Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
9a
BRIEFING MEMO
Date of Meeting
October 23, 2018
DATE: October 16, 2018
TO: Stephen P. Metruck, Executive Director
FROM: Kim DesMarais, Interim Sr. Director Human Resources
Tammy Woodard, Director Human Resources – Total Rewards
SUBJECT: 2019 Salary and Benefits Resolution Program
EXECUTIVE SUMMARY
The Salary and Benefits Resolution is the Port Commission’s authorization to provide pay and
benefits to the Port’s non-represented employees. The Resolution establishes the pay ranges
for non-represented jobs and authorizes the various benefits that comprise the overall benefits
package offered to non-represented Port employees. This briefing will highlight the
recommended changes to the benefits package, an adjustment to the non-represented pay
ranges for 2019, and recommended clarifications.
Following this presentation staff will return to request first reading of the Salary and Benefits
Resolution on November 13, 2018, followed by second reading and final passage of the
Resolution on November 27, 2018.
JUSTIFICATION
The Salary and Benefits Resolution specifies the pay and benefits programs authorized by the
Port Commission, while administrative details of these programs are maintained in Port
policies. The Resolution also includes authorization for benefits offered to Port of Seattle
retirees and to Port Commissioners as well as the administrative details of these benefits.
Updates to the Resolution are designed to keep the authorized pay and benefit plans current
and ensure the Total Rewards package that they are part of continues to support the attraction
and retention of employees with the talents and abilities necessary for the Port to achieve its
mission, vision and objectives.
DETAILS
Recommended changes to the Salary and Benefits Resolution
Adjustments to Pay Grades and Ranges for 2019
As in previous years, Human Resources staff examines available market data to determine how
well current pay ranges compare to market and if the ranges need to be adjusted to ensure
they remain competitive. The published salary surveys we utilize in this analysis have been
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Meeting Date: October 23, 2018
Template revised September 22, 2016; format updates October 19, 2016.
arriving later than anticipated and we are still waiting for some key survey data that will inform
how well our ranges compare to market and how much of an adjustment is needed. With the
limited data currently available, we are estimating that the required adjustment will be
between 3.0% and 3.5% to maintain market competitive pay ranges. Data will continue to
become available over the next few weeks and we will incorporate new data into a specific
recommendation for the first reading of the Resolution.
While not directly relevant to our pay range analysis, we survey local public employers in the
Puget Sound area to determine what they are projecting for their range adjustments. The pay
programs at most local public employers include cost-of-living increase for employees equal to
their range adjustments. At the time of our survey this year, only five of the 16 employers that
we surveyed were able to provide a projected 2019 increase amount and the average for these
five employers is 3%.
While other local public employers provide cost of living increases to their employees, at the
Port pay increases for non-represented employees are based on employee performance so
adjustments to the pay ranges do not result in automatic pay increases. The only automatic
pay adjustments for non-represented employees are to the new range minimum for employees
whose pay is less than the new minimum. Based on current estimates we expect fewer than 40
employees will require adjustments to the new minimum of their pay range.
Paid Leave Benefits
In response to employee feedback from our 2016 benefits survey and focus groups in 2017 that
the Port’s time off benefits are not quite as good as many other employers offer, we reviewed
general industry market data on Paid Leave and gathered information from local public
employers on Holiday and Personal day benefits provided to employees. As a result of this
research, and consistent with our Total Rewards Philosophy that we will provide a benefits
package that is better than market, we are recommending adding a personal day to the paid
leave benefits specified in section III.B.1., Paid Leave, of the Salary and Benefits Resolution. The
personal day will be administered similar to holidays where the benefit is not accrued or carried
over to the next year and must be used in the current year. The personal day will need be
taken as a full day off and cannot be split up and taken as multiple partial days off. Leave
programs that do not incur organizational liabilities are an effective way to increase the value of
our overall Total Rewards package, and adding one Personal Day will bring our holidays and
leave days to a level consistent with market.
Adjustments to Authorized Benefits
There will be some wording changes to Section III, Benefits Offered to Employees, and Section
V, Benefits Offered to Port of Seattle Commissioners, to specify that Healthcare benefits include
medical, vision, pharmacy and dental benefits. This clarification will provide enhanced visibility
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Meeting Date: October 23, 2018
Template revised September 22, 2016; format updates October 19, 2016.
to the different aspects of our health plans and provide flexibility in how we administer these
benefits.
Following years of declining enrollment over the past five (5) years, no new retiree enrollments
in the past three (3) years, and increasing costs, we will discontinue the retiree medical plans
after the end of 2018. We have been communicating this to retirees for the past three (3)
years, and have spent at least a year talking directly to enrolled retirees about how they might
find coverage to meet their needs, possibly at lower costs, through other channels. As a result,
sections IV.A. and IV.B., Medical Benefits for Retirees and Medical Benefits for Dependents of
Retirees, will be deleted. Section V.B., Commissioner Retiree Medical Benefits, will also be
deleted.
Other Adjustments
We will be making a change to Section II.A, Reporting Requirements for Certain Positions, to
clarify the reporting relationship of the Internal Audit Director and specify that performance
reviews will be prepared and conducted by the Executive Director.
We will also be making a slight change to the definition of the Probationary Period in Section I,
Definitions. The change will specify that we consider the Probationary Period to be an
extension of the hiring process.
Commission Notification
Pursuant to Section VI., Special Programs and Commission Notification, we are providing the
following information regarding material changes to plans contained within the Salary and
Benefits Resolution.
We are changing some administrative details of our healthcare plans based on feedback that
we received from employees through surveys and focus groups. Employees expressed a desire
for more choice in their health plan options. In response to this feedback we are making some
changes to our vision and dental plans.
We will separate vision benefits from our medical plans and offer separate vision benefits that
employees can elect separately from medical benefits. We will also offer an enhanced level of
vision benefits that will provide a higher level of benefit to employees if they elect this plan.
Employees who elect he enhanced vision plan will pay the additional cost of the plan.
Employees who elect the basic vision plan will have vision benefits similar to what is provided
within the current medical plan, though some out of pocket costs will be lower. If employees
maintain their current medical plan and elect the basic vision plan they will notice only very
minor differences in their payroll deductions for next year.
COMMISSION AGENDA – Briefing Item No. 9a Page 4 of 5
Meeting Date: October 23, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Similar to the two vision plan choices, we are updating our dental plan to make an additional
option available to employees. We are adding an enhanced plan option to the dental benefit
plan. The change to the dental program is cost neutral to the Port and like the vision plan,
employees who elect the enhanced plan will pay the additional cost of the plan through higher
premiums.
We are also enhancing the medical plans by adding some infertility benefits including Artificial
Insemination and Ovulation Induction. Adding these benefits will not increase costs for the
Port or employees. We will confidentially monitor utilization of these enhanced benefits to
determine if additional levels of infertility coverage may be warranted in the future.
We also want to bring visibility to the upcoming State mandated Paid Family and Medical Leave
program. Benefits will become available through this program on January 1, 2020. This new
program will provide partial pay (up to a maximum $1,000 per week) to employees when they
require time off for a serious medical condition, to care for a family member with a serious
medical condition, when they welcome a new child to their family (parental leave), or for
certain military situations. There will be a one week waiting period before benefits are
available, and the program will provide benefits for up to 12 weeks (up to 18 in some
pregnancy situations). The State program is funded through employee and employer
contributions that total about 0.4% of payroll with employers paying about 34% and employees
paying about 66% of the total premium. The Port contribution to the premium beginning in
2019 is estimated to be approximately $270,000. Premium collection will begin January 1, 2019.
Full details about this program are not yet available from the State.
Employers may opt out of the State administered plan by providing their own plan with benefits
that are at least as good as the State plan. Employers who opt out do not pay premiums, either
employer or employee portions, to the State. The State must approve an employer’s
application to opt out of the state plan and the application process includes a review of the
requesting employer’s proposed plan and policy. The Port is planning to apply to the State to
opt out of the State plan. We anticipate that our plan will be approved and will become
effective in 2020. We believe this will be an increased benefit to Port employees as they will not
be responsible for contributing to a program that they may or may not have need for.
In the event our application to opt out is not approved before the end of this year, we will begin
collecting premiums from employees and remitting them together with the Port’s contributions
to the State. If our application is not approved, we will attempt to resubmit our application. We
will include details on either the Port’s participation in the mandatory State program or our
Port specific plan in lieu of the State program as part of next year’s Salary and Benefits briefing.
COST
There is minimal cost associated with recommended 2019 changes to the Salary and Benefits
Resolution. Based on current data and the estimated range adjustment of 3.0% to 3.5%, the
COMMISSION AGENDA – Briefing Item No. 9a Page 5 of 5
Meeting Date: October 23, 2018
Template revised September 22, 2016; format updates October 19, 2016.
cost of adjusting the non-represented pay ranges will be approximately $40,000. Other
recommended changes to the Salary and Benefits Resolution will have no budget impact.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
(2) Summary of Changes
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None
