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HomeMy WebLinkAbout3.C. Restructuring of Human Resources, Economic Development, and Related Functions '. 3.~. . CITY OF SHAKOPEE Memorandum TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Human Resources, Economic Development, and Related Function 'Reorganization DATE: May 24, 2006 INTRODUCTION: . Atthe workshop meeting of May 30th, the Council will be asked to review and discuss a recommendation for restructuring the Human Resources (HR) function, and related impacts on jobs in the Administration and Community Development Departments. BACKGROUND: HUMAN RESOURCES FUNCTION: For many years, the City has employed a "decentralized" approach to HR. Payroll Benefits Coordinator Marilyn Remer has served the City in many aspects ofHR beyond her Payroll/Benefits title. Scott County has provided the City with recruitment and selection services, and we take advantage of many of their training opportunities. Each City department has been responsible for doing much of the work of putting together job descriptions for jobs that they need filled (with the assistance of Ms. Remer). Because of its civil service component, the Police Department has done some of its HR work in- house, and keeps its own personnel files. The City has grown to the point where this no longer works effectively. In the 2005 budget, there was money to begin using a shared HR professional, but two possible opportunities for splitting the position's time (City of Savage and Scott County) were not able to be actualized. Money again exists in the 2006 budget for shared services. However, after full examination, it appears that the shared HR solution would be only temporary in natUre. With more than 120 full time employees (and approximately 160 part-time and seasonal employees), the City has exceeded industry standards for a full time HR position. There is also an opportunity to do some restructuring, in that Ms. Remer has received permission from the Council to go on phased retirement (half-time) beginning July 10th, and will be fully retired January 10, 2007. It appears that' creating a full time HR Technician would serve the City well in terms of processing payroll, recruitment, hiring, coordinating benefits, coordination of employee training and orientation. We investigated whether this job could be shared with other .. positions within the City, but once again came to the conclusion that a full time position was needed. For that reason, we are recommending that a full time HR.Technician be posted, with that position to begin July 1 st. That would afford that position an opportunity to train in with Ms. Remer for the remaining six months of her employment with the City. That would be important, in that it would give the new individual valuable insights on health insurance renewals, end of year reporting,W-2 forms, etc. My recommendation would be to have this HR Technician position report to, and work closely with an Assistant City Administrator position (this would be an upgrade of the current Assistant to the City Administrator position). The ACA would be restructured so that approximately one-half of that job would be human resources responsibilities, but at more of a policy level. The ACA under. this format would continue to participate in collective bargaining negotiations, attend meetings of the Human Resources professional group for metropolitan area cities (TUG), provide for training, and engage in negotiations for the City's health insurance. There would also be other job duties assigned to the ACA. Another component of HR is training. We would continue to work with Scott County on this, as it is large enough to offer many training opportunities that are identical to the City's needs, without the City having to do that work itself. The Council should be aware that over the past several months, through the efforts of Ms. Remer and Wilson and City staff, we have been weaning the City from the County's assistance on recruiting and hiring. It seems to be working well. OTHER ASST. CITY ADMINISTRATOR RESPONSIBILITIES: Telecommunications/ Information Technology: The Assistant to the City Administrator position currently oversees the single full time, and two part-time Telecommunications staff. The Telecommunications staff works closely with Information Technology (IT), but IT is in the Community Development Department. IT has been a part of Community Development for many years, primarily because of the interest in, or skills of the two most recent Community Development Directors. However, structurally, it makes good sense to put this in a single'division under Administration. I recommend that IT be moved under the supervision of the ACA position. Communications: Currently, the Assistant to the City Administrator is updating the city's website. While this was not specifically identified in the job description when it was advertised, Kris Wilson has those skills, and so has taken that duty on. However, there is a half-time 90mmunications Coordinator position in the FY 06 budget, and we would seek to advertise for that to include web site responsibilities. The Communications Coordinator would also be responsible for the writing and publishing of informational brochures, educational information, new releases and the like. The ACA would also oversee this position. ; Special Pro;ects: As with the Assistant to the City Administrator position, the ACA would continue to be responsible for a variety of miscellaneous and special projects as they come up. .- ECONOMIC DEVELOPMENT FUNCTION: Adding the above items to the ACA position will not allow for a continuation ofthe half- time position to be devoted to Economic Development. I recommend thatthe Council transfer Economic Development to the Community Development Department. In' speaking with Ms. Wilson, many of her contacts with prospective businesses coming to Shakopee start with questions that are more related to zoning ("I'm looking for 5 acres where I can do X"). She contacts the Planning Department, gets an answer, and then returns the call to the prospect. If Economic Development was in Community Development, those questions could be answered more quickly. Having the Economic Development function being part of Community Development is a common model for cities. However, switching Economic Development for IT between Administration and Community Development is not an even trade - there would need to b~ an additional person added for Community Development staffing. However, this is where the EDA/City Council needs to have a serious discussion as to the function of Economic Development in Shakopee: . Should Economic Development be staffed with a full time position? . Is it a part-time position? . What tools should the City make available for economic incentives? Quite frankly, recent legislative changesh~ve made it very difficult for cities to offer much more than abatement, and even that is something that has not been utilized frequently in Shakopee. Therefore, the question for the Council is how it intends to utilize economic development? The cities of Bloomington and Brooklyn Park are two examples of cities, . which have actively pursued economic development as a function of the city. (In some cases, those cities have relied upon other more controversial tools for economic development, such as eminent domain). If the mission of the City is to provide more public relations when it comes to economic development, a full time position would be needed. However, some one who meets with local businesses to find issues or problems, or prepares promotional information, will have a difficult time moving beyond the "meet and greet" function without economic development tools. City Council/EDA needs to give direction as to what is the intended future of economic development. (See attached memo from Kris Wilson regarding a request to utilize tax abatement for existing building as a discussion point). OTHER POSITIONS: While the Council is considering position changes, it should also be aware of two other Issues: 1. Public Works Secretary Upgrade - A new full time Office Service Worker position was created in Public Works last year, and is paid at a grade 3. It has since become apparent that this position necessitates a full secretary position, which would be at a grade 4. 2. Payroll/Benefits Coordinator title change - A request has been received from Payroll Benefits Coordinator Marilyn Remer to retitle her job for the remainder of her tenure with the City. This was reviewed, and I have determined that this position has been doing work of general human resources nature that is above and beyond the Payroll Benefits Coordinator reflected in her title. Therefore, I recommend that Marilyn Remer'stitle be changed to HR Coordinator (from her current Payroll Benefits Coordinator position). This would involve no change in payor pay grade. BUDGET IMPACT: Such a restructuring would involve the following: Resources available from 2006 General Fund Budget: Salary FICA & PERA Payroll Benefits/Coord (Grade 7) $60,800 $8,100 Asst. to CA (Grade 7) 25,600* 3,400 Shared HR Consultant (no benefits) 43.000 Total $129,400 $11,500 $140,900 *$27,000 (plus $3,618 PERA & FICA) is funded thru EDA; the $25,600 includes and $5,000 ($670) from Telecommunications) Restructured (Impact on 2006 General Fund): Asst CA (Grade 8) 53,500 7,200 HR Tech (Grade 6) 44,200 5,900 PW.Secty Upgrade (Grade 4) 3,400 450 HR Coordinator (~time for remaining ~ ofyr.)(Grade 7) 14.000 1.900 $115,100 $15,450 $130,550 There would also be the savings from not utilizing Scott County on recruitment, which currently averages about$1500 per full time position listing. Addit.ional Impact on EDA Budget by Going to FT Position: EDA Coord (FT) (Grade 8) $28,000 $3,750 $31,750 Therefore, the budgetary uncertainty is in the EDACoordinator position. Going back to the Full Time EDA Coordinator position, such as what was in place when Paul Snook was here, would cost an additional $31,750 annually from the EDAhudget. That is available in the 2006 EDA fund balance, and could be drawn down from the 2007 budget). If the decision is made to stay half-time, the challenge would be to find a capable individual who could do it on this part-time basis. RECOMMENDATION: The purpose ofthe workshop is to discuss the needs. However, a decision should be made soon so that we can take advantage of the phased retirement of the (current) Payroll Benefits Coordinator. I recommend that Council discuss, and give direction on the following: 1. Future ofthe EDA function - is it a full time position or part-time position? Is it acceptable to reassign EDA to the Community Development Department? (Council reaction to the request for tax abatement on moving a business to an existing building would also be appreciated). 2. Should an Assistant City Administrator and HR Technician positions be authorized? If so, staff should be directed to bring back job descriptions to the June 6th meeting. 3. Should Public Works be authorized to upgrade the clerical position from Office Service Worker to Public W:orks Secretary? Ifso, a formal proposal including a job description should be brought to a future Council meeting.. 4. Should staffbe directed to bring back a title change for the Payroll/Benefits Coordinator position? ACTION REQUIRED: If the Council concurs, it should give direction on the above issues. Mark McNeill City Administrator MM:th Proposed Organization for Administration Department Proposed Organization for Community Development Department City of Shakopee Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Kris Wilson, Assistant to the City Administrator SUBJECT: Request for Tax Abatement on an Existing Building DATE: May 26, 2006 Introduction The City has been asked to consider providing tax abatement to a business that is considering relocation from another Twin Cities suburb to an existing building in the Valley Green Industrial Park. This request has raised several broader policy issues regarding the use of economic development incentives and the City's role in helping to fill vacant commercial/industrialland and space within the City. Background . The company in question is in the manufacturing business, and is seeking a newer facility and has focused their search on Shakopee. A commercial realtor has approached the City on the company's behalf requesting that the City consider some type of tax abatement to help offset the company's costs to relocate their manufacturing equipment to Shakopee. According to the agent, the company is in negotiations to lease approximately 80,000 square feet in an existing Valley Green Business Park building for a minimum of 10 years. If the company does bring their operations to Shakopee, they would bring a total of 76 jobs - 50 of which pay more than $14.00 per hr, which is the standard set in the City's Business Subsidy Policy. The building in question was built in 1998, but the portion that would be leased by this company has never been occupied. The assessed market value of the building is currently $5,100,900. Generally speaking, vacant spaces are assigned lower market values than occupied spaces. However, after speaking with the Scott County Assessor's office, it doesn't appear that fully leasing this building will significantly increase its market value. Therefore, there would not be much in terms of new tax revenue to abate. Discussion Questions Staff would appreciate having a discussion of some of the broader issues raised by this request, such as: 1. Is the City open to considering tax abatement to attract businesses to existing buildings in Shakopee? This is a legal use of tax abatement, which is a much more flexible tool than tax increment financing. Under the tax abatement statute, the City may abate all or any portion of the City taxes paid on a qualifying ~ . property. However, the Council would have to find that the benefits of providing the abatement exceed the costs to the City. This may be difficult on an existing building because we are faced with forgoing tax revenue that we currently collect, compared to a new development where we would be forgoing tax revenue that , would not exist but for the new development. On the other hand, the focus ofthe City's business subsidy policy is to both increase the City's tax base and create high-paying jobs in the City. Providing incentives for companies to locate in existing commercial/industrial buildings still brings jobs to the City, even ifthe tax base increases are modest. However, it may open the door to abatement requests from existing Shakopee businesses for to counter threats to move from the community. 2. Is the City willing to provide modest economic development incentives to modest projects? This might take the form of agreeing to abate any increase in taxes on the property leased to a company for a period of time, which has the benefit of not depriving the City of any revenue currently collected. The type of economic development presented by this particular business's request is not splashy or high-profile. However, as we've seen with other land and buildings in Shakopee, the big, high-profile prospects can be few and far between. An approach that offers some assistance to, smaller companies and those considering existing spaces. has the potential to steadily increase job opportunities and fill the numerous vacancies in our existing industrial park. In August of 2005, an analysis of Shako pee's commercial/industrial space showed approximately 2 million square feet was vacant. A quick review of to day's commercial/industrial listing shows at least 1.3 million vacant square feet. Lastly, it is reasonable to assume that high vacancy rates in our existing industrial park may negatively impact the ability to fully develop new areas such as Dean Lakes 'and future space on the west side of the City. ~~~ Kri HSOD Assistant to the City Administrator