Eastern Municipal Water District
California

Action/Info Item
4015

Approve and Authorize Implementation of Classification and Compensation Study Results for Supervisory and Confidential Classifications

Information

Department:Human ResourcesSponsors:
Category:Action/Info ItemMeeting Workflows:Board Admin Committee Workflow

Background

The Board of Directors of Eastern Municipal Water District (District) authorized the execution of the current Memorandum of Understanding (MOU) with International Brotherhood of Electrical Workers (Union), Local 1436 on August 17, 2016.  Included in the MOU was a provision to engage a consultant to perform a Classification and Compensation Study (Study).  The last Study performed by the District was in 2007.

 

A competitive Request for Proposal (RFP) process was undertaken collaboratively with the Union, Koff and Associates (Koff) was selected to prepare the Study.  On March 15, 2017, the Board authorized the General Manager to execute a contract with Koff to initiate the Study.

 

The Study consisted of two phases:

1.      Phase I – Classification Study (Review and update of all existing classifications); and

2.      Phase II – Compensation Study (Compensation analysis including benchmarking to selected comparable agencies and internal salary alignment process for all classifications). 

 

The following ten comparable agencies were identified and agreed to by the District and Union for the Study compensation analysis and benchmarking:

1.      Alameda County Water District

2.      City of Riverside Public Utilities

3.      Coachella Valley Water District

4.      Elsinore Valley Municipal Water District

5.      Inland Empire Utilities Agency

6.      Irvine Ranch Water District

7.      Orange County Sanitation District

8.      Orange County Water District

9.      Rancho California Water District

10.  Western Municipal Water District

 

Both phases of the Study have been completed.  Final Reports prepared by Koff are attached as Exhibit A and Exhibit B, respectively.

 

Phase I - Classification Study – Review and Update Classifications and Job Descriptions:

The classification phase consisted of employees completing orientation sessions and Position Description Questionnaires (PDQ).  Koff held employee interviews, revised job descriptions, and completed position allocations.  Employees were provided the opportunity to review the completed job descriptions and position allocations.  During this phase, over 320 PDQ’s were submitted, 122 individual and 84 group employee meetings were held, in addition to numerous follow up interviews.  Based on the information gathered from interviews and PDQ’s:

 

1.      Classification series were updated and, in some cases, consolidated to broad classes where the work performed was sufficiently similar (e.g. Air Quality/Environmental Compliance/CEQA classes and Light/Heavy Fleet Technician series);

2.      Current classifications were reviewed and recommendations were provided to consolidate or re-title.  All employees were notified as to either 1) no change, 2) title change, or 3) reclassification.  District received responses from 195 employees with no changes or comments, 248 had job description changes of which approximately 50 were comments on title and classification changes;

3.      Input received from employees was evaluated by Koff, and appropriate revisions were made to job descriptions, titles and/or classifications.  Employees were notified of the outcome of their proposed changes.  Approximately 75 percent of the requested changes were either partially or fully implemented, and the remaining 25 percent required no changes; and

4.      Revised job descriptions were made available in draft form to employees and will be considered final upon approval by the Board of Directors. 

 

Phase I of the Study was completed December 2018.

 

Phase II- Compensation Study - Comparison to Comparable Agencies and Internal Alignment of Positions:

 

Methodology for Review and Comparison to Comparable Agencies

Phase II of the Study is based on total compensation, as agreed upon during negotiations between the District and the Union.  Total compensation is a cumulative amount which includes:  base wages, health benefits, retirement (e.g. PERS), other tangible benefits (e.g. paid time off, life insurance, and dental), and other post-employment benefits (OPEB).

 

Koff utilized revised job descriptions and other information obtained during the classification stage of the Study to ensure a complete understanding of reporting relationships, functional areas of responsibility, and internal relationships and alignment with other classifications in the job series and within the District. This information was used to ensure accurate benchmarking of classifications to comparable agencies.  A 70 percent comparison match was used as criteria to identify the benchmarked classifications.  Comparisons were made using the median of data collected from the comparable agencies.

 

In addition, through the meet and confer process, the Union and the District agreed to Classification and Compensation Study Guiding Principles (Guiding Principles).  The goal of the Guiding Principles was to establish a clear understanding between the Union and the District regarding the assumptions, interpretation of data, and the process for completing Phase II of the Study.

 

Phase II of the Study was completed July 2019.

 

Results of Comparison to Comparable Agencies and Internal Alignment of Positions

A total of 140 benchmark classifications were selected in order to collect salary and benefits data within the defined labor market.  A total of sixty-four (64) classifications were benchmarked (Exhibit C).  Total compensation market results show that thirty-three (33) of the classifications are above the market median, and thirty-one (31) classifications are below the market median.  Koff provided Market Compensation Data Sheets for each benchmarked classification (Exhibit D).

 

Overall, comparisons of base salaries versus total compensation revealed that when the District’s benefits package and annual Cost of Living Adjustments (COLA) are factored in, the District has remained relatively competitive for most positions.  Further analysis indicates that, on average, classifications are 9.9 percent below the market median for base salaries and 0.1 percent above the market median for total compensation; a 10 percent difference.

 

Due to the unique nature of many of the EMWD job classifications, numerous classifications could not be directly benchmarked to the selected comparable agencies based upon the established Study criteria.  For these positions, Koff utilized the salary levels established for identified benchmark classes and recommended internal salary alignments with current job series at the District.  In some circumstances, revised job classifications or other factors warranted adjustments to the recommended alignments.

 

To recognize the internal value of our employees and to ensure the study is fair and equitable, management’s recommendation to the Board is that adjustments be approved to insure the maximum salary of all District classifications be set such that total compensation is within a range that is between 50th to 60th percentile as measured against the other comparable Agencies. 

 

For classifications that were found to be under the 50th percentile, recommended salary range adjustments place total compensation for the classifications at or between the 50th and 60th percentile.  For classifications in which the maximum salary was found to be over the 60th percentile, salary range  adjustments are recommended to place total compensation for the classification closest to the current maximum, without exceeding the 60th percentile.  There are two minor exceptions where classifications are recommended at slightly above the 60th percentile due to internal alignment and organizational issues.

 

With regard to employee salary placement, if total compensation for an employee’s classification is below the 50th percentile (under market), the employee’s salary is recommended to be increased and placed in the step within the new range at the hourly rate closest to their current rate.  If total compensation for an employee’s classification is at or between the 50th to 60th percentile (within market range), the employee’s salary is recommended to be placed within the new range at the hourly rate closest to their current rate.  If an employee’s hourly rate is between two steps, the employee is recommended for placement at the higher step.  Finally, if total compensation for an employee’s classification is above the 60th percentile (over market), it is recommended that the employee’s salary be “Y” rated.

 

The term “Y” rating means an employee will continue at their current rate of pay and will not be eligible for salary increases until the maximum salary of the classification is increased annually with Cost of Living Adjustments (COLA) to an amount at or above the rate of pay they are receiving.  However, the employee will still be eligible for a COLA increase based upon the maximum salary of their classification paid through a one-time lump-sum payment similar to a bonus payment. Based on review of the data, employees will typically transition out of “Y” ratings through these annual COLA increases within two months to two years, as authorized by the Board.

 

Implementation Plan

The District and Union met and conferred and arrived at a tentative agreement to implement the study recommendations, including revised job descriptions, classification allocations, internal alignments and classification salary range placements.  The Union, however, opted to seek a vote of its membership prior to fully endorsing and accepting implementation of the Study. The vote was conducted September 11, 2019 with 326 of the current 441 Union members voting. Of the 326 Union members that voted, 40% (129) voted in favor and 60% (197) voted against implementing the Study’s recommendations for the Union represented employees. Therefore, with the unfavorable outcome of the Union vote, under State law, the District cannot recommend to implement the proposed classification and compensation changes for the represented classifications.  Should the Union seek another vote and obtain an affirmative outcome, District staff would consider and provide a recommendation to implement changes to the Board at that time.

 

Staff recommends that the Board approve implementation of the study for supervisory and confidential classifications, which are not represented by the Union, in order to update classification job descriptions and salary adjustments placing them competitively within the 50th to 60th percentile of other comparable agencies. Following Board approval, updated Classification and Salary Schedules will be brought forward for Board consideration and adoption.  Implementation of the proposed changes is projected to be effective October 2019. 

 

 

Financial/Strat Plan/Enviro

FINANCIAL IMPACT:

The estimated Fiscal Year 2019-20 and 2020-21 total combined financial impact for implementation of the compensation study for the supervisory and confidential employees is estimated to be $589,000.  This cost was incorporated in the approved Fiscal Year 2019-20 and 2020-21 biennial budget.

 

STRATEGIC PLANNING GOAL/OBJECTIVE:

Recruit and retain highly qualified, diverse and productive employees providing competitive compensation and opportunities for career development, and advancement.

 

ENVIRONMENTAL IMPACT:

None

Recommendation

Approve and authorize implementation of the results of the Classification and Compensation Study for supervisory and confidential classifications including revised job descriptions, Classification and Salary Schedule, and Salary Schedule of Ranges; and appropriation of $588,800 for combined salary and associated benefit adjustments in FY 19-20 and FY 20-21

Meeting History

Aug 14, 2019 7:30 AM  Board Administrative Committee Regular Meeting
draft Draft
RESULT:RECOMMENDED FOR APPROVAL
Oct 2, 2019 9:00 AM  Board of Directors Regular Meeting
draft Draft

Ms. Zamora and Mr. Krammer provided a presentation for this item

Mr. Brian Raines, Ms. Robin Clayton, Mr. Dustin Palmer, Mr. Jon DeRyke, Mr. Dan Carney, and Mr. Sam Robinson all addressed the Board individually and provided their comments regarding the Classification and Compensation study.

RESULT:APPROVED [UNANIMOUS]
MOVER:David J. Slawson, Board Member
SECONDER:Philip E. Paule, Vice President
YES:Ronald W. Sullivan, Philip E. Paule, Stephen J. Corona, Randy A. Record, David J. Slawson