PORT OF SEATTLE

MEMORANDUM

COMMISSION AGENDA

Item No.

Date of Meeting

November 8, 2011

DATE: November 1, 2011

TO: Tay Yoshitani, Chief Executive Officer

FROM: Tammy Woodard, Sr. Manager, Total Rewards

David Leon, Benefits Manager

Ann McClellan, Compensation Supervisor

SUBJECT: Resolution No. 3655, First Reading, 2012 Salary and Benefit Resolution

ACTION REQUESTED:

First Reading of 2012 Salary and Benefit Resolution No. 3655: A Resolution of the Commission

of the Port of Seattle establishing jobs, pay grades, salaries, allowances and adjustments for Port

employees not represented by a labor union; authorizing and establishing conditions in

connection with the following benefits: social security; industrial insurance; unemployment

compensation; military leave; retirement; compensated leave, including civic duty, bereavement

leave, holidays, paid time off/extended illness leave, shared leave, and awarded time; insurance

benefits, including medical, dental, life and long-term disability; and authorizing this Resolution

to be effective on January 1, 2012, and repealing all prior resolutions dealing with the same

subject, including Resolution No. 3647.

SYNOPSIS:

The Salary and Benefit Resolution delegates authority from the Commission to the Chief

Executive Officer to direct the administration of compensation and benefits for the Port’s non-

represented employees. The resolution includes provisions governing pay practices, pay ranges

and benefit programs. When reviewing the 2011 Salary and Benefits Resolution and

determining what changes should be incorporated into the 2012 resolution, staff reviews what

has changed in the past year regarding pay, benefits and other total rewards programs. This year,

notable considerations include the upward trending of the Consumer Price Index (CPI), and

minor changes to the Port-sponsored health care plans.

Recommended changes to the Salary and Benefits Resolution are minimal and consistent with

changes in past years. Recommendations include a 2% increase to the salary ranges for non-

represented jobs, elimination of the range for the Chief Executive Officer job, updated holiday

schedule, reducing the maximum paid time off (PTO) balance to 700 hours, an updated Exhibit

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

November 1, 2011

Page 2 of 3

A that reflects non-union jobs, and minor wording changes to increase clarity. The cost of the

recommended changes is limited to those associated with the range adjustment and will be

approximately $10,000.

BACKGROUND:

The Salary and Benefit Resolution delegates authority from the Commission to the Chief

Executive Officer to direct the administration of compensation and benefits for the Port’s non-

represented employees. Compensation and benefits are major components of the Port’s total

rewards package which is key in retaining, engaging, and attracting skilled employees committed

to helping the Port achieve its mission, goals and business objectives. The programs and plans

covered by the Salary and Benefits Resolution will be reviewed against the total rewards

philosophy in the near future to evaluate how well they align with the philosophy. Work plans

and strategies will be developed for bringing plans and programs into alignment with the

philosophy if necessary.

The resolution covers approximately 867 employees, or 56% of the Port’s workforce, those

employees not represented by a labor union. The Port’s total rewards philosophy is to pay at

market and provide a benefits package that is slightly above market. Changes to the resolution

vary from year to year and like the 2011 resolution, the 2012 resolution does not contain any

substantial changes.

PROPOSED CHANGES:

There are minimal changes from the 2011 resolution. Most changes are made to clarify sections

of the resolution that have generated questions throughout the year or that must be updated to

reflect updated practices. Noteworthy revisions to the resolution include the following:

Resolution Section III.A. - Salary Ranges

We recommend a 2.0% increase to salary ranges for 2012. Each year, the compensation staff

reviews and analyzes data from various published salary surveys to determine how our pay

ranges compare to average market pay rates. This analysis is the basis for adjustments to the

Port’s ranges. This is different from the COLA approach most public employers use.

This year, our analysis of the labor market indicates the Port’s salary ranges, on average, are very

slightly below market. Salary surveys are reporting that pay is expected to increase, on average,

3.1% in 2012. Increasing ranges by 2% will keep ranges close to market and support retention of

high performing staff and recruiting of top candidates for open positions in 2012. Maintaining

the current range structure through 2012 could hinder retention and hiring, particularly if hiring

activities in the local labor market increase substantially before the end of 2012 as increases in

hiring activities are often accompanied by an upward pressure on actual pay levels.

Increasing the non-represented range structure will result in approximately 15 employees whose

pay is less than the new minimum of their salary range. The cost to increase pay for these

COMMISSION AGENDA

Tay Yoshitani, Chief Executive Officer

November 1, 2011

Page 3 of 3

employees to the new minimum of their range is approximately $10,000. We also recommend

eliminating the salary range for the CEO job. Eliminating this range simplifies the Salary and

Benefit Resolution and is consistent with section VI.B, which grants the Commission discretion

in determining pay and/or the salary range for the Chief Executive Officer.

Resolution Section III.C.1 - Salary Rates, Ranges, and Allowances for Non-evaluated Jobs

The section related to Japan Regional Staff Positions is being deleted from the Salary and

Benefit Resolution as the Port no longer has staff based in Japan.

Resolution Section VIII. - Administration of Benefit Programs

Changes in this section include updating the Port holidays for 2012 and reducing the PTO

balance limit to 700 hours in accordance with the plan put in place when the PTO program was

implemented.

Reference to the Long Term Sick Leave Account is also being eliminated. One employee still

had a very small balance in this account. The value of the balance was $143 and the hours were

added to the employee’s Extended Illness account.

Resolution Exhibit A

Exhibit A is attached to the Salary and Benefit Resolution and is a schedule of authorized non-

represented job titles. Though salary ranges require the approval of Commission or the Chief

Executive Officer, amendments to Exhibit A do not require this level of approval. Exhibit A is

amended and published periodically throughout the year by Human Resources and Development

to reflect the outcomes of on-going job evaluation work.

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS:

 November 1, 2011 – 2012 Salary and Benefit Resolution Briefing.

OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:

 Resolution No. 3655, Salary and Benefit Resolution

 Resolution No. 3655, Red-Line Version

 Exhibit A – Schedule of Authorized Non-Represented Position Titles and Salary Ranges

Effective January 1, 2012

 2012 Salary and Benefit PowerPoint Presentation