7b supp
ITEM NO: 7b supp DATE OF MEETING: November 1, 2011_ Agenda Purpose of the Salary and Benefits Resolution Updates since last year Answers to last year's Commission questions Information on Educational Reimbursement program Salary Range update Benefit plan updates Recommended changes for 2012 Standard changes Salary range changes 2 Salary and Benefits Resolution Background Delegates authority from the Commission to the CEO to direct administration of pay and benefits for nonrepresented employees Pay and benefits are major components of the Port's total rewards package Covers approximately 867 (56%) Port employees Contains provisions similar to collective bargaining agreements Benefits, basis for pay increases, holidays Does not set actual salaries for non-represented employees 3 Salary and Benefits Resolution Background Authorizes the Port to provide medical and dental insurance benefits Establishes Pay for Performance (PfP) as the manner for granting pay increases Merit-based increases tied to employees' performance plans and appraisals Stipulates that PfP will be administered within guidelines of the Salary Administration Policy Funding for PfP established by the Port budget PfP, unlike other public employers' plans, are not guaranteed increases 4 Salary and Benefits Resolution Background Resolution contains the salary range structure for non- union jobs Ranges are "open" ranges, they do not include specific pay steps Changes informed by New or changing laws governing pay or benefits Updates to Port pay or benefit policies Current Market pay levels Anticipated pay increases at local and regional, public and private , employers Input, and questions, from Port staff 5 Salary and Benefits Resolution Background Commission questions from last year What portion of employees receive a PTO cash out? 2010 2011 Percentage of non-union employees receiving a cash out 33% 26% Portion of cash outs due to termination 13% Portion of cash outs due to hour limit 14% Portion of cash outs due to employee request 73% Total hours cashed out 34,805 17,252 Value of cashed out hours $1.6 million $819,650 What portion of employees receive overtime? 2010 2011 Portion of non-exempt employees receiving overtime 18% 18% Number of overtime hours 5,193 5,885 Overtime pay $223,493 $295,397 6 Salary and Benefits Resolution Background Tuition Reimbursement Program not addressed in the Resolution component of the Learning and Development category of total rewards Activity since 2007 91 employees, mostly non-union $630,544 in tuition reimbursed Reimbursement ~ 64% of tuition Books, fees and other costs not reimbursed Educational programs must be pre-approved Individual classes must also be pre-approved 7 Salary and Benefits Resolution Background Tuition Reimbursement Program Not a major impact on recruiting, focus more on non- degree classes, seminars, conferences, etc. Supports employee contributions to the Port Survey results support positive impacts of employees with degrees greater job satisfaction, Greater sense of being appreciated, and belief that the Port will be a desirable employer in the long-run 8 Salary and Benefits Resolution Background Salary Ranges Last year ranges were about 1% below market Anticipated 2.9% average market pay increase for 2011 2.8% reported actual average market pay increase for 2011 Ranges were adjusted by 2% for 2011 9 Salary and Benefits Resolution Background Benefits Self-funding implemented in 2011 Slower cost increases attributable to self-funding 3% instead of 8% for 2012 Premium sharing formula changed slightly for 2011 Employees paying ~ 9% of the premium Continue managing Port cost for non-union benefits Slight increases to premium, copays, and deductible for 2012 Reviewing potential plan design changes for 2013-2014 10 2012 Salary & Benefit Resolution Changes Considerations for 2012 Upward Trend of the Consumer Price Index Minor changes to Port-sponsored health care plans 11 2012 Salary & Benefit Resolution Changes Standard Changes Updated holiday schedule Minor wording changes to clarify sections Reducing PTO balance limit from 800 hours to 700 hours 12 2012 Salary & Benefit Resolution Changes Jobs market priced to determine how ranges compare to market 14 published surveys utilized, 12 are all industry, 1 is local public sector, 1 is airport specific About half the non-union jobs market priced These jobs represent about 60% of non-union employees Port range midpoints compared to market average actual rates Ranges currently 0.3% below market Planned 2012 market pay increases average 3.1% 13 2012 Salary & Benefit Resolution Changes Planned pay changes of local public employers also informs range adjustment recommendation 12 local public employers contacted COLA increases planned to be zero to 2% Step increases expected between zero and 8.8% Total increases expected to range from zero to 8.8% 14 2012 Salary & Benefit Resolution Changes Pay for union jobs also considered Port COLA increases expected to be at least 2% based on CPI increase trends and collective bargaining agreements Local CPI-U most commonly used Annual increases to this index has ranged from 0.2% to 3.2%, most recent annual increase was 2.7%. 15 2012 Salary & Benefit Resolution Changes 2% range adjustment recommended for 2012 Recommendation is somewhat conservative Some skill sets remain in high demand If hiring activities increase before 2012 year-end, ranges could lead to recruiting challenges 16 Conclusion Recommended 2012 Resolution changes Changes are minimal Consistent with past years Range adjustment is conservative 17 Questions? 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