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Workforce Investments SOU FHI AKi I Workforce Investment. Comp, Benefits, Etc. Inteory Innovation Stacey Black Accountability Director of Human Resources Commitment to Excellence Teamwork 1 City of Southlake Strategy Map The City of Southlake provides municipal services that support the highest quality of Mission life for our residents and businesses. We do this by delivering outstanding value and unrivaled quality in everything that we do. Deliver on• Focus Areas Security Development and Volunteer sc% and Service Delivery ServC1 Aehleve fhe C2 Provide travel C�Provide attractive and C6 Attract and keep top-t F CS Promote' - • hest standards convenience unique spaces for businesses to drive a opportunities Custome safety and within City and enjoyment of personal dynamic and sustainable partnerships recurlty regbn Inleresta economic envlronmeM' Volunteer lnvaly Achieve -Collaborate wbh 83 Enhance resident 84 Provide IMprove hi h uali Performanco B60pt t-In-class select partners to quality of life and g q ty of delivery and use in all City hnplement service business sustainablllty customs operational techn Iplines solutions through tourLsm send processor F2lnveat to provide anal' S Fd maintain high quality J'' Managethe Provide Financial public assets Promote _Learning ureourpeo land the strategy Icadorahip develop owned decisi ca �• retain a akl workforce I' Live Our Core Values Workforce Investment • Compensation & Classification System • Benefit Programs • Training & Development Uj SOUTHLAKE h Welcome to the City of Southlake! ®SIX11T1LAK1 6- This presentation will cover three topics: 1) Compensation & Classification System; 2) Benefit Programs; and 3) Training & Development. 3 Compensation Program • Characteristics of an Effective Program — Internally Equitable — Externally Competitive — Affordable — Responsibly Safeguards Resources — Understandable — Efficient to Administer ®SOUTHLAKE 4 Compensation Background • Program developed in 2006 by Water's Consulting Group — Quality Plan with Proven Methodology • Implemented Phase I in FY 2007 • Implemented Phase II in FY 2008 ®SOUTHLAKE The current compensation program was developed in 2006 by an outside consultant: Water's Consulting Group. This consultant has extensive experience developing public sector compensation programs. They were able to provide the City with a quality plan with proven methodology. The program was implemented in two phases: Phase I was implemented in FY 2007 and Phase II in FY 2008. 5 Compensation Program • Program Development 1 . Employee and Management Communication 2. Comprehensive Position Analysis 3. Job Evaluation ®SOUTHLAKE The consultant developed the program using the following phases: 1.Employee and Management Communication Project began with communication to employees and management to explain the process and to obtain commitment and support from those working on the project. The consultant conducted general employee meetings with all employees to explain the objectives and the role of each employee. The consultant also conducted management briefings with the executive team throughout the process, provided project updates and discussed key results. 2.Comprehensive Position Analysis The first step in the position analysis phase was for every employee to complete a Job Description Questionnaire.The questionnaire asked employees to describe what they do and what they view as their essential functions. In addition it asked for physical demands and environmental conditions. Because all employees completed their own evaluation,this provided a realistic review of each position within the City. Supervisors reviewed each questionnaire and were asked to include additional information as necessary. In addition to the questionnaires,the consultant conducted interviews with supervisors and management to collect additional data regarding the essential functions of the positions. The consultant reviewed each classification to determine if there were classifications that could be combined to more accurately support the City's work environment. At this point in the process,only functions were reviewed and pay was kept out of the process until the very end. This allowed for more objective and reliable information from employees and supervisors. 3.Job Evaluation A point factor job evaluation methodology was used in order to determine the internal worth of each civilian position. A point factor systems measures positions in terms of the degree to which several compensable factors are present in a given position. Compensable factors are paid-for, measurable qualities,features, requirements or constructs that are common to many different kinds of jobs.Each factor has defined levels and the levels provide a measurement scale for rating each factor. This allows for an orderly method for measuring each job relative to every other job. The compensable factors are specific to the City of Southlake and include:education,experience, management and supervision, human collaboration skills,freedom to act,technical skill,fiscal responsibility, and working conditions. Supervisors were asked to complete a Job Evaluation Manual on each job classification. The Job Evaluation Manual captures the supervisor's rating of the compensable factors and supervisors were instructed to considers what the job requires most of the time under normal circumstances.The consultant then used the completed Job Evaluation Manuals to create a hierarchy of jobs. A Job Evaluation Team was formed to assist in reviewing the evaluations of all positions to establish their relative value within the City. Team members consisted of department directors and key managers. The team conducted an extensive review of the job evaluation process and the final result was a hierarchy reflecting each position worth relative to one another. Based on this hierarchy, positions were assigned to pay grades within the pay plan. 6 Compensation Program (continued) • Program Development 4. Salary Survey Collection 5. Salary Structure and Design Development 6. Implementation ©SOUTHLAKE 7 4. Salary Survey Collection The first step was to identify and define the competitive market(index or survey cities)and select positions for which valid data can be collected. Often called benchmark positions. Index cities were selected based on the following criteria: 1)employer size and complexity; 2)geographic proximity; and 3)nature of services provided. Benchmark positions were selected based on the following criteria: 1) positions are reasonably well known and clearly described; 2)commonly found in other organizations to ensure sufficient salary information; and 3) positions that are historically difficult to recruit or retain employees. Benchmarks are used as reference points for pricing non-surveyed classifications. The consultant collected and analyzed salary data from 12 index cities and reviewed 74 classifications. Private sector data was also collected and reviewed. 5. Salary Structure and Design Development The salary structure(pay plan)was developed taking into account the following: 1)width of pay grades; 2) midpoint progression from one grade to the next; 3)overlap of one grade to adjacent grades; and 4) organizational financial resources. The structure was designed to achieve a competitive level compared to the market data collected with a market policy of 103%of the weighted market average salaries. Steps were established at 3%-3.2%to allow for employee progression through the grade. Pay structures were developed with pay lines drawn that blended market data to establish smooth progression between grades within pay structures. Actual salaries were overlaid on each structure to provide a comparison of the organization to the structure. Pay spreads wre set at 40% between minimum and maximum salary for non-exempt and exempt. 19%-30%for DPS. 6. Implementation &Roll-out Three plans were developed: Non-exempt, Exempt, &Public Safety. Executive staff are unclassified. The current pay plan is tenure based; meaning that employees move from one step to the next based on tenure and available funding. For example: a new employee is hired at step 1. The employee successfully completes a 6 month probationary period (1 year for DPS)and will move to step 2. That 6 month date will become the annual date at which time an employee will move to the next step. However, step increases were frozen in FY10 and are proposed to remain frozen in FY11. Finally, the new compensation program was implemented in two phases. The first phase placed employees on the new pay plan, but not necessarily on step appropriate to their tenure in the position. Phase II placed employees on the step most appropriate to their tenure. 7 Compensation Program Goals • Maintain Competitive Edge — Midpoint 103% of Weighted Market Average (102% Executive) — Annual Market Survey • Attract & Retain Workforce — Fair & Understandable to Employees — Allow for Movement within Range (raises) — Clearly Defines Essential Functions • Fiscally Sound — Future Flexibility ®SOUTHLAKE The goals of the compensation program are to 1) maintain a competitive edge, attract and retain the workforce, and to be fiscally sound. 8 Program Maintenance • Annual Compensation Survey — FY09: Market Adjustments FY10: All Pay Frozen • Job Evaluation Team Reviews — Periodic Review of All Classifications (2009) — New Classification Placement • Job Description Review — As Openings Occur ®SOUTHLAKE Each year Human Resources completes a compensation survey to determine the City's position within the market. The survey reviews the benchmark positions using data from the index cities. Data is collected from the annual TML salary survey and directly from index cities. When available, private sector data is collected from the US Bureau of Statistics and is included in the survey review. In FY09 market adjustments were made based on the survey data. In FY10 all pay was frozen. The Job Evaluation Team will meet every couple of years to review all classifications to ensure proper placement on the pay plan. This review was last completed in 2009. The team will also meet to review new classification requests and classification adjustments for placement on the pay plan. Job descriptions are reviewed each time a vacancy occurs to ensure the description accurately reflects the essential functions of the position. 9 Fly 2011 Market Surveys • Data Collection: - 2010 TML Salary Survey - Directly from Index Cities • Analysis: - Little Movement Compared to FY 2010 Survey FY 2011 Market Position Desired Current Lagging Non-Exempt 103% 102% 1% Exempt 103% 102% 1% DPS 103% 96% 7% Executive 102% 97% 6% ©SOUTHLAKE Data collected was collected in May for the FY 2011 Market Survey and analyzed in conjunction with budget planning. As anticipated last year, there was little movement in the market. In addition, we anticipate little movement in FY11. Civilian pay is appropriate when compared to index cities. DPS continues to lag the market, but at the same rate as indicated in the last year's survey. On average, executive pay also lags the market. It is important to note that we anticipate very little market movement in FY11. 10 Maintenance Worker- Parks $36,000 $34,000 $32,000 $30,000 MAn $28,000 $26,000 Qom* c`yGo ce e°i oJ�a \\b 'Compares Southlake Midpoint to Index Midpoint ®SOUTHLAKE This chart graphically shows Southlake's midpoint when compared to the index city midpoint. 11 Court Clerk 1 $40,000 $38,000 $36,000 .,...., $34,000 � $32,000 $30,000 �Q��o Gca Il 'Compares Southlake Midpoint to Index Midpoint ®SOUTHLAKE This chart graphically shows Southlake's midpoint when compared to the index city midpoint. 12 Accountant $75,000 $70,000 " $65,000 "' $60,000 $55,000 $50,000 s ssi•ex s.z"' $40,000 ,,c e G`aQe �e 'Compares Southlake Midpoint to Index Midpoint ®SOUTHLAKE This chart graphically shows Southlake's midpoint when compared to the index city midpoint. 13 Firefighter $62,000 $60,000 $58,000 .,,o: $56,000 $54,000 $52,000 $50,000 $48,000 $46,000 or a�o�a e,\ce J\eya \\e QY& `\moo 'Compares Southlake Midpoint to Index Midpoint ®SOUTHLAKE This chart graphically shows Southlake's midpoint when compared to the index city midpoint. 14 Police Officer $68,000 554 25' $64,000 560 516 560.625 $60,000 S56 555 556.922 $56,000 554,527 S5<6 6 $55;23 $52,000 $48,000 °ec ���r�a�� ���a �;�c� �;��� ��� a'`��a � c *Compares Southlake Midpoint to Index Midpoint ©SOUTHLAKE This chart graphically shows Southlake's midpoint when compared to the index city midpoint. 15 FY11 Recommendations • No Market Adjustments • Freeze Step Increases (2"d Year) • Lump Sum Payment 1 .4% in January — Based on CPI May `09 — May `10. • 6 General Fund Positions Frozen • Eliminate IT Administrative Secretary • Realign GIS Coordinator to IT ®SOUTHLAKE This slide shows the recommendations for FY11. 16 Benefit Programs • Medical Insurance — Two Plans, offered by Aetna (HMO & POS) • Dental Insurance — Two Plans, offered by United Healthcare • Life, Accidental Death & Dismemberment, Long Term Disability Insurance • Medical & Dependent Care FSAs • EAP ®SOUTHLAKE The City offers benefits to all full-time employees. Benefits include medical insurance, dental insurance, life insurance, accidental death and dismemberment insurance, long term disability, medical and dependent care flexible spending accounts, and an employee assistance program. 17 Medical Premium Cost Sharing-Employee Only Coverage 51,000.00 $900.00 - $800.00 5700.00 $6010.00 — 5500.00 5 $400.00- 5300.00 5 6 S 7 S 5200.00 7 7 5 S 5 7 5 5100.00 5 5 $0.00 _ -. — -- ---- �6tv Contribution IIIIIIIIIIEnIpIoyeeContribution —Average City Contribution ®SOUTHLAKE This chart shows the cost of employee only medical insurance at our index cities. As you can see, the City's contribution beginning 10/01/10 will be $417.28 per month. The average employer contribution is $449.18. 18 Medical Premium Cost Sharing-Family Coverage Fs7 S $ , . $800.00 $ 3 5600A0 0 $ S S 5 $ 2 $4MO0 $ 6 $ $Z00.00 S $ $0-W P P° 4PQ� 2QL Ja\ .City Contribution Employee Contribution - -Cay Contribution Average ®SOUTHLAKE This chart shows the cost of family medical insurance at our index cities. This does not include the cost of the employee only coverage. As you can see, the City's contribution is $375.00 per month. The average City contribution is $574.58. Southlake employees pay $506.10 per month for family coverage. The average employee contribution is $309.03. 19 TMRS Retirement • Non-traditional, Joint Contributory, Hybrid Defined Benefit Plan • 833 Active Employers • 2010 Southlake Plan Changes: — Decreased CPI annuity increases from 70% to 50% of the CPI — Removed Transfer Provision from Updated Service Credits — $202,042 Savings ®SOUTHLAKE The Texas Municipal Retirement System (TMRS) is a non-traditional, joint contributory, hybrid defined plan. It is non-traditional because it is not a standard salary and service formula pension plan. It is Joint Contributory because both the employee and the City contribute to the plan. It is a Hybrid defined benefit plan because it has elements of both a defined contribution plan and a defined benefit plan. •Defined Contribution elements: member's basic benefit is calculated based on account balances rather than on a benefit multiplier applied to salary and service, but investments are not member directed like most defined contribution plans. Think 401 k plans. •Defined benefit features: 5% interest credit floor, prior service credits, updated service credits, cost of living adjustments to annuities, and lifetime annuity payable upon retirement. There are currently 833 employer actively participating in the TMRS retirement plan. in 2010 the City made 2 significant plan changes: 1) Decreased the repeating Consumer Price Index (CPI) annuity increases to retirees from 70% to 50% of the CPI. 2) Dropped the transfer provision from Updated Service Credits. Updated Service Credits may increase value of employee retirement benefits by accounting for increases in salary later in an employee's career and any city plan improvements (example — increasing contribution from 6% to 7% contribution rate). Transfer provision looked at employee's salary at a previous employing TMRS City and updated it to account for increases salary later in career and Southlake picked up the increase. This was provision was dropped. 20 TMRS Retirement • 52 Active Retirees • Retirement Calculation Factors — Total Member Deposits & Interest — City Matching Funds — Life Expectancy at Retirement — Monthly Payment Option Chosen — Beneficiary Life Expectancy — Future Interest at 5% ®SOUTHLAKE There are currently 52 Retirees. The average annual annuity is $14,998. The average annual annuity for a Public Safety retiree is $24,317. The annuity is calculated based on the following factors: 1) total member deposits and interest; 2) City matching funds; 3) life expectancy at retirement; 4) the monthly payment option chosen; 5) beneficiary life expectancy, if applicable; and 6) future interest of 5%. 21 Benefits to Payroll Ratio Benefits to Payroll Ratio 40% 35% 30% 25% 20% 15% 10% 5% Keller NRH Flower Grapevine Bedford Southlake Mound Ratio —Avg-35.02% ©SOUTHLAKE This chart shows Southlake's benefits to payroll ratio in comparison with the market. It is important to note that both Keller and North Richland Hills participate and contribute towards Social Security. The City of Southlake opted out of the social security program in the late 1980's. As such, both employees and the City do not contribute to the program. Employees will not receive service credits or social security benefits for time worked with Southlake. Instead, the City has chosen to offer the TMRS retirement program to employees. 22 Training & Development • FY 2010 — Organizational Development Training — Sexual Harassment Training — Safety Training • FY 2011 — Values Based Leadership — Ethics & Diversity — Safety Training ®SOUTHLAKE Finally, the City provides training and development for employees. In FY 2010 organizational development and sexual harassment prevention training was provided organization wide. In FY 2011 the City will be providing Values Based Leadership, ethics and diversity, and safety training. 23 SOU[HI AK Questions? Stacey Black Integrity (817) 748-8063 Innovation Accountability Commitment to Excellence Teamwork If you have any questions regarding this presentation please feel free to contact me at 817-748-8063. Thank you. 24