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HomeMy WebLinkAboutIR 7129 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7129 µA P TI ft"o To the Mayor and Members of the City Council Subject: PRELIMINARY SALARY ISSUES FOR 1986-87 raTa This informal report will address salary considerations for the Fiscal Year 1986-87 Budget. Many factors should be considered in making decisions regarding compensation, including comparative salary data, the city's ability to recruit and retain qualified employees, turnover data, cost-of-living indices, employee morale, and most importantly the City's ability to pay. As previously outlined, FY 1987 will be one of our most difficult years due to the loss of Federal Aid and the decline in the Texas economy. Background In 1984, the Council approved a budget which made a strong statement about the value of City employees and adopted a policy to have a 75th percentile goal on salaries. The 1985 budget stated: "The recommended program of compensation is the first step of a program to move salary ranges to the 75th percentile among competitive employers in the labor market. It is not reasonable to expect to compete for the most dedicated and productive workers while offering salaries that are substantially lower than competitors. Just as importantly, the contributions of employees in low-profile roles who make it possible for the City to meet its service mandates must not be ignored. It is imperative that all employees be recognized and rewarded as important members of the City team. The proposed salary plan is based on a five percent across-the-board increase which recognizes the impact of inflation during the current fiscal year. Additional salary range adjustments are recommended for those classifications which rank below the 75th percentile in a listing of employers with whom we compete. Generally, individual employees will receive no more than a ten percent increase, even in cases where their range is adjusted more than ten percent. Additional increases will be recommended in subsequent budgets to move all classifications to the 75th percentile within three years....This proposal, together with the performance-based management compensation plan recommended by the private sector Compensation Committee, should improve measurably the competitiveness of the City's salary structure. It is believed that the proposed salary plan also makes evident the City's recognition of its employees as its most valuable asset. The salary plan should be viewed as an investment in securing and maintaining this valuable resource." In the 1985-86 budget, the Council again adopted a budget which continued this program to move salary ranges to the 75th percentile among competitive employers in the labor market. In addition, the performance-based compensation plan was expanded to include 750 additional professional, administrative and supervisory employees. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS ^ INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7129 ;A I OR2.* To the Mayor and Members of the City Council Page 2 Subject: PRELIMINARY SALARY ISSUES FOR 1986-87 Salary Trends Although it is difficult to determine what other cities will do in this year's budget, there is some information which may be helpful to the Council. The City of Dallas' financial problems are well publicized and it appears that because of revenue shortfalls, etc., the City has reduced current salaries by 1% for most employees and 3% for certain administrative and managerial employees. In addition, there are a significant number of layoffs projected next year. It is anticipated the City of Dallas will continue to grant merit .The State of Texas has proposed a 3% across-the-board increase, but because of revenue shortfalls, the increase may be granted on a departmental basis and only if the department has sufficient funds available to cover the expenditure. The Dallas-Fort Worth International Airport Board Administration is recommending a 3% market adjustment across-the-board in addition to merit increases. This has not been approved by the Board. The City of Arlington is instituting a perform ance-based pay system using the Hay Method. All pay will be based on performance, and it is anticipated there will be some significant range Turnover Data Turnover statistics, which includes voluntary and involuntary terminations for the City in calendar year 1985 was 13.10 percent. For non-civil service employees, the rate was 18.10%. For Police employees, turnover for 1985 was 2.97%; for Fire employees, the rate was 1.81%. Summary of 1986 Survey Findings Management Pay Plan - This plan, which includes city management staff, department heads, assistant department heads and some division heads, is a performance-based plan. Salary increases are made strictly on the basis of an individual's performance; there are no across-the-board increases granted. In the 1985-86 budget, there was no adjustment in the pay ranges. However, our survey indicates this grouping of positions is approximately 5% below the 75th percentile. Administrative Pay Plan - This plan was established last year and also is a perform ance-based plan. Ranges were adjusted last year by 4.5%, but survey data indicate this grouping is approximately 10% below the 75th percentile. Clerical and Public-Safety-Related Classes - The ranges for the classifications in these job families were adjusted by 9.2% last year. Two-thirds of the eligible employees in these classes also were considered for a 5% merit increase. in addition to the clerical employees of the City, this grouping includes Park Rangers, City Marshals, Fire-Crash Rescue Squad, etc. Survey data indicate this grouping is approximately 4% below the 75th percentile. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7129 Page 3 To the Mayor and Members of the City Council Subject: PRELIMINARY SALARY ISSUES FOR 1986-87 Technical, Paraprofessionals, Service and Trades Classes - The ranges for these classes were adjusted by 4.5% last year. In addition two-thirds of the employees in these classes were considered for a 5% merit increase. Lab workers, Engineering Technicians, Plant Operators, Mechanics, Laborers, etc. are included in these job families. Survey data indicate this grouping of employees is approximately 7% below the 75th percentile. Police Classes - Ranges for sworn classifications in the Police Department were adjusted 4.0% last year. Also an additional step went into effect which gave many officers an opportunity to receive a 9.0% increase. Police and Fire classes do not provide for merit increases in accordance with prohibitions in the State Civil Service Law (1269m). In comparing the Police Officer class in the Metroplex, there is only a $106 difference between Fort Worth and the 75th percentile, or approximately -4.8%. However, we appear tenth among survey cities. It also should be noted no other Metroplex City has a Corporal/Detective rank, we have 150 Corporal/Detective positions. Fire Classes - In 1985-86, the ranges for Fire classes were adjusted 4.5%; an additional step also was added, which allowed many employees to receive a 9.2% increase. Survey data indicate the Firefighter class to be approximately 3.2% below the 75th percentile. Preliminary Staff Considerations and Recommendations 1. There would not be enough funds available to grant any across-the-board increases. Therefore, no across-the-board increases are being considered. 2. Salary range adjustments should be made in order to maintain a competitive position and to continue our policy to keep salaries at the 75th percentile or above. A change in a salary range does not affect any individual's pay. 3. Expand the peformance-based pay plan to all levels of the organization, excluding Police and Fire, where there is a legal prohibition. Therefore, when ranges are adjusted, employees would receive pay increases based only on their performance and their relative position within the pay range for their classification. There would no longer be across-the-board increases and merit increases. 4. If there was no range adjustment for Police and Fire classes, there would be 493 Firefighters and 287 Police Officers (all ranks) who would not receive an increase. (Similarly, there are approximately 800 non-sworn employees who are at the top of the range for their classification.) To grant all-Fire and Police personnel a pay adjustment, an additional step would be necessary or an across-the-borad pay adjustment. So, if a range was adjusted by 5%, all employees within the classification would receive the adjustment similar to an across-the-board increase. In addition, employees eligible for a step increase (based on meeting a specific years-of-service requirement) would get an additional 5% step increase. Summary Obviously, the 1986-87 Budget will be one of the most difficult to prepare in some years. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7129 DoE foer�x+ To the Mayor and Members of the City Council Page 4 ell, x CO Subject: PRELIMINARY SALARY ISSUES FOR 1`986-87 is 7 3 In preparing the preliminary budget, there is no funding for any across-the-board salary adjustment. At this time, it is my preliminary intent to include only funds for performance based pay adjustments and funds to address some adjustment in Police and Fire. Although a final recommendation has not been developed, I wanted you to be aware of our thinking. Personnel Director, Charlie Shapard and the Compensation staff will be available at the Pre-Council meeting Tuesday to respond to your questions. Also, I would appreciate your thoughts on the direction we are considering at the present time. Do ggl�asHarman City Manager DH:sm ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS