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HomeMy WebLinkAboutFIN 2018-03-20 Item 2B - Discussion - Compensation Policy for City EmployeesCity f Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Stephanie Brown, Human Resources Director CC: Mayor Allan Ekberg DATE: March 14, 2018 SUBJECT: Review of Compensation Policy Resolution No. 1796 ISSUE The City Council and Administration have committed to review and discuss Resolution No. 1796, which sets policy for compensation and benefits for City employees. BACKGROUND Beginning in the 1980's, the City Council adopted various resolutions regarding compensation policy. These resolutions focused on several common themes including: 1) An overarching goal to maintain a competitive position in the market place; 2) The desire to select and to retain a competent and productive work force; 3) The compensation system should reflect average compensation among the various employment markets in which the City competes for qualified labor; 4) l'rovides that classifications shall be based upon the Decision Band Method (DBM), for the represented and non -represented employees; 5) A comparative analysis for all positions shall be determined based upon internal and external factors; 6) A mix of wages and benefits shall be provided based on the average or above average of the defined market. These resolutions have since been updated and replaced over time, with many of these provisions carrying forward over the years. In 2013, Resolution No, 1796, was adopted which setcore value statements, specifically that the City desires to utilize standardized policies, procedures and processes whenever possible for compensating all employee groups, both non -represented and represented. From the I luman Resources perspective,sinccLhcudopii000[thimpo|iuyin20\3,ithuubceneffexiivck/ used as a guide and serves to establish criteria fouse when conducting analysis for salary and benefits. In the Collective Bargaining process, it has been objective; manageable, fair, representative of the market to which you chose to compare; used in good faith under our bargaining statue RCW 41.56; reduces the comparisons to those groups that are represented; sets parameters for pay and benefit considerations; it guides the pre -collective bargaining process as to what the City expects to receive for consideration in preparatioI for labor negotiations. 17 18 INFORMATIONAL MEMO Page 2 As it relates to the classification of new positions and the reclassification of existing positions, it provides the external market criteria based upon assessed valuation +/- 50% that we have been able to benchmark our positions to fairly consistently; provides consideration for internal comparability; identifies the data collection resources to use when conducting external market analysis; sets parameters for when a market study will be conducted and when a cost of living adjustment will be considered. The challenges we have experienced have generally been when we have positions that we are not able to find benchmark comparators for based upon the duties of the position (standard for a valid match is 5 positions). In addition, recently when the market for a certain position was highly competitive, we were not able to attract qualified applicants. During these times we look for creative, innovative and strategic ways to attract qualified applicants such as offering hiring bonuses. This has also been an effective recruitment strategy with our Civil Service positions. Given that some areas of Resolution No. 1796 are silent, addressing those silent areas would provide more clarity and an objective methodology to use for anomalies that may occur. Administration proposes consideration of the following for discussion with the Council. This list is not all inclusive as there could be other items the Council wants to consider. 1. Above and Below Market adjustments - specifically define what compensation standard would be used to set parameters for adjustment of wages when positions are above or below market. 2. Compression — establish a definition within the resolution that defines what it means, and what methodology will be used to address compression when it occurs. 3. Comparability — review the current methodology specifically as it applies to the external market for non -represented and represented employees. 4. Recruitment — review what barriers exist when it is a highly competitive external market, and ways to attract and retain future employees. In addition, Administration proposes the following tentative timeline for review and adoption of changes to Resolution No. 1796 by the full City Council: March 20 - Discuss the history of setting compensation prior to the adoption of Resolution No. 1796 April 3- Review the entirety of Resolution No. 1796 April 17 — Discuss proposed Administration and Council considerations May 8 - May 22 - June 11 - Present to City Council Proposed Resolution changes Continued discussion of proposed changes with the Council Adoption of revisions to Resolution No. 1796 by the Council We look forward to the review and discussion of Resolution No. 1796 with you at the Finance Committee meeting on March 20, 2018. Attachment: City Council Resolution No. 1796 Z:\Council Agenda Items\Human Resources\FinanceCommitteecompreviewmemo 3-14-18.doc City of Tukwila Washington Resolution No. J 1 9h 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. 1387. 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, position rates for comparable jurisdictions, as well as internal equity considerations should assist in guiding in 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; W'.\Word Processing\Resolutions\Compensation policy for City employees 5-29-13 final SBbjs Page 1 of 3 19 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: 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 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 every year 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 +/-50% of Tukwila's annual assessed valuation, based upon the Department of Revenue data, will be used to create the list of comparable jurisdictions for evaluation of salary information. 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. The cost -of -living adjustment (COLA) in odd -numbered years for non - represented employees shall be based upon 90% of the Seattle -Tacoma -Bremerton 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. W'.\Word Processing\Resolutions\Compensation policy for City employees 5-29-13 strike-thru SB.bjs 20 Page 2 of 3 4. 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. 5. The goal of the City is to mitigate or avoid salary compression issues where possible. An example of salary compression would be when a non -represented supervisor earns less, or is projected to earn less than those that he/she supervises due to contracted wage increases. 6. 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. 1387 is hereby repealed. PASSED BY THE CITY COUNCIL DF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this 3 day of uk( . , 2013. ATTEST/AUTHENTICATED: Christy O'Flah ' y, MMC, City Cler APPROVED AS TO FORM BY: ShelleStAi ersla• -, C = •rney Filed with the City Clerk: S Passed by the City Council: lo - Resolution � Number: W:\Word Processing\Resolutions\Compensation policy for City employees 5-29-13 final SB:bjs Page 3 of 3 21