AGENDA #5
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TO: |
Roger L. Stancil, Town Manager |
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FROM: |
Anissa N. Graham-Davis, Assistant Human Resources Director |
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SUBJECT: |
Compensation for Town Employees for Fiscal Year 2007-2008 |
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DATE: |
April 18, 2007 |
The purpose of this report is to present and discuss compensation information for Fiscal Year 2007-2008 for Town employees.
When the new Pay Plan was approved in 1999, the intention was that eligible employees would receive a step increase annually and that new employees would reach the job rate within four years. At that time, the Council expected to be able to fund both a step increase and a range increase for employees each year. This has not been possible in recent years. For Fiscal Year 2002-03, the Council approved a 3.78 percent merit increase, for 2003-04 a 3 percent range increase, for 2004-05, a 3.78 percent merit increase, and for 2005-2006 a 3.78 percent merit increase.
Last year the Council took action by approving a range increase of 3.0 percent for employees, effective October 2006. This helped keep the Town’s ranges aligned with the market.
We appreciate the Council’s effort to provide recognition of and support for the high standards of performance and service by Town employees by authorizing pay increases each year, especially in challenging budget years such as the Council is currently facing.
As you may know, the Town has also faced challenges. In the past two years, we have begun to experience difficulty in recruitment for many of the Town’s vacant positions; and the turnover rate has increased from less than 5 percent in 2004-05 to more than 10 percent for the past two years. If these trends continue, maintaining competitive pay rates will be a key factor in retention and in filling vacancies with competent employees to carry out essential Town services for citizens.
High fuel prices also have had a significant adverse impact on the costs of commuting and are not likely to decrease. Of the 702 Town employees, less than 20 percent live inside the Town limits.
It is probable that the costs of medical insurance premiums paid by employees would have adverse impact on employees’ pay if increases are not authorized. Some employees would actually earn a lesser salary if their salaries remained the same and their benefits costs were increased. For these reasons, we believe the Council will wish to consider approval of a pay increase for all eligible employees.
We believe that the Council should consider approving a range increase of 4 percent for the coming year, which would increase the salary of all eligible employees in these ranges by 4 percent. This would have a positive effect on employee pay at all levels. The pay survey findings indicate that 12 of the 21 Town jobs surveyed (57 percent) now have range midpoints which fall 5 percent or more below the market average in the region. If the organizations surveyed, with which the Town competes for employees, take action as usual in the first quarter of the upcoming budget year, the pay of Town employees will slip further below the pay of these competitors in the region.
Recognizing that the Council is facing a difficult budget year, we are suggesting the Council consider a 4 percent increase in the ranges for October 2007 rather than recommending a full 5 percent adjustment to close the gap,. This increase would keep the pay competitive with the market to a reasonable degree, and would minimize the negative impacts with which employees are faced. This pay increase would provide a positive framework for recruitment and retention of effective and productive Town employees, and send a message of appreciation for the efforts of the present employee group.
If these recommendations are approved, we believe the Town’s pay ranges and average employee pay will present a viable opportunity to job-seekers and enable the Town to maintain its workforce and meet citizens’ needs.
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12 month cost |
9 month cost |
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General Fund |
$1,034,596 |
$775,947 |
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Downtown |
$1,192 |
$894 |
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Transportation |
$320,108 |
$240,081 |
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Housing |
$33,153 |
24,865 |
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Parking |
$20,408 |
$15,306 |
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Stormwater |
$14,683 |
$11,013 |
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Fleet |
$18,609 |
$13,957 |
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Total |
$1,442,750 |
$1,082,062 |