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Compensation Study Presentation Public Safety & Neighborhood Services Committee February 28, 2007. S. Issues with the Study. Base Pay Final Study did not just evaluate base pay Results were modified to enhance City’s position “Joint” Study
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Compensation Study Presentation Public Safety & Neighborhood Services CommitteeFebruary 28, 2007 S
Issues with the Study • Base Pay • Final Study did not just evaluate base pay • Results were modified to enhance City’s position • “Joint” Study • Besides involvement in two initial meetings, Local 145 was not invited to participate in any way • Indexed for cost of living • Study was not indexed for COL as agreed to. • Cost of living has significant impact on competitive wages
Issues with the Study • Does not include the cities of San Francisco, San Jose or Oakland • all have been included in past studies presented to Council • These agencies traditionally compensate their employees at the highest rates in surveys • The exclusion of this data significantly skews the results • The inclusion of Houston and Phoenix are not relevant: • The cities are not within the sphere of competitive agencies • Cost of living is dramatically different than in California • Inclusion significantly reduces the average compensation information
The Past • Two years without a salary increase • Two years without a flexible benefits increase • Paying additional 5.7% of base pay towards retirement • Elimination of the following Retirement benefits for those hired after 7/1/05, including: • Loss of Purchase of Service option • Loss of Retiree Health coverage • Loss of participation in DROP • Loss of 13th Check
The Present - Salary • Compensation package is not competitive: • Since FY 2005, firefighter pay has fallen 7.2% behind the cost of living (source: CPI info provided by City of San Diego) • Average salary increases for study’s comparables*: • 3.97% in FY 07 • 4.33% in FY 08 • 3.12% in FY 09 • Experienced Fire Operations personnel will, and are, investigating employment with agencies offering higher pay & benefits • Recruitment Problem FY 03 3 declined academy appointment FY 04 7 “ “ “ FY 05 12 “ “ “ FY 06 13 “ “ “ • The department is currently receiving numerous requests for background review by other agencies *Source: City of San Diego Compensation & Benefit study
The Present – Flexible Benefits • City contribution to health benefits ($5,575) is the lowest of all agencies in the survey • $965 less than lowest comparable agency (Oceanside: $6,540) • $3,487 less than the average of all agencies • $8,263 less than the highest contributing agency (Encinitas: $13,838)
Maximum Health Care Contribution ComparisonSource: City of San Diego Compensation & Benefits Study
The Present • Local 145’s Salary Proposal • Five Year contract consistent with Mayor’s five year budget • Increase fire fighter pay to average of top 10 cities (by population) in stateover five year period • Helps avoid future recruitment and retention problems
The Present • City’s Proposal: • 0% Salary Increase • Significant change to health benefits delivery model which will severely reduce compensation to a majority of Local 145 members • Approximately $1M decrease which equates to $1,000 decrease per member in health benefits • Convert percentage based specialty pays into flat dollar amounts • For employees hired after 7/1/07: • Reduce Retirement factor from one-year high to three-year high • Reduce Retirement cap from 90% to 75%
The Present • Current Employee’s Perspective • Pension Benefit Under Attack • DROP Under Attack • Purchase of Service Under Attack • Approved Overtime Under Attack • Current salary Not competitive • Current health benefits Not competitive • Staffing Insufficient • Resources Insufficient
The Present • Future Applicant’s Perspective • Pension Benefit Not competitive • Current salary Not competitive • Current benefits Not competitive • Retiree Health No longer available • DROP No longer available • Purchase of Service No longer available • Approved Overtime Under Attack • Staffing Insufficient • Resources Insufficient
The Present • A continuation of freezes of salaries and benefits, attacks on pension benefits, and the overall instability of the City is leading new hires to accept position with other agencies • Since FY 03, 35 fire recruits have rejected job offers by the City to accept employment elsewhere • Number and quality of applicants has declined • On average 20% of each academy fails
The Present • What do we need? • Responsible decision-making that will treat the City’s work force fairly and keep pace with a competitive market • Mayor’s proposal will only create further recruitment and retention problems • Fire-Rescue will have 100 budgeted vacancies by the end of the fiscal year that will have to be filled either by new personnel or by overtime
The Present • What do we need? • Responsible decisions that show an understanding of, and appreciation for, the importance of experienced human capital in the success of the City’s reform efforts • Experienced employees are your most valuable commodity in terms of successful reform • Experienced employees will better serve the public • Lower turnover provides for more experience and lower cost
The Present • Responsible decisions today that won’t require more difficult and more expensive solutions later. • Loss of experienced personnel could create further liability for the City • Continuing to work toward the least competitive compensation package is not in the best interest of serving the public as the quality of service will suffer • The two-tier 1981 Pension Plan was a failure and all employees were returned to original plan • Public attacks on wages, benefits and overtime by the Mayor’s office continue while disregarding the contractual requirement to jointly study compensation and benefit issues
The Present • Contractually required studies not presented to Local 145 or the City Council: • DROP • Retiree Health for employees hired before 7/1/05 • Defined Contribution Retiree Health plan for employees hired after 7/1/05 • THESE EMPLOYEES AND ALL FUTURE FIRE PERSONNEL HAVE NO RETIREE HEALTH CARE • Flexible Benefits Study
The Future • City has proposed a 0% Salary increase and $1M decrease in health benefits for FY 2008 • City has proposed two significant retirement benefit changes that will make our pension system the worst in the County • Employees required to pay significantly more for their retirement than any other agency in the county of San Diego • Average salary increases for study’s comparables*: • 3.97% in FY 07 • 4.33% in FY 08 • 3.12% in FY 09
The Future • Continued reductions in compensation and attacks on benefits will motivate current employees to pursue jobs with competitive agencies • Highly qualified applicants will either accept a job with another agency or use the Fire-Rescue department as a stepping stone after they are hired. • BOTTOM LINE - The City’s current compensation proposal will exacerbate the recruitment and retention problems in the fire department.
The Future What will it look like?
Salary Increase ComparisonFY 07 through FY 09Source: City of San Diego Compensation & Benefit Study
