HomeMy WebLinkAboutAgenda - 01-18-2000 - 9cOrange County
Board of Commissioners
Action Agenda Item Abstract
Meeting Date: January 18, 2000
Action Agenda
Item No.?
Subject: Solid Waste Employee Transfer Plan - Employee Pay and Benefits
Department: Personnel
Attachment(s):
1 - Solid Waste Agreement Employee
Provisions
2 - Working List of Benefits Covered
Information Contact:
Elaine Holmes, Personnel Director
Extension 2550
Telephone Number:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 227-2031
Purpose: To consider approving in concept the plan for managing employee pay
benefits with the transfer of Town of Chapel Hill Solid Waste employees to Ora g and
effective March 20, 2000. To meet the March 20 effective date, it is necessary tha a County
Board consider the transfer plan now so that work can be completed in time for t the
implementation. March 20
Background: In August the Orange County Board of Commissioners approved the
"Agreement for Solid Waste Management." Subsequently in September he Towns Chapel Hill and Carrboro approved the agreement. Under this agreement, Town C
of Chapel
Hill Solid Waste Department employees will become Orange County employees effective
March 20, 2000. There are 28 permanent Town of Chapel Hill Solid Waste em
about five temporary employees. ployees and
Interlocal Agreement Provisions
Attachment 1 contains the provisions from the Solid Waste Agreement covering
terms
the employee transfer from the Town to the County. In summary, this provides of
that:
? With the transfer to Orange County, each transferred employee's total compensation
(pay and benefits) will be maintained at a "substantially equivalent' levelt he total
compensation provided by the Town of Chapel Hill as of the transfer date, althou h the
combination of pay and benefits for any employee will change because of the g
differences in benefits provided by the Town and the County.
Public Hearing: Yes
Budget Amendment
Needed: Yes
No X
No X
? After the transfer, the employees will become Orange County employees and all
components of the employees' compensation will be subject to the same changes in
salary and benefits as other Orange County employees.
Overall Objective
2
While there are many similarities in the pay and benefits provided by the Town of Chapel
Hill and Orange County, there also are differences in the pay and benefits and the relative
level of employer contribution to these various benefits. The overall objective of the
"substantial equivalency" policy is to assure the Solid Waste employees are kept whole with
the transfer to Orange County. The plan described below reflects on-going discussions of
Town of Chapel Hill and Orange County staff.
Determination of "Substantially Equivalent" Compensation
To determine "substantially equivalent" pay and benefits, staff plans the following steps:
1. Benefits Comparison
Compare in detail the benefit provided and cost for each Town of Chapel Hill and
Orange County employee benefit. (Attachment 2 is the working list of the benefits
covered in this analysis.)
2. Benefits Calculation
a. Place a monetary value on each benefit provided by the Town and the County.
b. For each employee, calculate the total monetary value of the benefits provided by
the Town of Chapel Hill as compared to Orange County.
Example: Employee A. B. Jones, With 10 Years Town Service,
Employee Only Health Insurance Coverage and a Town Salary of $25,000
Benefit (See
Attachment 2) Town County
401(k) Plan Contribution $1,250 $390
Health Insurance $2,201 $2,399
Dental Insurance 0 $166
Longevity Pay $650 $375
Vacation Leave $1,923
(20 days) $2,076
(21.6 days)
ll Etc. $ $
Grand Total (for
Benefits Shown only) $6,024 $5,406
c. For employees for whom the value of the Town's benefits exceeds that for the
County's benefits, add to the employee's Town salary as of the transfer date the
dollar difference between the total monetary value of the Town and County benefits
3
` to maintain a "substantially equivalent" total compensation package. For employees
for whom the value of the County's benefits exceeds that for the Town's benefits,
make no adjustment in the Town salary.
3. Count Salary Determination
a. Complete a position classification study to determine the classification and salary
grade for each position in the Orange County Classification and Pay Plan
b. Take the salary derived in Item 2c above (that includes the dollar difference
necessary to provide substantial equivalency) and determine whether that salary
includes in dollar amount added to the Town's salary at least the dollar equivalent to
the difference between the Town's five percent 401(k) plan contribution and the
County's $15 per pay period contribution. If the salary does not provide this
additional amount, adjust it so that it does. (This is approximately a 3 - 4 percent
increase depending on the employee's salary level.)
c. Place the salary on step in the County's Salary Schedule for the classification
assigned the position in the Orange County Classification and Pay Plan.
Additional Information Notes
Supplemental _Retirement - 401(k) Plan
Under the Internal Revenue Service regulations and as advised by the State 401(k) plan
administrator, the County may not continue to make the five percent 401(k) contribution for
Solid Waste employees that the Town makes. This is because other County employees do
not receive this same contribution. The effect of the handling planned here is to "cash out"
the difference between the Town and County 401(k) plan contribution and include that
contribution in the employee's salary. An individual employee then may voluntarily decide
to contribute all or part of this salary amount to the 401(k) plan as an employee contribution.
Future Pay and Benefits, Including Post Retirement Benefits
The planned pay and benefits model does not attempt to project future pay or benefits in
either the Town or the County. It also does not factor in differences in pay programs such
as cost of living, merit or future pay advancement in the salary range. When the Town
employees become Orange County employees, their future pay and benefits will be the
same as those provided for other County employees.
General Valuation Issues
The method set out in this abstract to determine substantially equivalent pay and benefits is
objective and quantifiable. However, from any one employee's standpoint the mix of
benefits (even if the total value is identical) in one organization may be preferred over the
other organization's mix. This may mean that the individual employee may place a higher
personal value on one benefit than another. For example, one employee may value time
off more highly (advantage Orange County) and another employee may value more the
subsidy for dependent health insurance (advantage Chapel Hill). Thus, it is possible that ar
individual employee may not be satisfied with the pay and benefits handling even thou
is objective, quantifiable and provides a substantially equivalent result. gh it
Implementation
It also is planned to incorporate the following principles in implementation.
1. Service Credit
Transferred employees will receive credit for their service as a permanent employee wi
the Town of Chapel Hill in calculating their total Orange County service. In thiwith
County program that varies with service such as Longevity Pay or Vacation Leave will any way,
take account of the previous Chapel Hill service. For example, an employee with 10
years of Town service will be credited with 10 years of County service. Creditable
service in the North Carolina Local Government Employees' Retirement System also will
transfer.
2. Vacation and Sick Leave Transfer
Any accumulated, unused Vacation and Sick Leave balances as of the transfer date wi
transfer to the County. II
3. Benefit Make Up and Salary Range Maximum
If these Solid Waste employees approach the maximum salary of their assigned Count
salary range in the future, permit the salary to exceed the maximum of the salary ran e
to the extent this is necessary to keep the "benefit make-up" intact so long as that g
employee is an Orange County employee.
4. New Solid Waste Employees Hired March 20 and After
Any Solid Waste employees hired on or after the transfer effective date (March 20 will
be hired as Orange County employees with no adjustment for differences with Chapel
Hill.
Next Steps
With the Board's approval of the planned pay and benefits handling, staff will continue wi
the implementation process including: th
1. Completion of a position classification study to determine the classification of each
position in the Orange County Classification and Pay Plan.
2. Completing the detailed comparison, analysis and valuation of benefits.
3. Addressing other personnel policy questions and issues identified.
4. Developing the final implementation package and bringing it back to
review, most likely in February 2000.
the Board for final
5. Implementing an on-going communications program with the Solid
Waste employees to
brief them on the pay and benefits handling and discuss questions both
in individual employee meetings with worksheets showing the final pay and as a benefits and
information for each employee.
fits
Financial Impact: The cost of employee pay and benefits for the Solid
is funded from the Landfill Fund. Prior to implementation, staff will ident employees
Waste
associated with the transfer. To the extent there is any additional cost, it wiilll y costs
from the Landfill Fund. funded
be
Recommendation: The Manager recommends the Board approve in concept
managing employee pay and benefits with the transfer of Town of Cha el Hill the plan for
employees to Orange County effective March 20, 2000. p Solid Waste
6
Attachment 1
Provisions From the Solid Waste Agreement Covering the
Transfer of Town of Chapel Hill Solid Waste Employees to Orange County
1. The County will assume solid waste management responsibility as follows....
Take on employees All of the System employees will be transferred to the County
and become County employees subject to the supervision of the County Manager in the
same fashion as other County employees.
The parties acknowledge that it is an important objective of this agreement that the
current total compensation package for System employees be maintained at a
substantially equivalent level through their transfer to the County, although the
combination of salary and benefits for any employee may change. The parties
recognize that all components of compensation to System employees after the transfer
will be subject to changes in salaries and benefits in the same fashion as other County
employees. The County and Chapel Hill will develop a detailed scheduled comparing
the total pre-transfer and post-transfer compensation for each System employee.
Chapel Hill will send a copy of the completed schedule to Carrboro.
Exhibit A - Definitions
"System Employees" means employees of Chapel Hill directly engaged in carrying out
System business (but expressly not including employees of Chapel Hill's sanitation
department).
Attachment 2
Working List
Benefits Covered In Analysis
Benefit Provided By
A. Benefits Included In Monetary Valuation
1. Social Security Both
2. Retirement System Both
3. 401(k) Plan Contribution Both
4. Health Insurance Both
5. Dental Insurance Orange County
6. Life Insurance Both
7. Disability Insurance (Short and Long Term) Chapel Hill
8. Unemployment Insurance Both
9. Longevity Pay Both
10. Employee Assistance Program Both
11. Holidays Both
12. Holiday Pay Both
13. Vacation Leave Both
14. Sick Leave Both
15. Petty Leave Orange County
16. Funeral Leave Both
17. Personal Leave Orange County
18. Family Leave Orange County
19. Workers Compensation Both
20. Tuition Reimbursement Both
B. Benefits Not Included in Monetary Valuation
1. Pre-Tax Insurance Payments Both
2. Medical and Dependent Care Spending Accounts Both
3. Retiree Health Insurance Both
4. Option to Purchase Supplemental Life Insurance Both
5. Leave without pay Both
6. Credit Union Both
7. 457 Supplemental Retirement Program Both
8. Direct Deposit Both
9. Employee Discounts Both
10. Shared Leave Both