HomeMy WebLinkAbout2001-11-14 AdjournedCOUNTY OF ALBEMARLE
EXECUTIVE SUMMARY
AGE N DA TITLE:
Compensation Recommendations for Adopted
Compensation and Benefits Strategy.
SUBJECT/PROPOSAL/REQUEST:
Request approval for the County Executive and
Superintendent to develop proposed budgets based on
the recommended salary scales, salary increase
amount, and projected medical insurance costs, subject
to available funding.
STAFF CONTACT(S):
Tucker, White, Castner, Morgan, Suyes, Gerome
AGENDA DATE:
November 14, 2001
ACTION: X
CONSENT AGEN DA:
ITEM NUMBER:
INFORMATION:
ACTION: INFORMATION:
ATTACHMENTS:
REVIEWED BY:
Yes
Background
Last fall, the School Board and Board of Supervisors approved a Total Compensation Strategy to target employee
salaries at 100% of market (salary range midpoints are targeted at @100th percentile)ahd target benefits slightly
above market (105% percentile). Our competitive market (Attachment #1) has been defined as:
· Counties and School systems of similar size within the State of Virginia,
· Counties and School systems located in the same geographic region of the State of Virginia, and
· Local private employers within the Charlottesville area, for positions that are not unique to government and/or
education sector.
To maintain competitive compensation, two separate, but related actions are required. First, ensure the salary scale
is competitive so that we are able to attract and recruit new employees. Second, ensure current employees are
rewarded for performance by maintaining internal equity in their pay range and also maintaining market
competitiveness for similar skills. The Joint Boards adopted processes to follow every year so that we may maintain
our strategy, as follows:
1. Annually survey the competitive market to determine the amount of their salary scale adjustments and the amount
of total increases they granted employees for that fiscal year. This data allows us to ascertain where the salary
scales (both classified and teacher) for Albemarle County stand relative to the current market and arrive at
recommendations for next year's salary scales.
2. Obtain data on what other organizations are projecting salary increase amounts to be for the next fiscal year
through a compensation database (WorldatWork). This data source is used, as it was last year, to project the
merit pool increase and develop the teachers scale (including step increase). WorldatWork is a not-for-profit
compensation association in the 28th year of providing this annual Salary Increase Budget Survey.
Compensation Strategy: Market Analysis and Recommendations
1) CLASSIFIED SALARY SCALE
July 2001 Salary Scale Adjustments
The Albemarle County scale adjustment of 4.5% for FY 01/02 was based on data that showed our salaries lagged the
market by approximately 4.5% as of September 2000 (Palmer & Cay). Market data from 30 organizations in our
competitive market has again been collected. Scale adjustments for FY 01/02 were given in 23 of surveyed
organizations, with a median increase of 2.5%. Therefore, the Albemarle County scale still lags the market by 2.5%.
Scale Recommendation for July 2002
Based on the scale adjustments of our competitive market, in order to continue closing the gap between Albemarle
County and our market, for FY 02/03, a scale adjustment of 3.0% is recommended.
11-08-01 ?05:25 IN
AGENDA TITLE:
Compensation Recommendations for Adopted Compensation and Benefits Strategy
November 14, 2001
Page 2
2) CLASSIFIED EMPLOYEES' INCREASE
July 2001 Total Increases
The total increases for FY 01/02 in our competitive market ranged from 2%-6%, with a median increase of 4.0%. In
an effort to bring employee salaries closer to market, Albemarle County funded a 4.2% merit pool for employees.
However, even with this increase, Albemarle County is still behind market.
Projected Increases for July 2002
The WorldatWork survey includes Virginia in the eastern region. Initial data on salary increases obtained from
WorldatWork for the eastern region in the field of education was 4.2% and for public administration was 4.4%.
However, the recent downturn of the economy and the fallout of the tragedy of Sept. 11, 2001 have effected many
companies. WorldatWork conducted an updated survey in October. As a result of the updated WorldatWork survey
information, WorldatWork's projected increase amounts have been adjusted to 3.3%.
Salary Increase Recommendation for July 200~
As agreed upon, the salary increase amount is obtained from Woddatwork. Based on the eastern region, education
and public administration scope measures, the recommended increase is 3.3%.
3) TEACHER'S SCALE
July 2001 Teachers Salary Comparison
The market data collected from 28 school systems shows that the FY 01/02 scale is at our targeted market. The
scale was developed last year by adjusting to market data at minimum, steps 5, 10, 15, 20, 25, 30, and maximum
scale amounts, and Projecting an increase. A differential was created between steps 1 through 3.
Scale Recommendation for July 2002
The Teacher's scale is built based on the projected total increase'obtained from WorldatWork of 3.3%. Any increase
would include the step increase,
Benefits Strategy
A Planning Team that includes members of the Board of Supervisors and the School Board, local government and
school division staff, and citizens has met for several months to assess the effectiveness of the current benefits
programs and proVide cost-neutral recommendations within the adopted strategy of 105% of market. This Benefits
Assessment Team worked with Tom MaCay, from Palmer and Cay Consultants to complete the following:
Analyze current situation by listing an inventory of existing benefits and reviewing workforce demographics;
Identify strengths and weaknesses of Albemarle's plan, compared to the market and in terms of employee
perceptions (Focus Group data collected July/August 2000).
The Team identified the next steps as indicated below:
1. Continue to review data to address the retirement plan issues related to:
· Virginia Retirement System
· 403(b) vendors
· Part-time pension annuity
· Voluntary Early Retirement Incentive Program
2. Continue analysis of:
· medical insurance for part-time employees
· dental plan
Medical Premiums
Based on claims data and a trend factor, an increase of 16% is projected for FY 02/03.
rapidly escalating medical costs that other employers are facing nationally.
This is consistent with the
RECOMMENDATION:
These recommendations are presented to both Boards for their approval in providing direction to both the County
Executive and Superintendent for their FY 02/03 budget preparation. It should be noted that all final funding
recommendations are subject to and based u pon available state and local revenues.
AGENDA TITLE:
Compensation Recommendations for Adopted Compensation and Benefits Strategy
November 14, 2001
Page 3
Recommendations are:
1. Approve Classified Salary Scale increase of 3.0%. Only new employees and those below the m~nimum for their
paygrade receive a salary increase from this adjustment.
2. Approve Teacher's Scale increase, including step, of 3.3%.
3. Approve salary increase amount of 3.3%. This amount funds the merit pool for classified/administrative
employees.
4. Preliminarily plan on 16% increase in medical insurance plan for FY 02/03.
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Attachment #1
Albemarle County
Adopted Competitive Market
Augusta County
City of Charlottesville
City of Chesapeake
City of Danville
City of Harfisonburg
City of Lynchburg
City of Roanoke
City of Staunton
City of Virginia Beach
City of Williamsburg
Buckingham County
Chesterfield County
Fauqttier County
Fluvanna County
Green County
Hanover County
James City County
Loudon County
Louisa County
Madison County
Montgomery County
Nelson County
Orange County
Prince William County
Roanoke County
Rockingham County
Spotsylvania County
Albemarle Service Authority
Martha Jefferson
UVA Health Systems
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COUNTY OF ALBEMARLE
EXECUTIVE SUMMARY
11-02-01 Alt:22 IN
AGENDA TITLE:
FY2002 Revised and FY2003 Estimated General Fund
Revenues/Budget Distribution
SUBJECT/PROPOSAL/REQU EST:
Revenue Discussion and Proposed Distribution of New
FY03 Local Tax Revenues to General Government and
School Division Operations
STAFF CONTACT(S):
Mr. Tucker, Ms. White, Mr. Breeden, Mr. Hildebeidel
AGENDA DATE:
November 7, 2001
ACTION.: X
CONSENT AGENDA:
ACTION:
ATTACHMENTS:
REVIEWED BY:
ITEM NUMBER:
INFORMATION:
INFORMATION:
/,
BACKGROUND:
Each October, the Department of Finance prepares preliminary revenue projections for both the current and upcoming fiscal
years. These revenue estimates are the first step in the budget preparation process and form the basis of the
recommended budget proposals to come before the Board of Supervisors next March. Based on these preliminary revenue
estimates, the Board also allocates the projected revenue growth, first to committed expenditures, such as revenue sharing,
capital outlay and debt service, and then between General Government and School Division operations.
DISCUSSION:
FY2001/02 and 2002/03 REVENUE REVISIONS/ESTIMATES
Attachment A provides both the revised projections for FY2001/02 and the preliminary estimates for FY2002/03 General
Fund revenues. Overall, current year (FY2001/02) revenues and transfers are expected to be approximately $1.2 million
(0.9%) over the appropriated FY2001/02 budget level, which reflects both an estimate of current economic activity and the
effects of the biennial real estate reassessment done in January, 2001. The estimated revenues and transfers for FY
2002/03 exceed the current year appropriated budget level by $6.9 million (5.4%), reflecting largely a continued, but slowing,
growth in revenues from real estate and personal property taxes (including the Personal Property Tax Relief Act
reimbursements from the Commonwealth).
The individual revenue increases are described below, and an explanatio, n of Attachment A is located at the end of the
executive summary:
REAL ESTATE TAX
The FY2001/02 Appropriated Budget had been prepared based on an estimated January, 2001 reassessment increase of
11%. The actual average reassessment increase rate was 12.59%. The effect of this increase h as been added to the base
and will continue to influence future revenues. Staff had anticipated a slowdown in the real estate market when the
FY2001/02 budget was prepared. Due to current economic conditions, that slowdown is now beginning to make itself
evident, particularly in the commercial sector and in projected new construction starts. The next reassessment I January,
2003) rate is currently anticipated to be in the range of an 8 to 12% increase. For the FY2002/03 revenue projection, staff
is using 8%, the lower end of the range.
PERSONAL PROPERTY TAX, including PPTR
This revenue source is projected to increase by $2.5 million (+9.8%) over the FY01/02 Appropriated Budget amount, The
impact of the economic slowdown is just beginning to become evident here. The 1st half 2001 tax bills increased 8.73% over
the prior year. The 2nd half 2001 tax bills, however, only increased 5.20%, compared to 10.37% for the prior year. At the same
time, the collection percentage rate is improving with the state reimbursement paying increasing percentages of individual
tax liabilities. Automobile dealers report that sales have begun to slow, excluding the current spike due to zero percent
financing, and do not anticipate sales to significantly increase until the 2"~ quarter of 2002. Business personal property tax
revenue has continued to decrease and staff anticipates additional decreases for the 2002 tax year.
AGENDA TITLE:
FY2002 Revised and FY2003 Estimated General Fund Revenues/Budget Distribution
November 7, 2001
Page 2
For this revenue analysis, staff has included Personal Property Tax Relief (PPTR) reimbursements from the Commonwealth
'.in this line item along with the local portion of the personal property tax, since regardless of the proportion reimbursed by
~' the Commonwealth, the total revenue realized should be approximately the same, with a only reclassification of revenue
between state and local sources.
PUBLIC SERVICE TAX
The assessments of Public Service Corporations are performed by the Virginia Department of Taxation and the State
Corporation Commission. Revenue has decreased due to a decrease in investment by public service companies and
because of the full phase-in of liberal depreciation policies adopted several years ago by the State Corporation Commission.
MACHINERY AND TOOLS TAX
Revenue has dropped by an estimated $247,000 (a 21.6% decrease) in the FY01/02 revised projection, as the effect of the
termination of operations in the County by several large manufacturers.
PENALTIES AND INTEREST
Revenues are down due to improvement in the rate of current year collections, due largely to personal property tax relief
payments, reimbursed by the Commonwealth for certain individual taxpayer personal property.
SALES TAX
Revenue projected for FY2002/03 is anticipated to remain flat compared to the FY2001/02 appropriated budget amount due
to the current overall economic slowdown. The effects of the national and state economic slowdown, as well as increased
layoffs and job losses, is only now beginning to make an impact on local sales tax revenue. The trend is difficult to predict
for the future, but staff should have more information in January when the final FY2002/03 budget revenue projections are
prepared.
BUSINESS LICENSE FEE
This revenue is primarily based on sales and other forms of gross receipts earned by local businesses. In the revised
projection for the current year (FY2001/02), this source of revenue is projected to decrease by about 3.3%, because of the
effects of a slowing economy.
TRANSIENT OCCUPANCY TAX
Projected revenues are expected to decrease, reflecting the reduction in tourism travel both nationally and statewide,
influenced by current economic conditions and concerns about the security of travelling.
OTHER LOCAL REVENUE
The decrease in Other Local Revenue reflects several items, including a significant decrease in interest earned on bank
deposits (down by $350,000) because of rapidly falling interest rates, decreases in income from various service fees, and
the effects of reclassifying certain accounts (such as the E-911 fund) from revenue to transfers, as discussed below.
STATE REVENUES (excluding PPTR)
State Revenues (excluding PPTR) are projected to be flat or slightly declining, reflecting the current state budget and revenue
situation and forecasts for FY2002/03.
TRANSFERS
Due to reporting changes, transfers are increasing as the County continues to reclassify certain receiptsthat are actually
transfers from other funds where they were originally reported as revenues, such as $919,000 in the E-911 Fund, and
transfers into the General Fund from the Tourism Fund. These changes are required to meet GASB 34 accounting standards
and other generally accepted accounting principles in the financial reports.
BUDGET GUIDANCE:
Based on the preliminary revenue estimate provided by the Department of Finance, the second step in the budget process
is the allocation of new local tax revenues, first to committed expenditures, i.e., city-county revenue sharing, capital funds
and debt service, and then to general government and school operations on a 40/60 basis.
AGENDA TITLE:
FY2002 Revised and FY2003 Estimated General Fund Revenues/Budget Distribution
November 7, 2001
Page 3
Attachment B shows a Preliminary Estimate of the FY2002/03 local tax revenue increase as $7,028,868 over the FY2001/02
,.Appropriated Budget amount, followed by the deduction of the amount of revenue to the City-County Revenue Sharing
'~" expenditure, for a Net Projected Local Tax revenue increase of $6,818,769.
The second section of Attachment B shows the increase amount for committed new non-departmental expenditures. For
capital outlay and debt service, the increase is $1,199,655, which is subtracted from the increase in local tax revenues. This
sub-total reflects a 4.1% growth rate in the current contributions to debt service and to the ongoing capital outlay amount,
plus both a capital reserve fund amount based on 1 cent of the projected real property tax revenue in FY2002/03 and the
one-half of a percentage point of the projected overall revenue growth (4.1%) to be dedicated to capital projects.
This formula was proposed by the County's financial consultants and approved by the Board to fund the County's 1 O-year
capital program.
Note: The 4.1% growth over the current year reflects the projected overall County revenue growth on the total County
Budget, which is lower than the general fund increase due to the assumption of level funding by the state for schools. The
percentage is derived from the projected increase in total County revenues and transfers over the FY2001/02 Appropriated
Budget level of $173.2 million.
The next two committed expenditures subtracted from the increase in local tax revenues are to project an amount for the
Board's Reserve at $200,000 (a decrease of $397,098), and the $92,100 estimated for refunds (the same as FY 2001/02).
After making the above deductions, the remaining uncommitted local tax revenues are estimated to be $6,016,212. Of this
amount, 60% ($3,609,727) is allocated to the School Division and 40% ($2,406,485) to General Government operations
for FY2002/03. This allocation provides a projected increase of 5.9% to the School Division in the recurring General Fund
Transfer from local tax revenues, and of 5.2% for General Government operations to cover increased baseline costs, fixed
costs and additional program needs.
RECOMMENDATION:
Staff recommends that the Board approve the projected FY2002/03 allocation of local revenues to the Capital Improvement
Program, in accordance with the guidelines recommended by the financial advisors, and to the School Division and General
Government areas for operating costs.
3
AGENDA TITLE:
FY2002 Revised and FY2003 Estimated General Fund Revenues/Budget Distribution
November 7, 2001
Page 4
UNDERSTANDING ATTACHMENT A
Attachment A provides both the revised General Fund revenue projections for FY2001/02 and preliminary revenue estimates for
FY20.02/03.
Column A shows the current year appropriated budget revenues as of July 1, 2001. Column B is the October, 2001 revised projection
of FY01/02 revenues. Column B-A shows the difference between Column A (the July 1,2001 revenues) and Column B (the October
revised FY01/02 revenue projection). To determine the total increase in estimated current year revenues, you will see that Column B-A
shows a projected total $1.2 million increase, which is a 0.9% increase, over the FY01/02 appropriated budget revenue amount.
Column C shows the preliminary revenue estimates for FY2002/03 at a total of $135.7 million Column C-B is the difference between
Column C (the preliminary FY02/03 estimate) and Column B (the FY01/02 revised revenue projection), and shows that total General
Fund revenues and transfers are estimated to increase by $5.7 million or 4.4% (shown in Column C-B) over the FY01/02 revised
projection in Column B.
The comparison of the FY01/02 appropriated budget revenues to the preliminary estimate of FY02/03 revenues is shown in Column
C-A. This column shows the difference (increase or decrease) between Column C (the preliminary estimated FY02/03revenues) and
Column A (the FY01/02 budgeted revenues). Column C-^ shows that budget to budget total General Fund revenues and transfers are
projected to increase by $6.9 million (+5.4%), which is a combination of the $1.2 million (+0.9%) increase in current year revised
revenues over appropriated revenues (Column B-A) and the $5.7 million (+4.4%) projected growth rate over the current year revised
revenues (Column C-B). Each individual revenue source can be analyzed in this same manner as a way of understanding the basis
of the projected budget to budget increase, however, individual percentage changes may not add to the total percentage change due
to rounding of the percentage changes to one decimal point.
For purposes of this revenue analysis, budgeted or estimated Fund Balance amounts and changes are NOT included, since they are
not a factor in the allocation of new revenue dollars.
Cc: Dr. Kevin C. Castner, Superintendent of Schools
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