AGENDA #3b
TO: W. Calvin Horton, Town Manager
FROM: Patricia W. Thomas, Human Resources Director
SUBJECT: Information about Council Member and Town Salaries and Health Insurance Benefits
DATE: April 4, 2001
A Council member requested information on the amount of change in Town salaries since 1989, the year when the salaries of the Mayor and Council members last increased.* Council members also requested information about a standardized formula that could be used to adjust salaries annually in a manner similar to the increases of Town staff, and about Town health insurance benefits.
Changes in Town salaries:
I compared the hiring rates of 25 representative positions in 1989 to the current hiring rate and found that salaries had increased an average of 51.6%. The following jobs are illustrative of the changes in hiring rates in the 11 years since Council salaries were increased.
|
|
Hiring rate October 1, 1989 |
Hiring rate October 20, 2000 |
% increase |
|
|
|
|
|
|
Sanitation Collector |
$13,437 |
$21,952 |
63.37% |
|
Bus Driver |
15,555 |
24,202 |
55.59% |
|
Fire Equipment Operator |
20,846 |
30,888 |
48.17% |
|
Planner II |
22,982 |
32,433 |
41.12% |
Changes in the cost of living: I used the “inflation calculator” on the Bureau of Labor Statistics’ web page and found that:
$7500 in 1989 would be comparable in buying power to $10,633 in 2001, and
$12,500 in 1989 would be comparable in buying power to $17,722 in 2001.
Each reflects an increase in the cost of living of 42% in the 11 years.
There are several formulas which the Council could adopt, using either external or Town-related data:
Using external data: Indices such as changes in the U.S. Consumer Price Index (CPI) or the Employment Cost Index could be used as guides for annual increases in Council salary rates. Both of these are regularly published indices available from the US Bureau of Labor Statistics. The most recent reports show an annual increase of:
3.5% in the CPI and
4.1% in the Employment Cost Inde.
Using Town of Chapel Hill workforce data: Other formulas which the Council could consider would be to change Council salaries annually by one of the same percentages that Town employees’ salaries are projected to change that year. One of these formulas could be used:
- Pay range adjustment: This year the Manager may recommend that each of the rates in the salary schedule increase by 2.75%. This schedule adjustment is recommended to help maintain hiring rates and ranges that are competitive with the 75th percentile of the local market.
- Annual merit percentage: This year the Manager may recommend that employees whose salaries are above the Job Rate receive an average merit increase of 4.5%. This adjustment is recommended to provide career advancement and recognition for longer-term Town employees.
- Cost of increase as a percentage of payroll: If the recommended components of the Manager’s pay increase proposal are approved, payroll costs will increase by about 4.4% in FY 2001-2002.
Health insurance rates:
The health insurance rates for individual coverage for employees are as follows:
Regular full-time employee working 37.5-40 hours a week: Town pays 100% of individual coverage with monthly premiums ranging from $194 to $217 a month.
Regular part-time employee working 30 hours a week: Town pays 75% of individual premium; the monthly amount paid by the Town would range from $146 to $163, with the employee paying the remaining 25% of the premium.
Regular part-time employee working 20-29 hours a week: Town pays 50% of individual premium; the monthly amount paid by the Town would range from$97 to $108, with the employee paying the remaining 50% of the premium.
The Town also pays a portion of dependent coverage. The amounts paid by the Town for dependent coverage vary based on the hours worked by the employee, by the insurance carrier selected and by the type of coverage (options are: employee/spouse, parent/children, or full family coverage) selected by the employee.
ATTACHMENT
*Town Council member salaries increased from $4,000 to $7,500 and the Mayor’s salary from $8,000 to $12,500 in 1989.