hours notice and re-work that is caused by the Council or City employees missing meetings and deadlines will be billed beyond the quoted project fee at discounted public sector rate of $250/hr. (private sector rate is $375/hr.). Consultant Qualifications: I believe my skills and experience remain a good match for this work, as I offer:  Five years of continuity in working with the City of Palo Alto Council and CAOs on performance management. An insider’s understanding of City culture and citizen expectations with the outsider’s ability to be fully objective about the process and relationships.  Deep and broad experience in performance management (including executive evaluation), executive coaching, negotiation, interpersonal communication, rewards and recognition, and career development – all important components of this project. Sherry L. Lund Associates Proposal: 2012-2013 CAO Annual Review Process Page 5  Thirty-five years experience in organizational consulting--with twenty-three years consulting experience in my own firm—for a broad variety of organizations in the public and private sector: o Public sector/non-profit experience examples include: Cities of Fremont, Santa Rosa, Dublin, San Ramon, Sausalito, Sonoma, Mission Viejo, Tracy, Fairfield, Union City, CA; plus the City of Tualatin, OR; Counties of Santa Clara, San Mateo, Alameda and Riverside, CA; BAAQMD, Sonoma County WMA, Carnegie Mellon University (Provost), the Dr. Susan Love Research Foundation, the Council on Foundations, S. H. Cowell Foundation, and the University of California. o Global private sector examples include: Intel, HP, Acco Brands, Cisco Systems, Seagate, The Gap, Levi Strauss, Driscoll’s, Xoma, Genelabs, among many others. This broad experience allows me to collect best practices from many sources and to avoid getting locked into the paradigms and traditions of a single type of organization. Next Steps Upon acceptance of this proposal by the CAO Committee and Council, the next steps are to: 1. Execute a contract per your internal procedure. 2. Develop a project schedule that is based on availability of all parties; revise it, as necessary, with Council at the earliest meeting possible. Please note that a schedule cannot be confirmed until the contracting process is complete. I would be very pleased to work with the Council and the CAOs again on the annual review process. Please let me know if I may provide additional information. Best regards, Sherry Lund Principal 247 La Cuesta Drive Portola Valley, CA 94028 (650) 619-5500 fax (650) 561-8414 sherrylund@aol.com March 7, 2013 Mayor Greg Scharff Chairperson, Council/CAO Committee City of Palo Alto City Council 250 Hamilton Avenue Palo Alto, CA 94301 Dear Mayor Scharff: Based on direction given by the Council/CAO Committee on March 6, I have updated this proposal. The purpose of these changes is to reflect the Committee’s desire to optimize the methodology for the City Manager’s staff. The change, on page 3, is to add Project Step 3B and on page 4, to adjust the cost accordingly. As part of my proposal for the CAO annual performance review process, I’m including a separate cost quotation for gathering feedback from staff members. The purpose of this additional component is to provide better input to the internal leadership portion of the performance review. I am submitting separate proposals for the annual review cycle and mid- year performance update discussions for ease of Council’s consideration of each individual component of Council’s performance management process. Project Context City Councils hold CAOs accountable for staff leadership, yet Councilmembers often feel they do not have enough balanced contact with staff members to assess this factor. Council members are usually able to directly observe CAO interaction with members of the public, other community stakeholders, and members of governmental agencies. The one aspect of performance that they rarely have the opportunity to directly observe or assess is staff leadership. Often impressions of leadership are formed based on occasional casual conversations that may not be at all representative of the collective staff’s views. Councils do not generally need deep and detailed information. They need to have enough balanced feedback to conclude that leadership is solid, that there are early signs of a potential problem that merits a mention, or that there is a clear problem that requires an action plan or Sherry L. Lund Associates Proposal: 2012-2013 CAO Staff Feedback Option Page 2 intervention. Councils typically don’t engage in offering detailed leadership advice to their CAOs, but they may direct an individual to address an issue or pattern of issues,and/ or to seek outside assistance. Project Methodology Choosing a methodology to get feedback from the staff level is critical to achieve a quality outcome. Whatever methodology is used needs to include a well-executed process, careful question construction, the ability to verify the accuracy of the messages in context, and useful results. To do otherwise leads to poor outcomes and legal risk. One of the simplest and most inexpensive ways to gather feedback is through a written survey. However, there is a great deal of potential for abuse in gathering multi-rater feedback through written survey questions alone. Some of the more problematic aspects are:  There is no interpretive context for comments, e.g., whether feedback from an individual is merited or is vindictive and personal.  If responses are unclear, too general, or don’t provide examples, there is no opportunity to ask follow-up questions.  Written feedback alone is more reliable in an organization with a history and culture of giving and receiving performance feedback across all levels. People who know that they will both be givers and receivers of feedback tend to use feedback constructively rather than to punish. Conducting interviews overcomes most of the disadvantages of written surveys. An experienced interviewer can assess the context of comments, e.g.:  Is feedback coming from a staff member who is on a performance plan himself/herself?  Is the CAO striking the right balance of leadership while executing Council’s vision for change? E.g., is the leader advancing change, dealing with collective bargaining, reorgani- zing staff and processes to achieve efficiencies/effectiveness)? CAOs are delivering a lot of difficult news in today’s economic climate, but skilled leaders manage to find the right balance and speed of change while maintaining the respect of their teams and stakeholders.  Are the staff member’s expectations reasonable, compared to other organizations and generally accepted good leadership behavior? Clearly, conducting interviews is a better solution from a methodology perspective. However, the logistics of interviewing approximately 30 direct reports for the four CAOs becomes a heavy, cumbersome, and more expensive process. The CAO Committee asked me how I could most optimize the staff feedback process, given the uneven scope and responsibilities of the CAOs. Therefore, I recommend a blended approach. Sherry L. Lund Associates Proposal: 2012-2013 CAO Staff Feedback Option Page 3 I am proposing using the process we used last year for the City Attorney, City Auditor, and City Clerk. Combining both written survey feedback with some brief interviews maintains the integrity of the process while balancing time and cost factors. Because the City Manager’s staff is larger, and because the scope of the job is so much broader than the other CAOs, I am proposing conducting individual interviews, approximately one hour in length, to gather feedback from his direct reports. This approach allows for a more in-depth assessment. Project Steps I propose the following process, as described in the steps below:  Step 1: During each CAO’s staff meeting, I introduce myself, the purpose for soliciting feedback, and the process.  Step 2: One-on-one with each CAO, I listen to the CAO’s perspective and weigh that as I consider context. As part of my regular meetings with CAOs to kick off the annual evaluation process, I now talk with them about context that they feel I should be aware of (from their perspective). I can simply expand that discussion at no added cost.  Step 3A (for Attorney, Auditor, and Clerk’s staff only): I ask staff members to respond in writing to 4-6 targeted questions that require comments. Comments, not ratings, are required to formulate a clear plan for change. Responses are submitted to me with names attached, so that I am able to follow up with questions. However, all feedback reported to Council and CAOs is anonymous. Step 3B (for City Manager’s staff only): I conduct individual interviews of approximately one hour in length. These longer, in-person interviews provide a more robust method of collecting feedback, reflective of the City Manager’s greater breadth and scope of leadership.  Step 4 (for Attorney, Auditor, and Clerk’s staff only): I read comments and follow up with brief phone interviews. In these interviews, I probe more deeply, fleshing out examples and testing assumptions to validate messages and themes. (Note that this step does not apply to the City Manager’s staff, as  Step 5: I summarize final feedback and include it in Council’s feedback package.  Step 6: I provide follow-up consulting as needed. Timeline This process would be started at the front end of the annual review process (May-June) in order to seamlessly integrate it into the annual CAO review process. Sherry L. Lund Associates Proposal: 2012-2013 CAO Staff Feedback Option Page 4 Cost This project can be completed for a project price of $ 9,500. That total includes Steps 1-5 for $8,500, plus for Step 6 (follow-up consulting), up to 4 hours or $1,000. All expenses are included. This quotation represents consideration for volume pricing as an add-on to the annual evaluation process. Please note that price quoted is a package price for all 4 CAOs as described above and cannot be unbundled without re-quoting. Next Steps Upon acceptance of this proposal by Council, the next steps are to: 1. Execute a contract per your internal procedure. 2. Develop a project schedule, based on availability of all parties; revise it, as necessary, with Council at the earliest meeting possible. Please note that a schedule cannot be confirmed until the contracting process is complete. It would be a pleasure to work with the Council and the CAOs on this component of the CAO review process. I would be happy to provide whatever additional information you may need. Best regards, Sherry Lund Principal 247 La Cuesta Drive Portola Valley, CA 94028 (650) 619-5500 fax (650) 561-8414 sherrylund@aol.com February 23, 2013 Mayor Greg Scharff Chairperson, Council/CAO Committee City of Palo Alto City Council 250 Hamilton Avenue Palo Alto, CA 94301 Dear Mayor Scharff: Following is a proposal for 2012-2013 mid-year CAO performance review updates for consideration by the CAO Committee and City Council. I am submitting separate proposals for the annual review cycle and for gathering input from CAO staff members for ease of Council’s consideration of each individual component of Council’s performance management process. Project Description When an employee reports to a single manager, performance dialogue typically happens throughout the course of normal work and one-on-one meetings. When an employee reports to a group, these same opportunities do not exist. CAOs may have frequent conversations with individual Council members, but rarely have the opportunity to get unified feedback from their collective bosses. CAOs manage significant human and financial resources in the City. In a highly dynamic environment with nine bosses, a year is a long time to go between performance dialogue. Mid-year check-in discussions allow for course correction, reprioritization, and early intervention so that performance is actively managed and resources are correctly deployed. While Council has the opportunity to give feedback to CAOs, CAOs also have the opportunity to raise questions and check assumptions that help guide their performance for the rest of the year. The process itself is simpler and more streamlined than the annual performance review process. During 2012-2013, you would like to schedule mid-year check-in review discussions for the City Manager, City Attorney, City Auditor, and City Clerk (the latter is an addition this year). Sherry L. Lund Associates Proposal: 2012-2013 CAO Midyear Updates Page 2 Timeline Preparation work for this project would begin in November, with discussions held in December, 2013. Project Steps and Consultant Responsibilities Step 1: Advance Preparation for Discussions Advance preparation allows both Council and CAOs to use group time effectively and efficiently. To prepare, I do the following:  Interview each Council member individually for 45-60 minutes to gather update feedback on the four CAOs. The key questions are: o Do you feel this CAO is on track with the goals and objectives? o Are there any changes/course corrections you would like to make in your expectations or the CAO’s performance? o Is there any other feedback you would like to provide?  Interview each CAO (30 minutes each) to see if there are questions or issues that they would like to raise with the Council. Examples may include getting clarity on performance goals and priorities,  Summarize Council feedback and CAO questions and prepare agendas and materials for closed sessions—all of which support an efficient and effective discussion. Step 2: Closed Session Performance Check-in Discussions The discussions are a simpler version of the annual review, but the discussion format is generally the same. I do the following:  Meet with Council in closed session to agree on update feedback, then bring in each CAO individually for feedback and discussion.  Provide facilitation and technical assistance as needed during the discussions. Based on the differing scope of responsibilities and number of direct reports, I suggest allocating closed session time as follows: two hours for the City Manager; one and one-half hours for the City Attorney; one and one-half hours for the City Auditor; and one hour for the City Clerk. Step 3: Post-Session Wrap-Up Sherry L. Lund Associates Proposal: 2012-2013 CAO Midyear Updates Page 3 Upon completion of the closed session discussions, I do the following:  Document agreed-upon Council feedback.  Answer follow-up questions with CAOs.  Use feedback from Council and CAOs about how the process worked to refine it for the future. Due to the highly confidential nature of this assignment, I personally perform all work on this contract. Client Responsibilities In order to support the success of the project, Client agrees to:  Assure involved parties are available for one-on-one and group meetings.  Identify an internal liaison that can schedule appointments and schedule closed sessions.  Provide meeting space and A-V equipment required.  Commit to a professional and respectful process. Project Cost This project can be completed for a project fee of $7,550.00 which includes expenses -- $ 6,550 for the City Manager, City Attorney, City Auditor and $ 1,000 for the addition of the City Clerk this year. This quotation is offered based on economies of scale for at least three CAOs, and cannot be unbundled without re-quotation. Meetings missed without 24 hours notice and re-work that result from missed meetings and deadlines will be billed beyond the quoted project fee at discounted public sector rate of $250/hr. (private sector rate is $375/hr.). Next Steps Upon acceptance of this proposal, the next steps is to execute a contract per the City’s internal procedure. I would be pleased to help you implement this next refinement of the CAO performance review process. Please let me know if I may provide additional information. Sincerely, Sherry Lund Principal Council Appointed Officers Committee DRAFT MINUTES Page 1 of 7 Special Meeting Wednesday, March 6, 2013 Chairperson Scharff called the meeting to order at 5:04 P.M. in the Council Conference Room, 250 Hamilton Avenue, Palo Alto, California. Present: Berman, Holman, Kniss, Scharff (Chair) Absent: AGENDA ITEMS 1. Discussion and Recommendation to the City Council to Amend the Contract with Sherry Lund Associates to Exercise an Option to Extend for One Year for a Total Cost Not to Exceed $46,850 for 1) Consulting Services related to the 2012-2013 Annual Performance Reviews for Four Council Appointed Officers for a Total Cost Not to Exceed $32,300, 2) Solicitation of Staff Feedback Related to Performance Evaluations for a Total Cost Not to Exceed $7,000, and 3) Mid-year Performance Review Updates for a Total Cost Not to Exceed $7,550. Sherry Lund, Sherry Lund Associates, spoke on the proposed performance process for the four Council Appointed Officer’s (CAO) reviews. She provided three components for review and consideration. The first component was the annual review process which would begin in the April timeframe; included in the process was the CAO’s thought process on their self-evaluation, input on their concerns, and feedback regarding each other. Council would receive the information and provide feedback on how to proceed. She would typically be present during the final review between the CAO and the Council. The second component was a Staff feedback component; a 360 review approach. The purpose of a 360 was to provide feedback on staff leadership. In the review process she ties the feedback to themes and looks for discrepancies from the employees. The third component was a mid-year check-in; typically in the December timeframe. The annual review was more Council driven where the CAO’s received feedback directly from Council; DRAFT MINUTES Page 2 of 7 Council Appointed Officers Special Meeting Draft Minutes March 6, 2013 however, a year from one review to the next was a staggering distance so she believed the mid-year would solve the dilemma of staying on task with the course directed by Council during the last annual review. Mayor Scharff felt the first discussion should be around the annual performance evaluation contract. He noted the existing contract allowed for an amendment to extend the term. He asked if there were elements being requested in the amendment which were not covered in the current contract. Ms. Lund noted the contract negotiated in 2012 was for a term of up to a three year period but did not speak to the possible fund amount changing each year. As far as the terms of the contract, no, she did not request renegotiation. Council Member Holman stated in the six years Ms. Lund had been performing the CAO review process Council had expressed confidence in her work and if Council were to take on the task it would be an overload on them. Council Member Kniss asked how the CAO reviews were completed prior to Ms. Lund. Ms. Lund clarified her understanding was a recruiter had been hired to perform the review process and once they had retired she was brought on board. She was unfamiliar with the process the previous person used; although, the output she had seen appeared to be a series of ratings with a few paragraphs explaining the ratings. Council Member Kniss asked the length of time Ms. Lund had been in the profession. Ms. Lund said she had been a professional evaluator for over 35 years. Council Member Kniss asked if Ms. Lund utilized the 360 degree review process and feedback. Ms. Lund stated she used the 360 degree feedback in her executive coaching processes. The product she preferred was from the Center for Creative Leadership which was a very robust product and at a higher cost to perform for individuals. Mayor Scharff believed the 360 degree process would be a valuable discussion for the second component. DRAFT MINUTES Page 3 of 7 Council Appointed Officers Special Meeting Draft Minutes March 6, 2013 MOTION: Mayor Scharff moved, seconded by Council Member Holman to recommend the City Council exercise the option to extend the evaluator contract for one-year for the consulting services related to the 2012-2013 Annual Performance Reviews for four Council Appointed Officers for a total cost not to exceed $32,300. MOTION PASSED: 4-0 Mayor Scharff asked for clarification on the additional evaluation cost of $7,000 related to the Staff feedback. He requested other options for Staff feedback and their possible costs. Ms. Lund mentioned Council had discussed some form of Staff feedback during her tenure but had struggled with adding more funds and determining the appropriate change to the process. For the 2012 evaluation processes she devised a survey and distributed it to the direct reports for feedback. Once she received the surveys’ back she made a few phone calls where she felt it was necessary. Other options would include the 360 degree feedback which would typically take an individual 45 minutes to complete the questionnaire, so as not to take away from the work flow of an organization select individuals would be selected to complete the information. She felt the 360 degree process was better suited as a developmental tool than as an evaluation one, it would add significantly to the cost, and to the time Council would need to review the evaluation process. MOTION: Council Member Holman moved, seconded by Council Member Kniss to recommend the City Council approve the solicitation of Staff feedback related to performance evaluations for a total cost not to exceed $7,000. Council Member Holman said the term used in Ms. Lund’s explanation was a modified 360 degree process. Ms. Lund said yes, the idea was to use the feedback to fill in the missing information, not to perform an exhaustive process on each CAO. Council Member Holman found the survey information from the 2012 evaluations helpful. Mayor Scharff asked whether the 360 degree process as approved was the correct balance or should there be more added for certain CAO’s given two DRAFT MINUTES Page 4 of 7 Council Appointed Officers Special Meeting Draft Minutes March 6, 2013 CAO groups were small, one was middle sized, but one was significantly larger. Ms. Lund would not propose a process that she did not feel was viable. She acknowledged it would be helpful to have additional feedback to perform a greater degree of evaluation for the City Manager’s Office because he manages many more employees. In order to survey a larger number of employees in a single organization she felt the better approach would be for an organizational survey. If the question was how the CAO was performing as a leader, their direct Staff would provide the most valuable information. Mayor Scharff stated one of the Council’s most important activities was to effectively manage the CAO’s. He was anticipating Ms. Lund to strike the correct balance to assist Council with the task. Council Member Holman wanted to confirm her understanding of Ms. Lund’s suggestion of not performing a full 360 degree but for an organization the size of the City Managers’ to perform an organizational survey specifically designed towards that office. Mayor Scharff believed suggesting the organizational survey was part of the scope of the agenda. The scope was concerning what the City Council desired Ms. Lund to do for them with respect to the CAO evaluations. If she wished to return with a proposal for the organization survey, he was supportive. Council Member Holman suggested amending the Motion or making a second Motion. Ms. Lund agreed the perfect balance had not been struck; however, she believed they had reached a reasonable indicator. The City Manager has a huge organization and manages the lion’s share of the City’s assets. Ideally her preference would be one-on-one interviews with his Staff and sample survey’s. Mayor Scharff asked the cost for an individual interview process. Ms. Lund noted for the City Manager’s organization alone, an additional cost for 10 hours or $2,500. Mayor Scharff recommended amending the Motion from $7,000 to not to exceed $9,500. DRAFT MINUTES Page 5 of 7 Council Appointed Officers Special Meeting Draft Minutes March 6, 2013 Council Member Holman requested Ms. Lund to provide specific language on what she would be performing so the language in the Motion was adequately reflected. Ms. Lund stated the Amendment would cover performing one hour one-on- one individual interviews with each one of the City Manager’s direct reports. Council Member Kniss asked for clarification on the City Manager’s evaluation process, if Ms. Lund would sit down with each individual direct report to have a more clarifying discussion with them. Ms. Lund stated yes. That process would present her with a more robust opportunity to gather more specific feedback and her experience has told her there was no substitute for a one-on-one conversation. Council Member Kniss asked if the employee was aware that their responses were completely anonymous in the process. Ms. Lund said yes, they were totally anonymous. The information reported to the Council was on the theme of the leadership not individual statements. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to change the total not to exceed cost from $7,000 to $9,500 for individual interviews with each of the City Manager’s direct reports. MOTION AS AMENDED PASSED: 4-0 Council Member Holman asked for clarification on the organization survey. Ms. Lund stated it was a process to receive feedback from every level of a single organization. Council Member Holman asked if that process would not only cover the layers but also as an example; how the City Attorney’s office responds to department requests. Ms. Lund stated the organization survey could be set-up in the manner which best suits the City Council’s desired end result. An organizational survey was a large process to deploy. She stated she no longer performs such large tasks. DRAFT MINUTES Page 6 of 7 Council Appointed Officers Special Meeting Draft Minutes March 6, 2013 Council Member Holman asked if Ms. Lund would be the appropriate person to request returning with a proposal or would she recommend someone else. Ms. Lund would be happy to recommend names of people who perform those types of surveys. She offered to coordinate with the chosen person to speed up their process. Mayor Scharff was interested in exploring the concept prior to making a decision without sufficient data. He asked Ms. Lund if she would facilitate the process by supplying names, cost options, and the benefits. He noted being uncomfortable handing over the process to a person the City was unfamiliar with as well as the individual being unfamiliar with the City’s process. Ms. Lund was not interested in employing an individual as a subcontractor. Mayor Scharff clarified the City would deal directly with the individual whereas Ms. Lund would act as the Human Resources department for the CAO’s. Ms. Lund agreed to perform preliminary scouting to locate costs, because the scope varies and depending on the size of the survey the cost could significantly range. Council Member Kniss asked if Ms. Lund had seen an organizational survey completed in a governmental type of organization. Ms. Lund mentioned her thought process on the survey was whether the people in place to take action were capable of driving the results. The purpose of such a survey was for positive change and action. Her experience has shown smaller focused processes were better for achieving best practice outcomes. The two goals she would ask a client who wished to perform such a survey was 1) what was the driving force for requesting the possible organizational changes and 2) were the individuals in charge resigned to drive the changes. Council Member Kniss felt the process being used was sufficient and the additional organizational survey was consumptive. She was not against an organizational survey but believed she was not familiar enough to make a decision at the moment. Council Member Holman felt there were too many unknown variables to make a decision and recommended gathering more information. She requested information on whether other city entities had completed an organizational survey and how they felt it assisted the organization. DRAFT MINUTES Page 7 of 7 Council Appointed Officers Special Meeting Draft Minutes March 6, 2013 Ms. Lund did not have ample data to supply a response to the Committee but was willing to send out feelers and retrieve the necessary figures and statistics to return with a satisfactory report. She recommended putting the concept on hold until further notice. Mayor Scharff suggested directing the Chair to discuss the goals and ability to put the results in motion with Ms. Lund and make a determination on whether to have her return for further discussion. He had concerns with going before Council with an expense of $40,000 for an un-vetted process. Ms. Lund noted the amount could be from $40,000 to $70,000. Mayor Scharff stated the recommendation to Council would need to be clear in the sense of why the Committee recommended it. The other concern was the cost for Ms. Lund’s time and efforts for gathering the information. Council Member Holman did not feel it was fair for Ms. Lund to report to the Committee on resources without compensating her. She requested Ms. Lund simply supply resources of persons the Committee could contact for further information. Ms. Lund said in reviewing her client list she did not believe any of the cities she works with have performed an organization survey. Council Member Kniss agreed to have the Chair engage in an off-line conversation with Ms. Lund regarding the organizational survey and return to the Committee if they felt there was merit. MOTION: Council Member Holman moved, seconded by Council Member Kniss to recommend the City Council approve the mid-year performance review updates for a total cost not to exceed $7,550. MOTION PASSED: 4-0 ADJOURNMENT: Meeting adjourned at 5:46 P.M.