R-00-10-26-13F1 - 10/26/2000RESOLUTION NO. R- 00- 10- 26 -13F1
WHEREAS, the City of Round Rock desires to retain professional
consulting services to update the employee compensation system, and
WHEREAS, Watson Wyatt & Company has submitted an Agreement for
Consulting Services to provide said services, and
WHEREAS, the City Council desires to enter into said Agreement
for Consulting Services with Watson Wyatt & Company, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City an Agreement for Consulting Services with Watson
Wyatt & Company to update the employee compensation system, a copy of
said agreement being attached hereto and incorporated herein for all
purposes.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended, and the Act.
RESOLVED this 26th day of Oc ••er, '000.
r ^ " A. STLUKA, . ., Mayor
ST: City of Round Rock, Texas
JO! E LAND, City Secretary
R. \WPDOCS \RESOLUTI \E01026F1.WPD /eC
CITY OF ROUND ROCK
AGREEMENT FOR CONSULTING SERVICES
WITH WATSON WYATT & COMPANY
THIS AGREEMENT is made and entered into on this the A) day of the month of
uNt.f b€A) , 2000 by and between the City of Round Rock, a Texas home -rule municipal
corporation, whose offices are located at 221 East Main Street, Round Rock, Texas 78664 -5299
(hereinafter referred to as the "City"), and Watson Wyatt & Company, whose offices are located at
2121 San Jacinto Street, Suite 2400, Dallas, Texas 75201 -2772 (hereinafter referred to as the
"Consultant ").
RECITALS:
WHEREAS, City desires to contract for Consultant's assistance in providing an in -depth
study to include a review of the City's compensation strategy; and
WHEREAS, the parties desire to enter into this Agreement to set forth in writing their
respective rights, duties and obligations hereunder;
NOW, THEREFORE, WITNESSETH that for and in consideration of the mutual promises
contained herein and other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, it is mutually agreed between the parties as follows:
1.01 EFFECTIVE DATE, DURATION, AND TERM
This Agreement shall be effective on the date this Agreement has been signed by every party hereto,
and shall remain in full force and effect unless and until it expires by operation of the term indicated
herein, or is terminated or extended as provided herein.
The teen of this Agreement shall be no later than six (6) months from the effective date hereof. It
is acknowledged by the parties hereto that Consultant has made a written representation to City that
its time estimate for completion of the project is approximately four (4) months.
1.02 PAYMENT
In consideration for the professional services to be performed by Consultant, City agrees to pay
Consultant a not -to- exceed total sum of Eighty-two Thousand and Five Dollars and No /100
($82,005.00), plus expenses only as enumerated on Exhibit A attached hereto and made a part hereof
for all purposes. Consultant's compensation for professional services shall not exceed, without
written consent, the following:
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Project Work Step Estimated Fee Range
Compensation Strategy $19,900 - $23,800
* Focus Groups, Interviews
* Strategy Session
Market Pricing Analysis $12,800 - $15,400
* Market Pricing of Positions
* Development of Market Pricing Worksheets
Implementation and Costing Scenarios $24,000 - $28,900
* Salary Structure Review
* Developing Costing Scenario
* Formal Presentation to Management
* Formal Presentation to Council
* Employee Meetings
Employee Communications Strategy $ 8,000 - $10,000
Technical and Administrative Services 5% Fee $ 3.235 - $ 3,905
Totals $67,935 - $82,005
City reserves the right to review the project at any time, including at the end of any deliverable or
phase, and may elect to terminate the project with or without cause or elect to continue with the next
deliverable or phase.
1.03 TERMS OF PAYMENT
To receive payment, Consultant shall prepare and submit a series of monthly invoices. Each invoice
shall state and detail the deliverable(s) accomplished, along with documentation for each deliverable,
and shall state the percent completion of the work accomplished during that particular billing period.
1.04 PROMPT PAYMENT POLICY
In accordance with Chapter 2251, V.T.C.A., Texas Government Code, payment to Consultant will
be made within thirty (30) days of the day on which City receives the performance and/or
deliverables, or within thirty (30) days of the day on which the performance of services was
complete, or within thirty (30) days of the day on which City receives a correct invoice for the
performance and/or deliverables or services, whichever is later. Consultant may charge a late fee (fee
shall not be greater than that which is permitted by Texas law) for payments not made in accordance
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with this prompt payment policy; however, this policy does not apply to payments made by City
in the event:
1. there is a bona fide dispute between City and Consultant concerning the services
performed that causes the payment to be late; or
2. the terms of a federal contract, grant, regulation, or statute prevent City from making
a timely payment with federal funds; or
3. there is a bona fide dispute between Consultant and a subcontractor or between a
subcontractor and its supplier concerning the services performed which causes the
payment to be late; or
4. the invoice is not mailed to City in strict accordance with instructions, if any, on any
purchase order, or this Agreement or other such contractual agreement.
1.05 EXPENSES
City shall reimburse Consultant at actual cost for expenses described in Exhibit A that are directly
attributable to work performed under this Agreement. Consultant shall submit an itemized invoice
of Consultant's expenses, with appropriate documentation attached. City shall endeavor to pay
Consultant in accordance with the prompt payment policy described above.
1.06 OBJECTIVES, DELIVERABLES, AND SCOPE OF WORK
Compensation Strategy
• Project initiation: conduct one -hour project planning meeting with key contacts, held by
conference call only at the discretion and request of City;
• Preparation for revisiting current compensation strategy: over the course of two days on site,
conduct employee focus group meetings (at least two one -hour focus group meetings of ten
to twelve employees) and one -on -one interviews with Department Directors (at least eight
to ten individual interviews);
• Review of compensation strategy: meet with City Management and Department Directors
in a four -hour meeting to review the existing strategy, to present the focus groups and
interview results in a summarized fashion, and to discuss needed changes. The emphasis
shall be on the competitive marketplace and City's desired position with respect to the
market. Consultant shall facilitate the discussion. Thereafter, Consultant shall capture the
discussion in a revised strategy statement draft. Following one cycle through City
Management, Consultant shall finalize the statement.
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Market Pricing Analysis
• Consultant shall collect updated market information for City's jobs, and shall use the updated
strategy as a basis for market comparisons. Consultant's present estimate is that City's total
number of jobs has increased from 175 in April 1999 to approximately 200 -225 at present.
• Consultant shall update the market information where possible and gather new information
as needed. Consultant shall collect market information from published salary survey data,
working in conjunction with a representative from City, with such work to be performed in
the salary survey library of Consultant's Dallas office. Such work shall be a review of salary
surveys to ensure proper job matching. Consultant has made a written representation to City
that its time estimate for completion of this portion of the project is approximately three to
four days. Consultant shall "pre- match" as many jobs as possible to reduce the amount of
time required for City's representative to be in Consultant's Dallas office.
• Following the job- matching portion of the project, Consultant shall develop a Market Pricing
Worksheet for each position, then forward such Worksheets to City for review prior to
proceeding with other portions of the project.
Implementation and Costing Scenarios
• Following collection of market data, Consultant shall review City's existing salary structure
to determine whether it is still applicable. If not, Consultant shall develop a new structure
with similar design characteristics (by way of illustration and not limitation, midpoint
progression, range width). Consultant shall overlay City's employee population on the new
structure to determine City's overall market position, employees under range minimum, and
employees over range maximum.
• Consultant shall work with City to identify positions where internal pay appears to need
adjusting to market levels. Consultant shall provide costing scenarios in the form of
spreadsheets, and same shall be provided to City in a soft file format so that City will be able
to develop additional scenarios as needed.
• Consultant shall conduct a formal presentation of the results of the project to City
Management and Department Directors in a two -hour meeting in which findings and the
market data will be summarized in a final report.
• Following the meeting with City Management, Consultant shall present a condensed version
of the formal presentation to City Council. Consultant shall also conduct all- employee
meetings (at least four to six meetings) beginning on -site the moming following the Council
meeting and continuing throughout the day.
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Employee Communications Strategy
• Consultant shall work with City in a one -half day session to develop a communications
strategy around the topics of market -based compensation and this update in particular. A
Senior Consultant from Consultant's firm shall facilitate the session. Key considerations of
such compensation communications strategy are:
* Identification of key audiences;
* What information should be communicated;
* How it can best be delivered;
* What media would be most appropriate;
* Time frame for communications;
* Responsibility.
This strategy will drive the development of the presentation for the all - employee meetings
to be conducted by Consultant near the end of the project.
• With reference to other employee communications, Consultant shall work with City in a
number of ways from strategy development only to "over- the - shoulder" guidance to
complete outsourcing of communications materials. Production of communications
materials, other than the presentation for the all- employee meetings, will not be included in
the fee estimate contained herein; however, Consultant shall provide fee estimates for such
work following the strategy development, if desired and requested by City.
1.07 NON - APPROPRIATION
This Agreement is a commitment of City's current revenues only. It is understood and agreed that
City shall have the right to terminate this Agreement at the end of any City fiscal year if the
governing body of City does not appropriate funds sufficient to purchase the services as determined
by City's budget for the fiscal year in question. City may effect such termination by giving
Consultant a written notice of termination at the end of its then current fiscal year.
1.08 TERMINATION
City may terminate or suspend performance of this Agreement for City's convenience upon written
notice to Consultant. Consultant shall terminate or suspend performance of the Services on a
schedule acceptable to City. If termination or suspension is for City's convenience, City shall pay
Consultant for all uncontested services performed to date of notice of termination.
This Agreement may be terminated by either City or Consultant upon written notice in the event of
substantial failure by the other party to perform in accordance with the terms of this Agreement. The
non - performing party shall have fifteen (15) calendar days from the date of the termination notice
to cure or to submit a plan for cure acceptable to the other party. The non - defaulting party shall be
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entitled to receive just and equitable compensation for all services completed and all legal fees
incurred by this action.
1.09 INDEPENDENT CONTRACTOR STATUS
Consultant is an independent contractor, not City's employee. Consultant's employees or
subcontractors are not City's employees. This Agreement does not create a partnership relationship.
Neither party has authority to enter into contracts as agent for the other party. Consultant and City
agree to the following rights consistent with an independent contractor relationship:
1. Consultant has the right to perform services for others during the term of this
Agreement.
2. Consultant has the sole right to control and direct the means, manner and method by
which services required by this Agreement will be performed.
3. Consultant has the right to hire assistants as subcontractors, or to use employees to
provide the services required by this Agreement.
4. Consultant or Consultant's employees or subcontractors shall perform the services
required by this Agreement. City shall not hire, supervise, or pay any assistants to
help Consultant.
5. Neither Consultant nor Consultant's employees or subcontractors shall receive any
training from City in the skills necessary to perform the services required by this
Agreement.
6. City shall not require Consultant or Consultant's employees or subcontractors to
devote full time to performing the services required by this Agreement.
7. Neither Consultant nor Consultant's employees or subcontractors are eligible to
participate in any employee pension, health, vacation pay, sick pay, or other fringe
benefit plan of City.
1.10 CONFIDENTIALITY
Consultant shall take reasonable measures to preserve the confidentiality of any proprietary or
confidential information that City provides to it in connection with this engagement, provided that
no claim may be made for any failure to protect information that occurs more than two (2) years after
the termination or expiration of this agreement. At the conclusion of the engagement, at City's
request, Consultant shall return to City all materials, data and documents that City has provided to
Consultant, except that Consultant may retain one (1) copy of these materials for its archival
purposes, subject to Consultant's confidentiality obligations hereunder. All proprietary information,
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materials and software owned or created by Consultant and all work papers, computer runs, software,
databases and drafts created during the course of this engagement will remain the property of
Consultant, and be subject to Consultant's records retention policy.
1.11 INTELLECTUAL PROPERTY OWNERSHIP
Consultant brings his procedures and processes to the scope of work addressed by this Agreement.
Nothing herein shall limit Consultant's right to copyrights, patent rights, and other intellectual
property rights held by Consultant and utilized in performing the services hereunder. All final
documents and reports prepared by Consultant as part of the services shall become the exclusive
property of City.
1.12 WARRANTIES
Consultant warrants that all services performed under this Agreement shall be performed consistent
with generally prevailing professional or industry standards. City must report any deficiencies in
Consultant's services to Consultant in writing within 120 days of performance to receive warranty
remedies. City's exclusive remedy for breach of the above warranty shall be the re- performance of
Consultant's services or as otherwise provided for herein.
THIS WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES,
WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY ORAL OR
WRITTEN REPRESENTATIONS, PROPOSALS OR STATEMENTS MADE PRIOR TO THIS
AGREEMENT.
1.13 LIMITED LIABILITY
Consultant's total liability to City under this Agreement for damages, costs and expenses, regardless
of cause, shall not exceed the compensation received by Consultant under this Agreement. In no
event shall Consultant be liable for City's lost profits or special, incidental or consequential damages
even if Consultant has been advised of the possibility of such damages.
1.14 INDEMNIFICATION
Consultant agrees to hold harmless, defend, and indemnify City for and from all losses, damages,
and claims arising as a result of actions by Consultant and its agents and subcontractors during its
performance pursuant to this Agreement. Except to the extent that Consultant is obligated to
indemnify City, City shall indemnify Consultant against any third party claim or liability not arising
from negligent or wrongful performance by Consultant.
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1.15 ASSIGNMENT AND DELEGATION
No party may assign any rights or delegate any duties under this Agreement without the other
parties' prior written approval.
1.16 LOCAL, STATE AND FEDERAL TAXES
Consultant shall pay all income taxes, and FICA (Social Security and Medicare taxes) incurred while
performing services under this Agreement. City will not do the following:
1. Withhold FICA from Consultant's payments or make FICA payments on
Consultant's behalf;
2. Make state and/or federal unemployment compensation contributions on Consultant's
behalf; or
3. Withhold state or federal income tax from Consultant's payments.
1.17 NOTICES
All notices and other communications in connection with this Agreement shall be in writing and
shall be considered given as follows:
1. When delivered personally to the recipient's address as stated in this Agreement.
2. Three (3) days after being deposited in the United States mail, with postage prepaid
to the recipient's address as stated in this Agreement.
Notice to Consultant:
Watson Wyatt & Company AND TO:
2121 San Jacinto Street
Suite 2400
Dallas, Texas 75201 -2772
Notice to City:
City of Round Rock AND TO:
Attention: City Manager
221 E. Main Street
Round Rock, Texas 78664
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General Counsel
Watson Wyatt & Company
1717 H Street, N.W.
Washington D.C. 20006
City of Round Rock
Attention: City Attorney
309 East Main Street
Round Rock, Texas 78664
Nothing contained in this section shall be construed to restrict the transmission of routine
communications between representatives of City and Consultant.
1.18 APPLICABLE LAW
The laws of the State of Texas shall govern this Agreement. Venue shall lie in Williamson County,
Texas.
1.19 EXCLUSIVE AGREEMENT
This is the entire Agreement between Consultant and City.
1.20 DISPUTE RESOLUTION
If a dispute arises under this Agreement, the parties agree to first try to resolve the dispute with the
help of a mutually selected mediator. If the parties cannot agree on a mediator, City and Consultant
shall each select a mediator and the two mediators shall agree upon a third mediator. Any costs and
fees, other than attorney fees, associated with the mediation shall be shared equally by the parties.
City and Consultant hereby expressly agree that no claims or disputes between the parties arising
out of or relating to this Agreement or a breach thereof shall be decided by any arbitration
proceeding, including without limitation, any proceeding under the Federal Arbitration Act (9 USC
Section 1 -14) or any applicable state arbitration statute.
1.21 AMERICANS WITH DISABILITIES ACT
Consultant shall take the necessary actions to ensure its facilities and employment practices are in
compliance with the requirements of the Americans with Disabilities Act. Any cost of such
compliance will be the sole responsibility of Consultant.
1.22 SEVERABILITY
The invalidity, illegality, or unenforceability of any provision of this Agreement or the occurrence
of any event rendering any portion of provision of this Agreement void shall in no way affect the
validity of enforceability of any other portion or provision of this Agreement. Any void provision
shall be deemed severed from this Agreement, and the balance of this Agreement shall be construed
and enforced as if this Agreement did not contain the particular portion of provision held to be void.
The parties further agree to amend this Agreement to replace any stricken provision with a valid
provision that comes as close as possible to the intent of the stricken provision. The provisions of
this Article shall not prevent this entire Agreement from being void should a provision which is of
the essence of this Agreement be determined void.
IN WITNESS WHEREOF, City and Consultant have executed this Agreement on the dates indicated.
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,r s • • OUNDR PCK,
O
A. Stluka, Jr., Ma
TE S ATTEST:
Jo Land, City Secretary
Date Signed: (O - t7Cr, Date Signed: /Q - , -7Q
WATSON WYATT & COMPANY
By:
Robert Ryan, Managing Consultant
Date Signed: / - R - Zoo
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huvteG
Exhibit A
Expenses
• Meals, not to exceed City's travel per diem.
• Lodging.
• Telephone, fax, online and telegraph charges.
• Postage and courier services.
• Printing and reproduction.
• Computer services.
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City shall reimburse Consultant at actual cost for the following expenses that are directly attributable
to authorized work performed under this Agreement:
• Travel expenses other than normal commuting, including airfares, rental vehicles,
and highway mileage in company or personal vehicles at $0.31 cents per mile. All
travel must be approved by the City and Chamber prior to the Consultant incurring
travel expenses.
DATE: October 18, 2000
SUBJECT: City Council Meeting — October 20, 2000
ITEM: 13.F.1. Consider a resolution authorizing the Mayor to execute Agreement
for Consulting Services with Watson Wyatt & Company to update
the employee compensation system. This will be the second update
of the City's compensation system by the firm of WatsonWyatt
Worldwide. The City continues to be committed to maintaining a Pay
and Classification Plan that is internally equitable and externally
competitive with business in our community, cities, and other
competing markets.
To ensure that we maintain our ability to recruit and retain qualified employees, a market
study was conducted in 1997 and a commitment was made to conduct a bi- annual market -
based compensation study. The first update was conducted in 1999. Due to compelling
information presented by the Police Officer's Association and the Fire Department, and to the
continuing rapid changes in the job market, the study that was scheduled to begin Spring,
2001 has been moved up by six months.
Funding:
General fund
Cost:
The estimated fee is based on the proposed Project Work Step.
Benefit:
Ensures that the City has the most updated market information to ensure that compensation
plan reflects current market trends.
History:
This would be the second update of the plan since the major study was completed by
WatsonWyatt Worldwide in 1997.
Mayor
Robert A. Stluka, Jr.
Mayor Pro-tem
Earl M. Hairston
Council Members
Tom Nielson
Carrie Pitt
Earl Palmer
Isabel Callahan
Jimmy Joseph
City Manager
Robert L Bennett, Jr
City Attorney
Stephan L Sheets
CITY OF ROUND ROCK
December 6, 2000
Ms. Sarah Hutchinson
Watson Wyatt & Company
2121 San Jacinto Street, Suite 2400
Dallas, Texas 75201 -2772
Dear
Sincerely,
Enclosures
Joanne Land
City Secretary
Fax: 512 -218 -7097
1-800-735-2989 TDD
www.ci.round- rodc.tx.os
221 East Main Shea
Round Rock, Texas 78664
512 -218 -5400
The Round Rock City Council approved Resolution No. R- 00- 10- 26 -13F1 at their
regularly scheduled meeting on October 26, 2000. This resolution approves the
agreement with Watson Wyatt & Company for consulting services to update the
employee compensation system.
Enclosed is a copy of the resolution and two original agreements. Please return one of
the originals after they have been signed. If you have any questions, please do not
hesitate to contact Teresa Bledsoe at 218 -5494.
1- 800 -735 -2988 Voice