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HomeMy WebLinkAboutCOW 2025-01-12 Item 4E - Resolution - City Compensation PolicyCity of Tukwila Thomas McLeod, Mayor Marty Wine, City Administrator AGENDA BILL ITEM NO. 4.E. Agenda Item Proposal to revise City Compensation Policy: Resolution 1951 Sponsor Thomas McLeod, Mayor Mayor's office Legislative History January 12, 2026 Committee of the Whole January 26, 2026 Special Meeting Recommended Motion ❑ Discussion Only ❑x Action Requested MOVE TO approve the compensation policy. EXECUTIVE SUMMARY Resolution 1951 has governed the City's compensation framework for several years. Since its adoption, the City's workforce, labor market conditions, and policy priorities have evolved significantly. Council has emphasized equity, transparency, and long-term financial sustainability, and the City has undertaken major compensation -related work, including the recent Classification and Compensation Study (in 2024) and discussions at the Financial Sustainability Committee. Beginning in June 2025, Human Resources initiated a review of Resolution 1951 to assess whether the policy continues to meet operational needs and align with current practices. During this review, Council requested additional context, comparisons to other jurisdictions' policies, and clarification regarding how a compensation philosophy fits within the City's overall governance framework. Based on that feedback, staff is not proposing to replace Resolution 1951, but rather to revise and modernize it, retaining Council governance, while updating outdated or unclear provisions. DISCUSSION Staff is seeking Council feedback on the following proposed revisions to Resolution 1951: • Clarifying purpose and rationale: Moves explanatory language from outdated "Whereas" clauses into the body of the policy so the "why" behind compensation decisions —recruitment, retention, equity, and fiscal stewardship is clearly stated and durable over time. • Updating market study cadence: Establishes a standard three-year market study cycle for non -represented employees, while retaining flexibility to conduct studies more frequently if market or operational conditions warrant. • Aligning policy with actual practice: Removes references to automatic cost -of -living adjustments (COLA) and clarifies that wage adjustments are determined through collective bargaining, administrative processes, and the budget, consistent with how compensation is currently set. • Formalizing a total compensation approach: Explicitly recognizes total compensation including pay, benefits, and leave as the basis for evaluating competitiveness, an approach already used for police compensation and now applied consistently across employee groups. • Clarifying comparable jurisdictions: Codifies use of assessed valuation, police department presence, and Valley Cities as comparators, aligning the policy with methodologies already in use. 68 • Strengthening equity and compression oversight: Adds explicit commitments to monitor equity and compression, apply the City's Equity Toolkit, and report annually to Council. • Reinforcing governance roles: Clarifies the roles of Council, the Mayor or designee, and Administration, including requiring Council review of the Compensation Policy prior to adoption of the biennial budget. • Align New Hire Pay with City Policy: Revising the policy to delegate approval authority to the Mayor rather than Council. This would allow timely salary negotiations without delaying decisions. Requiring written justification for exceptions to reinforce transparency. Consistently communicating this policy to hiring managers to reduce pay compression and inequities at entry. FINANCIAL IMPACT Complete for all items with fiscal implications Disclaimer: Final terms and scope of work subject to r City Atta Comments: There is no immediate fiscal impact associated with revising Resolution 1951. Any future compensation adjustments resulting from market studies, equity reviews, or collective bargaining will continue to be reviewed and approved through established budget and bargaining processes. ATTACHMENTS • Draft revised Resolution 1951 • Summary of proposed changes 69 C:1Users\andy-y\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\DWVWM4YX\Agenda Bill_Proposal to revise Res 1951 (002).docx 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. 1951. 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, recruitment or retention difficulties for certain positions, and position rates for comparable jurisdictions, as well as internal equity considerations, should assist in guiding the compensation of employees; and a cost of living (COLA) allowance in odd numbered y 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 above the aver omparable jurisdictions; and WHEREAS, the City Council will participate in setting negotiation expectations and reviewing and approving represented employee group contracts; and, HLREEAS,increases in pay for positions on the salary range will be apQjo.y d the Council for each osition classification, as adopted in the City's iennoaI Budget and as amended or supplemented from time to time; 2026 Legislation: Compensation Policy Version: 1/6/2026 Staff: T. Croone Page 1 of 4 70 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The following statements and processes arccrarm ensation pphiiosopil is adopted for the purpose of guiding employee compensation programs for employees offor 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 other year by the end of the third . 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. mm. i ,.:. .._mmcompensation 1. T©t l ©raw ensation. Where racticablc., the total tal cost ofco red addition a iH.. i g the value of earn and paidea v _ will be cpr°asd� in �.�... to flaase� I��anr�din0......�..' .�.....�.�. earned .........lea.ye, the value of iHealth 'insurance and benefits for evit deferred corn ensation tion d other cascompensation. 2, )Periodically, the.... City nay conduct a salaj and benefits rnarket survey©; ensures the City's positions are paid appropriately as evaluated against comparable jurisdictions, economic conditions in the area, prevailing ware rate.��d or recruitment or retention considerations for certainpositions. Market ad t vents to positions on tl.ie e idPP� ons" salau�y�cl�ecl�IlP shall) br' � sratiolm7a d u ect t.o �u etar c 1-3. 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. Comparable jurisdictions will also include the, cameo raphic labor market where Tukwila attracts applicants from, to include the Vallem Cities Kent, Renton, ub��rn Federal Way,. and Cues Moines..._ Auburn to .the Cit will use the same comparable jurisdictions for both represented and non -represented employee groups. 2026 Legislation: Compensation Policy Version: 1/6/2026 Staff: T. Croone 71 Page 2 of 4 24. 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. 0 the City Council. For represented employees, the City desires to pay salaries that are competitive to the City's comparable jurisdictions. 3 a. 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 CouncilMayor or their designee for review and approval. If the documented justification results in reclassification, any adjustments will be made in alignment with City policy. 46. 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). Considerations for cost -of -living adjustment for odd 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. 57. 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. . 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. implementation. 79. The City Council shall review the compensation policy described herein on an annual basisprwor to a royal ofw the Biennial Budget 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 '1951 is hereby repealed. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Special Meeting thereof this day of , 2026. 2026 Legislation: Compensation Policy Version: 1/6/2026 Staff: T. Croone Page 3 of 4 72 ATTEST/AUTHENTICATED: Andy Youn-Barnett, CMC, City Clerk Armen Papyan, Council President APPROVED AS TO FORM BY: Kari Sand, City Attorney 2026 Legislation: Compensation Policy Version: 1/6/2026 Filed with the City Clerk: Passed by the City Council: Resolution Number: Staff: T. Croone 73 Page 4of4 Thomas McLeod, Mayor Human Resources Division - TC Croone, Chief People Officer Resolution 1951 Proposed Changes What's Changed • Market study cadence clarified: Non -represented market studies moved from a "odd year" and "even year" cadence to a standard three-year cycle, with flexibility retained. • COLA language revised: Removes implied or fixed COLA assumptions and reflects current practice, which varies by bargaining agreement and budget decisions. • Total compensation emphasized: Explicitly adopts a total compensation framework across employee groups. • Comparable cities clarified: Formalizes use of Valley Cities and assessed valuation criteria consistent with police compensation practices. • Equity and compression strengthened: Adds explicit commitments to equity analysis, use of the Equity Toolkit, and annual reporting to Council. • Governance alignment improved: Updates references to decision -makers (Mayor or designee) and requires Council review prior to the biennial budget. What Stayed the Same • Council governance is retained: Compensation policy remains Council -adopted and Council continues to set expectations through the budget and bargaining process. • Comparable market methodology is preserved: Assessed valuation continues to be used as a key criterion in identifying comparable jurisdictions, in combination with local and regional cities, to ensure market comparisons reflect both fiscal capacity and the actual labor market from which the City recruits. • Represented and non -represented employees are covered: The policy continues to apply citywide. • Fiscal stewardship remains central: Compensation decisions continue to be subject to budgetary review and approval. • Flexibility is preserved: Administration retains the ability to respond to market conditions, recruitment challenges, and equity concerns within the policy framework. Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gov 74 Resolution 1951 Proposed Changes Page 2 City Tukwila Auburn Benchmarked Cities Non -Represented Policy Represented (CBA) Policy Assessed valuation used; Biennial adjustments: Based on Resolution 1951 Benchmarking (even years) & COLA (odd years, 90% framework; Adjustments via CPI-W); Benefits slightly above average. bargaining; Cadence ^'2-3 years. Step -based schedule; No assessed valuation; No explicit COLA. Renton Step -based salary tables; Incentives (longevity, education); No assessed valuation; No explicit COLA. Kent Salary Commission for elected officials; Comparables used but not assessed valuation; No COLA. Federal Limited data; No assessed valuation; No explicit Way COLA. Des No data found. Moines 1. Maintain Assessed Valuation Benchmarking Teamsters CBA includes longevity pay; No COLA; Market study cadence not defined. AFSCME CBA: market adjustments for roles w/out study since 2022; cadence "'3 years. CBAs not detailed; Adjustments negotiated. No detailed CBA data located. No data found. Why: Tukwila's Compensation Policy (Resolution 1951) and City pay policy emphasize maintaining a fair, market -competitive structure. Using assessed valuation to select comparables keeps benchmarking tied to the City's fiscal capacity rather than arbitrary peer groups. This approach strengthens Tukwila's credibility during interest arbitration with our three police bargaining units, where objective financial comparables carry significant weight. Documenting the use of assessed valuation alongside peer jurisdictions (Valley Cities) provides both credibility in arbitration and recognition of market competitiveness within our geographic region. Additionally, including the City of Lynnwood —whose daytime and nighttime populations mirror Tukwila's—helps build a more well-rounded set of compensation comparables. 2. Codify Market Study Frequency — Every 3 years (Trienniel) Why: While Personnel Policy 02.05.21 establishes equitable salary administration and Council sets ranges annually, codifying a triennial citywide market study would create consistency for both represented and non -represented employees. A three-year cadence smooths volatility (such as the Phone: 206-433-1800 • Email: Mayor@TukwilaWA.gov • Website: TukwilaWA.gov 75 Resolution 1951 Proposed Changes Page 3 COVID period when CPI-W exceeded 8%), allowing anomalies to self -correct while ensuring long-term competitiveness. 3. Strengthen CBA Language on COLA Why: Current practice for non -represented employees ties odd -year adjustments to 90% of CPI-W. Represented CBAs vary, but standardizing language across unions to reference CPI-W or a fixed minimum percentage creates predictability. We successfully incorporated this approach into the 2025 negotiations across all Tukwila CBAs and will continue this practice. Standardizing COLA language reduces disputes during bargaining and reinforces alignment with the City's policy to remain market competitive. 4. Transparency in Reporting Why: While policy requires consistent application of salary plans, HR can enhance accountability by publishing an annual compensation summary to executive leadership, the Mayor, and Council. The report would include: • Comparable cities used (with assessed valuations). • CPI-W data for the year. • Salary adjustments applied (COLA, market, step movement). Providing this annual report supports fiscal transparency, improves Council's decision -making, and gives employees a clear understanding of how their pay aligns with City policy. 5. Align New Hire Pay with City Policy Why: Personnel Policy 02.05.21 requires new hires to start at step one of their grade unless justified by exceptional experience, with placement above mid -step requiring Council approval. To strengthen compliance and equity, we recommend: • Revising the policy to delegate approval authority to the Mayor rather than Council. This would allow timely salary negotiations without delaying decisions. • Requiring written justification for exceptions to reinforce transparency. • Consistently communicating this policy to hiring managers to reduce pay compression and inequities at entry. Phone: 206-433-1800 • Email: Mayor@TukwilaWA.gov • Website: TukwilaWA.gov 76