Compensation Study Presentation Compensation Study Presentation Public Safety & Neighborhood Services Public Safety & Neighborhood Services

CommitteeCommitteeFebruary 28, 2007February 28, 2007

SS

Issues with the StudyIssues with the Study

Base PayBase Pay– Final Study did not just evaluate base payFinal Study did not just evaluate base pay– Results were modified to enhance City’s positionResults were modified to enhance City’s position

““Joint” StudyJoint” Study– Besides involvement in two initial meetings, Local Besides involvement in two initial meetings, Local

145 was not invited to participate in any way145 was not invited to participate in any way Indexed for cost of livingIndexed for cost of living

– Study was not indexed for COL as agreed to.Study was not indexed for COL as agreed to.– Cost of living has significant impact on Cost of living has significant impact on

competitive wagescompetitive wages

Issues with the StudyIssues with the Study Does not include the cities of San Francisco, San Does not include the cities of San Francisco, San

Jose or OaklandJose or Oakland– all have been included in past studies presented to Councilall have been included in past studies presented to Council– These agencies traditionally compensate their employees These agencies traditionally compensate their employees

at the highest rates in surveysat the highest rates in surveys– The exclusion of this data significantly skews the resultsThe exclusion of this data significantly skews the results

The inclusion of Houston and Phoenix are not The inclusion of Houston and Phoenix are not relevant:relevant:– The cities are not within the sphere of competitive agenciesThe cities are not within the sphere of competitive agencies– Cost of living is dramatically different than in CaliforniaCost of living is dramatically different than in California– Inclusion significantly reduces the average compensation Inclusion significantly reduces the average compensation

informationinformation

The PastThe Past

Two years without a salary increaseTwo years without a salary increase Two years without a flexible benefits increaseTwo years without a flexible benefits increase Paying additional 5.7% of base pay towards Paying additional 5.7% of base pay towards

retirementretirement Elimination of the following Retirement benefits Elimination of the following Retirement benefits

for those hired after 7/1/05, including:for those hired after 7/1/05, including:– Loss of Purchase of Service optionLoss of Purchase of Service option– Loss of Retiree Health coverageLoss of Retiree Health coverage– Loss of participation in DROPLoss of participation in DROP– Loss of 13Loss of 13thth Check Check

The Present - SalaryThe Present - Salary Compensation package is not competitive:Compensation package is not competitive:

– Since FY 2005, firefighter pay has fallen 7.2% behind the cost of living Since FY 2005, firefighter pay has fallen 7.2% behind the cost of living ((source: CPI info provided by City of San Diegosource: CPI info provided by City of San Diego))

– Average salary increases for study’s comparables*:Average salary increases for study’s comparables*: 3.97% in FY 073.97% in FY 07 4.33% in FY 084.33% in FY 08 3.12% in FY 093.12% in FY 09

– Experienced Fire Operations personnel Experienced Fire Operations personnel will, and are, investigating employment will, and are, investigating employment

with agencies offering higher pay & benefitswith agencies offering higher pay & benefits- Recruitment ProblemRecruitment Problem

FY 03 FY 03 3 declined academy appointment3 declined academy appointment FY 04FY 04 7 “ “ “7 “ “ “ FY 05FY 05 12 “ “ “12 “ “ “ FY 06FY 06 13 “ “ “13 “ “ “

– The department is currentlyThe department is currently receiving numerous requests for receiving numerous requests for background review by other agenciesbackground review by other agencies

**Source: City of San Diego Compensation & Benefit studySource: City of San Diego Compensation & Benefit study

Fire RecruitFire Recruit Total Compensation ComparisonTotal Compensation Comparison

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

Top Step Fire Fighter IITop Step Fire Fighter II Total Compensation ComparisonTotal Compensation Comparison

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Top Step FFII/PM Top Step FFII/PM Total Compensation ComparisonTotal Compensation Comparison

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Fire EngineerFire Engineer Total Compensation ComparisonTotal Compensation Comparison

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Riverside

Orange County F.A.

Anaheim

Long Beach

Los Angeles

Escondido

Santa Ana

Oceanside

Murrieta

Chula Vista

County of Los Angeles

Encinitas

Fresno

Sacramento

San Diego

Carlsbad

San Marcos

El Cajon

VistaSan Bernadino County

National City

Phoenix

Houston

Fire CaptainFire CaptainTotal Compensation ComparisonTotal Compensation Comparison

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

Fire Battalion ChiefFire Battalion Chief Total Compensation ComparisonTotal Compensation Comparison

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

The Present – Flexible The Present – Flexible BenefitsBenefits

City contribution to health benefits ($5,575) is City contribution to health benefits ($5,575) is the lowest of all agencies in the surveythe lowest of all agencies in the survey

– $965 less than lowest comparable agency (Oceanside: $965 less than lowest comparable agency (Oceanside: $6,540)$6,540)

– $3,487 less than the average of all agencies$3,487 less than the average of all agencies– $8,263 less than the highest $8,263 less than the highest

contributing agency contributing agency

(Encinitas: $13,838)(Encinitas: $13,838)

Maximum Health Care Contribution Maximum Health Care Contribution ComparisonComparison

Source: City of San Diego Compensation & Benefits StudySource: City of San Diego Compensation & Benefits Study

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

The PresentThe Present

Local 145’s Salary ProposalLocal 145’s Salary Proposal

– Five Year contract consistent with Mayor’s five Five Year contract consistent with Mayor’s five year budgetyear budget

– Increase fire fighter pay to average of top 10 Increase fire fighter pay to average of top 10 cities (by population) in statecities (by population) in state over five year over five year periodperiod Helps avoid future recruitment and retention Helps avoid future recruitment and retention

problemsproblems

The PresentThe Present

City’s Proposal:City’s Proposal:

– 0% Salary Increase0% Salary Increase– Significant change to health benefits delivery model which Significant change to health benefits delivery model which

will severely reduce compensation to a majority of Local will severely reduce compensation to a majority of Local 145 members145 members Approximately $1M decrease which equates to $1,000 Approximately $1M decrease which equates to $1,000

decrease per member in health benefitsdecrease per member in health benefits– Convert percentage based specialty pays into flat dollar Convert percentage based specialty pays into flat dollar

amountsamounts– For employees hired after 7/1/07:For employees hired after 7/1/07:

Reduce Retirement factor from one-year high to three-year Reduce Retirement factor from one-year high to three-year highhigh

Reduce Retirement cap from 90% to 75%Reduce Retirement cap from 90% to 75%

The PresentThe Present

Current Employee’s PerspectiveCurrent Employee’s Perspective– Pension BenefitPension Benefit Under AttackUnder Attack– DROP DROP Under AttackUnder Attack– Purchase of Service Purchase of Service Under AttackUnder Attack– Approved OvertimeApproved Overtime Under AttackUnder Attack– Current salaryCurrent salary Not competitiveNot competitive– Current health benefits Current health benefits Not competitiveNot competitive– StaffingStaffing InsufficientInsufficient– ResourcesResources InsufficientInsufficient

The PresentThe Present

Future Applicant’s PerspectiveFuture Applicant’s Perspective– Pension BenefitPension Benefit Not competitiveNot competitive– Current salaryCurrent salary Not competitiveNot competitive– Current benefitsCurrent benefits Not competitiveNot competitive– Retiree HealthRetiree Health No longer availableNo longer available– DROP DROP No longer availableNo longer available– Purchase of Service Purchase of Service No longer availableNo longer available– Approved OvertimeApproved Overtime Under AttackUnder Attack– StaffingStaffing InsufficientInsufficient– ResourcesResources InsufficientInsufficient

The PresentThe Present

A continuation of freezes of salaries and A continuation of freezes of salaries and benefits, attacks on pension benefits, and benefits, attacks on pension benefits, and the overall instability of the City is the overall instability of the City is leading new hires to accept position with leading new hires to accept position with other agenciesother agencies– Since FY 03, 35 fire recruits have Since FY 03, 35 fire recruits have rejected job offers by the Cityrejected job offers by the City to accept employment elsewhereto accept employment elsewhere- Number and quality of applicants has Number and quality of applicants has declineddeclined

- On average 20% of each academy failsOn average 20% of each academy fails

The PresentThe Present

What do we need?What do we need?– Responsible decision-making that will Responsible decision-making that will

treat the City’s work force fairly and treat the City’s work force fairly and keep pace with a competitive marketkeep pace with a competitive market Mayor’s proposal will only create further Mayor’s proposal will only create further

recruitment and retention problemsrecruitment and retention problems Fire-Rescue will have 100 budgeted Fire-Rescue will have 100 budgeted

vacancies by the end of the fiscal year that vacancies by the end of the fiscal year that will have to be filled either by new personnel will have to be filled either by new personnel or by overtimeor by overtime

The PresentThe Present

What do we need?What do we need?– Responsible decisions that show an Responsible decisions that show an

understanding of, and appreciation for, the understanding of, and appreciation for, the importance of experienced human capital importance of experienced human capital in the success of the City’s reform effortsin the success of the City’s reform efforts Experienced employees are your most valuable Experienced employees are your most valuable

commodity in terms of successful reformcommodity in terms of successful reform Experienced employees will better serve the Experienced employees will better serve the

publicpublic Lower turnover provides for more experience Lower turnover provides for more experience

and lower cost and lower cost

The PresentThe Present Responsible decisions today that won’t Responsible decisions today that won’t

require more difficult and more expensive require more difficult and more expensive solutions later.solutions later.– Loss of experienced personnel could create Loss of experienced personnel could create

further liability for the City further liability for the City – Continuing to work toward the least competitive Continuing to work toward the least competitive

compensation package is not in the best compensation package is not in the best interest of serving the public as the quality of interest of serving the public as the quality of service will sufferservice will suffer

– The two-tier 1981 Pension Plan was a failure and The two-tier 1981 Pension Plan was a failure and all employees were returned to original planall employees were returned to original plan

– Public attacks on wages, benefits and overtime Public attacks on wages, benefits and overtime by the Mayor’s office continue while by the Mayor’s office continue while disregarding the contractual requirement to disregarding the contractual requirement to jointly study compensation and benefit issuesjointly study compensation and benefit issues

The PresentThe Present

Contractually required studies Contractually required studies not not presented to Local 145 or the City presented to Local 145 or the City Council:Council:– DROPDROP– Retiree Health for employees hired Retiree Health for employees hired

before 7/1/05before 7/1/05– Defined Contribution Retiree Health plan Defined Contribution Retiree Health plan

for employees hired after 7/1/05for employees hired after 7/1/05 THESE EMPLOYEES AND ALL FUTURE FIRE THESE EMPLOYEES AND ALL FUTURE FIRE

PERSONNEL HAVE NO RETIREE HEALTH CAREPERSONNEL HAVE NO RETIREE HEALTH CARE

– Flexible Benefits StudyFlexible Benefits Study

The FutureThe Future City has proposed a 0% Salary increase and $1M decrease City has proposed a 0% Salary increase and $1M decrease

in health benefits for FY 2008in health benefits for FY 2008

City has proposed two significant retirement benefit City has proposed two significant retirement benefit changes that will make our pension system the worst in the changes that will make our pension system the worst in the CountyCounty

Employees required to pay significantly more for their Employees required to pay significantly more for their retirement than any other agency in the county of San retirement than any other agency in the county of San DiegoDiego

Average salary increases for Average salary increases for study’s comparables*:study’s comparables*:

– 3.97% in FY 073.97% in FY 07– 4.33% in FY 084.33% in FY 08– 3.12% in FY 093.12% in FY 09

The FutureThe Future

Continued reductions in compensation and attacks Continued reductions in compensation and attacks on benefits will motivate current employees to on benefits will motivate current employees to pursue jobs with competitive agenciespursue jobs with competitive agencies

Highly qualified applicants will either accept a job Highly qualified applicants will either accept a job with another agency or use the Fire-Rescue with another agency or use the Fire-Rescue department as a stepping stone after they are department as a stepping stone after they are hired.hired.

BOTTOM LINE - The City’s current compensation BOTTOM LINE - The City’s current compensation proposal will exacerbate the recruitment and proposal will exacerbate the recruitment and retention problems in the fire department.retention problems in the fire department.

The FutureThe Future

What will it look like?What will it look like?

Salary Increase ComparisonSalary Increase Comparison FY 07 through FY 09FY 07 through FY 09

Source: City of San Diego Compensation & Benefit StudySource: City of San Diego Compensation & Benefit Study

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%