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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 12/20/2011 - SECOND READING OF ORDINANCE NO. 172, 2011, ADOPTINDATE: December 20, 2011 STAFF: Janet Miller Amy Sharkey AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 10 SUBJECT Second Reading of Ordinance No. 172, 2011, Adopting the 2012 Classified Employees’ Pay Plan. EXECUTIVE SUMMARY Ordinance No. 172, 2011, unanimously adopted on First Reading on December 6, 2011, adopts the 2012 classified employees’ pay plan. The 2012 Pay Plan establishes a structure for employee compensation. It is the framework that sets the minimum and maximum pay for City positions. The methodology used by the City is based on compensation best practices. The 2012 Pay Plan uses average actual salary data collected from public and private sector markets for benchmark positions to determine pay range midpoints within occupational groups. Ranges for non-benchmark jobs are established using a point factor system that is calibrated against the benchmark jobs. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary - December 6, 2011 (w/o attachments) COPY COPY COPY COPY ATTACHMENT 1 DATE: December 6, 2011 STAFF: Janet Miller Amy Sharkey AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 20 SUBJECT First Reading of Ordinance No. 172, 2011, Adopting the 2012 Classified Employees’ Pay Plan. EXECUTIVE SUMMARY The City of Fort Collins 2012 Pay Plan establishes a pay range structure for employee compensation. It is the framework that sets the minimum and maximum pay for City positions. The methodology used by the City is based on compensation best practices. The 2012 Pay Plan uses average actual salary data collected from public and private sector markets for benchmark positions to determine pay range midpoints within occupational groups. Ranges for non- benchmark jobs are established using a point factor system that is calibrated against the benchmark jobs. BACKGROUND / DISCUSSION Prior to 2007, the philosophy used to develop the City’s annual pay plan was based on setting pay range maximums, within occupational groups, at the 70th percentile of the market. Pay ranges were developed using pay range maximum data collected from 18 peer organizations. The 2008 Pay Plan began a transition toward a new compensation philosophy. Rather than using pay range maximums to develop the pay structure, average actual pay data collected from the same 18 benchmark organizations was used to set the pay range midpoints. The pay range minimum and maximum was developed using the pay range midpoint, establishing a 40% difference between the minimum and maximum of pay ranges. In 2008, staff attended a course, “Market Pricing - Conducting a Competitive Pay Analysis” to learn about best practices in compensation, benefits and total rewards. Staff used the recommended methodology to design the 2009 Pay Plan. This same methodology was used to design the 2012 Pay Plan and is outlined below: Step 1 – Market Identification Consistent with City Council direction, we utilized a market identification process to ensure that the City’s Pay Plan aligns closely with the actual markets with which we compete (both the public and private sectors). The City identified 143 benchmark jobs for which we could gather market pay data. The Colorado Front Range (Fort Collins to Colorado Springs) was identified as the market for professional and technical jobs. Northern Colorado, including Larimer and Weld Counties, was the market identified for administrative support and some labor trade jobs. Salary data for these two markets includes cities and counties with populations greater than 50,000 and private sector data, where available. Step 2 – Market Data Collection and Analysis Average actual salary data was collected for the benchmark jobs using surveys from Mountain States Employer’s Council (MSEC) and the Colorado Municipal League (CML). Average actual salary (also referred to as the mean) is the sum of all reported pay for every employee in a benchmark job divided by the number of incumbents in a given job. Because the salary data was collected in March 2011, staff “aged” the data by multiplying survey salaries by an Employment Cost Index, 1.2%, (for government jobs) to arrive at an effective average actual pay rate to be implemented in 2012. COPY COPY COPY COPY December 6, 2011 -2- ITEM 20 Primary Data Sources Mountain States Employer’s Council (MSEC) Colorado Compensation Survey MSEC Colorado Compensation Survey represents Colorado employers of all sizes. Data was collected from 442 respondents located across the State of Colorado representing 41,755 employees. Government employers represent 20% of the employers. MSEC surveys 379 benchmark jobs. Mountain States Employer’s Council (MSEC) Information Technology Compensation Survey Data is collected from 337 respondents. There are 5,887 employees and 81 benchmark jobs. Information is not broken down by geographic region or type of industry. Mountain State Employer’s Council (MSEC) Public Employers Compensation Survey Data is collected from 118 respondents. There 33,685 employees and 344 benchmark jobs. Colorado Municipal League (CML) CML reports compensation from many jurisdictions in the State of Colorado, including municipalities, counties, and special districts. Step 3 – Establish Pay Ranges After collecting the most recent data, each pay grade was analyzed. Average actual salaries were used to set the City’s midpoint for each pay grade within seven occupational groups that make up the Classified Employees’ Pay Plan. In order to determine pay grade midpoints (the pay structure), staff used regression analysis to establish the best line of fit for the average actual salaries and pay grades. Midpoints were then used to establish the minimum and maximum of the pay range (40% spread). As a result of the market analysis, staff is recommending that the pay ranges for three of the seven occupational groups be adjusted. Accordingly, all pay grades within the Administrative Professional, Information Technology, and Electric Utility Operations and Skill Trade occupational groups have been adjusted upwards by 2%. All pay grades within the other four occupational groups (Administrative Support, Tech/Engineering, Operation Skill Trades/non- electric trades and Police Civilian) remain at their current levels. The result of all this effort is the recommended 2012 Classified Employee Pay Plan. FINANCIAL / ECONOMIC IMPACTS Funding for the 2012 Classified Employees’ Pay Plan is included in the 2012 Adopted City Budget, as amended. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. ORDINANCE NO. 172, 2011 OF THE COUNCIL OF THE CITY OF FORT COLLINS ADOPTING THE 2012 CLASSIFIED EMPLOYEES PAY PLAN WHEREAS, Section 2-566 of the City Code requires that the pay plan for all classified employees of the City shall be established by ordinance of the City Council; and WHEREAS, the City is committed to compensating employees in a manner that is fair, competitive and understandable; and WHEREAS, the annual market analysis conducted by the Human Resources Department includes public and private employer survey information for Northern Colorado and the Front Range, providing clear benchmark information for approximately 143 benchmark positions; and WHEREAS, the pay plan recommended by the City Manager is consistent with City Council objectives, including the philosophy of establishing pay ranges by using the average actual salaries for benchmark positions to set the mid-point of pay ranges for those positions; and WHEREAS, the City Council believes that the adoption of the recommended pay plan is in the best interests of the City and further believes that the allocation of individual salaries within the pay plan should be related to employee performance. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby adopts the 2012 City of Fort Collins Classified Employees Pay Plan (the "Plan"), a copy of which is attached hereto as Exhibit A and incorporated herein by this reference. Section 2. That the effective date of the Plan shall commence with the January 9, 2012, pay period. Section 3. That the City Manager shall fix the compensation levels of all classified employees within the pay levels established in the Plan except to the extent that the City Manager determines, due to performance or other extraordinary circumstances, that the pay level of a particular employee should remain below the minimum or be fixed above the maximum for that employee’s job title. Introduced, considered favorably on first reading, and ordered published this 6th day of December, A.D. 2011, and to be presented for final passage on the 20th day of December, A.D. 2011. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 20th day of December, A.D. 2011. _________________________________ Mayor ATTEST: _____________________________ City Clerk