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HomeMy WebLinkAboutCOW 2025-07-14 Item 5D - Discussion - City Compensation PolicyITEM INFORMATION STAFF SPONSOR: TC CROONE ORIGINAL AGENDA DATE: 07/14/25 AGENDA ITEM TITLE Compensation Policy Presentation CATEGORY Discussion Motion Resolution Ordinance Bid Award Public Hearing Other Mtg Date 7/14/25 Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date SPONSOR Council Mayor Admin Svcs DCD Finance Fire P&R Police PW SPONSOR’S SUMMARY Human Resources uses the City's Compensation Policy, Resolution 1951, as guidance for market studies prior to each contract negotiation. Additionally, the Resolution provides guidance for when we conduct non-represented market and compensation studies. This presentation is to discuss context, challenges, and potentially explore options to revise the policy. REVIEWED BY Trans&Infrastructure Svcs Community Svcs/Safety Finance & Governance Planning & Community Dev. LTAC Arts Comm. Parks Comm. Planning Comm. DATE: N/A COMMITTEE CHAIR: N/A RECOMMENDATIONS: SPONSOR/ADMIN. Human Resources COMMITTEE N/A COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $ $ $ Fund Source: GENERAL FUND Comments: MTG. DATE RECORD OF COUNCIL ACTION 7/14/25 MTG. DATE ATTACHMENTS 7/14/25 Informational memorandum dated 7/14/25 Resolution No. 1951 - City's Compensation Policy Policy 02.05.21 - Salary Plan Administration for City Staff Compensation Policy PowerPoint presentation COUNCIL AGENDA SYNOPSIS ----------------------------------Initials --------------------------------- ITEM NO. Meeting Date Prepared by Mayor’s review Council review 07/14/2025 TC 5.D. 87 INFORMATIONAL MEMORANDUM To: City Council From: TC Croone, Chief People Officer CC: Mayor Thomas McLeod Date: July 14, 2025 Subject: Compensation Policy presentation ISSUE There have been several challenges with Resolution 1951 guidance, including using Assessed Value (AV) as a benchmark. Cities with AV’s that align with the resolution tend to be cities that are geographically distant from Tukwila. We would like to explore options with the council to re-examine the resolution as it is written and consider options for revision, based upon lessons learned from recent negotiations and the 2023 study. BACKGROUND Human Resources engaged with McGrath Consulting to conduct a market and compensation study in 2023. The study was scheduled to be completed in 2020. However, it was postponed due to turnover within Human Resources COVID. A summary of the market and compensation study was provided to the council via a memo November 12, 2024. Human Resources uses Resolution 1951 as guidance for market studies prior to each contract negotiation. Additionally, the Resolution provides guidance for when we conduct non- represented market and compensation studies. DISCUSSION Provide context for the purpose of Resolution 1951. Discuss market and compensation study from 2023 for non-represented employees. Discuss internal equity and compression. Discuss potential revisions to Resolution 1951 going forward. RECOMMENDATION The Council is being asked to review and discuss potential changes to Resolution 1951 during the July 14 meeting. ATTACHMENTS A.Resolution 1951 B.Policy 02.05.21 C.Compensation Policy PowerPoint presentation 88 City of Tukwila Washington Resolution No. J 957 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ESTABLISHING A COMPENSATION POLICY FOR CITY OF TUKWILA EMPLOYEES AND REPEALING RESOLUTION NO. 1796. WHEREAS, the City believes that the purpose of a compensation program is to facilitate recruiting, retention, development and productivity of employees; and WHEREAS, the City desires to utilize standardized policies, procedures and processes, wherever possible, for compensating all employee groups, both represented and non -represented; and WHEREAS, the City recognizes that current economic conditions and forecasts, long-range City budget forecasts, and position rates for comparable jurisdictions, as well as internal equity considerations, should assist in guiding the compensation of employees; and WHEREAS, the City has made a determination to, when economic conditions allow, review and adjust non -represented employee salaries via a market analysis to that of the average of comparable jurisdictions in even -numbered years, and to provide a cost -of -living (COLA) allowance in odd -numbered years; and WHEREAS, the City has made a determination to, when economic conditions and negotiations allow, provide represented employees with salaries that reflect the average of comparable jurisdictions; and WHEREAS, the City has made a determination to, when economic conditions allow, provide benefits to represented and non -represented employees that are slightly above the average of comparable jurisdictions; and WHEREAS, the City Council will participate in setting negotiation expectations and reviewing and approving represented employee group contracts; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: W:\Word Processing\ Resolutions\Compensation policy for City employees 11-14-18 Page 1 of 3 89 Section 1. The following statements and processes are adopted for the purpose of guiding compensation programs for employees of the City of Tukwila. A. Information to be provided to the City Council. 1. For Represented Employees. A written presentation of current internal and local external public agency salary and benefit trends, including a salary and benefits market survey of comparable jurisdictions, as defined herein, will be provided to the City Council. This presentation must be made to the Council prior to the commencement of negotiations with the bargaining units regarding salary and benefits. The City Council and Administration will discuss represented employee group negotiation expectations, negotiating points, salary and benefit change floors and/or ceilings prior to the beginning of, and at appropriate points during, negotiation sessions. 2. For Non -Represented Employees. A written presentation of current internal and local external public agency salary and benefit trends, including a salary and benefits market survey of comparable jurisdictions, as defined herein, will be provided to the City Council by Administration every year by the end of the third quarter that a non -represented salary increase is due. Relevant Association of Washington Cities (AWC) data from the previous year's Washington City and County Employee Salary and Benefit Survey, for the comparable jurisdictions, will be used in the salary market survey. B. Compensation Policy. 1. All Puget Sound jurisdictions with +75/-50% of Tukwila's annual assessed valuation, using the most current data from County Assessors, will be used to create the list of comparable jurisdictions for evaluation of salary information. A second criteria to be used to refine comparable jurisdictions is to only include cities with their own police department. It is desirable to use the same comparable jurisdictions for both represented and non -represented employee groups. 2. For non -represented employees, the City desires to pay the average salary for the particular pay scale, as derived from the comparable jurisdiction data described in Section B.1. If the City's pay scale for any classification does not represent the average of comparable salary ranges (+/-5%), written justification must be provided to the City Council. For represented employees, the City desires to pay salaries that are competitive to the City's comparable jurisdictions. 3. Positions that are 5% below the market and up to 10% above the market are considered competitive with the market and will receive a market adjustment the year the survey is to occur. Those positions more than 10% above the market will not receive an adjustment during the year the market adjustment is to occur and will warrant further evaluation. Documented justification of potential reclassification will be provided to the City Council for review and approval. If the documented justification results in reclassification, any adjustments will be made in alignment with City policy. W:\Word Processing\Resolutions\Compensation policy for City employees 11-14-18 Page 2 of 3 90 4. The cost -of -living adjustment (COLA) in odd -numbered years for non - represented employees shall be based upon 90% of the Seattle -Tacoma -Bellevue Consumer Price Index (CPI-W) Average (June to June). It is desirable to calculate represented cost -of -living adjustments the same way, unless a different method is authorized by the Council. Considerations for cost -of -living adjustment for odd - numbered years will be based upon internal equity with represented groups to determine if an adjustment is warranted. Administration will provide a written justification documenting that an adjustment is warranted for the City Council's review and approval prior to implementation. 5. The goal of the City is to establish parity between represented and non - represented employees' benefits. The City desires to provide employee benefits that are competitive to the comparable cities described herein. The City will endeavor to keep increases to annual health care costs under market averages. If costs exceed market averages, adjustments will be made to reduce benefit costs. 6. The goal of the City is to mitigate or avoid salary compression issues where possible. An example of salary compression is when there is only a small difference in pay between employees regardless of their skills, level, seniority or experience. Administration will provide a written justification documenting that an adjustment is warranted for the City Council's review and approval prior to implementation. 7. The City Council shall review the compensation policy described herein on an annual basis to assess efficacy and make adjustments if warranted. If the Administration determines that a deviation from the above process (in its entirety or for individual positions) is necessary, it will provide justification to the City Council for review and approval prior to the adoption of any process change. Section 2. Resolution No. 1796 is hereby repealed. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this / gm) day of y/o i P M b-- -- , 2018. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: 1U- c Rachel B. Turpin, City Attorney Verna Seal, Council President Filed with the City Clerk: / 1-I Gt-/? Passed by the City Council: j Resolution Number: (c1,51 W:\Word Processing\Resolutions\Compensation policy for City employees 11-14-18 Page 3 of 3 91 92 93 JULY 14, 2025Tukwila’s Compensation PolicyResolution 195194 Tonight’s Presentation: IntroductionƒOverview: Resolution 1951 and its intentƒPolicy & PracticeƒOur Experience: 2023 Class & Comp study, Application of Res. 1951ƒManaging Salary Compression and Internal Salary EquityƒFuture: Consider Policy ChangesƒCouncil Review & Discussion95 Tukwila’s Employees & Classifications: 243 Represented, 37 Non-Represented3 Unions, 8 Bargaining UnitsPolice Non-commissioned• Police Records staff• Represented by USWCommissioned• Officers, Sergeants, Commanders• Represented by Teamsters 117Program Managers? UpdateListListRepresented by Teamsters 763Administrative/Technical•Court operations and support staff•DCD inspections & permits•Finance support•Parks & Recreation staff•Administrative support staff•Represented by Teamsters 763Maintenance/Trades• Facilities Custodians & Techs• Maintenance & Operations staff(Utilities)• Fleet & Facilities staff• Represented by Teamsters 763Professional/Supervisory•TIS, DCD professional staff•Courts, Emergency Management•Public Works Project & Programmanagement•Parks & Rec, Finance/Payroll Project &Program management•Represented by Teamsters 763Non-Represented•Confidential administrative support•Analysts•Managers•Directors & Deputy Directors•Deputy City Administrator•Police Chief and Deputy Police Chief96 Res 1951: What’s in the Policy•Comparable jurisdictions to evaluate pay: Puget Sound, +75/-50% of Tukwila’s assessed valuation (AV), cities with police department•Compensation Goals: Non-represented -average of comparable jurisdictions or justify to Council; Represented -competitive to comparable jurisdictions. Avoid compression.•Competitive: market adjustment for -5% market and up to 10% above market•COLA: odd years (non-rep), 90% of CPI-W Average. Parity between represented and non-rep, consider internal equity; justify to Council.•Benefits: goal is parity between represented and non-rep employees, competitive with comparables, keep increases below market average.•Information for Council: benefit trends, market survey of comparables, negotiation expectations, updates (for RepresentedEmployees, before negotiations; Non-RepEmployees, each year 3rdquarter)•Annual City Council policy review97 Res. 1951: Intent of Comp Policy ƒHelp recruit, retain, and develop productive employeesƒUse standard approaches to compensate all employees (parity)ƒInformed by economics; budget forecast; comparables; internal equityƒAdjust non-rep pay with market analysis (even years), COLA (odd years)ƒProvide represented employees with pay at average of comparablesaseconomic conditions and negotiations allowƒProvide non-rep employees with benefits above average of comparablesƒCouncil participation: set negotiation expectations, review CBAs98 Policy and PracticeLast Class & Comp Study (Non-Rep)• Planned for 2020• Postponed due toCOVID and HRturnover•Completed &Implemented in2023Interest Arbitration (Police)• Why AssessedValue is important•Objectivebenchmarks• Indicator of what acity can afford• Signals stabilityAdministration Policy 02.05.21•DefinesAdministrationand Councilresponsibility• Procedure for newhires, transfers,promotions,reclassifications99 Our Experience2023• Completed & ImplementedClass and Comp Study fornon-reps only2024• Negotiated 7 of 8 contracts• Used AWC data for marketcompensation benchmarks• Presented to council viaClosed Sessions to getauthority2025•Negotiation for 1 contract pending• Potential rollover to 2026 of4 contracts – Teamsters 763• Class & Comp studies forNon-Rep and Teamsters 763will begin, per Res. 1951100 Our Experience –2023 Class & Comp StudyStudy was for non-represented employeesDelayed from 2020 due to COVID and HR turnoverGoals: Ensure that salaries aligned with market competitors; eliminate the Decision Band Method (DBM) of determining salaries and pay gradesImplemented salary changes in Dec. 2023, funded with mid-biennium budget adjustmentStudy recommendations: 7-step compensation schedule, point factor system, built from average of market, don’t use AV, designed to minimize compression, separate schedule for Deputy Chief, Chief, City Administrator101 Our Experience –Pros & Cons of Res. 1951What has worked well-Authorization from council prior to negotiations gives clarity and guidance -Benchmarking both AV cities based upon Res. 1951 and Valley citiesChallenges- Using only AV cities based upon Res. 1951- Required frequency of comp studies- Updating outdated job classifications, descriptions, together with conducting compensation studies- Adhering to Policy 02.05.21 for new hires- Salary compression, internal equity is still unbalanced- Calculating comps manually- Transparency to Council 102 Salary CompressionSalary Compression –Employees at pay rates close to, or sometimes higher than, what long-term employees or supervisors earn. How do we manage it? Regularly review and adjust compensation structure to keep pay equitable across roles and experience levels. 103 Internal Salary EquityWhat is it?•Employees are paid fairly compared to others based on job responsibilities, experience, and performance. •Similar pay for similar workHow do we manage it?Regularly review pay across roles to ensure employees in similar positions with comparable experience and performance are compensated fairly. Needs clear job descriptions, consistent evaluation, structured pay ranges, management accountability. 104 Comparable JurisdictionsEdmondsLakewoodLynnwoodMarysvilleMukilteoMill CreekLake StevensIssaquahBothellPuyallupComparable jurisdictions based upon Assessed Value (AV)Valley Cities that are geographically near TukwilaAuburnDes MoinesFederal WayKentRenton105 Potential Policy Changes•Remove Council reclassification approval - align with City policy•Challenges meeting current policy: frequency of/time needed for marketstudies, timing for council reports and COLA•Compensation data always a year behind•Total cost of compensation vs. pay•Update comparable cities: expand criteria beyond AV, include geographyof neighbors (surrounding/Valley Cities)•Better job classifications for comparison and job matching•What would be part of an ideal policy?•Council Discussion & Questions106