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HomeMy WebLinkAbout01/13/2025 - Meeting Minutes Minutes Meeting Citizens’ Compensation Advisory Committee January 13, 2025 Members Present: Brandon Dew (Chair) J. Clair Baldwin (Vice-Chair) Leandro Tane Casey Lund Mike Terry Jeff Worthington Tia Larsen Members Excused: Staff Present: David Salazar, Compensation Manager Michael Jenson, Senior Compensation Analyst Lori Gaitin, Benefits Manager Penny Lopez, Human Resources Technician Jonathan Pappasideris, Senior City Attorney Guests: A recording of these proceedings is on file and available by request from the SLC- HR department. Meeting Open & Welcome: Chair Brandon Dew called the meeting to order and established a quorum of members was present. New member nomination and appointment by the committee – Brandon Dew introduced Tia Larsen as the Committee’s choice of nominee to fill the remainder of Jana Bake’s term through August 31, 2026. Following the Chair’s call for formal nominations, Casey Lund made a motion to approve Tia as the Committee-appointee; the motion was seconded by Jeff Worthington. The motion passed with all in favor. After sharing a summary of her professional career experience, including approximately 13 years of compensation and benefits administration, Brandon officially welcomed Tia as the newest committee member. Review & adopt October 1, 2024, meeting minutes: Mike Terry moved to approve the minutes of the meeting held October 1, 2024; Casey Lund seconded motion. Other than noting a minor spelling error in Clair Baldwin’s name, the minutes were approved by all other members present. Utah Open meetings Act annual training: Jonathan Pappasideris delivered annual training required for all city board, commission, and committee members on Utah’s “Open and Public Meetings Act.” During his presentation, Jonathan reviewed and explained how committee members’ roles are impacted by the Act, as outlined in Utah Code, Section 52-4. Basic principles of the Act dictate meetings of a public body, including the CCAC, are generally supposed to be open to the public. Specific highlights of the presentation include: • Description of what constitutes a meeting o Requirements for closing a public meeting or holding emergency meetings • Requirements for conducting official business o Quorum of members is required to conduct official business • Publication of annual meeting schedule o Meeting agendas must be posted no less than 24 hours before, date/time and place • Electronic meeting requirements • Public notice and posting of meeting agendas at an anchor location • Public comment is not required, but may be allowed as determined by the committee • Meeting minutes o Written minutes adopted by the committee are the official record of each meeting according to state statute. • Penalties for violations of the Act • Meeting records and member communications may be subject to Government Records Access Management Act (GRAMA) Public Comment: None Review of 2024-25 labor market, economic, and related salary budget forecast reports and information: David Salazar outlined the process of creating and transmitting the committee’s annual report to the city’s elected officials by March 1st of each calendar year. David noted typical content and recommendations reflected in the Committee’s past annual reports have included references and information obtained from a variety of published salary budget surveys and economic reports. The following is a summary of relevant statistics and data obtained from a variety of salary budget forecasts and other key sources, including WorldatWork, indicating the direction employers are focused on heading into 2025. Following the rise of salary budgets in more recent years at levels as high as five or more percent, WorldatWork characterized the approach to administering salary budgets in 2024-25 by a majority of U.S. employers as “moderate.” Trends impacting salary increase budgets in the coming year include: ■ Strong (but not longer red-hot) labor market ■ Easing inflation ■ Potential for release of capital when interest rates drop ■ Expanding pay transparency requirements ■ Continued changes around remote and hybrid work ■ Economic uncertainty due to geopolitical factors, including but not limited to conflicts in Ukraine and Israel Although the average overall salary increase budget for 2024 in the U.S. was 3.9%, participants in WorldatWork’s 2024-25 survey predict an average of 3.8% for 2025. Other salary budget survey reports - Payscale (July 31, 2024): 3.5% average pay raises for 2025; 3.6% actual increases in 2024. - Conference Board (September 8, 2024): 3.9% average salary increase budgets for 2025; 3.8% actual budgets in 2024. - Mercer (December 10, 2024): 3.7% average total increase budgets for 2025; 3.7% actual average increases in 2024. David also shared the following tables, highlighting actual 2024 and projected 2025 salary budget increases by type of increase, state, industry, and organization size as reported by WorldatWork. In response to Leandro Tane’s question about whether the city’s overall compensation strategy is a lead, lead-lag, or lag strategy, David explained historically the city’s position is to lag, but by no more than two percent in order to maintain a competitive pay position. Clair Baldwin also mentioned past and current challenges the city has had retaining talent due to lagging wages compared to other employers in the local area market. David noted the total number of organizations reporting budget increases of over 4% has gone down from almost 45% to about 25%. The effect of these changes is a consolidation of salary increase budgets in the 3-4% range. In 2024, almost 70% of organizations in WorldatWork’s study had budgets in this range. It is predicted next year almost three-quarters of organizations will have budgets in this range. Tia Larsen asked what action the city takes regarding jobs found to be outpacing or leading the market. David explained pay for employees in market-leading jobs is held in the same until market catches up. He emphasized this approach is especially critical when considering the city’s negotiated wage schedules for union-covered jobs and employee pay rates. Michael Jensen provided committee members with an overview of how market pay information is used to evaluate the market pay competitiveness for the city’s benchmark jobs. He outlined how analysis is differentiated and split into three separate employee groups, including: non-union represented, AFSCME, and Public Safety (for firefighters and police officers). For non-represented employees, market pay competitiveness is assessed by comparing median pay among the city’s employees compared to the market 50th percentile. This year’s analysis revealed that among a total of 43 benchmarks: five are significantly lagging (by 10% or more); ten are slightly lagging; 19 are considered to be in the competitive range (which is between 98.1% and 109.9% of market); and, nine fit the significantly leading category (which is greater than or equal to 110% of market). Michael noted additional analysis the Compensation team has taken into considerations includes tracking the year-over-year pay differences for each benchmark job. A new approach to this year’s market pay comparison includes aging market data collected as of January 1, 2025 to reflect a future value of July 1, 2025, to coincide with the timeframe the city’s market adjustments are implemented. When asked by Tia Larsen if this approach was utilized last year, Michael explained this is a first attempt and the change in approach is intended to minimize worsening of the market pay gap between the time the committee’s report is published and the city implements its market pay adjustments in July. Leandro Tane asked how P50 (median) market pay information is used to compare against the midpoint of salary ranges assigned to each job. Michael Jenson explained how market median is utilized to compare both the potential need for slotting jobs in a new pay range as well as individual market-based pay adjustments. Michael added pay range assignments are typically not reduced but are more likely to increase one or more pay grades when market pricing shows greater than a five percent pay difference. Particular attention and focus is given when market data shows a shift greater than five percent for any one benchmark. Regarding the minimum number of data points used for matching purposes, Leandro asked what minimum standard the city relies on. Michael stated relative to the number of data sources is five for benchmark jobs; no minimum standard has been established or used in practice for the number of incumbents. Tia Larsen asked what percentage of the city’s total number of jobs are included in this year’s pricing. David and Michael confirmed the total number of benchmark jobs has remained consistent and is approximately ten percent. New benchmarks may be added as market pay for more benchmarks become available. Clair Baldwin observed a consistent challenge and common complaint impacting non-represented is the lack of movement through their respective pay ranges and asked what recommendation, if any, the Committee may wish to consider. Leandro Tane asked how variable pay is factored into the city’s pay comparison. David explained how the lack of variable pay program and matching total cash compensation presents certain challenges for the city. In lieu of a variable pay program, the city relies instead on promoting other tangible and intangible offerings such as benefits cost sharing (e.g. employer paid share of medical insurance is 95%); remote and hybrid work schedules; front-loaded city paid contributions to employee health savings accounts, etc. Tia Larsen and Leandro Tane suggested alternatives to help offset variable pay differences include to consider matching market at P70 or P75, assuming a lead-lag compensation strategy, and performance-based pay adjustments. David mentioned an existing tool available to department city managers is the ability to grant discretionary pay adjustments to non-represented employees based on merit, performance, skills, and other factors. Among the city’s AFSCME-covered benchmark jobs, market pay competitiveness is assessed by comparing union top pay step compared to the market 50th percentile. This year’s analysis revealed that among a total of 37 benchmarks: one is significantly lagging (by 10% or more); seven are slightly lagging; 20 are considered to be in the competitive range (which is between 98.1% and 109.9% of market); and nine fit the significantly leading category (which is greater than or equal to 110% of market). Michael Jenson reported a custom survey is underway and results will be shared at the committee’s next meeting. Next meeting date: Brandon Dew confirmed the next committee is scheduled to take plance on Monday, January 27, 2025, from 3:30 – 5:00 p.m. Unfinished Business – None Jeff Worthington motioned to adjourn the meeting; Mike Terry seconded the motion. The meeting was adjourned at 5:10 p.m.