AGENDA# 1a(2)

 

BUDGET WORKING PAPER

 

 

TO:                  W. Calvin Horton, Town Manager 

 

FROM:            Patricia W. Thomas, Personnel Director

 

SUBJECT:       Cost Elements of  Recommended Pay Adjustments

 

DATE:             May 17, 2000

 

 

Cost elements of the recommendations for October 1, 2000 implementation are :

 

 

 

 

 

 

Total  cost  

October 1

 

 

Adjust up to new minimum or new probationary step

Up to next nearest step (includes flat dollar payment to assure a 4.5% minimum increase is paid)

 

 

1 additional step to relieve compression

 

 

4.5% average merit increase above Job Rate

 

 

 

Employees below Job Rate:

 

Above Job Rate

 

General

$789,000

$118,000

$372,000

$182,000

$117,500

 

Transportation

$242,000

$61,200

$92,800

$ 68,000

$20,000

 

Housing

 $42,000

$13,200

$18,800

$ 3,000

$7,000

 

Parking

 $15,000

$7,500

$6,000

$ 1,500

  0

 

Total:

$1,088,000

$199,900

$489,600

$254,700

$144,500

 

Percentage

 

18%

45%

23%

14%

 

 

 

The average employee increase to implement the plan is approximately 5.6% in the General Fund.  Because positions in the other funds are more significantly behind the labor market, the average increase Town-wide is approximately 6.5%.

 

I believe it is important to note, however, that about 23% of the recommended increase, or about 1.5% of the 6.5%, is for relief of compression  in the pay structure.  Reduction of compression has been an important issue for the Council and employees. *

 

About another 15% of the total, or 1% of the 6.5%, is to bring employee pay rates up to a pay rate more competitive in the local labor market.  This, too, is an important objective addressed by the Council.  If we are to be able to attract and retain top quality employees, I believe we need to pay wages at least near the top quartile --  75th percentile -- of the local market.

 

So, addressing compression and aiming for the 75th percentile of the labor market comprises a significant part of the cost of our recommendations for pay increases this year –  approximately 2.5% of the 6.5% average employee increase.  The remainder of the  cost for  increases are attributable to the cost of  step / career advancement increases for employees in the Developmental Range and merit pay increases for employees in the Performance Range. 

 

 

 


*   Further reduction of compression by providing an additional step for employees with 5  or more years of service would have cost another $600,000 and was not recommended  for the Council’s consideration this year.