SUBJECT Employee Pay and Benefits by nhz10206


                                        ORANGE COUNTY
                                    BOARD OF COMMISSIONERS

                              ACTION AGENDA ITEM ABSTRACT
                               Meeting Date: November 30, 2000
                                                                             Action Agenda
                                                                             Item No. 1

    SUBJECT: Employee Pay and Benefits

    DEPARTMENT: Personnel                              PUBLIC HEARING: (Y/N)                No

    ATTACHMENT(S):                                     INFORMATION CONTACT:
     Under separate cover:                             Elaine Holmes, Personnel Director,
       Pay and Benefits Report                         Extension 2550

                                                       TELEPHONE NUMBERS:
                                                        Hillsborough 732-8181
                                                        Chapel Hill  968-4501
                                                        Durham       688-7331
                                                        Mebane       336-227-2031

PURPOSE: To consider the directions the Board of Commissioners wishes to pursue as to
Orange County employee pay and benefits for fiscal year 2001-02 and 2002-03.

BACKGROUND: During 1998-99, the Board of Commissioners completed a comprehensive
review of the employee pay and benefits plan. After consideration and discussion, the Board
reached consensus on the elements of the pay and benefits plan. The Board also decided that
this plan would be in effect for two years to provide for more continuity in the plan and to reduce
the need to revisit the plan each year. Fiscal year 1999-00 was the first year of the two-year
plan and the current fiscal year (2000-01) is the second year.

                                 Questions For Consideration

Based on the Board’s plan, the Board will be considering in the November 30 work session the
directions that it wishes to pursue as to employee pay and benefits over the next two year
period; that is, fiscal year 2001-01 and 2002-03.

Questions for the Board’s consideration include the following:

•   Is the Board satisfied as to current directions?

•   Are there any unachieved or new objectives that the Board wishes to pursue? If so
    what are these?
                                    Pay and Benefits Report

Under separate cover, staff has provided a Pay and Benefits Report as background information
to the Board’s consideration of the pay and benefits plan in the November 30 work session. As
specifically requested by the Board, the report includes sections on cafeteria benefits, vacation
buy back option, domestic partner benefit coverage and retirement incentives. In addition the
report provides updated information on the Cost of Living Increase, In-Range Increase,
Meritorious Service Awards, area local government pay plans, 401(k) plan and the Orange
County employee work force.

                          Staff Feedback As To Possible Directions

In the Board’s consideration of the directions in the pay and benefits plan, staff would offer the
following feedback.

•   Base Salaries

    Employee base salaries continue to be a top priority from both an employee perspective and
    from the perspective of the County’s need to maintain a competitive pay plan in support of
    employee recruitment and retention. The County continues to experience intense labor
    market pressure. Section C of the Pay and Benefits report on the In-Range Increase
    includes data as to the County’s current recruitment experience.

    Base salaries are most impacted by the cost of living and in-range increase elements of the
    pay plan and staff recommends the Board continue the present focus on these elements of
    the pay plan.

•   County-Wide Position Classification and Pay Study

    Given the 10 years that have elapsed since the County’s last county-wide classification and
    pay study and the need to maintain a competitive and equitable pay plan, the County
    Manager and Personnel Director recommend that the Board pursue conducting a
    classification and pay study of all County positions in the upcoming two year period to
    update the plan on a comprehensive basis.

    This comprehensive study would reassess internal salary relationships among all positions
    and re-establish the County’s position in the labor market in relation to County employers. If
    the Board desires, staff will return with a specific proposal, plan and estimated costs for
    conducting such a study.

•   County 401(k) Plan Contribution

    In terms of the County’s employee benefits plan, increasing the County’s 401(k) plan
    contribution from the present $15 per pay period continues to be an employee priority and
    increasingly has become a significant issue in the County’s recruitment efforts given the
    higher 401(k) plan contribution provided by area local government employers. If the Board
    wishes to give this further consideration, the Section G 401(k) plan portion of the Pay and
    Benefits Report provides several options.

FINANCIAL IMPACT: The Pay and Benefits Report notes financial impact related to specific
items for discussion.

RECOMMENDATION(S): The Manager recommends that the Board consider the employee
pay and benefits plan and provide direction to staff as to the pay and benefits plan elements
that it wishes to pursue for 2001-02 and 2002-01.

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