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Mar 25

Manager's Message: Update on Budget Development and Compensation Study

Posted on March 25, 2015 at 1:25 PM by Mary Bunting

With the arrival of spring, we approach the release date for the Manager's recommended budget. This year's budget is much less painful than prior years, as those of you that attended my budget workshops have learned. For those of you who were not able to attend, I am attaching a link (http://youtu.be/eSu-Bg62wp4) to a full video presentation that summarizes why our budget is improving and why I expect the positive trend to continue in future years. It is a very detailed briefing, but it provides information on all our major revenues and expenses.


As I have been communicating all along, employee salary increases are our highest priority for the Fiscal Year 2016 (FY16) budget. I gave one explicit instruction to the budget development team: give me a balanced budget that provides salary increases for all employees. We are in the final stages of balancing the budget, so I cannot yet announce the final details, but I am pleased to report that my recommended budget will honor this commitment.


Today, Nicole Clark - our Human Resources Director - will give Council an update on our compensation study and our general approach to compensation this year and moving forward. Here is a summary of what she, and I, will say:

  • Our highest compensation priority is an across the board salary increase for all employees. This includes full-time, part-time and WAE employees. This will be done in the first paycheck of our next fiscal year which begins in July. This had to be the highest priority and first step of our implementation, because we know that pay scale adjustments that come out of the compensation study will not impact all employees. We do have some jobs that are paid better than the market average, and typically these positions do not receive adjustments. That said, because we were not able to give consistent raises over the years of the recession, even those who are paid above the market need and deserve a pay raise. I will be able to announce the size of the across the board increase on April 8th. (As I stated above, we are in the final stages of balancing the budget and it would not be prudent to announce until that process is completed.)
  • Our compensation study - being conducted by an independent, 3rd party (Management Advisory Group - MAG) - will not be completed and released until the fall, but we are nevertheless planning for implementation.
  • Our second compensation adjustment will be the pay scale changes that result from the compensation study we will get in the fall. When pay scales are changed, employees who are below the new minimum receive increases to adjust their pay to that new level. We will target these adjustments for January 2016, as it will take time to implement all proposed changes in our information technology systems once the report is received. 
  • Our third compensation adjustment will be compression adjustments, which we have asked our consultant to help us address. We are targeting these adjustments for July, 2016. We need to do compression adjustments after pay scale adjustments. When employees who are below revised minimums are brought to the new level, it will compress - or "bunch" - salaries of less experienced employees against those who are more senior. We already have compression, because of the lack of consistent salary increases during the recession, but we must implement new pay scales first so we are able to address compression correctly. If we did compression adjustments first, and then adjusted pay scales, we would undo what we just fixed, so this implementation order is essential. 

We will also plan for general wage increases in July, 2016 as well. Both the Council and I are committed to returning to consistent, sustainable wage increases and that will continue to be our highest budget priority as we exit the recession and return to more sustainable revenue growth. While we do not know exactly how much revenue will be available in future years, we know all of our revenues are moving in the right direction. Again, I encourage you to tune into the attached video to have a better understanding of these trends.

I hope this interim update is helpful to you. Please feel free to email me if you have questions. I look forward to announcing the details of our proposal to you on April 8th. As I have stated on many occasions - both to you and to the larger community - our employees are what make our community special. With improved fiscal conditions, we will be able to demonstrate our appreciation in more tangible changes to paychecks. Thank you for sticking with us during the difficult times all cities faced. The recession's impact on you, as well as your dedication and commitment in spite of it, are understood and much appreciated! 


Mary

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