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1987-04-252. 3. 4. 5. 6. 7. 8. PROPOSED AGENDA FOR ClT~ COUNCIL WORK SESSION SATURDAY, APRIL 25, 1987, 8:30 A.M. Call the meeting to order at 8:30 A.M. Review of March 28, 1987, Work Session Minutes. Public Works facility. Consideration of the City hiring its own Assessor. Proposed addition of one Police Officer. Office Staff salaries for 1987. Other business. Adjournment.' 75 YEARS CITY OF MOUND 5341 MAYWOOD ROAD MOUND, MN 55364 (612) 472-1155 April 25, 1987 TO: FROM: SUBJECT: MAYOR AND CITY COUNCIL~.~., ED SHUKLE, CITY MANAGER PERSONNEL ISSUES AND 1987 SALARY RECOMMENDATIONS FOR OFFICE STAFF INTRODUCTION It has been past practice that non-union employees have undergone annual salary review. In the past, those salaries have been examined in late fall preceding the year in which they would become effective; They have been examined following settlements of the City's three union contracts. As you know, however, the union contracts were not settled until earlier this month. Therefore, non-union office salaries for 1987 have not been discussed previously. The purpose of this memorandum is to present sound justification on why I believe our non-union office personnel should receive salary adjustments that are at least equal to what the union employees are receiving. Prior to the discussion on salary adjustments, I would like to briefly cover Performance Evaluations and Comparable Worth. ,PERFORMANCE EVALUATIONS When I arrived at the City of Mound, I instituted a performance evaluation program. Performance evaluation involves the analysis of an employee's performance in relation to their job responsibilities. Performance evaluation serves the needs of the organization, manager or supervisor and employee. The benefits/payoffs for a system are as follows: Organizational Needs - Productivity and efficiency - Documentation of personnel actions - Objective salary administration - Human resource planning and development Manager Needs - Communication, clarification, update - Department effectiveness and coordination - Identify and develop promotable candidates Employee Needs - Clarification of expectations, accountabilities - Personal recognition - Evaluate career options - Development of abilities Under this program, each full-time employee was required to undergo an evaluation. Department heads evaluated their subordinates while I directly evaluated the department heads. Evaluations were done in 13 basic areaa: 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Job Knowledge Productivity Quality Relationships with Others Dependability Work Habits Initiative Acceptance of Supervision and Directions Employee Strengths and Contributions made to Job during Appraisal Period and Development Achieved since last Performance Review Improvement Areas Overall Evaluation Additional Comments Employee's Comments A performance rating schedule was used within the program: 3 = Commendable Achievements consistently exceed the stated standards/ objectives· 2 = Satisfactory Achievements consistently meet the majority of stated standards/objectives; in some areas, accomplishments may have exceeded expectations, where in others, they may occasionally have fallen short; however, the overall level of achievement is acceptable, and represents solid, satisfactory work. 3 1 = Needs ImDrovemen~ Achievements frequently do not meet standards/objectives; employee is meeting minimal work expectations; shows need for improvement in key areas. NA = N_ot Acceptable Achievements consistently fall below the stated objectives/ standards; probation or termination is to be considered unless performance improvement is shown during the ne~t review cycle. An evaluation form was used for the actual evaluation. It was a self- explanatory form that each supervisor used in evaluating their employees. The supervisor was to complete the form by themselves and then was to meet with each individual employee to discuss the evaluation with him or her. Upon completion of the employee meeting, the employee was to sign the form acknowledging that they discussed the evaluation with the supervisor. A copy was then given to the employee, a copy was retained for the supervisor's personnel file and a copy was given to me for my personnel file. The ultimate goal of the performance appraisal process is the professional development of personnel. The purpose of the performance appraisal form is to provide a basic format from which supervisors may identify strengths, weaknessess, and levels of development. I believe that this process is extremely important and can be a very valuable management tool in assisting supervisors with managing their departments. It also benefits the employee being evaluated and helps them improve their individual work performance and results in a better them improve their individual work performance and results in a better employee. COMPARABLE WORTH As you know, the Minnesota Legislature passed legislation in 1984 requiring public entities to establish equitable compensation relationships. This legislation, called the Comparable Worth Law (CWL), does not define equitable compensation relationships in specific operational terms. It enumerates the principles broadly, leaving the specific definition of equitable compensation relationships to: 1. 2. 3. The city if the employees are not unionized. The city and a union for non-essential employee groups. The city, a union, and outside arbitrator(s) for essential employee groups. The CWL requires cities to measure the relative worth of jobs in the city by means of a job evaluation system; measure the market-value worth of jobs for similar positions outside of the city; and give primary consideration in negotiating or establishing compensation relationships to the measured comparable work value of their employees. The sequence of actions by a city under the CWL is: 1. Conduct a job evaluation study to determine the relative job worth of jobs. 2. Conduct a market study to determine the value of jobs in the marketplace. 3. Give the union(s) representing employees a "report" 5 containing the results of a job evaluation system· Determine the relative weight which the city wishes to assign to relative job worth versus relative market value. File a report on the city's implementation plan with the Minnesota Department of Employee Relations. The plan must include an identification of classes for which a compensation inequity exists and a timetable for implementation of pay equity. Cities should be able to make judgements as to whether inequities exist after they have completed both a market study and the relative job value study. In response to the CWL, the City of Mound joined with approximately 150 cities and other public agencies around the State of Minnesota in a job evaluation study. Control Data Business Advisors (CDBA) was hired by this group of cities to do the job study. The original objectives of the Joint Compensation Study were to: - Provide relatively consistent results across cities, while preserving cohesiveness of existing joint and coordinated collectively bargained agreements as well as ensuring cost containment. - Provide a high level of participation in development and implementation of the study. - Result in maximum self-sufficiency on the part of the cities once implemented. - Employ a system that would meet statutory requirements, be nondiscriminatory, and be applicable to all city jobs. - Provide accurate, up-to-date, comprehensive job descriptions as 6 the basis for job description and market comparisons. - Finalize benchmark data and job evaluation results. - Provide strategies for establishing equitable compensation relationships for benchmark jobs. - Maximize potential acceptance of results by employees, bargaining agents, and elected officials in terms of study process and methodology. CDBA's job evaluation study was based upon actual tasks that each employee performed within their job. Each employee was required to complete a job questionnaire which would identify the tasks within that job and an approximate percentage of time that it would take to perform that task. Upon completion of the questionnaire, CDBA tabulated the data from the questionnaires and placed values on the tasks identified which resulted in job evaluation points. Twenty-nine benchmark jobs were identified with corresponding points and then employees from each of the cities in the study were placed, by individual jurisdictions, on the benchmark rating scale. In order to make any sense from all of this, it is important that actual compensation be linked to the various jobs On the rating scale. CDBA did review, in general, market data for the 29 benchmark jobs presented in the study. This, however, was not sufficient. The Metropolitan Area Management Association (MAMA) is attempting to conduct a market study (private and public sector pay data) that will more easily assist each individual city in developing its own pay structure. 7 In summary, the job evaluation study has indicated that we underpay our clerical employees, who in almost all cases are female. They are underpaid in relation to other city positions, which happen to be mostly male. Our society and our local governments have changed in'recent years. In the past, a city's primary function was to provide for the construction and maintenance of the infrastructure, that is, sewer, watermains and roads. Today, the processing of information has become more important and also more time-consuming, with bigger consequences for errors. Like it or not, our pay scales and the overall marketplace have not yet reflected that change. Another outcome of our job evaluations has been an assessment in most cases for the first time, of what our employees are actually doing. The value of this exercise as a tool to perform future work-content audits will be a benefit for years to come. The CWL requires that a pay equity program be implemented beginning August 1, 1987. It does not necessarily mean that actual salary adjustments be made at that time, but that the city demonstrate that it is attempting to deal with this subject. It should be noted, however, that as of August 1, 1987, litigation is permitted to begin regarding pay equity disputes. For our purposes, I believe after reviewing the results of the job evaluation study, clerical wages will definitely require some increases which could range from 1% - 4% of their base pay. Please keep this in mind as we approach August 1. OFFICE STAFF SALARIES The office staff group of employees would include: Judy Fisher, Senior Accounting Clerk Gayle Burns, Account Clerk Dee Schwalbe, Special Assessment Clerk Linda Strong, Secretary-Receptionist Shirley Hawks, Police Secretary Marge Stutsman, Administrative Assistant to Building Official Joyce Nelson, Public Works Secretary Lois Sandquist, Utility Billing Clerk Julie Clyne, Liquor Store Assistant Manager In the past, salaries have been increased for these employees on an across-the-board basis. Typically, these increases have followed union' settlements. In 1987, I am recommending that the above employees, with the exception of Linda Strong, receive a 3% increase retroactive to January 1, 1987, and a 1% increase on July 1, 1987. This follows the police sergeants and patrol contract settlements recently approved. Please refer to Exhibit "A" for breakdown of employees. In the case of Linda Strong, I am recommending a more substantial increase. This is due to the fact that she is the lowest paid secretary-receptionist for suburban cities under 10,000 population as identified by the Stanton Survey, the common resource used by all cities in the metropolitan area. Even Minnetrista, population 3,380, pays more ($14,040 for 1986). When Linda started with the city in 1985, she began as a receptionist 9 on a part-time basis. She was moved into full-time in late 1985. When I began in January 1986, I changed her job description and added more secretarial responsibilities from my office. I then allowed department heads to utilize her secretarial skills and now she is involved in more secretarial work than what was originally envisioned. Linda's position is an important one. caller hears when telephoning City Hall. greets you when you enter City Hall. should be rewarded for it. She is the first employee a She is the first person that She does well at her job a~d Therefore, I am recommending a substantial increase of $2,000 per year or 18.1%. I realize that this percentage increase is high but remember that percentages will be higher on a smaller number. Furthermore, this adjustment will bring her more in line with similar positions in other suburban cities of our size. A breakdown of this increase is also shown in Exhibit "A". I believe the evaluation program has been a definite improvement to the City's operations. I believe that employees must be told how they are performing in relation to their job description. They must have the opportunity to acknowledge their evaluation and be able to comment on it. Our employees have benefited from evaluations and the supervisors have also benefited. They have developed an administrative skill they may not have had before or have had the opportunity to use. Comparable Worth is a subject you will be hearing more about. Further 10 analysis of the job evaluation study and the opportunity to study market data from the private and public sector will assist in the implementation of a comparable worth program. As the summer gets closer, you will be hearing more on this. Finally, the actual salary recommendations for our non-union office staff. I believe they are y_~ salary adjustments. I realize that paying our Secretary-Receptionist substantially more than the others may cause some hard feelings, but please remember that Linda Strong is greatly underpaid now for what she is doing and I believe this kind of an adjustment is justified. If we don't do something now, the differential will be even greater and will cost more to resolve. Good employees are sometimes hard to find. This position has been difficult to fill in the past. Let's make an effort to retain a good employee. With regard to the Department Heads and myself, I would like to meet again in about 2 weeks to bring firm recommendations on salary adjustments. I have been working on this group of employees, but I have not completed my analysis. Could we possibly meet again on Saturday, May 9? Please advise. 11 II I Il I II II -,I I II (2o I II I.~ I II '-~ I II II (::::) I (~) It I Il I !1 I II I II O~ I II ~ I --~ II ~i I t.~ II I ~'1 II II ,~' I 0 mm I II II Im '~1 I II 0 I II ~ I II I~ I II · I II ~l~ I II ..a I II I II I II I II I II I II I~ I II 0 I II .1~ I I~ II " I II ~ I 0 II 0 I 0 II I II I II I II I II I II I II I~ I II I~ I II · I II ~ I II 0 I II I II I II I II I II I Il ~ I II II (:20 I II · I II I%) I II .t:: I II I II I II II ~ I II ~11 I II ..a I '-~ II · I II 0 I ~1~ II ~ I ~ I I . I I I I I I I I I I I I I p,o o o i ,. ,? I ! ! I I I- ' I , ti I II I II I II II I,,.~1 I II I,.,iJ I II ~J II I II · J II .l~ I II I~1 II I II I II I II I II ~1 II II II · II ~,~ I I! ! 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I 75 YEARS CITY OF MOUND 5341 MAYWOOD ROAD MOUND, MN 55364 (612) 472-1155 April 22, 1987 TO: City Council FROM: City Clerk The City Manager has requested that I reseach the merits of having Hennepin County do our assessing or having our own City. Assessor. The following points are very important in formulating a decision: 1. Property tax as a source of revenue to the City. A. Authority to tax. B. The role of property tax. C. "Real" property tax. Assessment of property. A. Assessment officials. Valuation of property. A. Classification of property. Equalization procedures. A. City Board of Review. PROPERTY TAX AS A SOURCE OF REVENUE FOR THE CITY OF MOUND· Property tax is no longer the major source of revenue for Minnesota cities. Less than one quarter of city revenue is derived from property tax. AUTHORITY TO TAX All taxing authority is vested in the state legislature. It is the state legislature which authorizes city property taxes and sets limits upon such taxes. Consequently, all city taxing authority is subject to change or revision by the legislature at any time. ROLE OF PROPERTY TAX There are, essentially, only three kinds of taxes: those levied against what a person earns, owns or spends. Income tax is an example of the first, sales tax represents the last. The property tax, whether levied against real or personal property, is a tax against the wealth which a person owns. It is essential that local officials be intimately familiar with property tax itself, with the tax levy limits and authorizations, with the details of its execution and with the maintenance of improvement of the tax base. Property tax supports many different governmental jurisdictions. For example every dollar that a City of Mound property owner, pays, through the property tax the following percentage of that dollar goes for: City of Mound School Dist. #277 Vocational School Misc. Levies Watershed District Hennepin County 16.76% 49.30% 1.31% 5.49% .12% 27.02% TOTAL 100.00% "REAL".._PROPERTY TAX The City has no authority to determine what property is taxable, 2 nor in what proportions or amounts. The legislature alone prescribes the procedures to be followed and sets all rates and exemptions. The assessor and the local board of review are authorized only to determine valuations in accordance with the procedures prescribed by the legislature. All real property subject to taxation is listed and at least one- fourth of the parcels listed must be each year with reference to their value on January 2 preceding the assessment so that each parcel is reappraised at maximum intervals of four years. ~SSESSMENT OF PROPERT~ There are four basic steps in the assessment of property: (1) Appraising property to determine its full and true value; (2) Classifying property to establish its assessed value; (3) Equalizing valutaions to reduce inequities; (4) reassessing property when necessary. SEE VALUATION OF PROPERTY for the first 2 items and the last two SEE EQUALIZATION PROCEDURES. ASSESSMENT OFFICIALS STATE OFFICIAL The state commission of revenue supervises the administration of assessment laws, striving to secure just and equal assessment of all property in the state. Some of the commissioner's duties include ordering the reassessment of any or all real or personal property in any assessment district and requiring cities to supply any needed information relating to the assessment of property and collection of taxes. COUNTY OFFICIAL The assessment official at the county level is the county assessor. It is his or her duty to make the final determination of the value of all property subject to assessment and taxation. If there is a city assessor, the locally appointed assessor views and appraises the property, but all the book work and final evaluations are assigned by the county assessor. This means that if there are deficiencies in the assessment procedures or any inequity in the value of property, the county assessor is empowered to correct them and the costs for the corrections would be for charged to the city. CITY ASSESSOR A city assessor places valuations on all taxable real property in the city. To do this, the assessor receives annually from the county auditor, on or before the first Monday in December of each year, the necessary assessment books and blanks. The work must be completed and books returned to the county auditor either on or before the first Monday in May or after the last meeting of the city board of review, whichever date is later. VALUATION OF PROPERTY All property is to be valued at its market value. "Market value" is defined by State Statute to mean the usual selling price at the place where the property to which the term is applied is located at the time of assessment, being the price which could be obtained at a private sale and not at a forced or auction sale. Market value is not necessarily the same as original cost or intrinsic value since the assessor is also authorized~to consider other value-producing factors in assigning value to property in terms of money. CLASSIFICATION OF PROPERT~ The assessed value of property, that value on which tax is imposed, is a given percentage of the property's market value. The percentage of market value that is actually submitted subject to tax is fixed by state law and depends upon the property's classification which in turn depends upon its use. The process of deriving a property's assessed value for tax purposes can be demonstrated as follows. Let us assume that the property being valued is land and a building for' residential homestead purposes, and that their combined market value is $100,000, as determined by the assessor. To determine the assessed value, the market value is multiplied by the percentage rate established for the particular classification of property. In this case it would be: 18% of the 1st $65,000 which equals $ 11,700.00 and 28% over $65,000 which equals 9~800.00 ASSESSED VALUE $ 21,500.00 Tax on this property would be figured as follows: Assessed Value ($21,500) x millrate (108.637) = $2335.70 tax The homestead credit is figured as follows: 54% of tax, up to $700.00 maximum = - 700.00. TOTAL TAX ON HOMESTEAD PROPERTY = $1635.70 This same property non-homestead would be figured as follows: 28% of Market Value ($100,000) x millrate (108.637) = $3041.84 TOTAL TAX ON A NON-HOMESTEAD PROPERTY EQUALIZATION PROCEDURES After the assessor has completed the work, it is reviewed and, within limitations, modified at the city, county and state levels of government. During this review procedure, two kinds of corrections are made: 1. The assessor's lists are check for accuracy, individual complaints are heard, and any necessary adjustments are made. This the sole concern of the city board of review. 2. The ratio of market to assessed market values is equalized. The county and state boards devote a greater percentage of their time to this task. Only when the assessments have been reviewed and equalized by all three levels of government do they become the official assessed values for tax purposes. cITy, DOARD OF REVIEW In Mound's case, the City Council is the Board of Review which meets as it will on May 12th. The city assessor (if Mound had one) and the county assessor must attend this meeting with their assessment books and papers. At the first meeting the board and the assessor accept and record the complaints and reasons. Then the board adjourns and the assessor reviews the parcels in question and brings back his recommendations at a later meeting, but no later than 20 days after the first meeting. In fulfilling its role, the board of review has three main functions to perform: 1. It must review the assessor's list, making sure that all taxable property in the city has been ,properly placed upon it. 2. It must review the assessor's valuations, striving to standardize the ratio between market value and adjusted market value for each individual piece of property. To accomplish this, the board may raise or lower valuations on individual properties, but 'increases in valuations cannot be made without first notifying the property owner and giving him an opportunity to be heard. 3. The board must hear and settle complaints of individual property owners regarding the valuations which have been placed upon their property. The local board of review may not reduct the total or aggregate amount of the assessment returned by the county assesser by more than 1~.' This means that compensation must be made for reductions in assessed values by making comparable increases in assessments against other parcels of property. (NOTE: THIS IS VERY IMPORTANT.) If a persons still feels aggrieved by an assessment after the local board of review, he or she may appear before the county board of equalization, but persons NOT appearing or notifying the local board of review of their complaint may not move on to the 7 county board of review. SERVICES INCLUDED IN ASSESSING CONTRACT. COST WITH HENNEPIN_COUNT~ 1. Maintenance of a computer file and physical file on each property's physical characteristics, valuation and classification. 2. Physically inspect and review 25% of the parcels each year as required by State statute. 3. The remaining 75% are adjusted by use of their computer assisted assessment system. 4. Physically inspect and value all new construction, additions and renovations. 5. Conduct all homestead procedures (see attached Exhibit "A"). 6. Process all divisions and combinations for Mound. 7. 'Initiate, for the taxpayer, abatement applications. 8. Make appraisals for, testify or negotiate all district court or tax court filings. 9. Analysis of property sales. 10. Preparing assessment runs. 11. Reviewing properties at taxpayer's request. 12. When valuation notices are mailed, they have appraisers on duty to answer telephone inquiries and do review appraisals - this effort is aimed at resolving as many taxpayer concerns as possible prior to the local Board of Review. 13. A representative from the County Assessor's Office attends the local Board of Review as the primary advisor to the board members on valuation and assessing procedures. They also do additional review appraisals and related investigations as requested by the local board. They also attend any other meetings the Council deems necessary. 14. They have at least one appraiser on duty each day to answer Mound taxpayer questions. We will be paying $38,707 in 1987 for these services. Mound has 4,691 parcels which means that it costs about $8.25 per parcel for Hennepin County to assess. If the City went for a private contract the only service Hennepin County would provide to the taxpayers of Mound would be to tell them what their taxes are. Any other calls or inquiries would be directed to the city and then on to the local assessor. The county assessor has charged the following since 1984: 1984 $37,637 1985 $37,945 1986 $37,94;4 1987 $38,707 9 PROPOSED COSTS FOR LOCAL ASSESSOR (CONTRACT EMPLOYEE) An average starting salary for an assessor in the metro area is $39,200. The City would have to provide the following: 1. Necessary filing area and working area for the purpose maintaining required assessment records. 2. All of the equipment and supplies necessary of required for performance of services. 3. Pay for all direct expenses, including those forms and supplies, film, aerials and other miscellaneous and homestead material and postage. 4. Necessary support staff to process homesteads (See Exhibit A for duties), type, answer more phone calls, ete. I have found that cities that contract with private contract assessors are paying from $10.12 per parcel to $12.00 per parcel. 10 Page 1 - EXHIBIT "A" Homestead applications are taken for both full-year and mid-yea~ homesteads. When applying for homestead, applicant must do the following: 1) complete homestead application 2) submit a copy of the deed 3) submit proof of occupancy, when needed. Processing the homestead application: 1) check over the application form 2) check deed for the following: a) date b) signatures c) notary signature d) legal description 3) contact applicant if more information is needed 4) index cards.(both alphabetical and numerical) are made for each home- stead application that is completed and filed in with other active cards. (There are at least 2 index cards for each parcel that is homesteaded.) The old index cards are pulled out and filed in with the inactive index cards. 5) A homestead declaration card must be typed if parcel was not homesteaded the previous year. 6) Homestead application and copy of the deed is filed with the other applications for that year. Homestead declaration cards are mailed on December 31st of each year for full-year homestead applicants and on May 31st for mid-year applicants. The homestead cards are printed by computer for those parcels that were homesteaded the previous year. The others must be typed --- these include all of the mid-year cards. Page 2 - EXHIBIT "B" When the homestead cards are returned, they are compared to the index cards that were made when the original application was taken. They are checked for the following: 1) name 2) address 3) ?.I.D. Number 4) signature 5) Social Security Number If one of the above do not match, check out and make any changes that are needed. If the homestead car~ checks out to be OK, the following is done: 1) homestead card is stamped date received 2) index card is stamped date the homestead card is received 3) folder is marked to indicate homestead credit should be given for that year 4) homestead cards are filed in P.I.D. number order. Final notices are mailed to those who do not return their homestead card . For homestead applicants who do not qualify, the index cards are pulled from the active cards and filed in with the inactive. Returned-in-the-mail homestead cards are kept and filed. The index cards must be kept up to date through 6ut the year. Envelopes and homestead cards must be ordered for the mailing of the homestead cards. A primary/secondary list is typed once a year. This is a list of all homesteaders who are homesteading more than one parcel for that year. This information is obtained from the index cards.