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Home My WebLink AboutCOM 0273.001 1996-1998 i"~ NYY Of N, tP,•'•y~,:'~~'~w'.y Michael R. Ben Stephen K. Yatnashlro ~ Dinctor of Personnel Mayor Rodney T. Kaido Deputy Director of Personnel a OF NF ll.IIlllt~~1 II~ ~2T~U2Itt DEPARTMENT OF CIVIL SERVICE n ~ _ Hilo IJgoon Centre, I01 Aupuni S[reeq Suite 133 ~ ~ . a. -n Hilo, Hawaii 96720-4260 (808) 961.8361 Fox (808)~l 961-8617 Li . CP ) ~ -'Z7 -i May 9, 1997 'f o The Honorable James Arakaki, Chair and Members, Hawaii County Council 25 Aupuni Street Hilo, Hawaii 96720 Dear Chairperson Arakaki and Members of the Council: RE: Bill 78, Salary Ordinance for FY '97-`98 Transmitted herewith is a copy of the Salary Commission's February 28, 1997 recommendation to Mayor Stephen K. Yamashiro on department head salaries. At the May 6, 1997 Finance Committee meeting, Council member Santangelo inquired about what factors the Salary Commission took into consideration for its recommendation. While I did offer a response to Council member Santangelo, I am providing you with a copy of the recommendation to ensure that you have all relevant facts behind the recommendation to better understand it. Sincerely, Michael R. Ben, SPHR Director of Personnel enclosure , '.t~. ~.11QlA1141'. . 1lAY q i997 .«r_ ; n,; „yy w N Stephen K. Yamashiro I Mayor , ~Illil'C7~~J II~ ~t[~lT2ltt SALARY COMMISSION Hilo lagoon Cen[re, 101 Aupuni Stteet, Suite 133 Hilo, Hawaii 96'!20.4260 (808) 961-8361 Fax (608) 934.7101 February 28, 1997 The Honorable Stephen K. Yamashiro, Mayor County of Hawaii 25 Aupuni Street Hilo, Hawaii 96720 Dear Mayor Yamashiro: As was requested through your director of personnel Mike Ben, the salary commission initiated a review of the salaries for certain executives compensated on the executive pay schedule. Having done so, the salary commission recommends that: 1. salaries for department heads be adjusted from $66,384 to $81,168; and, 2. salaries for other executives assigned to the executive pay schedule be similarly adjusted to maintain the pay relationship which exists among these positions. The recommendation, if accepted, will result in an increased cost for executive salaries of $375,246 annually, or 22.27% (see Exhibit A). Please note, however, that this increased cost is based on current filled positions. Our recommendation is being made in consideration of a number of important factors and observations. The Honorable Stephen.... Yamashiro February 28. 1997 Page 2 Pay of Other Employees A major factor in our recommendation was that of pay increases afforded County employees during the past seven years. While County employees generally received the same amount of pay increases, we took note of the pay increases for the professional and scientific employees (Bazgaining Unit 13) and top level managerial employees. We have done this because the work of these two groups closely relate to that of the executives, and this was a good reference point for our discussion. During the period 1990 to 1995, B.U. 13 employees saw pay increases to their salaries totaling 27%. During the same period of time, top level managerial employees saw pay increases totaling 28%. In the recent interest azbitration decision involving B.U. 13, County professional and scientiftc employees will be receiving, on average, a 5.1% pay increase for the period 1995-1997. Thus, for B.U. 13, the amount of pay increases for the seven year period 1990-1997 will total 32.1%. We understand that by law excluded managerial employees must be given at least a comparable pay increase to that afforded B.U. 13. Assuming, then, that the excluded employees will get at least 5.1%, the amount of pay increases for the seven year period 1990-1997 will total 33.1%. Averaging shows that B.U. 13 will have averaged 4.58% increases per year for the seven year period. Excluded managerial employees will have averaged 4.72%for the seven year period. Our proposed increase will average out to 3.18% for the same seven year period. Exhibit B details the pay increases for B.U. 13 and the excluded managerial employees for the 1990-1997 period. Consumer Price Index The proposed salary increase compares favorably to the rise over the seven year period in the consumer price index for urban workers (CPI-U). The CPI-U increased a total of 28.98% during the 1990-1996 period. This averages out to 4.14% per year. (See Exhibit C.) The Honorable Stephe, Yamashiro February 28, 1997 Page 3 Inversion Because salaries for employees have continued to increase while salaries for executives have not, the salaries of eight employees have exceeded that of a department head (however, one employee retired in December'96). Three other employees have salaries which exceed the salary for department heads. With the anticipated 5.1% increase, nine employees will be earning more than a department head while three employees will be earning more than a deputy department head. This "inversion' of salaries does not make for a sound compensation plan which recognizes and preserves salary relationships among individuals. This inversion is especially disconcerting given the fact that department heads and deputy department heads work closely with these top level managerial employees to accomplish departmental goals and objectives and in maintaining the operations of the County. The salary commission believes no County employee should earn more than department heads given the authority and responsibilities of a department head. This authority and responsibility should not be valued at $10,848 less than a subordinate employee. (See Exhibit D.) Our recommendation will make department head salaries the same as the highest compensated top level managerial employee and will result in no employee earning more than a department head. This recommendation only addresses department head salaries in comparison to top level managerial employees and does not address the inversion that will still exist with deputy department heads. Also, we realize that this pay adjustment will be affected in the near future as negotiations are now taking place for the contract period 1997-1999. No Pay Adjustment Made Since April 1, 1990 The last pay adjustment made to executive salaries was on April 1, 1990, after four years had passed since the previous pay adjustment (1986). As in the instant situation, the salary commission was asked by the mayor to recommend an appropriate pay adjustment. The salary commission did so and recommended a The Honorable Stephe. Yamashiro February 28, 1997 Page 4 26.5% pay adjustment to correct the very same problems we are addressing today that occurred during the 1986-1990 period wherein no pay adjustments were made. Then-mayor Tanimoto was receptive to the recommended pay adjustment and submitted it to the County Council. The County Council approved the 26.5% adjustment. Like in 1990, the interim period between pay adjustments compels us to submit a double digit recommendation. Our recommendation is based upon the same factors taken into consideration in 1990. The difference here is that seven years will have lapsed rather than four. In comparison, our proposed 22.27% increase for a seven year period is modest compared to the 26.5% pay adjustment that was made for a four year period. Other Comments The salary commission is concerned that we have had to recommend a double digit increase to place executives at a level comparable to County employees. The salary commission in the past has recommended and tried to act upon more timely pay adjustments. In 1992 and again in 1993, the salary commission believed that executives should have been provided pay adjustments of approximately 7.64% and that timely adjustments be made in executive salaries. Had our recommendations been acted upon, the amount of adjustment we are recommending today would not have been as high. Assuming that our recommendation is accepted, we hope that another significant time period will not be allowed to lapse before an adjustment is once again made. We recommend that the administration or the County Council consider a methodology where timely pay adjustments are considered and awarded County executives. These pay adjustments should take into consideration the duties and responsibilities the executives perform and their relationships with other County employees. It does not seem appropriate that County employees continue to receive increases in their compensation while the compensation for County executives who are called upon to manage the County's affairs and to provide necessary leadership to County employees and the community receive no adjustments whatsoever. The Honorable Stepha. Yamashiro February 28, 1997 Page 5 Pay adjustments are necessary to attract and retain qualified, competent, and motivated executives. An incentive must be in place to demonstrate that the County wishes to compensate all of its workforce fairly and justly for the work they perform. Without a fair and just compensation plan for executives, we believe that the next administration will have a difficult time in recruiting the type of leadership this County would want leading it into the next millennium. Finally, we note that our recommendation would result in department head salaries and the salary of the managing duector exceeding the mayor's salary. Should our recommendation or any other pay adjustment be considered and approved, the salary commission will meet once again to consider pay adjustments for elected officials in relation to any adjustments made for executives. Sincerely, Gerald Kita, Chair J Salary Commission attachments cc: Salary Commission Members i:XHIBfT A Payroll (Filled Positions Only) New Current New Amount New Amount Pay Money Annual Monthly Of Annual Of Percent Position Grade Salary Salary Salary Increase Salary I en rease Increase Band Director A-07 53,234 $38,808 53,955 $721 $47,460 $8,652 22.29°k Safety Coordinator A-10 53,744 544,928 $4,579 $835 554,948 510,020 22.30% Asst Corporation Counsel A-17 55,269 563,228 $6,442 $1,173 577,304 514,076 22.28% Asst County Physician (1/2 A-17 52,635 531,620 $3,221 $586 $38,652 57,032 22.24°k Asst County Physlclan (1/4 A-17 51,317 515,804 51,611 $294 519,332 53,528 22.32°h Asst County Physician (114 A-17 51,317 $15,804 $1,611 $294 519,326 53,522 22.29°~ Dep. Chief Engineer A-17 55,269 563,228 $6,442 $1,173 577,304 514,076 22.26% Dep. Police Chief A-17 55,269 563,228 $6,442 $1,173 $77,304 $14,076 22.26°k Dep. County Clerk A-17 55,269 563,228 $6,442 $1,173 577,304 514,078 22.26°h Dep. Director of Personnel A-17 $5,269 $83,228 $6,442 $1,173 577,304 514,076 22.28% Dep. Fire Chief A-17 55,269 $63,228 $6,442 $1,173 577,304 514,076 22.26°h Dep. PB:R Director A-17 55,269 563,228 $6,442 $1,173 577,304 514,076 22.26% Dep. Planning Director A-17 $5,269 563,228 $6,442 $1,173 $77,304 514,076 22.26°h 1st Dep. Prosecuting Attny A-18 55,532 566,384 $6,764 $1,232 581,188 574,784 22.27% Chief Engineer A-18 $5,532 566,384 $6,764 51,232 581,168 514,784 22.27°k Police Chief A-18 55,532 566,384 $6,764 $1,232 581,188 514,784 22.27°~ Corporation Counsel A-18 55,532 566,384 58,764 $1,232 581,168 514,784 22.27°~ County Clerk A-18 55,532 566,384 $6,764 $1,232 581,168 514,784 22.27% County Physlclan (112) A-18 52,766 533,192 $3,382 $816 540,584 57,392 22.27% Dep. Managing Director A-18 55,532 566,384 $6,764 $1,232 581,188 514,784 22.27°~ Director of Finance A-18 55,532 566,384 $6,764 $1,232 561,188 514,764 2227% Director of Liquor Control A-t8 55,532 $66,384 $6,764 $1,232 $81,168 514,784 2227°~ Director of Personnel A-18 55,532 566,384 $6,764 $1,232 581,168 514,784 22.27°k Director of R8D A-18 55,532 566,384 $6,764 $1,232 581,168 514,784 22.27°k Fire Chief A-18 55,532 586,384 $6,764 $1,232 581,168 514,784 22.27°h Legislative Auditor A-18 55,532 566,384 $6,764 $1,232 581,168 514,784 2227°~ P8R Director A-18 $5,532 $88,384 $6,764 $1,232 581,168 514,784 22.27°h Planning Director A-18 55,532 568,384 56,764 51,232 $81,168 514,784 22.27°h Managing Director A-19 $5,809 569,708 $7,102 $1,293 $85,224 515,516 22.26% New New Money Annual Montly Annual Pavroll Pavroll Pavroll Pa roll 5140,422 51,685,064 $171,693 52,060,310 Add'I Add'I Annual Percent Cost Cost Increase 531,271 $375,246 22.27°h vteis7 0:1sa1 cammlEXEC.XLS EXHIBIT B SALARY INCREASES FOR BU-13 EMPLOYEES SINCE APRIL 1, 1990 07/01 /90 5.25% average step movements and across-the-board increases 07/01 /91 6.75% average step movements and across-the-board increases 07/01 /92 3.00% across-the-board increases O1 /Ol /93 4.00% across-the-board increases 07/01/93 $768.00 bonus 07/01 /94 4.00 across-the-board increases 07/01 /95- 4.00% step movement plan increases 06/30/97 07/01 /96 2.25% across-the-board increases 2.82`Y average step movements SALARY INCREASES FOR EXCLUDED MANAGERIAL EMPLOYEES SINCE APRIL 1, 1990 07/01 /90 6.00`Yo across-the-board increases 07/01 /91 7.00% across-the-board increases 07/01 /92 3.50 across-the-board increases Ol /O1 /93 3.50` across-the-board increases 07/01/93 $768.00 bonus 07/01 /94 4.OOY across-the-board increases 07/01 /95- 4.00% within range progressions 06/30/97 07/01 /96 5.10% across-the-board' `estimation of what will be the average increase for EM employees; yet to be approved IXHIBIT C Consumer Price Index for Honolulu CPI-U Annual Change 1st Half Change 1981 91.7 89.9 1982 97.2 6.00% 95.9 6.67% 1983 99.3 2.16% 98.6 2.82 % 1984 103.5 4.23 % 102.5 3.96 % 1985 106.8 3.19 % 106.3 3.71% 1986 109.4 2.43 % 108.9 2.45 % 1987 114.9 5.03 % 113.3 4.04 % 1988 121.7 5.92 % 120.1 6.00% 1989 128.7 5.75 % 126.4 5.25 % 1990 138.1 7.30 % 135.5 7.20% 1991 148.0 7.17 % 146.8 8.34 % 1992 155.1 4.80 % 153.9 4.84 % 1993 160.1 3.22 % 158.6 3.05 1994 164.5 2.75 % 163.4 3.03 % 1995 168.1 2.19 % 166.9 2.14 % 1996 170.7 1.55 % 170.5 2.16 % CPI-U CPI for All Urban Consumers EXHIBIT D County of Hawaii -Comparison of Executive Salaries wffh Top 20 Excluded Managerial Employees' Salaries EM Current 12/01 /96 Exeeufive lades a a es $78,564 Mayor (1) $77,232 Public Works $76,848 Mayor (2) $75,000 Water Manager $74,064 Water $74,064 Prosecuting Attomey $71,916 Public Works $70,212 Administration $70,000 Deputy Water Manager $69,708 Managing Director $68,868 Public Works $68,544 Public Works $67,296 Finance $67,248 Finance $66,384 Department Heads, Deputy Managing $64,860 Finance Director, 1st Deputy Prosecuting Attomey, $64,440 Police County Clerk, and Legislative Auditor $63,780 Police $63,228 Deputy Department Heads, Deputy $62,436 Police County Clerk $62,424 Public Works $61,284 Parks $60,480 Planning $60,132 Police $59,676 Fire $58,920 Water $58,RR4 Finance $58,512 Public Works (1) Salary determined by Salary Commission, effective 07/01 /93 (2) Salary currently received by the Mayor 12/01/96