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ARF- 3778

Regular Agenda Item 4. D.

Regular BOS Meeting

Meeting Date:	06/07/2016
Submitted By:	Don McDaniel Jr., County Manager
Department:	County Manager
Fiscal Year:	FY16	Budgeted?:	Yes
Contract Dates Begin & End:	07/01/16 to 06/30/17	Grant?:	No
Matching Requirement?:	No	Fund?:	Renewal

Information

Request/Subject

Annual Compensation Plan and Employee Pay Consumer Price Index Adjustment

Background Information

In November of 2012, the Board of Supervisors approved a lump sum payment to employees based upon the increase in the Consumer Price Index (CPI). The 1.7% payment was the first pay increase employees had received since January 2008. In July of 2013, the Board approved a performance based lump sum payment to employees ranging from 1.5% to 3.5% based upon the individual's performance. In December of 2013, the Board approved a lump sum payment to employees based upon the 1.8% increase in the CPI. In June of 2014, the Board approved a performance based lump sum payment to employees ranging from 1.5% to 3.5% based upon the individual's performance. Lump sum increases were provided to employees rather than increases to their rate of pay because the County was undergoing a complete Classification and Compensation Study to provide internal equity and external parity in employees' pay.

In July of 2014, the Class and Comp Study was implemented and all but a few recent hires were given salary increases. The cost to the County was approximately $1.3M.

In July of 2015, the Board of Supervisors approved a 1.8% adjustment to the Compensation Plan and provided a 1.8% pay increase to all employees based upon the change in the Consumer Price Index.

In January of 2016, the Board of Supervisors approved Performance Pay increases for all eligible employees ranging from 1% to 3% based upon their Performance Appraisal scores.

Evaluation

It is important to keep the Compensation Plan which was adopted in July of 2014, up to date. The primary way to keep the plan current is to adjust the plan annually based upon the change in the CPI. The Compensation Plan was adjusted by the Board of Supervisors in June of 2015.

The Index for the Unadjusted 12 Months Ended March 31, 2016 shows an increase of 2.0% for all items less energy. The entire Compensation Plan without regard for the employees within the Plan should be adjusted upwards by 2.0% so that the minimum and maximum would increase in each grade. This will prevent the Class & Comp Plan from being out of date and irrelevant in 3 to 5 years. Also to keep the Plan current, as jobs change and the market changes, the Human Resources Department will consider job reclassifications as appropriate.

In addition to the annual Plan adjustment, employees should also be considered for commensurate increases in their pay. A 2.0% increase is proposed for all employees hired and on the payroll on June 27, 2016, which is the beginning of the first pay period in FY17. Employees would see the increase in their checks of July 15, 2016.

This increase is estimated to cost the County approximately $575,000, and sufficient funds have been budgeted in the Tentative FY17 Budget. The Tentative Budget will be considered for adoption by the Board at the Regular Meeting of June 21, 2016.

Conclusion

Adjusting the Classification and Compensation Plan annually by an amount equal to the change in the Consumer Price Index is critically important to keeping the Plan current and relevant. Many plans become outdated and irrelevant within a few years of adoption because they are not maintained. The cost to the County to have the Study done and to implement the Plan would soon be lost if we don't maintain it properly.

According to the Bureau of Labor Statistics, the cost of living has increased year over year, March 2015 to March 2016. Employees' pay should keep pace with this increase. The 2.0% increase for employees is the right thing to do and it appears that sufficient funds are available for the Board of Supervisors to provide the raise.

Recommendation

The Administrative Team recommends that the Board of Supervisors implement the annual adjustment to the Compensation Plan based upon the annual increase in the Consumer Price Index (March 2015 to March 2016) equal to 2.0%; and further, adjust all employee salaries by 2.0% effective June 27, 2016.

Suggested Motion

Information/Discussion/Action to approve Attachment A to this agenda item, which is the annual adjustment to the Compensation Plan based upon the annual increase in the Consumer Price Index equal to 2.0% and adjust all employees' salaries by 2.0% effective June 27, 2016. (Don McDaniel)

Attachments
Attachment A-2016 Salary Structure
Attachment B-2015 Salary Structure