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HomeMy WebLinkAbout2000-11-08 AdjournedNovember 8, 2000 (Adjourned Meeting) (Page 1) An adjourned meeting of the Board of Supervisors of Albemarle County, Virginia, was held on November 8, 2000, at 4:30 p.m., Room 235, County Office Building, McIntire Road, Charlottesville, Virginia. The meeting was adjourned from November 1, 2000. PRESENT: Mr. Lindsay G. Dorrier, Jr., Ms. Charlotte Y. Humphris, Mr. Charles S. Martin, Mr. Walter F. Perkins and Ms. Sally H. Thomas. ABSENT: Mr. David P. Bowerman OFFICERS PRESENT: County Executive, Robert W. Tucker, Jr., County Attorney, Larry W. Davis, and Clerk, Ella W. Carey. Agenda Item No. 1. The meeting was called to order at 4:34 p.m., by the Chairman of the Board of Supervisors, Mr. Martin; and by the Chairman of the School Board, Dr. Ward. SCHOOL BOARD MEMBERS PRESENT: Mr. Kenneth C. Boyd; Mr. R. Madison Cummings, Jr.; Ms. Susan C. Gallion; Mr. Gary W. Grant; Mr. Stephen H. Koleszar; Ms. Diantha H. McKeel; and Dr. Charles M. Ward. SCHOOL BOARD MEMBERS ABSENT: None. OFFICERS PRESENT: School Division Superintendent, Dr. Kevin C. Castner; Deputy County Attorney, Mark Trank; Assistant Superintendent for Support Services, Dr. Frank E. Morgan; Director of Fiscal Services, Jackson Zimmermann; Director of Human Resources, Michael Thompson; and Clerk, Tina Pendleton Fuller; and Clerk of the Board of Supervisors Ella Carey. ________________ Agenda Item No. 2. Compensation and Benefits Strategy. Mr. Martin recognized the work of the Compensation Planning Committee. The following information was provided to both boards: The Committee, that includes members of the Board of Supervisors and School Board, local government and school division staff and citizens, has been working with the Palmer and Cay Consulting Group (PCCG) to study current compensation and benefits programs and practices in Albemarle County. The primary objective of this study has been to develop a proposed Compensation and Benefits strategy for the County, which would include the following components: · Overall Goal – A broad statement of the County’s strategic direction for employee compensation and benefits. · External Market – A definition of the external labor market. · Internal Equity – A broad statement of the County’s position regarding the issue of maintaining internal equity. · Positioning of Compensation and Benefits – The targeted positioning of both compensation and benefits relative to the identified external market. · General Salary Guidelines – Outline of the strategy for distributing individual base salary increases. The Planning Team began work in March of 2000. The process pursued by the Team in conjunction with PCCG included the following major steps: · Agreement on a list of benchmark jobs to be surveyed annually to establish the external competitiveness of the County’s current compensation and benefits. · Agreement on a list of specific jurisdictions/organizations to be surveyed annually in the external competitiveness review. · Development of a survey instrument to obtain specific information from survey participants concerning compensation and benefits and distribution of the survey to agreed upon external market organizations.. · Analysis of survey data by PCCG to compare Albemarle County’s current compensation to the external market. · Agreement by the Planning Team on PCCG’s analysis and findings based on the collected survey data. · Agreement by the Planning Team on where the County should target its compensation relative to the external market. · Development (by PCCG) of a proposed Compensation and Benefits Strategy based on the Planning Team’s consensus. · Agreement by the Planning Team on the proposed Compensation and Benefits strategy to be presented. The attached document (on file) provides the proposed Compensation and Benefits Strategy. The survey data indicated that Albemarle County is at approximately 95% of its market in terms of pay and 105% of its market in terms of benefits. The major recommendation contained in the document is that the County should strive to achieve pay at 100% of the defined competitive market and benefits at 105% of the defined competitive market. Mr. Martin introduced Ms. Karen Collins and Mr. Tom MacKay, PCCG, who provided an overhead November 8, 2000 (Adjourned Meeting) (Page 2) presentation to the Boards (copy on file). Ms. Thomas asked how salary adjustments were made for the Charlottesville area, including the geographical area used. Ms. Collins said there was data for 64 benchmark jobs that were used when determining if they were at market. The median number was used 32. It was determined that using the median number and private survey, Albemarle was 4.7 percent below market; the difference between private survey data (Albemarle chose the benchmark jobs to be considered) and published survey data (obtainable from various sources that includes the Charlottesville area). The median salary differential is 4.7 percent. By taking the data received from various cities and counties in Virginia, a salary differential is determined by taking the average of all salaries within Richmond and taking the average of all salaries in the Charlottesville area and figuring out what is the differential between the two. The data is then adjusted and “normalized” to the Charlottesville area. She provided comparisons to other states, such as California, and cost of living allowances’ comparisons. In the Charlottesville area, people are making less money but paying a higher cost of living. Mr. Boyd expressed concern about how the geographical differential was used because it is subjective. Ms. Collins said the Committee did not reach consensus on this issue. No matter how you slice it, the Charlottesville area is four to eight percent below market. Mr. Boyd said the four to eight percent below market is not necessarily across the board. We are below market on the lower end of the salary scale (Grades 1-13) more so than we are at the higher end of the scale (Grades 14 and above). Ms. Collins agreed and said it is within the salary structure. Mr. Boyd said that he feels that it is misleading when discussion occurs about providing an across the board four or eight percent pay increase for all job categories, when some positions do not require adjustments. Ms. Collins said the salary structure is four to eight percent below market. If the salary structure is adjusted to 4.5 percent, then we have to figure out where they are within those pay ranges based on years of experience and make adjustments accordingly. Ms. Thomas asked about increasing certain positions above eight percent for hard-to-fill positions like bus drivers. Ms. Collins went over page 31 of the report (Salary Structure Midpoint Comparison to Market). She noted that pay compression also needs to be considered. How do you address pay compression for individuals within those ranges and how do you get employees to market? The salary structure would need to be adjusted every year in order to keep up with the market. Mr. Perkins said there may be performance problems with some employees and that may be the reason why they are below midpoint. Ms. Collins said it could be a contributing problem, but it is not the problem in of itself. She noted that in the past five years, Administrative Assistant/Secretarial pay has increased by $8,000 to $9,000 from $23,000 to $30,000. If there is a tenured secretary, it took him or her ten years to get to the $28,000 to $30,000 level. Someone coming in at age 22 tomorrow will make this amount immediately. This is pay compression. Mr. Boyd said on page 34 of the report, in order to address compression, it could cost $931,610. Ms. Collins said this cost is minus teachers. The Boards are asked to adopt a benefit and compensation strategy. By doing so, the Boards agree that they want to be on par with the competitive market, with the salary structure at market and benefits slightly above market. The details of how to get there, the Compensation Planning Team will have to develop recommendations for the Boards to consider. For a really rough cost analysis, if the Boards adjusted the salary structure 4.5 percent and then moved employees who fell below the new minimums to the new minimum, the cost would be $74,000 to $1.7 million (moving employees to midpoint in tiers). The teacher scale would also need to be adjusted 4.5 percent – all teachers are based on salary steps; therefore, the cost would be $1.7 million. The teacher scale would also need to be reassessed to see if salaries are at market. Mr. Boyd said the geographic data presented is more skewed toward the City of Charlottesville, rather than Albemarle County. Ms. Collins agreed. Data is not perfect and generalities must be used. Attracting, motivating, and retaining employees are the primary goals. The philosophy is to have the salary scale at market, with benefits slightly above market. Mr. Grant asked what the rationale was for targeting benefits at 105 percent. Why not 100 percent? Ms. Collins said it is the balance of the two – one philosophy is to be above market on benefits and behind market on compensation. However, in terms of attracting, motivating, and retaining employees, the Planning Team wanted to pay compensation at market (100 percent) and to leave current benefits at 105 percent above market. The rationale is to have the overall compensation plan to be above market. Mr. Larry Lawwill, Planning Team member, said that the County is currently at 105 percent for benefits and if compensation is increased and the benefits decreased, people would not see it as a positive move (taking from one to give to the other). Ms. Marjorie Shepherd, Planning Team member, said the 105 percent for benefits and what is being recommended for compensation brings the overall County package to slightly over 100 percent. Mr. Paul Wright, Planning Team Member, further explained the Committee’s rationale. Ms. Collins said employee focus groups were created and interviewed (see report). These focus groups provided valuable input regarding salary and benefits. The overall issue was that employees did not want to “rob Peter to pay Paul.” Employees like their benefits, but they felt that compensation was below market, and they did not want to give up their benefits in order to increase compensation. Mr. Grant asked about the County’s employee retention rates. Ms. Collins said retention and motivation are equally important. The County’s philosophy needs to be clearly communicated to employees. Employees may agree to stay for reasons other than salary (hours, coworkers, commute, career path, etc.) if they are aware of the complete compensation package. Mr. Boyd said that the Committee received information about retention and asked if it was included in the staff report. Ms. Collins said the information was included in a previous report provided to the Committee, and that she could provide the information if needed. She highlighted job categories that were significantly below market, such November 8, 2000 (Adjourned Meeting) (Page 3) as bus drivers (18 percent), custodians (11 percent), police (10 percent), and teachers (15 percent). Mr. Dorrier asked of the municipalities that were surveyed, how many had compensation and benefit packages at 100 percent of market. Ms. Collins said that if the County adopted the compensation plan, it would be competitive with many of the other municipalities. She noted that most of her public sector clients had benefits better than the County in the eight to 10 percent range or 30 percent of payroll. Albemarle County’s benefits are 25 percent of payroll. However, some public sectors pay less compensation because of benefits. The rationale is salaries may be lower, but employees will have job security and other perks. Mr. Perkins asked what types of value do you emphasize regarding job security when you compare the public sector to the private sector. Ms. Collins said that many private sectors cut positions due to corporate downsizing and lack of profits. However, some public sectors are hiring consultants to help streamline operations to make it a “leaner and meaner” operation by reducing duplication of effort, including elimination of positions through attrition or other means. Ms. Thomas asked if job security should affect the figures presented. Ms. Collins said no. Employees want job security and are willing to sacrifice long-term equity to keep it. Mr. Perkins said it would be a remote possibility that Albemarle County would lay off employees, unless it merges with the City of Charlottesville. Ms. McKeel said in the report (Private Survey Participants – page 16), only one business is listed as participating in the survey. Why? Ms. Collins said only one business agreed to participate out of many that received the survey. Mr. Martin said the survey was sent to private schools, and they also chose not to participate. Mr. Boyd said the survey response rate was 35 percent, which is good. Ms. Collins said published survey data was also used. Mr. Martin asked the Board of Supervisors to wrap up because of its 7:00 p.m. meeting in Room 241. What the Boards are asked to do tonight is to agree to the philosophy. The Compensation Committee would then iron out the details, including costs and provide that information to both Boards for approval and implementation. Mr. Koleszar emphasized that the Boards would need to adjust the salary scale at least 4.5 percent by July 2001 as well as provide three to four percent funding for an annual increase (or whatever that figure may be). Every year, the salary structure will need to be reassessed to ensure that it stays at market. Dr. Castner expressed concern about other public sectors aggressively increasing teacher salary scales in order to attract teachers in a tight labor market due to teachers retiring, with fewer teachers entering the teaching field. He noted that many of these public sectors may not be accurately reflected in the report. Dr. Ward expressed concern about how the report will affect the teacher salary scale and if the philosophy would be the same. Mr. Koleszar said the Planning Committee will project competition growth for each year. A survey will then be developed and sent to the private survey participants. Based on the results, adjustments will be made accordingly. Mr. Martin said if the Joint Boards are in agreement with the proposed Compensation and Benefits strategy, the Planning Team would reconvene to develop recommended implementation details for the strategy. These recommendations would be presented to the Joint Boards in approximately thirty (30) days. Staff recommends the following actions: · Adopt the Proposed Compensation and Benefits Strategy, as follows: Overall Goal.The overall goal of the County's Compensation and Benefits strategy is to provide competitive compensation opportunities that reinforce high performance from all employees and the achievement of organizational goals. Therefore, the County's overall compensation and benefits programs should: · Support the mission, goals, and interests of the County, its customers and employees. · Enable the County to attract and retain qualified and high-performing employees who are: - Flexible and adaptable-Achievers - Service-oriented-Customer-oriented · Motivate and empower employees to act in the best long-term interests of the County and its customers. · Reward employee innovation and performance. · Maintain both internal equity and external competitiveness. · Support teamwork throughout the County in meeting common objectives. · Promote ease and flexibility in compensation and benefits program administration. Competitive MarketThe primary competitive market for all County positions is defined as Counties . and School systems of similar size within the State of Virginia and/or are located in the same geographic region of the State of Virginia, and for positions that are not unique to government and/or education industry, the competitive market also includes local private employers within the Charlottesville area. th Base Salary100 . Base salary range midpoints are targeted at approximately market levels (i.e., @ percentileBase salary increases will be based on competitive market increases and the availability of ). funds. The County's salary structure will be reviewed on an annual basis to ensure that the program: (1) is externally competitive; (2) meets our employee's individual needs; and (3) minimizes costs to the November 8, 2000 (Adjourned Meeting) (Page 4) County. Internal Equity.Our focus on establishing an equitable compensation program is reflected in our dedication to considering internal equity, as well as market compensation levels, in establishing base salary ranges. Therefore, job scope and responsibility requirements will each play a key role in determining compensation levels relative to the external market. th Benefits.105 Benefits will be targeted slightly above the County's competitive market (i.e., @ percentileThe County's benefits program will be reviewed on an annual basis to ensure that the ). program: (1) is externally competitive; (2) meets our employee's individual needs; and (3) minimizes costs to the County. · Direct the Planning Team to submit the following to the Joint Boards within approximately thirty (30) days: A proposed base salary structure adjustment based on the approved Compensation and Benefits Ø strategy. A proposed process for addressing pay compression within the new base salary structure. Ø The costs associated with addressing pay compression within the revised salary structure. Ø A proposed compensation increase to maintain market competitiveness for FY 02. Ø Proposed salary administration guidelines outlining the following: Ø The process for determining the annual salary structure adjustment § The process for determining the annual merit increase § Ms. Humphris offered a motion to adopt the proposed Compensation and Benefits Strategy, as set out above, and directed the Planning Team to submit an additional report (with the above information) to the joint boards within 30 days. Mr. Dorrier seconded the motion. Roll was called, and the motion carried by the following recorded votes: AYES:Mr. Perkins, Ms. Thomas, Mr. Dorrier, Ms. Humphris, and Mr. Martin. NAYS:None. ABSENT: Mr. Bowerman. Mr. Koleszar then offered a motion to adopt the proposed Compensation and Benefits Strategy, as set out above, and directed the Planning Team to submit an additional report (with the above information) to the joint boards within 30 days. Ms. McKeel seconded the motion. Roll was called, and the motion carried by the following recorded votes: AYES: Mr. Koleszar, Mr. Cummings, Dr. Ward, Mr. Boyd, Ms. Gallion, Ms. McKeel, and Mr. Grant. NAYS:None. ______________ Agenda Item No. 3. Preliminary General Government and Schools Split of New Local Tax Revenue. Ms. White, Assistant County Executive, presented and provided a “Preliminary General Government and Schools Split of New Local Tax Revenue” Budget to both Boards (on file). The “Proposed Preliminary Distribution of Total Available Net New Local Tax Revenue” of $7,145,876 is as follows: Available New Revenues to School Division Operations at 60 percent is $4,287,526. Available New Revenues to General Government Operations at 40 percent is $2,858,350. FY 2001/02 Operational Budgets: Appropriated Budget Preliminary Estimate$Inc/Dec $Inc Over FY 00/01 (1)FY01/02 (2) FY 00/01 School Division (Transfer from General Fund)$56,673,355 $60,961,081$4,287,526 7.6% (last year) $3.8 million or 7.4% General Government Operations$43,551,473$46,409,823 $2,858,350 6.6% (last year) $2.5 million or 6.5% (1) July 1, 2000 Appropriated General Fund FY 00/01 Budget. (2) Finance Department Preliminary Revenue Projections as of October 18, 2000. (3) Reflects a 6.6% increase based on Financial Advisor recommendation. (4) 0.5% revenue growth allocated to capital based on Financial Advisor recommendation. Ms. Thomas said that the Capital Reserve of $576,980 receives two of the four cents noted on the spreadsheet (on file). The County Executive’s Management Analyst said that in order to keep the Capital Reserve where it needs to be, the Board of Supervisors must keep the two cents in order to meet Capital Improvement Program (CIP) needs for the next 10 years. This proposal will take away one of the two cents and that has not been agreed to by the Board of Supervisors. If the two cents is not kept, then the Board of Supervisors may have to do a Bond Referendum or take other measures to make up the money. Mr. Martin said the way the one-cent is portrayed in the document is misleading, given one-cent of the two cents that would have been put in the Capital Reserve is being taken away. The Board of Supervisors needs to review this issue. Mr. Tucker said the reason why the one-cent reduction could be considered is because of the revenue surplus; staff proposed putting $2.0 million directly into the Capital Reserve. Over a period of time, if staff can continue to do that, it is hoped that the $10.0 million deficit November 8, 2000 (Adjourned Meeting) (Page 5) would be eliminated. This is the reason why the one-cent was subtracted from the Capital allocation. Ms. White said that the financial consultants are currently reviewing CIP issues and recommendations will be forthcoming to the County and School Division. Mr. Dorrier asked if the School Board wanted to renegotiate the Memorandum of Understanding and the CIP. Dr. Ward said there was no School Board consensus to review those issues this year. _________________ Agenda Item No. 4. Other Matters Not Listed on the Agenda. Ms. Thomas said she is interested in knowing more about how teachers are recruited and what incentives are offered to retain them in the School Division. Dr. Ward suggested that the next joint meeting of the Boards, to follow-up on Compensation recommendations, be December 7, 2000, 4:30 p.m., in Room 235. Both Boards agreed on this date. __________________ Agenda Item No. 5. Adjournment. At 6:13 p.m., there being no further business, Mr. Martin adjourned the Board of Supervisors' meeting. Ms. Gallion then offered a motion, seconded by Mr. Cummings, to adjourn the School Board. Roll was called, and the motion carried by the following recorded votes: AYES: Mr. Koleszar, Mr. Cummings, Dr. Ward, Mr. Boyd, Ms. Gallion, Ms. McKeel, and Mr. Grant. NAYS:None. ________________________________________ Chairman Approved by the Board of County Supervisors Date Initials