Loading...
R-03-02-27-9C1 - 2/27/2003Mayor Nyle Maxwell Mayor Pro-tem Tom Nielson Council Members Alan McGraw Carne Pitt Scot Knight Isabel Gallahan Gary Coe City Manager Jim Nuse City Attorney Stephan 1. Sheets ROUND ROCK, TEXAS PURPOSE. PASSION. PROSPERITY. March 11, 2003 Ms. Sarah Hutchinson, CCP, SPHR Senior Consultant Watson Wyatt & Company 2001 Ross Avenue, Ste. 4200 Dallas, TX 75201 -2989 Dear Ms. Hutchinson: The Round Rock City Council approved Resolution No. R- 03- 02 -27- 9C1 at their regularly scheduled meeting on February 27, 2003. This resolution approves the agreement for Consulting Services to update the employee compensation system. Enclosed is a copy of the resolution and original agreement for your files. If you have any questions, please do not hesitate to contact Teresa Bledsoe at 218 -5494. Christine R. Martinez City Secretary Enclosure CITY OF ROUND ROCK Admlmstrative Dept, 221 East Main Street • Round Rock, Texas 78664 Phone 512 218 5400 • Fax 512 2,8 7097 • www around -rock Ix us CITY OF ROUND ROCK AGREEMENT FOR CONSULTING SERVICES WITH WATSON WYATT & COMPANY J. THIS AGREEMENT is made and entered into on this the er day of the month of 003, by and between the City of Round Rock, a Texas home -rule municipal corporation, whos 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 2001 Ross Avenue, Suite 4200, Dallas, Texas 75201 -2989 (hereinafter referred to as the "Consultant "). RECITALS: WHEREAS, City desires to contract for Consultant's assistance in conducting an update of City's compensation system for implementation in 2003; 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 term of this Agreement shall be no later than three (3) 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 one to two months. 1.02 PAYMENT In consideration for the professional services to be performed by Consultant, City agrees to pay Consultant a not -to- exceed sum of Thirty -nine Thousand Three Hundred Dollars and No /100 ($39,300.00), plus a seven percent (7 %) Technical and Administrative Services fee, plus expenses only as enumerated on Exhibit A attached hereto and made a part hereof for all purposes. Mw dostCOR oa - a7 - kg 0 tw0.tgnRxabmwyW W"B)9. W P �k6 1 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 City receives the performance and /or deliverables, or within thirty (30) days of the day the performance of services was complete, or within thirty (30) days of the day 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 with this Prompt Payment Act 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 conceming 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 Act policy described above. 1.06 OBJECTIVES, DELIVERABLES, AND SCOPE OF WORK Project Planning Meeting Consultant shall conduct a one -hour conference call meeting between Consultant's representatives, City's representatives, and others as designated by City. 2 Updating Market Information for City's Jobs Consultant shall collect updated market information for City's jobs using the updated strategy developed in 2001 as the basis for market comparisons. For fee purposes, Consultant will estimate City's total number of jobs at approximately 225 -250 at the present time. Consultant has provided a list of City's jobs currently in its database, and City shall update that list prior to Consultant moving forward. From such updated list, Consultant shall update the market information where possible and gather new information as needed. Consultant shall collect market information from published salary survey data. Consultant shall provide City with a draft copy of the market pricing worksheets for City's jobs. City shall review the date, and Consultant shall update as directed. Consultant shall then furnish City with a final copy of the market pricing worksheets. Review and Possible Adjustment to Existing Salary Structure Consultant shall review City's existing salary structure to determine whether it is still applicable. If not, Consultant shall recommend an adjustment or shall develop a new structure with similar design characteristics (byway 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, any employees under range minimum, and any employees over range maximum. Consultant shall work with City to identify positions where internal pay appears to need adjusting to market levels. At City's election, a City representative may spend one day in Consultant's Dallas office working with Consultant to review the employee overlay, any changes to the structure, and positions that appear to need adjustment. Implementation 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 such meeting with City Management, Consultant shall present a condensed version of the formal presentation to City Council. Technical and Administrative Services 7% Fee Total Estimate Fee Range for Professional Services $32,800.00 - $39,300.00 3 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. 1.07 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 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 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 retum 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, 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. 5 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. 1.15 ASSIGNMENT AND DELEGATION No party may assign any rights or delegate any duties under this Agreement without the other party's 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: 6 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: 2001 Ross Avenue Suite 4200 Dallas, Texas 75201 -2989 Notice to City: City of Round Rock AND TO: Attention: City Manager 221 E. Main Street Round Rock, Texas 78664 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 athird mediator. Any costs and fees, other than attomey 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. 7 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 SEVERABHJITY 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. CITY O • • O . D) By: axwell, Mayor, ry Date a Signed: 4/ 7 -03 WATSON WYA COMPANY B ie Hale, Division Practice Leader, Compensation e Signed: Christine R. Martin z, City Secretary Date Signed: 41-0`3 Exhibit A Expenses 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 $0.37 cents per mile. All travel must be approved by City prior to Consultant incurring travel 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. 9 RESOLUTION NO. R- 03- 02- 27 -9C1 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 as Exhibit "A" 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 bylaw 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. CHRISTINE R. MARTINEZ, City Secretary 0, \wdox \RRSOLUTI \R10227C1 100 /ec RESOLVED this 27th day of February, 00 .4- ' / NY . ' ft WEL , ayo' City of Round Rock, Texas THIS AGREEMENT is made and entered into on this the day of the month of , 2003, 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 2001 Ross Avenue, Suite 4200, Dallas, Texas 75201 -2989 (hereinafter referred to as the "Consultant"). 1.02 PAYMENT 0 Av.doa\CORROgnRwauanw,A00011839 WPDr8g CITY OF ROUND ROCK AGREEMENT FOR CONSULTING SERVICES WITH WATSON WYATT & COMPANY RECITALS: WHEREAS, City desires to contract for Consultant's assistance in conducting an update of City's compensation system for implementation in 2003; 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 term of this Agreement shall be no later than three (3) 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 one to two months. In consideration for the professional services to be performed by Consultant, City agrees to pay Consultant a not -to- exceed sum of Thirty -nine Thousand Three Hundred Dollars and No /100 ($39,300.00), plus a seven percent (7 %) Technical and Administrative Services fee, plus expenses only as enumerated on Exhibit A attached hereto and made a part hereof for all purposes. EXHIBIT 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 City receives the performance and/or deliverables, or within thirty (30) days of the day the performance of services was complete, or within thirty (30) days of the day 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 with this Prompt Payment Act policy; however, this policy does not apply to payments made by City in the event: 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 Act policy described above. 1.06 OBJECTIVES, DELIVERABLES, AND SCOPE OF WORK Project Planning Meeting Consultant shall conduct a one -hour conference call meeting between Consultant's representatives, City's representatives, and others as designated by City. 2 Updating Market Information for City's Jobs Consultant shall collect updated market information for City's jobs using the updated strategy developed in 2001 as the basis for market comparisons. For fee purposes, Consultant will estimate City's total number of jobs at approximately 225 -250 at the present time. Consultant has provided a list of City's jobs currently in its database, and City shall update that list prior to Consultant moving forward. From such updated list, Consultant shall update the market information where possible and gather new information as needed. Consultant shall collect market information from published salary survey data. Consultant shall provide City with a draft copy of the market pricing worksheets for City's jobs. City shall review the date, and Consultant shall update as directed. Consultant shall then furnish City with a final copy of the market pricing worksheets. Review and Possible Adjustment to Existing Salary Structure Consultant shall review City's existing salary structure to determine whether it is still applicable. If not, Consultant shall recommend an adjustment or 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, any employees under range minimum, and any employees over range maximum. Consultant shall work with City to identify positions where internal pay appears to need adjusting to market levels. At City's election, a City representative may spend one day in Consultant's Dallas office working with Consultant to review the employee overlay, any changes to the structure, and positions that appear to need adjustment. Implementation Consultant shall conduct a formal presentation of the results of the project to City Management and Department Directors in atwo -hour meeting in which findings and the market data will be summarized in a final report. Following such meeting with City Management, Consultant shall present a condensed version of the formal presentation to City Council. Technical and Administrative Services 7% Fee Total Estimate Fee Range for Professional Services $32,800.00 - $39,300.00 3 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. 1.07 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. Iftermination 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 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 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, 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. 5 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. 1.15 ASSIGNMENT AND DELEGATION No party may assign any rights or delegate any duties under this Agreement without the other party's 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 ormake FICA payments onConsultant'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: 6 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: Notice to City: City of Round Rock AND TO: Attention: City Manager 221 E. 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 Watson Wyatt & Company AND TO: 2001 Ross Avenue Suite 4200 Dallas, Texas 75201 -2989 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 amediator and the two mediators shall agree upon athird 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. 7 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 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. CITY OF ROUND ROCK, TEXAS ATTEST: By: Nyle Maxwell, Mayor Christine R. Martinez, City Secretary Date Signed: Date Signed: WATSON WYATT & COMPANY By: Sarah T. Hutchinson, CCP, SPHR, Senior Consultant Date Signed: 8 Exhibit A Expenses 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 $0.37 cents per mile. All travel must be approved by City prior to Consultant incurring travel 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. 9 W 1! W at Wyatt Yfiirldwide ide December 15, 2002 Ms. Teresa Bledsoe Director of Human Resources City of Round Rock 221 E. Main Street Round Rock, Texas 78664 Dear Teresa: ' Subject: Proposal for Compensation Market Update Watson Wyatt is pleased to present this proposal to conduct an update of your compensation system for implementation in early 2003. We understand that the City is committed to updating your system every other year. The last update was conducted in 2001. Our Approach to Your Project Watson Wyatt & Company Suite 4200 2001 Ross Avenue Dallas, TX 75201 -2989 Telephone 214 530 4200 Fax 214 530 4250 We will begin your project with a one -hour project- planning meeting with you and any other key contacts. We expect that this meeting will be conducted by conference call. In the next step of your project, Watson Wyatt will collect updated market information for your jobs. We will use the updated strategy developed in 2001 as the basis for market comparisons. For fee purposes, we estimate that your total number of jobs is approximately 225 — 250 at this time. We have provided a list of the jobs currently in our database for the City, and understand that you would like to update that list prior to moving forward. Once we have your final list, we will update the market information where possible and gather new information as needed. As in the past, we will collect market information from published salary survey data. We will provide you with a draft copy of the market pricing worksheets for your jobs. After you have had a chance to review the data, we will update as needed and will provide you with a final copy of the market- pricing worksheets. Once the market data has been collected, we will review your existing salary structure to determine whether it is still applicable. If not, we will recommend an adjustment, or we will develop a new structure with similar design characteristics (i.e., midpoint progression, range width). We will overlay your employee population on the new structure to determine your overall market position, any employees under range minimum, and any employees over range maximum. We will work with you to identify positions where internal pay appears to need adjusting to market levels. We think it would be helpful to you to spend one day in our Dallas office working with us to review the employee overlay, any changes to the structure, and positions that appear to need adjustment. Ms. Teresa Bledsoe December 15, 2002 Page 2 Watson Wyatt will conduct a formal presentation of the results of the project to City Management and Department Directors in a two -hour meeting. We will summarize our findings and the market data in a final report. Following the meeting with City Management, we will present a condensed version of the formal presentation to the City Council. Fees and Timing • We estimate that the project will require elapsed time of approximately one to two months. We understand that the project will likely begin in mid to late February 2003. Sarah Hutchinson, Senior Compensation Consultant, will be the overall project manager. She will be assisted by compensation analytical staff. We estimate our fees for your project to be $32,800 - $39,300. The estimated fees are for professional services only. In addition, Watson Wyatt charges separately for out -of- pocket expenses for travel, special mailings, etc. Lastly, Watson Wyatt follows the standard practice for our industry and charges an additional Technical and Administrative Services fee of 7 %. This charge helps to recover our ongoing investment in technical and administrative services (i.e., computer systems, software, and hardware) that enable us to work more effectively and efficiently on our clients' behalf. Watson Wyatt bills monthly. All invoices are payable on receipt; a monthly finance charge of 1% will be applied to all invoices remaining unpaid after 30 days. Summary Teresa, we look forward to working with the City again. If the scope of work and approach described in this letter are acceptable to you, we will work with the City to develop the formal terms of engagement. Watson Wyatt appreciates the opportunity to be of service to the City, and we look forward to working with you again. Please feel free to contact me with any questions or comments at 214 -530 -4154. Sincerely, Sarah T. Hutchinson, CCP, SPHR Senior Consultant W DATE: February 21, 2003 SUBJECT: City Council Meeting — February 27, 2003 ITEM: 9.C.1. Consider a resolution authorizing the Mayor to execute an Agreement for Consulting Services with Watson Wyatt & Company to update the City's Employee Compensation System. Resource: Teresa S. Bledsoe, Human Resources Director History: This would be the third update of the plan. Maintenance of the compensation system requires that the City continues its current practice of addressing market pressures and internal equity on an ongoing basis and that a thorough market study be conducted every two years. The last market study was conducted in 2001. Estimated cost for the project is between $32,800 and $39,300. Funding: Cost: $32- 39,000 Source of funds: General Fund Outside Resources: WatsonWyatt Worldwide Impact/Benefit: Ensures that the City's Pay and Classification Plan remains competitive in the appropriate market. Public Comment: N/A Sponsor: N/A