PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      7a 
STAFF BRIEFING 
Date of Meeting    October 22, 2013 
DATE:    October 15, 2013 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Tammy Woodard, Assistant Director, HRD  Total Rewards 
SUBJECT:  Commission Briefing - 2014 Salary and Benefits Resolution 
SYNOPSIS 
The Salary and Benefits Resolution is a delegation of authority from the Commission to
the Chief Executive Officer to oversee administration of compensation and benefits for
the Port's non-represented employees. The resolution includes provisions governing pay
practices, salary ranges, and benefits programs. This resolution has historically been
updated annually. When reviewing the current Salary and Benefits Resolution to
determine changes needed for the coming year's resolution, staff reviews changes during 
the past year that impact the programs included in the resolution. 
There will not be major changes to the Salary and Benefits Resolution for 2014 and
changes will be consistent with changes in past years. We will be recommending a 2.0%
increase to the Port's non-represented salary ranges. This recommendation is consistent
with the current market analysis and available market projections. The recommended
range adjustment will impact approximately 6 employees and have a 2014 cost of about
$5,000. 
BACKGROUND 
What is the Salary and Benefits Resolution? 
The Salary and Benefits Resolution is a delegation of authority from the Commission to 
the Chief Executive Officer to direct the administration of compensation and benefits for
the Port's non-represented employees. Compensation and benefits are major components
of the Port's Total Rewards package, which is important to retaining, engaging, and
attracting skilled employees committed to helping the Port achieve its mission, goals, and
business objectives. The resolution covers approximately 950 employees, or 54% of the
Port's workforce. 
What does the Salary and Benefits Resolution Cover? 
The Salary and Benefits Resolution authorizes the Port to provide medical and dental,
time off, and other benefits to employees, and it authorizes sharing health care premium
costs between the Port and employees. The resolution also establishes the Pay for 

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 2 of 6 
Performance (PfP) program as the basis for non-union employees' pay increases, and
stipulates that the program will be administered under Port Policy HR-21, Salary
Administration. The Port's PfP program is performance, or merit-based, and employee
increases are linked to their performance appraisals. Non-union employees do not
receive any automatic cost of living adjustments (COLAs) or step increases. The
resolution further stipulates that funding for PfP will be established by the Port's budget
process and that the Human Resources and Development (HRD) department will
implement the program. 
The resolution also includes the salary range structure, which is a listing of each of the
Port's salary ranges identified by a pay grade (number) along with the minimum, middle
point, and maximum pay for jobs assigned to each pay grade. Increases to the Port's
salary ranges are based on how the overall range structure compares to market and the
overall local pay changes expected for the coming year. Employee pay can fall anywhere
within the range and increases to the salary range structure do not result in any automatic
pay increases unless an employee's pay is less than the new minimum of the range
following a range structure increase. The cost of below-minimum adjustments resulting
from salary range structure increases is generally negligible and absorbed in the budget at
the department level where necessary. 
The Port's merit-based PfP program and market-based structure adjustments are different
from the pay programs in place at many public employers. Most public employers utilize
a step-in-grade program where employees' pay is based on a pay step within their range,
and they receive automatic increases from one step to the next based on tenure until their
pay reaches the top step, or maximum, of their range. Along with the step-in-grade
program, most public employers grant COLA increases to employees. COLA increases
are typically based on changes to the Consumer Price Index (CPI) and represent a change
to the employers' entire pay structure; all grades, ranges, and steps are adjusted by the
COLA amount. When the pay structure adjusts, the employees' pay adjusts along with
the structure by the COLA amount. 
What are changes to the Salary and Benefits Resolution based on? 
Many factors are reviewed and considered before updates to the Salary and Benefits
Resolution are recommended. These can include: 
changes to laws governing employee benefits; 
updates to Port pay and benefits policies; 
estimates provided to the Port budgeting process; 
current market pay levels; 
anticipated pay increases at local and regional, public and private employers; 
known and estimated COLA and stipulated increases included in the Port's
collective bargaining agreements; 
input, as well as questions, from managers and employees about the current
resolution; and

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 3 of 6 
how last year's anticipated market pay changes compare to actual pay changes
this year. 
While the resolution addresses pay and benefits for non-union employees, policies and
other documents also provide comprehensive guidance to HRD staff in administering the
Port's pay and benefits programs. Port policies address many provisions of the resolution
and address various aspects of the Port's Total Rewards package. The Total Rewards
Program document and benefit plan documents also contain program administration
details beyond those included in the Salary and Benefits Resolution. 
What has happened since November 2012? 
When reviewing the current (2013) Salary and Benefits Resolution and determining what
changes should be incorporated into the 2014 resolution, it is helpful to look at what is
different, or has changed in the past year. 
As part of the Total Rewards philosophy implementation, Port staff has been analyzing 
how well plans and programs align with the philosophy and we have begun to address
some identified gaps. Pay and benefits programs specified in the Salary and Benefits
resolution were determined to be quite well aligned with the Total Rewards philosophy
with the exception of health plans. Health plans are not completely aligned with the
philosophy and a multi-year Healthcare Strategy was developed to set direction for
bringing these plans into alignment with the strategy. 
Benefits  Last year we were preparing to make very minimal changes to the Port's
benefits package while we converted to a new claims administrator. Over the past few
years the Port has taken steps to contain health care costs, including implementing a
wellness program, sharing premium costs with employees, and increasing the employee
cost sharing for services received. In 2011, to help contain health plan increases and
exercise greater control over health plan elements, the Port changed the way health plans
were funded and began self-insuring them. In 2012, deductibles and copays for all Portsponsored
health plans were increased slightly. And, in 2013 we changed medical claims
administrators for the Port-sponsored plans. This was the result of a competitive
procurement process that resulted in reduced administration costs. The changes to health
plans over the past several years have contributed to overall annual health care cost
increases for the Port of less than 3%. This is noticeably less than the national health care
trend of about 6 - 8%. 
Salary ranges  A year ago we recommended a 2% increase to the non-represented salary
ranges. At that time our market analysis indicated that our non-represented salary range
structure was 1% below market. Additionally, the data from published salary surveys
suggested a 2.8% average pay increase for this year. The actual average pay increase
reported in the surveys for this year is the same as last year's projected 2.8%.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 4 of 6 
SALARY AND BENEFITS RESOLUTION CHANGES FROM 2014 
Considerations for 2014 
Changes to the Salary and Benefits Resolution take into account the varied and distinct
nature of the Port's business, the work employees perform, and aspects of the business
environment that may impact the Port's business or the labor market for employees. For
2014, an economy that is showing varying signs of recovery is a consideration. In
addition, changing timelines and requirements of the Affordable Care Act continue to
lend a sense of uncertainty to how we administer healthcare plans. The Port established
and introduced a multi-year Healthcare Strategy earlier this year designed to bring health
plans into closer alignment with the Total Rewards Philosophy and address the
implications of the Affordable Care Act. This strategy also makes the direction for the
Port's health plans more clear. In 2014 one medical plan option will be eliminated and a
qualified High Deductible Health Plan will be introduced. Consistent with the Healthcare
Strategy, employee cost sharing will increase with existing medical plans, the dental plan
annual maximums will increase and a very slight dental plan premium sharing will be
introduced. These changes do not have a direct impact on the Salary and Benefits
Resolution, but are an important component of the overall Total Rewards package. 
Standard Changes 
Each year there are some changes to the Salary and Benefits Resolution that are
necessary to keep it current or increase clarity. For 2014 these standard changes will
include: 
an updated holiday schedule for 2014; 
the reduction of the Paid Time Off (PTO) accumulation limit from 600 to 480 
hours, and 
minor wording changes to add clarity to some sections. 
Salary Ranges 
HRD staff reviews and analyzes updated pay data from published salary surveys each
year to assess how well Port non-represented salary ranges compare to market. We
compare average actual market pay for a job to the middle point of the job's salary range
to determine how well the pay range for the job compares to market. We use data from
all industry (public and private) employers unless a job is unique to the public sector. We
use all industry data because the Port recruits employees from, and loses employees to,
employers in a variety of industries. Published pay data is combined with information
about anticipated pay changes from other employers to inform recommended salary range
changes. 
For 2014, we utilized data from 12 published salary surveys to update market data on
slightly less than half the Port's non-represented jobs covering nearly 60% of non-union

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 5 of 6 
employees. Salary surveys include data on jobs that are considered "benchmark" jobs;
jobs that are common and exist at many employers. This year's market analysis indicates
that the non-represented range structure, overall, is 0.2% below market. Salary planning
surveys together with pay increase projections contained in salary surveys are reporting
an anticipated 2.9% average increase for 2014. 
Data we gather from local public employers regarding their anticipated pay changes also
helps inform recommended salary range adjustments. We have requested data from 13
local public employers. Data received to date indicates that COLA increase plans vary
considerably and are expected to range from 0 to 2.61% with expected total (COLA plus
step) increases to range from 0 to 10.5%. 
We also review how pay for employees in the Port's represented jobs is expected to
increase when formulating a range adjustment recommendation. For 2014 the majority
of the collective bargaining agreements covering Port employees include pay changes
that are not yet known because they are based on future CPI changes or the agreements
are not yet final. The following chart, while not an indication of future CPI changes, 
shows how the Seattle-Tacoma-Bremerton Consumer Price Index  All Urban
Consumers (CPI-U) has changed over the past two years. This index is the one most
commonly used in Port labor agreements. 

Seattle-Bremerton-Tacoma CPI-U 
August 2012 - August 2013 
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Aug-12  Oct-12  Dec-12  Feb-13  Apr-13  Jun-13  Aug-13
CPI-U Sea-Tac-Brem  2.7%    2.3%    1.4%    1.8%    1.2%    1.4%    1.1%

We will be recommending an increase of 2.0% to the Port's non-represented salary
ranges for 2014. Implementing a range adjustment that is a little less than the projected
average market pay increase is a conservative approach that might lead to retention and

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 6 of 6 
hiring challenges if hiring activities in the local labor market increase notably during 
2014. While the economic outlook remains uncertain, some skill sets (particularly
technical skills including information technology and engineering) remain in high
demand and pay for jobs requiring these skills is expected to continue increasing faster
than general industry jobs. With a 2.0% increase to the salary range structure, we expect
about 6 employees to have pay rates less than the adjusted range minimum. The
estimated cost to adjust pay for these employees to their new range minimum is about
$5,000. 
Foreign Language Premium 
The Port's Foreign Language Premium policy provides a $20/hour premium (in addition
to an employee's current hourly rate) to employees who provide translation services to
the Port when doing so is not a regular part of their job. This practice was reviewed and
analyzed to see how well it aligns with the Total Rewards philosophy. The analysis
revealed that this practice is unique and thus not aligned with the philosophy. As a result,
we will be recommending that this policy be deleted. 
Insurance Benefits 
The existing Salary and Benefits Resolution combines insurance eligibility for employees 
and commissioners into one section. We will be recommending separate sections for
employee and Commissioner insurance eligibility to ensure clarity and reduce the
possibility of confusion. Actual eligibility will not change for employees or
commissioners as a result of this change. 

ATTACHMENTS TO THIS BRIEFING 
PowerPoint presentation 
Draft 2014 Graded Salary Range Structure 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None