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Home My WebLink AboutFIN 2025-07-28 Item 1B - Discussion - Compensation PolicyINFORMATIONAL MEMORANDUM To: Finance and Governance Committee From: TC Croone, Chief People Officer CC: Mayor Thomas McLeod Date: July 28, 2025 Subject: Compensation Policy presentation follow-up Purpose As a follow-up to the presentation provided to the full City Council on July 14, 2025, I will be presenting additional information and responding to Councilmember questions regarding Resolution 1951 at the upcoming Finance and Governance Committee meeting on July 28. Background During the July 14 Council meeting, I provided an overview of the City's current Compensation Policy under Resolution 1951. The presentation highlighted challenges with the assessed value (AV) benchmark, internal equity concerns, and insights gained through recent labor negotiations and the 2023 compensation study. Council requested further discussion on potential revisions to the resolution to ensure it remains a useful and practical tool for guiding compensation policy. This follow-up presentation will build on the feedback received and offer options for modernizing the resolution to better reflect the City’s goals and labor market realities. Next Steps During the July 28 Finance and Governance Committee meeting, I will: •Recap key points from the July 14 Council presentation •Address follow-up questions •Request guidance on next steps for potential policy updates Attachments A. Resolution 1951 - Compensation Policy B. PowerPoint Presentation 23 24 25 26 JULY 14, 2025 Tukwila’s Compensation Policy Resolution 1951 27 Tonight’s Presentation: Introduction Overview: Resolution 1951 and its intent Policy & Practice Our Experience: 2023 Class & Comp study, Application of Res. 1951 Managing Salary Compression and Internal Salary Equity Future: Consider Policy Changes Council Review & Discussion28 Tukwila’s Employees & Classifications: 243 Represented, 37 Non-Represented3 Unions, 8 Bargaining Units Police Non-commissioned •Police Records staff •Represented by USW Commissioned •Officers, Sergeants, Commanders •Represented by Teamsters 117 Program Managers •Courts •Public Works •Emergency Management Represented by Teamsters 763 Administrative/Technical •Court operations and support staff •DCD inspections & permits •Finance support •Parks & Recreation staff •Administrative support staff •Represented by Teamsters 763 Maintenance/Trades •Facilities Custodians & Techs •Maintenance & Operations staff (Utilities) •Fleet & Facilities staff •Represented by Teamsters 763 Professional/Supervisory •TIS, DCD professional staff •Courts, Emergency Management •Public Works Project & Program management •Parks & Rec, Finance/Payroll Project & Program management •Represented by Teamsters 763 Non-Represented •Confidential administrative support •Analysts •Managers •Directors & Deputy Directors •Deputy City Administrator •Police Chief and Deputy Police Chief 29 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 Represented Employees, before negotiations; Non-Rep Employees, each year 3rd quarter) •Annual City Council policy review30 Res. 1951: Intent of Comp Policy Help recruit, retain, and develop productive employees Use standard approaches to compensate all employees (parity) Informed by economics; budget forecast; comparables; internal equity Adjust non-rep pay with market analysis (even years), COLA (odd years) Provide represented employees with pay at average of comparables as economic conditions and negotiations allow Provide non-rep employees with benefits above average of comparables Council participation: set negotiation expectations, review CBAs 31 Policy and Practice Last Class & Comp Study (Non-Rep) •Planned for 2020 •Postponed due to COVID and HR turnover •Completed & Implemented in 2023 Interest Arbitration (Police) •Why Assessed Value is important •Objective benchmarks •Indicator of what a city can afford •Signals stability Administration Policy 02.05.21 •Defines Administration and Council responsibility •Procedure for new hires, transfers, promotions, reclassifications32 Our Experience 2023 •Completed & Implemented Class and Comp Study for non-reps only 2024 •Negotiated 7 of 8 contracts •Used AWC data for market compensation benchmarks •Presented to council via Closed Sessions to get authority 2025 •Negotiation for 1 contract pending •Potential rollover to 2026 of 4 contracts –Teamsters 763 •Class & Comp studies for Non-Rep and Teamsters 763 will begin, per Res. 1951 33 Our Experience –2023 Class & Comp Study Study was for non-represented employees Delayed from 2020 due to COVID and HR turnover Goals: Ensure that salaries aligned with market competitors; eliminate the Decision Band Method (DBM) of determining salaries and pay grades Implemented salary changes in Dec. 2023, funded with mid-biennium budget adjustment Study 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 Administrator34 Our Experience –Pros & Cons of Res. 1951 What has worked well -Authorization from council prior to negotiations gives clarity and guidance -Benchmarking both AV cities based upon Res. 1951 and Valley cities Challenges -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 35 Salary Compression Salary 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. 36 Internal Salary Equity What is it? •Employees are paid fairly compared to others based on job responsibilities, experience, and performance. •Similar pay for similar work How 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. 37 Comparable Jurisdictions Edmonds Lakewood Lynnwood Marysville Mukilteo Mill Creek Lake Stevens Issaquah Bothell Puyallup Comparable jurisdictions based upon Assessed Value (AV) Valley Cities that are geographically near Tukwila Auburn Des Moines Federal Way Kent Renton38 Potential Policy Changes •Remove Council reclassification approval - align with City policy •Challenges meeting current policy: frequency of/time needed for market studies, 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 geography of neighbors (surrounding/Valley Cities) •Better job classifications for comparison and job matching •What would be part of an ideal policy? •Council Discussion & Questions 39