PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      7a 
STAFF BRIEFING 
Date of Meeting    November 4, 2014 
DATE:    October 17, 2014 
TO:     Ted Fick, Chief Executive Officer 
FROM:    Ann McClellan, Compensation Manager, HRD 
SUBJECT:  Commission Briefing - 2015 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 that
occurred over the past year that impact the programs included in the resolution. 
No major changes to the Salary and Benefits Resolution for 2015 are proposed, and the
changes that are proposed are consistent with changes in past years. We recommend 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 affect approximately eight employees and have a
2015 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 960 employees, or 53% 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 amount of cost sharing between the Port and
employees is determined as part of the annual budget process.  The resolution also
Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
October 17, 2014 
Page 2 of 6 
establishes the Pay for 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 
Ted Fick, Chief Executive Officer 
October 17, 2014 
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 2013? 
When reviewing the current (2014) Salary and Benefits Resolution and determining what
changes should be incorporated into the 2015 resolution, it is helpful to look at what is
different, or has changed in the past year. 
To ensure alignment with the Port's Total Rewards Philosophy, Port staff continues to
analyze how well our plans and programs align with the philosophy and address any
identified gaps. Pay and benefits programs specified in the Salary and Benefits resolution
are well aligned with the Total Rewards philosophy with the exception of health plans
where changes through 2014 have made significant strides in aligning these plans with
the philosophy. The Healthcare Strategy that was developed in 2013 continues to guide
changes to health plans and increase alighment to the Total Rewards Philosophy.
Benefits Over the past few years the Port has taken steps to contain health care costs,
including implementing a wellness program, becoming self-insured, sharing premium
costs with employees, and increasing the employee cost sharing for services received. In
2014 one medical plan option was eliminated and a qualified High Deductible Health
Plan was introduced. Consistent with the Healthcare Strategy, employee cost sharing
increased, and a very slight dental plan premium sharing was introduced. Additionally,
dental plan annual maximums for employees and their dependents were increased. These
changes did not have a direct impact on the Salary and Benefits Resolution, but are an
important component of the overall Total Rewards package.  The changes to health plans
over the past several years have contributed to containing Port health care cost increases 
and the 2014 increase to Port costs was again less than 2%.
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 0.2% below market. Additionally, the data from published salary surveys
suggested a 2.9% average pay increase for this year. The actual average pay increase
reported in the surveys for this year is very slightly less at 2.8%.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
October 17, 2014 
Page 4 of 6 
SALARY AND BENEFITS RESOLUTION CHANGES FROM 2014 
Considerations for 2015 
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
2015, an economy that is showing varying signs of recovery is a consideration. In
addition, timelines and requirements of the Affordable Care Act continue to change and
evolve, leading to challenges in administering the Port-sponsored healthcare plans. The
Port established and introduced a multi-year Healthcare Strategy in 2013 designed to
bring the Port sponsored 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 2015 there will be few changes to the Port-sponsered health plans. Out-of-pocket
maximums will increase for the Cigna Deductible and High Deductible Health Plans and
employee premium sharing will increase for the Cigna Deductible, Group Health, and
most Dental options. These increases are consistent with the Healthcare Strategy and
Total Rewards Philosophy and will move these plans closer to market while still
providing health benefits options that are slightly higher than market. In July of 2015, we
anticipate increases to both the employee and the employer contribution to the Public
Employees Retirement System (PERS). 
The changes to benefits plans are incorporated into the Port budget, and are 
considerations for the Salary and Benefits Resolution as they impact the plans and
programs the Resolution authorizes. 
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 201 5 these standard changes will
include: 
an updated holiday schedule for 2015; 
an updated Graded Salary Range Structure that reflects a proposed 2% range
adjustment; 
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

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
October 17, 2014 
Page 5 of 6 
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 2015, we utilized data from 11 published salary surveys to update market data on 
55% of the Port's non-represented jobs covering approximately 70% of non-union
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 0.9% below market. Salary planning
surveys together with pay increase projections contained in salary surveys are reporting
an anticipated 2.9% average increase for 2015. 
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 2.00% with possible total (COLA plus
step or merit) increases to range from 0 to 10.88%. 
We also review how pay for employees in the Port's represented jobs is expected to
increase when formulating a range adjustment recommendation. For 2015 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 2013 - August 2014 
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Aug-13  Oct-13  Dec-13  Feb-14  Apr-14   Jun-14  Aug-14
CPI-U Sea-Tac-Brem  1.1%    0.6%    1.3%    1.2%    2.4%    2.0%    1.8%
We will be recommending an increase of 2.0% to the Port's non-represented salary
ranges for 2015. Implementing a range adjustment that is a little less than the projected

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
October 17, 2014 
Page 6 of 6 
average market pay increase is a conservative approach that might lead to retention and
hiring challenges if hiring activities in the local labor market increase notably during 
2015.  There are some skill sets (particularly technical skills including information
technology and engineering) that 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 eight 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. 
Other Changes 
We will also be proposing the following updates to the Salary and Benefits Resolution for
2015: 
An addition to the definition section for "at-will" and "for-cause" designations, 
An update to the list of jobs that are not evaluated with the Port's job evaluation
system, 
Clarifying language about pay and benefits for the Chief Executive Officer, 
Language to clarify pay for overtime eligible employees who work when the
clocks change for Daylight Savings Time; and, 
Addition of the Faith or Conscience Days required by a new state law 

ATTACHMENTS TO THIS BRIEFING 
PowerPoint presentation 
Draft 2015 Graded Salary Range Structure 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
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