Oro Valley's Employee Compensation Seems "In Line" With Comparable Communities

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Last week, Oro Valley issued a press release announcing an employee compensation study of Oro Valley employees. Oro Valley will pay $30,000 for this study.

The objective of this study is to determine if the wages and benefits paid Oro Valley employees are competitive.   The town will contract for the study within the next 12 weeks, targeting completion in the fall. (Source)  The Daily Star has already concluded that Oro Valley pays more than Marana for comparable top level jobs. (view Marana's Classified Salary Schedule)

We compared randomly selected earnings for higher level Oro Valley employees to those in the the Town of Sahuarita.  We found that Oro Valley salaries are about the same as that town. For example:

• The average police sergeant in Sahuarita earns $81,318.  In 2012, the average earnings of and Oro Valley police sergeant was $81,752. (The highest grade wage level for a police sergeant in Marana is $72,551.) 
• Oro Valley police officers were paid an average of $53,405  in 2012.  This places Oro Valley at the higher end of the Marana salary scale for this position and in the low-mid range of the Sahuarita salary range for the same position.

So, on the surface, Oro Valley upper level earnings seem comparable, if not a bit greater than, two sister communities: Marana and Sahuarita.

The Oro Valley compensation study will also include an analysis of fringe benefits paid.  Oro Valley, for example, pays all of the employee's medical premium.   This is a significant benefit.  This is rare in the private sector.  It is more common in the public sector.  These benefit policies could vary among cities and towns.

Another fringe benefit, in the case of the police department, is the value of the take home cars that most Oro Valley officers have.  The value of this fringe benefit in gas saving alone could be $300, even for a short commute.  Any compensation study must include a comparison of this policy and its value to the employee.

We know that there are some who will argue that take home cars are not a fringe benefit. They are required as part of the job.  We also understand that the IRS does not consider them a taxable fringe benefit.  However, it does have value to the employee because it eliminates their commuting costs.  Also, we know, because we have been sent pictures (which we have chosen not to publish) that these cars are used for personal use.
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We thought it would be useful, as a backdrop, to provide you with Oro Valley salaries and wages stand today.

Overview

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Oro Valley paid more than $17.3 million in wages to 440 employees in 2012 (Source).

71% of this is paid to employees in 3 departments: Police (42%), DIS (18%) and Water (11%).  53% of the personnel are employed in these 3 departments.  This means that the average wage per employee in these departments is greater than that of other departments.   This could be for a number of reasons. For example, there may be more part-time employees in other departments, thus reducing the average wages for this department; or, the people in those departments may be paid less for comparable jobs.

The Big Earners

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10% of the total spend went to 14 people, all of whom earned more than $100,000:

• $476,854 to 4 police department employees
• $342,764 to 3 in the legal/magistrate area
• $231,447 to 2 in DIS
• $265,579 to 2 in Town Management/Finance: 
• $244,740 to 2 in the Water Department:
• $111,076 to 1 in Parks and Recreation

The Next Tier

34 people, or 8% of employees earned from $80,000 to $99,000.  Their wages total almost $3 million.  82% of these wage earners work in 3 departments: Police (18%), DIS (16%) and water (8%).

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The Rest
The remaining  393 or 89% of all employees earned a total of $12,624,805, 73% of all wages paid.

70% of the wages in this last tier, the bulk of those employed by the town, were employed in the three largest departments.

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Conclusions
Wages are determined by the market and by the skill levels required of a specific job. Therefore, it is not possible to reliably compare individual salaries across departments.  Generally, senior law enforcement, legal, and engineering personnel command a higher wage than positions that require lower levels of expertise.  Oro Valley's wage numbers illustrate this.

How these numbers compare to what other cities and towns pay will be the focus of the Oro Valley compensation study.  Our preliminary study says that Oro Valley wages, at least at higher wage jobs, are at least equal to if not greater than two comparable local communities.
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