-- of Orange County Cities"*

Note: Missing finding numbers detected: F5, F6

Comments 1

• CO1
  In addition to the four items already addressed, the City believes it is important to address a number of other aspects of the report. Total Compensation The Grand Jury's compensation report shows a comparison of specific individuals occupying a similar (to varying degrees) position at a singular point in time. While this method illustrates a city's actual costs for a certain individual in a particular year, it does not provide a true "apples to apples" comparison of each city's costs for a given position. Items that can vary significantly from individual to individual in the same position include base salary, health insurance, and leave payouts. Nearly all positions have a salary range, which means a newer employee typically has a significantly lower salary rate than a long-term employee. For any position, the City's contribution towards a specific individual's health insurance costs will also vary based on the specific employee's choice of coverage, family size, and hire date. As an example, for a given management classification, the City's annual contribution for health insurance could range from a low of $3,600 to a high of $18,168, a difference of nearly $15,000. In addition, when an employee retires or otherwise leaves the City, we are required to cash out accumulated leave time. As a result, when an employee leaves the City (as was the case in 2009 with our Director of Public Works), the City's costs for benefits appears abnormally high due to the one-time payout. Therefore, if the goal is to compare relative costs for each position, a better approach would be to list the maximum cost of salary and benefits available to an employee in a particular job classification. For City Council compensation, the Grand Jury chose to list the one Council Member at each city with the highest level of compensation during the survey year. We believe this approach does not paint an accurate picture, as the benefits paid towards each of our Council Members in 2009 ranged from a low of $3,858 to Response to Compensation Study of Orange County Cities August 30, 2011 Page 4 the high of $26,319 listed in the report. A more valid approach would be to list the maximum cost of benefits available to any Council Member in each city, or to list the average of the actual compensation provided to all Council Members in that city. Positions Compared The Grand Jury's report states that eleven management positions were analyzed for "consistent analyses". However, the top position in a specific field at one city is not necessarily comparable to the top position in that same field at another city. The City believes that many of the benchmark positions included in the Grand Jury's study are not truly equivalent and would not typically be compared in a routine compensation study, which paints a misleading picture of relative compensation. There are many factors to consider when determining the comparability of positions, including scope of responsibility, complexity of assigned programs, breadth and depth of required education and experience, decision-making authority, breadth and complexity of supervision exercised, and nature and extent of interpersonal communications. As examples, using these criteria, we do not consider the Director of Human Resources in Anaheim (a department head) to be equivalent to the Human Resources Manager in Cypress (a division manager) or the Information Technology Director in Garden Grove (a department head) to be comparable to the Information Technology Supervisor in Tustin (a division manager). The Grand Jury's report mistakenly indicates that Tustin has separate positions of Public Works Director and City Engineer, with vastly different compensation figures for each position. At the City of Tustin, these two roles are assumed by a single job classification, the Director of Public Works / City Engineer. The data provided by the City showed two employees with the title of Director of Public Works / City Engineer receiving compensation in 2009, with a total compensation differential of $65,654. Over the course of 2009, the City had two individuals in the Director of Public Works / City Engineer position, as a long-term employee retired and was succeeded in the position by the Assistant Director of Public Works. This particular example illustrates how the Grand Jury's methodology of listing actual compensation provided to specific individuals can produce misleading results, as previously discussed. Correlation with City Population The City believes there is a flaw in the report's premise that there should be a direct correlation between a city's population and a position's total compensation. While residential population is a factor in determining the comparability of cities and positions, focusing on correlation between population and compensation is not especially useful. Other key factors that should be considered include the number and quality of services provided by the city, the amount and complexity of the city's annual budget, and the size of the city's workforce. All of these factors significantly affect the work that is performed by a city's staff, and are relevant to the level of compensation provided to its employees. Response to Compensation Study of Orange County Cities August 30, 2011 Page 5 Exclusion of Services The Grand Jury's analysis specifically excluded certain types of employees, including police. However, at the City of Tustin, the Police Department comprises half of the City's workforce and providing police services internally significantly impacts many other City departments and positions. Having a police department adds significantly to the complexity and volume of work in areas such as labor negotiations, personnel issues, medical leaves, risk management, payroll processing, and information technology. Transparency Grades 7 The City of Tustin prides itself in transparency to the public, and we believe the City has been very proactive in providing the content people in which people are interested, in a format that is easy to access. Therefore, we take great exception to the Transparency grades given to our City by the Grand Jury. Regarding accessibility, the industry standard statewide, if not nationwide, has been to provide compensation information on the agency's Human Resources web page. As previously discussed, to augment to information we already provided online, the City implemented a new "Transparency in City Government" web page in November 2010 to make it even easier for the public to access information on employee compensation and other areas of interest, such as financial documents and mandatory reports and filings. In terms of content and clarity, it appears that the Grand Jury provided the City with lower than expected scores because while we have for many years listed the salary and benefits paid for each position, we do not currently list actual salary and benefit costs paid in a given year for specific individuals. As discussed earlier, until very recently there was little public interest in presenting compensation data in this particular format, but the City will provide this information going forward. The City's intent is to be as transparent as possible, so if there is anything else we need to do to receive straight "A's" in transparency, we would greatly appreciate specific feedback. Adjustments to Compensation It should also be noted that the study evaluated compensation data from calendar year 2009. Since that time, we have significantly lowered the City's personnel costs. Since 2010, in addition to eliminating a number of positions, the City has cut contributions toward the employee share of retirement by approximately one-half and drastically reduced the compensation paid to City Council members' salary and benefits. Overall, the City believes the Grand Jury did a commendable job in putting the spotlight on public employee compensation and preparing an objective analysis of compensation in Orange County. We offer our sincere Response to Compensation Study of Orange County Cities August 30, 2011 Page 6 thanks to the Grand Jury volunteers for their public service. If you have any questions regarding this letter, please contact Kristi Recchia, Director of Human Resources, at (714) 573-3052. Sincerely, Jerry Amante Mayor C: Orange County Grand Jury City Council William A. Huston, Interim City Manager Kristi Recchia, Director of Human Resources