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Item 4C.. AGENDA ITEM #4C FEBRUARY 9, 2004 CITY OF ATLANTIC BEACH CITY COMMISSION MEETING STAFF REPORT AGENDA ITEM: One-Time Pay Adjustment for Police Officers SUBMITTED BY: George Foster, Human Resource Manager DATE: February 3, 2004 BACKGROUND: On January 12, 2004, the City Commission discussed, and approved, various pay adjustments for Police Officers as proposed by the Chief of Police David Thompson. During these discussions, information was requested as to what the cost would be to provide a "one-time" pay increase to Police Officers to bring them in line with the Jacksonville Sheriffs Office's (JSO) pay scales. It is estimated that to increase the pay of our sworn Police Officers, excluding the Director/Chief and Deputy Director/Deputy Chief, to that of JSO Officers, using the October 2002 JSO pay, would cost ~, approximately $232,524 annually. This estimated cost would increase by the amount of the JSO October 2003 pay increase, which is still being negotiated. To provide all current employees, including Police Officers, with a one time pay adjustment to bring them up to the appropriate pay „~, utilizing Atlantic Beach's current pay plan would cost the City approximately $236,657 annually. However, this action would result in Police Officers receiving less than the use of the JSO pay plan. If we adjust the pay for Police Officers, there are two additional issues that should be considered: pay compression and internal pay equity. If we raise the pay for other sworn Police Officers to JSO levels, we have pay compression between their pay and the pay of the Deputy Director of Public Safety, who is also a sworn Police Officer in that his current pay differential would be reduced to .001 % or $75 annually; therefore, we should raise his pay accordingly. However, if we raise his pay, then we will have pay compression between the Deputy Director of Public Safety and the Director of Public Safety and should raise the pay of the Public Safety Director accordingly. If we raise the pay for these "management" officials, we create an internal equity pay issue in that their pay will be higher than other ~* management officials within the City. However, if we do not raise their pay, then we have pay compression and one of these employees receiving only $75 per year more than those that he supervises and, ~"' within a few years, receiving less than those that he supervises. e~. AGENDA ITEM #4C FEBRUARY 9, 2004 Employee pay adjustments were previously reviewed prior to implementation of the October 2001 Classif cation & Pay Plan and not implemented due to two major factors: 1) overall cost and 2) ~" cost benefit analysis. In the implementation of the October 2001 Classification and Pay """" Plan, employees were provided with additional pay for up to seven years of City service. No credit was provided to employees with prior "non-city" experience or for City service over seven years. The "" consultants advised that to provide credit for additional years of service would be very costly and would not be cost effective from cost versus an increased retention basis. As pay is only one of many factors that affect the City's ability to recruit and retain employees, City Staff has annually reviewed the total compensation and benefits of our employees in order to improve recruitment and retention. Some recent changes have been: Classification & Pay plan implemented on October 1, 2001; change of employee birthday holiday to Personal Leave; allowing employees to change their Personal Leave maximum accrual limit and a substantial pay increase effective October 1, 2003. For Police Officers the City has also recently expanded the take home vehicle program and proposed providing additional pay to Police Off cers for vaxious additional duties. It is believed that these changes,. along with annual reviews and ~,,, modifications, will prevent the City from again getting into a pay compression or serious pay deficient position and are long term, not short term immediate fixes for recnzitment and retention issues. Comparison of pay from one City to another City is also potentially misleading in that pay is only one item of an employee's overall compensation package. For example, Atlantic Beach Police Officers contribute 1 % of their salary to the pension plan; whereas, JSO Officers contribute 7%. Although the pension benefits are similar, JSO officers are not covered under Social Security and JSO retirees have a COLA provision. This is just one of the complex items that affects the "net" pay for our Police Officers. Although "net pay", along with other benefits, is not normally considered by the employee when they compare their pay, these variables must be considered when the City is determining how to obtain the most cost effective benefit for the limited funds available to the City. Although pay is a high retention determinant, it is not one of the highest reasons affecting recruitment and retention. Utilizing the combined results of several studies provided some consistent patterns. Data from a Society for Human Resource AGENDA ITEM #4C FEBRUARY 9, 2004 Management Retention Practice Survey indicated that the top three reasons that employees leave are: #1 -Career Opportunities Elsewhere (78% listed this as one of the reasons for leaving); #2 -Better Compensation and Benefits Package (65% listed as this one of the reasons for leaving); and #3 -Poor Management (21 % listed this as one of the reasons for leaving). Retention of Police Officers is not the only retention issue within the ~• City. The attached listing of employees by year-of--hire indicates that retention of employees throughout the City is similar. Another hard to fill job has been that of Waste Water Operator where the City is ~* competing against JEA for a limited resource. Other hard to fill jobs have been: Emergency Communication Operator, Animal Control Officer, Painter, and Meter Reader. Some workforce comparisons are: ~. Total City workforce with more than 7 years of service = 40.5% Sworn Police Officer with more than 7 years of service = 44.0% Total City workforce with more than 10 years of service = 37.0% Sworn Police Officer with more than 10 years of service = 44.0% BUDGET: Funds for any pay adjustment would need to be identified and included within the City budget. RECOMMENDATION: A one-time pay adjustment is not recommended. CITY MANAGER: Any pay adjustments should be provided to all employees.