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?
Percentage of non-union employees receiving a cash out
Portion of cash outs due to termination
Portion of cash outs due to hour limit
Portion of cash outs due to employee request
Total hours cashed out
Value of cashed out hours

2010
33%

34,805
$1.6 million

2011
26%
13%
14%
73%
17,252
$819,650

 What portion of employees receive overtime?
Portion of non-exempt employees receiving overtime
Number of overtime hours
Overtime pay

2010
18%
5,193
$223,493

2011
18%
5,885
$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 nondegree 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?

18