SUBJECT: SEE BELOW DATE: January 20, 2016 SUPPLEMENTAL
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1 COUNCIL AGENDA: 1/26/2016 ITEM: 3 ^ SAN CITY OF fit: JOSE ^Sk CAPITAL OF SILICON VALLEY Memorandum TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Jennifer Schembri SUBJECT: SEE BELOW : January 20, 2016 Approved"^. / Date //2C)//fe SUPPLEMENTAL SUBJECT: INFORMATION REQUESTED BY THE CITY COUNCIL REGARDING CITY WORKFORCE PAY S SINCE REASON FOR SUPPLEMENTAL This supplemental memorandum is intended to provide information regarding the extent of City workforce pay increases since , per the direction of the City Council as part of Item 3.3 on the December 8, 2015 San Jose City Council Agenda. BACKGROUND At the November 18, 2015, Rules Committee meeting, the City Manager was directed to provide information regarding the status of the City's efforts to restore pay and any other compensation increases given to the entire City workforce since , including general wage increases, step increases, and management pay for performance increases, prior to making any decisions to restore Council pay. This memo contains background information regarding the history of citywide compensation reductions beginning in 2010 and information regarding employee salary increases. In November 2010, the City Council in open session approved a Fiscal Year goal of reducing the total ongoing employee compensation for all City employees by ten percent (10%) and rolling back any general wage increases received in Fiscal Year This ten percent (10%) reduction in personnel costs was realized on June 26, 2011 for ten (10) of the City's eleven (11) bargaining units, as well as Executive Management (Unit 99) staff, and on September 18, 2011 for the remaining bargaining unit. In addition, on June 7, 2011, the City Council in open session approved the recommendation of the Council Salary Setting
2 January 20, 2016 Page 2 of 5 Commission Report, dated April 26, 2011, which, in part, was to reduce the salaries of the Mayor and each Councilmember by approximately ten percent (10%). The Salary Setting Commission's Report, dated April 22, 2015, recommends to the City Council a 9.6% salary increase for the Mayor, and 13.6% salary increase for the Council. The City Council has not received a salary increase since approving the Salary Setting Commission's 2011 recommendation to approve the ten percent (10%) decrease for Councilmembers. ANALYSIS Average City Workforce Pay Increases Following the pay reductions for City staff, which were folly realized by September 18, 2011, there have been various pay increases for employees represented by the City's eleven (11) bargaining units, as well as employees in Unit 99. These pay increases have come from negotiated general wage increases, salary step advancements, and performance based compensation increases as a result of the Management Performance Program (MPP). For the purpose of tracking City workforce pay increases since , all data related to employees receiving step and/or performance based compensation increases has been limited to employees who have been employed by the City from September 18, 2011 through December 15, In some cases, employees may have transferred between bargaining units during this time. In circumstances such as these, any step or performance based compensation increases as a result of the MPP have been counted toward the bargaining unit that represented the employee at the time they received the step or MPP increase. It is also important to note that data contained in this memorandum does not include salary increases due to employee promotions, or adjustments made to the City's Pay Plan in response to recruitment and retention issues, such as modifications to the Electrician class series, Building Inspector class series, and the Planner class series, among others. General Wage Increases (GWI) Following the ten percent (10%) reduction in personnel costs, the MOAs reached with the City's bargaining units, as well as the Compensation Summary for employees within Unit 99, have contained the following GWI:
3 January 20,2016 Page 3 of 5 Employee Unit Ongoing GWI FYE FYE 2016 Effective June 19, 2016 Effective First Pay Period FY OE#3 8.00% 3.00% 3.00% IAFF 8.00% 3.00% 3.00% ABMEI 8.00% 3.00% 3.00% IBEW 8.00% 3.00% j AMSP 8.00% 3.00% 3.00% AEA 8.00% 3.00% 3.00% CAMP 8.00% 3.00% 3.00% POA 10.66% 4.00% 2.3 MEF 8.00% 3.00% 3.00% CEO 8.00% 3.00%.4 Unit % 3.00% 3.00% ALP 8.00% 3.00% _5 Average 8.22% 3.08% 3.00% A comprehensive listing of all GWI from Fiscal Year through all current MO As can be found in Attachment A. Step Increases Employees in classifications represented by the POA, IAFF, ABMEI, MEF, OE#3, IBEW, and CEO are non-management employees. Per their MOAs and City Policy Manual, Section 3.3.3, Non-Management Performance Program, classifications represented by these bargaining units have specific salary steps within their pay ranges that employees advance through based on the amount of time they have spent in their current classification and step. With the exception of transitioning from Step 1 to Step 2 for some bargaining units, an automatic step increase is granted to employees upon completion of one full year (2,080 hours worked) in each step. Prior to June 26, 2011, there had been a difference of approximately five percent (5%) between steps within a single classification. Effective June 26, 2011 for ABMEI, MEF, OE#3, IBEW, and effective September 18, 2011 for CEO, for classifications in these bargaining units the difference in pay between each salary step changed from approximately five percent (5%) to approximately two and one half percent (2.5%), which resulted in an increase in the number of 1 The IBEW MOA expires on June 30, This figure does not include a 4.00% ongoing, non-pensionable retention bonus premium pay that was agreed to as part of the January 1, 2016 December 31, 2016 MOA between the City and the POA. 3 The POA MOA expires on December 31, The CEO MOA expires on June 30, The ALP MOA expires on June 30, 2017.
4 January 20, 2016 Page 4 of 5 steps in the pay ranges for these classifications. POA and IAFF continue to have a five percent (5%) difference between steps. Bargaining Unit Number of Employees Step in 2011 Step in 2015 Average Total Increase from Step Increases Per Employee POA % 94.45% 4.72% IAFF % 88.40% 6.91% ABMEI % 87.50% 3.90% MEF 1, % 46.80% 3.45% OE# % 65.70% 3.71% IBEW % 81.40% 2.23% CEO % 65.79% 2.56% Please note that this data represents the average total salary increase per applicable employee due to step increases over a time period of over approximately four years, from September 18, 2011 through December 15, Please also note that this data includes employees who were at the top step of their classification on September 18, 2011 and who still occupied that same classification and step on December 15, As such, while these employees were part of the City workforce data set, they did not receive any additional salary increase(s) from one or more step increases, but were included when calculating the average increases from step increases per employee since Management Performance Program (MPP) Increases Employees in classifications represented by AEA, AMSP, CAMP, and ALP, as well as employees in Unit 99 are management employees. Per their MOAs, Compensation Summaries, and City Policy Manual, Section 3.3.2, Management Performance Program, classifications represented by these bargaining units, or contained within Unit 99, have open ranges in between their minimum and maximum salaries, instead of designated steps. Additionally, there are no automatic increases in pay as a result of the length of time an employee has spent within their classification. Instead, advancement in an MPP classification is achieved solely based on the employee's rating on their annual performance appraisal. During the fall of each year, the City Manager provides guidelines for salary increases based on performance ratings. Following the ten percent (10%) total compensation reduction, the MPP program was frozen until the beginning of FY Once it resumed, the guidelines provided for up to a two and one half percent (2.5%) merit increase based on performance. Per these guidelines, employees at the top of their salary range are eligible for up to a two and one half percent (2.5%) one-time lump sum bonus based on their performance. The data below reflects the ongoing merit increases received.
5 January 20, 2016 Page 5 of 5 Bargaining Unit And Executive Management Number of Employees of Salary Range in 2011 of Salary Range in 2015 Average Total Increase from Ongoing MPP Increases Per Employee AEA % 39.68% 5.45% AMSP 15.00% 35.71% 4.54% CAMP % 45.24% 3.94% ALP 18.18% 16.67% 5.36% Unit # % 31.28% 5.52% Please note that this data represents the average total salary increase per applicable employee due to performance based compensation increases as a result of the MPP over a time period of over approximately four years, from September 18, 2011 through December 15, Please also note that this data includes employees who were at the top of the pay scale for their classification on September 18, 2011 and who still occupied that classification and remained at the top of the pay scale for their classification on December 15, As such, while these employees were part of the City workforce data set, they did not receive any additional salary increase(s) from performance based compensation increases as a result of the MPP, but were included when calculating the average increases from ongoing MPP increases per employee since As each bargaining unit may have different amounts for salary step increases and MPP increases, it is difficult to provide an overall average of all City workforce pay increases received since per Council direction. A conservative method of accounting for City workforce pay increases from through December 15, 2015 would be to assume at least an eight percent (8%) increase as a result of GWIs, and either (1) a 2.23% pay increase due to salary step increases, or (2) a 3.94% pay increase due to performance based compensation increases as a result of the MPP. % JENNIFER SCHEMBRI Director of Employee Relations Attachment: List of all GWI from through all current MO As For questions please contact Jennifer Schembri, Director of Employee Relations, at (408)
6 Attachment A List of All General Wage Increases Through Current MOAs EMPLOYEE UNIT OE#3 0.00% N/A 2.00% 4/27/ % 6/22/ % 6/21/ % 6/19/ % First PP 2017 IAFF 0.00% N/A 0.00% N/A 5.00% 6/22/ % 6/21/ % 6/19/ % First PP 2017 ABMEI 0.00% N/A 2.00% 11/24/ % 6/22/ % 6/21/ % 6/19/ % First PP 2017 IBEW 0.00% N/A 2.00% 10/27/ % 6/22/ % 6/21/ % 6/19/2016 TBD TBD AMSP 0.00% N/A 2.00% 6/23/ % 6/22/ % 6/21/ % 6/19/ % First PP 2017 AEA 0.00% N/A 2.00% 10/13/ % 6/22/ % 6/21/ % 6/19/ % First PP 2017 CAMP 0.00% N/A 2.00% 6/23/ % 6/22/ % 6/21/ % 6/19/ % First PP 2017 POA 0.00% N/A 4.00% 12/22/ % 6/22/ % 6/21/ % 6/19/2016 TBD TBD MEF 0.00% N/A 2.00% 6/23/ % 6/22/ % 6/21/ % 6/19/ % First PP 2017 CEO 0.00% N/A 2.00% 6/23/ % 6/22/ % 6/21/ % 6/19/2016 TBD TBD UNIT % N/A 2.00% 6/23/ % 6/22/ % 6/21/ % 6/19/ % First PP 2017 ALP % N/A 2.00% 6/23/ % 6/22/ % 6/21/ % 6/19/2016 TBD TBD Average 0.00% 2.00% 3.19% 3.03% 3.08% 3.00% EMPLOYEE UNIT TOTAL ONGOING TOTAL ONGOING OE#3 8.00% 14.00% IAFF 8.00% 14.00% ABMEI 8.00% 14.00% IBEW 8.00% 11.00% AMSP 8.00% 14.00% AEA 8.00% 14.00% CAMP 8.00% 14.00% POA 10.66% 14.66% MEF 8.00% 14.00% CEO 8.00% 11.00% UNIT % 14.00% ALP % 11.00% Average 8.22% 13.31% Additional Notes: 1 This wage increase was negotiated as part of FY 13/14 negotiations. 2 Prior to 2010 employees represented by ALP were in Unit POA contract expires on December 31, IBEW, CEO, and ALP contracts expire on June 30, January 13, 2016 City of San Jose
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