HomeMy WebLinkAboutFIN 2019-09-23 Item 2D - Update - Non-Represented Employees' CompensationCity f Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance Committee
CC: Mayor Ekberg
FROM: Juan Padilla, Human Resources Director
DATE: September 17.2O18
SUBJECT: Non -Represented Employee Compensation
ISSUE
City Council adopted Resolution 1951, adopted in November of 2018, provides policy direction
b)the Administration regarding employee compensation. This isthe first year this revised policy
is being implemented, and is also a "market" year for non -represented employees. The purpose
of this item is to share the implementation steps to date with the Committee, seek additional
guidance from the Committee on some areas of implementation and meet the timelines detailed
in the policy.
DISCUSSION
Before going into the specifics of implementing Resolution 1951, below is aquick discussion Of
the changes made from the previous resolution, 1796. The biggest changes are found in the
following categories:
1. Specific timelines and information due to the council for non -represented employees with
data specifically to come from the AVVCWashington City and County Employee Salary
and Benefit Survey.
2. Expanded the number of comparable cities by increasing the comparable cities' annual
assessed valuation from +5&-5O96to+75/-5O96and that comparable cities must have
their own police departments.
3. Strict guidelines on how to deal with positions that are either more than 5% below the
market and 1096 above the market.
4. Simplified the language describing compression.
5. Review of the policy onanannual basis.
Resolution 1951 is broken down in two main areas: "Information to be provided to the City
Council" and "Compensation Pn|icy." Acopy Ofthe policy iSattached for reference. Below is
discussion nfthe implementation of the different areas todate.
1. Al —^ForRepnssenUad Employees": The information laid out in this section has been
shared with the City Council during executive session by bargaining group throughout
the process ofnegotiating the latest collective bargaining agreements. During this
calendar year Human Resources has successfully negotiated new contracts with six
bargaining groups. Of the two remaining, one achieved o tentative agreement this week
and the other continues tObargain and the current contract does not expire until the end
ofthis year.
2. A2—"For Non -Represented Employees": Current internal salary trends show that
represented employees are receiving on increase in2O2Oand 2O21 ranging from 1.53%
to 1.7%(90%-10096OfCP|). Externally, while staff knows ofODcities that have yet
made a final decision on 2020 compensation, conversations with their staff indicate most
are contemplating an increase for non -represented staff between 1.5% and 396. The
adopted City of Tukwila budget included a 2.5% increase from 2019 to 2020 for non -
represented employees.
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INFORMATIONAL MEMO
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Staff is seeking guidance from the Council to finalize the information based on
challenges that have arisen inthe implementation ofthis new policy. There are 3Snon-
represented employees that hold 36different positions in 15different bands. Previously
the City had benchnnarkedapproximately 12positions. Staff has attempted toexpand
benchnOa[hedpositions toover 2Opositions inorder tVprovide @more complete
analysis. TheAVVC Employee Go|ory and Benefit Survey is not comprehensive, leaving
many positions unable tVbebenChnl8rked/benchnnarkedpositions require finding at
least five other comparable positions within our comparable citieo\. Staff can and has
reached out to the other comparable cities to achieve a higher number of benchmarked
positions, but such activity is outside of the policy direction given in the resolution.
Going outside the 8VVC survey aUovvS the City to better track total compensation, as the
benefit information provided byAVVCiSincomplete.
o Question for the Committee — Should staff go beyond the AWC survey in order to
gather osmuch information aapossible, which would include polling our
comparable cities for information oneach non -represented position?
o Question for the Committee — Alternately, should the City contract with an
outside firm for Ofull market study?
3. B1 —Thia section changed the jurisdictions defined as comparable cities from +50-50Y6
ofTukmi|o'eannual assessed value tV+75/-5O96AVwith apolice department. This has
resulted in the City now having 15 COnOpmrob|e cities, Seven under TukVvi|a's/\Nand
eight above. The comparable cities with their AV are attached.
o C}ueationfortheCommittee—thepo|ioydoesnot address Fire aaonly three of
our comparable cities have stand-alone fire departments /Gnoquo|nnie. W1uki|teo
and Bothell). This affects two employees, the Fire Chief, and Assistant Fire
Chief. Staff believes there are two options: 1)the City can choose tonot
benchmark these positions, or2)the City can use comparable fire
diStricts/authD[idesvvith the same A/Vdirection given in section B1 of Resolution
1851. Neither ofthese are perfect options.
4. B2 — Staff ig currently analyzing the salaries with comparable jurisdictions and will
present the information to the Committee on October 14, 2019.
5. B8—Staff iacurrently analyzing the data per the item above. Atthe October 14.2U1S
Finance Committee staff will provide all documentation defined inthis section ofthe
resolution.
0. B4 — This section, non -represented COLA for odd years, was implemented in November
of2O10for the 2O19Fiscal Year aampart ofthe biennial budget process.
7. B5—Staff ianot suggesting any changes toemployee benefits at this time. The
Administration expects there will be a discussion on health care costs during the
2O21/2O22budget process.
8. B8 —Ane|ysis to date ohovva that there is salary compression within the organization.
Specifica||y, recent contract changes have resulted in compression between the Police
Commanders and Deputy Chief. Compression otthis level has acascading effect
impacting other leadership positions. The full compression analysis will bepresented to
the Committee onOctober 14.2O19.
9. B7 — Staff strongly agrees that the compensation policy should be reviewed on a regular
basis. In fact, implementing this policy has brought to light deficiencies in the {}ity'S
Decision Band Method (DBK8)compensation system. Like any major aystenn.vvithouta
significant refresh on o regular basis, a otatioDBM system can become obsolete. In
addition, after a review of comparable and neighboring cities, it is has become clear that
most have moved away from o OBM system to market -based ones. While any employer
needs to have a system — and the DBM one did work for the City for a number of years —
it is clear that either the OBM needs to be updated or the City should move to a different
system. Staff believes the City should explore moving to a market -based system and
z:\Cnunoi|Agenda |emy\Commonioatmns\o019Non Rep Draft m°mn.omu
INFORMATIONAL MEMO
Page 3
will be bringing a proposal to the Finance Committee in the fourth quarter of this year for
@ process exploring this option. Moving to anew compensation system — and even
simply updating the existing OBK8one SOthat can function 8Srequested bvResolution
1Q51—will require @ budget amendment.
RECOMMENDATION
Staff is seeking answers to the questions raised above and will return to the next Finance
Committee meeting with the full analysis discussed above.
ATTACHMENTS
F<eSO|UtiOO1351
Resolution 17S0(repealed bvResolution 1951\
Comparable cities with assessed value
Z:\Council Agenda 9Non Rep Draft memvuvu
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Washington
Resolution No. J C75)
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:
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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°/0 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.
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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 9.7f day of r\foue kr' , 2018.
ATTEST/AUTHENTICATED:
) ')-
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Verna Seal, Council President
Filed with the City Clerk: /
Passed by the City Council:
Resolution Number: lqS1
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City of Tukwila
Washington
Resolution No. 1 1 c/h
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;
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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.
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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 pF THE CITY OF TUKWILA, WASHINGTON,
r
at a Regular Meeting thereof this 3 04,/ day of -a-v./0 0 , 2013.
ATTEST/AUTHENTICATED:
Christy O'Flah
APPROVED AS TO FORM BY:
SheIH ersla -, C o ney
Kathy Hotig rdyoi.oiI Presi
Filed with the City Clerk: 6"
Passed by the City Council: Lo-„,
Resolution Number: 14) (lb
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Comparable Cities per Resolution 1951
4V per Billion
Y6ofTukvv|a'sAV
Snoqua|nnie
3469
5196
Mill Creek
4128
62%
Lake Stevens
4335
65%
Des Moines
4356
6596
Medina
4479
6796
Muki|teo
5129
7796
Puyallup
6261
9496
Tukwila
6685
100%
Lakewood
5929
104%
Lynnwood
7015
10596
Marysville
7986
11996
Edmonds
10223
15396
Federal Way
11393
17096
Bothell
11415
17196
Auburn
I1435
17196
Issaquah
11567
173%
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