HomeMy WebLinkAbout17 - Resolution Adopting FY 2013-14 Budget Presentation 2Agenda Item No. 17
June 11. 2013
The Facts
The FLA report did NOT recommend raises.
"The study recommended a 22 percent increase in City
Manager Dave Kiffs yearly compensation package." That's
just false.
No one got a raise as a result of the FLA report.
Under PERS rules, every position must have an
established salary range.
Budget item asks for $35K in funds for one -time bonuses
These do not count towards retirement
If spread among executive staff, could be $3K/each
City Manager today & City Manager yesterday
Previous v. Current CM
in current dollars
Compensation Info -
Current Dollars
Previous CM
Current CM
Salary
$ 247,291
$
231,750
Pension Contribution
(81457)
$
(20,858)
Net Salary
$ 238,834
$
210,893
Difference
$
(27,941)
in current dollars
Why set Ranges?
► Ranges are commonplace across the private and public
sectors.
► They:
Limit or avoid pension spiking by prohibiting outlier salaries
( "one- offs ").
Alignment — similar jobs get similar pay
Inside the Org — department to department, function to function
Outside the Org — city to city
Set up progression steps within career paths and incentives to
retain qualified personnel.
Give certainty and equity to an organization's pay structure.
Should be reviewed and updated regularly.
►
How to Set Ranges
► Select agencies /cities to compare.
► Seek common job classifications
Different duties - Public Works Director
► Aggregate the salaries — statistically show:
What's the 50th Percentile? - vs
What's the 60th Percentile?
► Council picked the 50th Percentile
► Pick a distance within the ranges.
Comparison Agencies
---------------------------------- - - - - --
Anaheim
Carlsbad
Costa Mesa
Fullerton
► Huntington Beach
Irvine
Long Beach
► Oceanside
► Orange
Santa Ana
Torrance
OC Sheriff /OCFA
(all larger in size than NB)
50th Percentile v. Median v.60th
Position
Salary
Low
High
City A, Position A
$ 1501000
City B, Position A
$ 1251000
$ 125,000
City C, Position A
$ 1701000
City D, Position A
$ 1721500
City E, Position A
$ 1371000
City F, Position A
$ 1421250
City G, Position A
$ 180,000
$ 180,000
City H, Position A
$ 1761000
City I, Position A
$ 145,000
City J, Position A
$ 152,000
50th Percentile= 1511000
Median = $ 1541975
60th Percentile= $ 159F200
Distance Within Ranges
City of NB previous to FLA = generally, about 22%
between the low and the high within the range.
Limiting on the low side and high side
Limits opportunities for advancement across a career
Best practice = 50% (25% on each side)
* FLA recommended and Council chose 50% between low
and high (25% on each side of the 50th Percentile)
Extent of Range
Lowy
50th Percentile
High
Range of 25% each side
' ' x'250
' x' :000
y 1 , 8,750
From the FLA Study
--------------------------------------- - - - - -- ------------------------------------ - - - - --
$300,000
$250,000
$200,000
$150,000
$50,000
City of Newport Beach, CA
Executive and Administrative Staff - Market 50th Salary Structure
D E F
DBM Value
0 Newport Salary
— Linear (Newport Salary)
1 Current Ranges
Important FYI about FLA
FLA comparisons set on SALARY plus a geographic labor
factor — but ...
But NOT Total Compensation, which includes
Pension pickup by employees
Level of health benefit
Why is this a concern?
Employees in Newport Beach tend to:
Pay more for pension costs (8% - 12.35% of pay) than employees in
other agencies (can be a 4 -8% differential)
Receive slightly lower health benefits
Be further behind comp cities than is visible if just salary is compared
Once Ranges are Set, then what?
Council can hire within the range
City Manager, City Attorney, City Clerk
City Manager can hire within the range
Other executive positions (Fire Chief, Police Chief, Finance
Director, more)
All assuming budget is available
City becomes compliant with PERS rules
Does not mean people will get raises, go to top of range,
etc.
U
Again
The Register editorial was wrong.
Ranges are not raises
The FLA study did not recommend the CM get a 22% raise. It made
no salary recommendation.
r Setting ranges = required by PERS rules
Every PERS member city either has ranges, is working on ranges, or
is out of compliance
Setting ranges = good personnel practice
Setting ranges raises
Setting ranges everyone goes right to the top of their range
How nonsensical would that be?
$35K total across several positions for one -time bonuses