HomeMy WebLinkAboutAgenda - 05-09-2000-3ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 9, 2000
Action Agenda
Item No.
SUBJECT: Employee Compensation for Fiscal Year 2000-01
DEPARTMENT: Personnel PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
1-Approved Pay and Benefits Plan
2-Cost of Living Information
3-1999-00 Approved Pay Plans and
INFORMATION CONTACT:
Elaine Holmes, Personnel Director,
Extension 2550
Proposed 2000-01 Pay Plans TELEPHONE NUMBERS:
4- Meritorious Service Awards Hillsborough 732-8181
5- Estimated Expenditure Changes Chapel HIII 968-4501
for 2000-01 Durham 688-7331
Mebane (336) 227-2031
PURPOSE: To receive information on employee compensation for 2000-01 and to provide
guidance, as desired, to the Manager on two pay elements (recommended Cost of Living
Increase and In-Range Increase amounts) in developing the Manager's Recommended Budget.
BACKGROUND: During 1998-99, the Board of Commissioners completed a comprehensive
review of the employee pay and benefits plan. After consideration and discussion, the Board
reached consensus on the elements of the employee pay and benefits plan. The Board also
decided that this plan would be in effect for two years to provide for more continuity in the pay
plan and reduce the need to revisit the pay plan each year. The current fiscal year (1999-00) is
the first year of the two-year plan and the upcoming fiscal year (2000-01) is the second year of
the plan.
Attachment 1 lists the elements of the Board approved pay and benefits plan. Based on the
Board's adopted plan, there are two pay plan decisions to be made for 2000-01. These are:
- The amount of the Cast of Living Increase and
- The amount of the In-Range Salary progression.
In_the Manager's Recommended Budget, the County Manager will be recommending Cost of
Living and In-Range Salary progression amounts for 2000-01. The purpose of the May 9 work
session discussion is to provide an opportunity for the Board to receive information about the
pay plan, to ask questions, to identify any additional information needed and, to extent
Commissioners desire, to provide guidance to the Manager on the Cost of Living Increase and
In-Range progression for 2000-01.
2
As background information to the Board's discussion, the following information is provided.
Cost of Living Increase
Subject to final review of the budget, the Manager plans to recommend a 3.0 percent Cost of
Living Increase. This recommendation is based on both cost of living and market factors.
- As to cost of living:
• Thus past calendar year has seen a higher rate of increase in the cost of living as
reflected in the consumer price index than the past two years. For calendar year 1999,
the cast of living increased. at a seasonally adjusted annualized rate of 2.7 percent. This
increase has continued into 2000 with a rate of 3.7 percent for the 12 months ending
March 2000.
• Based an the first three months of 2000, the. U.S. Department of Labor's Bureau of Labor
Statistics reports the consumer price index is increasing at a seasonally adjusted
annualized rate of 5.8 percent. Rising costs for energy (including gasoline), food,
housing, as well as costs in most other expenditure categories account for the increase.
Housing also has been impacted by the increasing home mortgage cost. .
• Attachment 2 shows Orange County Cost of Living Increases over the past 10 years
along with increases in the cost of living as reflected in the consumer price index. Given
the continuing pace of inflation and the unlikelihood of being able to offset the full impact
of a significant increase such as 5.8 percent in a single year, the three percent is
recommended to keep County salaries on track with the cost of living.
- As to market:
• The area labor market continues to be characterized by the lowest unemployment in
,decades. As of February 1995, grange County unemployment was 1.3 percent as
compared to 2.4 percent in February 1995. In the Raleigh/Durham/Chapel Hill MSA
unemployment in February 2000' stood at 1.8 percent compared to 3.1 percent in
February 1995..
• Recruitment continues to be difficult in more technical and specialized areas and far
certain business and administrative positions. Examples of such positions include Public
Health Nurses, Emergency Management Technician -Paramedics, Telecommunicators,
,CPS Social Workers, Computer/PC support positions, Planners, Budget Analysts and
cerkain Administrative Assistants. To fill positions, more salary offers must be made at
salaries above Step 1 of the County's salary range.
• The charts below show the percentage adjustments to salary structures of area local
government pay plans for 1998-99 and 1999-00. This indicates the continuing need for
Orange County to maintain its salary structure in relation to the area market.
].99$-99
5.0°!°
4.5%
A.0%
3.5
3.0
2.5
2.0°h
1.5 %
1.0 %
D.5°!
0.0%
Pd ` Lp O° O i 4+ O ~
4.5 %
4.0
3.5%
3.0%
2.5
2.0 %
1.5%
1.0 %
0.5 %
0.0
G°~ ~ G+fl ~~~ yam ~p1~ G°~ G°~ CP~ ~~° G°~
4 p~'
• Attachment 3 shows in detail the approved pay plans for area employers for fiscal year
1999-00 and information currently available as to recommended pay plans for 2000-01.
In Range Salary progression
The Board may recall that far 1999-00 it decided to increase the amount by which an employee
could progress in the salary range from a quarter step (about 1.25 percent) to a half step (about
2.5 percent). We are pleased to report to the Board that this decision has been successful in
positively addressing the Board's goal of providing for employee advancement in the salary
range in relation to new hires and in relation to the labor market as the employee gains
additional experience and proficiency. The Manager plans to recommend the Board continue
the In-Range Salary progression amount as a half step (about 2.5 percent) in support of these
goals.
Meritorious Service Awards and Equity/Retention Fund
Experience to date indicates the Meritorious Service Awards are achieving the Board's
objective of focusing on the highest levels of performance and accomplishment. Attachment 4
provides data on the eight months to date. Given that the number of awards granted have been
below the numbers that had been projected and budgeted, the recommended budget amount
for 2000-01 has been reduced to reflect the awards experience to date.
As with Meritorious Service Awards, the Equity/Retention program is serving the objectives for
which it was approved of addressing equitable salary relationships. Attachment 4 provides data
on the eight months to date.
When the Board considers the pay plan to be in effect after the two year period, staff will have
more experience to report on and will provide more comprehensive information on the impact of
this and the other pay and benefits plan elements.
FINANCIAL IMPACT: Attachment 5 shows the new County cost.associated with the
recommended Cost of Living, In-Range salary progression and Meritorious Service Awards.
RECOMMENDATION(S): The Manager recommends that the Board receive the information
and provide guidance as desired on the Cost of Living and In-Range elements of the pay plan
for 2000-01.
1999-00
4
Attachment 1
Approved Pay and Benefits Plan Elements
For 1999-00 and 2000-01
1. Cost of Living Increase and In-Range Salary Progression
The Board determines each year the total amount of cost of living and in-range increase to
be awarded based on cost of living and market factors. The Board designates:
- A portion of this to be applied as salary structure adjustment (as COLAs have been
applied in the past) applicable to all employees.
- A portion of it to be applied as In-Range Salary Increase to move the salaries of
employees whose work performance is proficient or higher to higher salaries in the salary
range.
To address the need for salary progression, the Board approved a half step (about 2.5
percent) as the amount of the, In-Range Salary Increase for 1999-00.
2. Meritorious Service Awards
The Board provided for Meritorious Service Awards. These are one-time lump sum awards
that do not become a part of annual salary. The Board provided for two tiers of awards:
Exceptional - $1,500 and Superior - $750.
3. 401(k) Plan Contribution
The Board decided to implement a $15 per pay period County 401(k) plan contribution for
permanent employees effective July 1, 1999. The Board's final consensus was that this
contribution would be on an across the board basis.
4. Personal Leave Days
The Board decided to grant each permanent employee two personal leave days to be used
as determined by the employee with the department head's approval. '
5. Equity/Retention Fund
The Board decided to establish an Equity/Retention Fund to address establishing or re-
establishing equitable salary relationships among employees in a work unit, including any
inequities results from past salary increase limits on promotions and to support retention.
Attachment 2
Cost of Living Increase
1, Orange County Cost of Living Increases
As Compared to Increases in the Consumer Price Index
Fiscal
Year Cost of Living
Increase Consumer Price Index
(CPI) Increase CPI For Calendar
Year
2000-01 3.0%* 2.7%
(5.$%) 1999
(Projected for 2000)
1999-00 2.0% 1.6% 1998.
1998-99 2.5% 1.7% 1997
1997-98 2.5°/a 3.3% 1996
1996-97 2.5% 2.5% 1995
1995-96 2.4% 2.7% 1994
1994-95 2.25% 2.7% 1993
1993-94 2% 2.9% 1992
1992-93 2% 3.1 % 1991
1991-92 0% 6.1 % 1990
1990-91 4% 4.C% 19$9
* Proposed
2. Additional Consumer Price Index Information
The above chart shows changes in the national consumer price index as reported by the
U.S. Department of Labor's Bureau of Labor Statistics. It covers items such as food,
housing, apparel, transportation, medical care, education, energy, and other goods and
services. Far the 12 months ended March 2000, the Consumer Price Index increased 3.7
percent. Based on the January through March 2000, the Bureau of Labor Statistics reports
that the consumer price index is increasing at a seasonally adjusted annualized rate of 5.$
percent. Most major expenditure groups have contributed to the rise in the cost of living.
For example,
Category 1999 Increase Annualized Rate Based on
Jan -March 2000
Food and Beverage 2.0% 1.9%
Energy 13.9% 50.5%
Housing 2.2% 4.9%
Transportation 5.4% 16.9%
Medical Care 3.7% 4.8%
Other Goods and Services 5.1 % 8.0%
Attachment 3 .
Approved 1999-00 Pay Plans of Area Employers
COLA/Market
Em to er Ad'ustxnents Performance-Related Additional Notes
Alamance 2.5 % for all About 30 % of employees receive 2.5 %
County employees merit increase based on department's
7-1-99 determination of high performance.
Carrboro 2.0 % for all 3.5 % if below midpoint, meets
employees standards in all functions and exceeds
7-1-99 in 25 %.
2.5 % if above midpoint, meet
standards in all functions and exceeds
in SO%.
Cary 3.0 % adjustment Depending on location of salary in Salary increase may be granted
to salary ranges salary range and performance rating in combination of base salary &
7-1-99 of: lump sum depending on place in
Standard - 0-4°lo salary range.
Proficient - 0-7 %
Exemplary - 0-10% Salary increases budgeted at
5.0 % of payroll. Lump sum
In addition, for special significant payments budgeted at 1.25 % of
contributions, there is a lump sum payroll.
award.
Also implementing classification
and pay study results budgeted
at 2 % of a roll.
Chapel 3.0% adjustment 4.75 % average merit increase. 1 % lump sum bonus if rated as
Hill to all salary "outstanding".
ranges
11-1-99
Chatham 2.5 % for all 2.5 % merit increase if below Received an additional 1 %
County employees maximum of salary range and 401(k) for a total of 3%.
7-1-99 performance rated as "Standard" or
"Above Standard."
Durham 2 % for all If good or outstanding - 5 % Raising salary range minimum
City employees If satisfactory and below midpoint- 5 % 9 % and max 2 % . If below
7-3-99 min.-will be raised to new min.
Durham None From Steps A - C, if "meets Received lump sum of money to
County expectations" or higher, 5%. address internal inequities.
From Steps C1 - J1, if "meets
expectations" or higher, 2.5%. All salary ranges were extended
by an additional S%.
OWASA None-- All 4.75 % average merit increase. Performance awards eligibility
awards are and amounts are on the
performance discretion of the Executive
based Director.
COLA/Market
Em to er Ad'ustments Performance-Related Additional Notes
Person 3 % for all No performance .evaluation system, na
County employees merit increases or lump Burn awards.
7-1-99
Raleigh 5 °7o for all In addition to 5 % : Awards of $250 given to all
employees If in lower range: employees in Feb. 2000.
7-3-99 Standard 2.5%, Above Standard,
3.75 %; Outstanding 5
If in upper range:
Standard 0%, Above Standard, 1.25%,
Outstanding 2.5
State of Effective 7/1/99:
NC
1) State employees - 3 % across the
board increase (2 % career growth, 1 %
COLA) and .5 % bonus.
2) State Paid School Teachers -
Average of 7.5 % increase.
Wake 2.8 % adjustment Option A -Dept may set performance County budgets at average of
County to band structure ratings and associated increase 4% for each employee. Funds
effective 3/16/00 amounts with funds available. are allocated among depts.
20 % of dept's allocation is for
Option B -Dept may opt not to use top performers with "exceeds"
performance ratings, but rank expectation rating;
employees in order of top performers. 75 % of dept's allocation is for
Top 25 % of employees are considered performers with "meets"
top performers. Dept has discretion on expectation rating.
whether to award the bottom 5 % of 5 % of department's allocation
employees. based on 4% is not budgeted
with the assumption that 5 % of
employees will receive "below"
expectation rating.
Orange 2.0 % far all 2.5 % In-Range Increase if Meritorious Service Award
County employees performance is "Proficient" or higher If superior, $750 and if
effective 7-1-99 ~ exceptional, $1500 as lump
sum., Began $15 per pay period
401(k) contribution
k:\comp\paysv-99.doc
4!26!00
Proposed 200001 Pay Plans of Area Employers
COLA/Market
Em to er A 'ustrnents Performance-Related Additional Notes
Alamance Proposing 1.0% Proposing a performance based system
County, for all employees where employees will be evaluated
7~1-00 (and potentially receive salary
increases) two times a year. If this is
approved, COLA will be built into this
system and will no longer be proposed
separately in the future.
Carrboro Proposing 2, 5 % Proposes 2.5 % if below midpoint,
far all employees meets standards in all .functions.
7-1-00 Proposes S.0% if below midpoint, -
meets standards in all functions and
exceeds in 25%.
Proposes 2. S % if above midpoint,
meets standards in all functions and
exceeds in 25 % .
Proposes 5.0 % if above midpoint,
meet standards in all functions and
exceeds in SO%.
Cary Proposing 3.0 % Proposing that depending. on location Salary increases budgeted at.
adjustment to of salary in salary range and 5.0% of payrall. Lump sum
salary ranges performance rating of: payments budgeted at 1.25 % of
7-1-00 Standard = 0-4% payroll.
Proficient - 0-7 %
Exemplary - 0-10% Salary increase may be granted
in combination of base salary &
In addition, for special significant lump sum depending on place in
contributions, there is a lump sum salary range.
award.
In addition to merit increases,
proposing new employees move
out of the developnnental stage
more quickly by having the
opportunity to receive up to
5.0 % increase every 6 months
(with an "acceptable"
performance rating) until they
reach market segment of range.
Proposing that funds for this be
budgeted at 3.S% of payrall.
Proposes classification arid pay
study results be budgeted at
6.0 % of payrall.
Chapel, Not Available Not Available
Hill
COLA/Market
Em to er A 'ustments Performance-Related Additional Notes
Chatham Proposing 3 . D % Proposing 2.5 % merit increase if Proposes an additional 1 %
Counry .far all emplayees below maximum of salary range and 401(k) for a total of 4%.
7-1-00 performance rated as "Standard" or
"Above Standard."
Durham Nat Available Not Available
Ci
Durham Not Available Proposing that:
County From Steps A -- C, if "meets
expectations" or higher, 5%.
From Steps C1 - J1, if "meets
expectations" or higher, 2.5 %.
OWASA None planned - Not Available Performance awards eligibility .
all awards are and amounts are based on the
performance discretion of the Executive
based Director.
Person Not Available No performance evaluation system, no
Caun merit increases or lum sum awards.
Raleigh Not Available Proposing that: Awards of $250 given to all
If in lower range: employees in Feb. 2000. It is
Standard 2.5%, Above Standard, unknown if awards will be given
3.75 %; Outstanding 5 % in Feb. 2001.
If in upper range:
Standard 0%, Above Standard, 1.25%,
Outstanding 2.5 %
State of Proposing that: The effective date of the
NC increase may not be 7/ 1 /00, but
1) State employees - 3% across the may be 10/1/00.
board increase (2 % career growth, 1 %
COLA) and .5 % bonus.
2) State Paid School Teachers -
Average of 7.5 % increase.
Wake Not Available Not Available
Coun
Orange Proposing 3.0 % Proposing 2.5 % In-Range Increase if Meritorious Service Award
County far all employees performance is proficient or higher. If superior, $750 and if
effective 7-1-00 exceptional, $1500 as lump
sum.
k:\comp\paysv-0O.doc
5/3/00
~o
Attachment 4
Meritorious Service Awards
Based on the approximately eight months experience to date, the Meritorious Service Awards
are meeting th'e Board's goal of focusing on the highest levels of performance and
accomplishment.
In budgeting for the awards in 1999-00, it had been projected that approximately 25 percent of
employees would receive an award. This included five to seven percent of employees receiving
the exceptional award. The chart below shows the awards granted through April 24, 2000. In
numbers these are significantly below the numbers that had been projected and budgeted..
Meritorious Service Awards Granted
July 1, 1999 through April 26, 2000
Award Type Number Granted
Superior - $750 44
Exceptional - $1,500 14
Total 58
Total Number Permanent
Employees As of April 24 661
Equity/Retention Fund
As with Meritorious Service Awards, this program is serving the objectives for which it was
approved: To implement the Equity/Retention program, Personnel staff contacted each
department head and met individually with those who thought they had situations needing to be
addressed through the Equity/Retention Fund. Personnel staff then analyzed the specific
salary situations identified. In the approximately eight months to date, 22 salary adjustments
have been granted under this program to address equitable salary relationships.
Attachment 5
Estimated Expenditure Changes
For COLA, In-Range and Meritorious Service Awards
zooo-o~
Projected
Element Expenditure
Changes
Cost of Living Increase (Manager recommends
3.0% salary increase effective July 1, 2000. $ 745,194
Approved COLA for 1999-00 was 2%.)
In-Range Salary Increase (Manager recommends
2.5% for proficient ar higher work performance
effective with pertormance review. This is the same 278,975
amount as 1999-00.)
Meritorious Service Awards (Exceptional, $1,500
and Proficient with Superior Accomplishment, $750, (26,630)
with Manager's Advance Approval)''*
Total $ 997,539
"`Costs include salary and benefits (retirement, social security)
'`* Projected budget reduction reflects reduced award
level from original budget of $159,779 for 1999-00
H:\e\paybenco\00 PAY~ST 1. xls5/2/2D00