The Town recently conducted a salary and benefit analysis comparing Oro Valley town staff salaries with “comparable” jurisdictions across Arizona. How scientific was this 2019 study? Well, let’s take a look at the salary analysis that the Town performed six years ago.
In 2013, former Town Manager, Greg Caton, “contracted” a study of salary comparisons. The study compared Oro Valley to towns three times our size and all but one had a property tax.
Although Sahuarita and Marana were included in that study, they made up only two of the 11 communities considered. Eight of the 11 cities in the study were in Maricopa County and all have substantially larger populations than Oro Valley.
At that time, former Councilmember Mike Zinkin noted:
“Our employees are well paid and they deserve it [but] do they deserve to get paid as much as an employee in Avondale [or other Phoenix Communities]? The cost of living is much more up there."Former Councilmember Bill Garner noted that:
“The salary study was flawed from the outset with much of the results suspect as many comparisons were done using cities and Towns much larger than Oro Valley.”Nonetheless, in 2014, the Hiremath council approved a budget that allowed for an across-the-board increase in salaries that fell below the compared cities/towns. This, along with annual raises of 3.5 to 4% is what Oro Valley town employees have received. This does not take into effect other employee benefits such as health insurance and an on-site health clinic.
Below is a direct quote from the FY 2019/20 TMRB
“The Human Resources Director conducted a salary and benefit analysis recently among comparable jurisdictions across the state and the data show that Town pay ranges are below those in comparable communities and positions by an average of 9% overall. It is not financially feasible to adjust ranges by the full amount in one year. Ensuring the Town remains competitive as an employer will require a multi-year approach. Therefore, the Recommended Budget includes funding for a 4% adjustment to all Town salary ranges not covered by a negotiated agreement. Actual salary adjustments will only be given to employees whose current salary falls below the new range minimum, a cost of approximately $50,000. Town staff will continue to evaluate the plan and economic conditions in the coming fiscal year to determine next steps for FY 2020/21.
In addition, the salary and benefit analysis also revealed that the Town’s current annual merit increases are slightly above the average compared to our comparable communities. Over the past seven years, following three years of no raises for employees, the Town has offered merit increases of 3.5% for a successful annual evaluation and 4% for an outstanding annual evaluation. The Recommended Budget reduces those increases 25%, to 2.5% for a successful evaluation and 3% for an outstanding evaluation.”
It’s curious
In her narrative, Town Manager, Mary Jacobs admits that the Town’s annual merit raises have been above the norm. Therefore, if we brought the employee salaries up to “acceptable” standards in 2013, and their annual merit raises have been above the norm, how is it that we need to re-adjust the employee salaries again?
Adding it up
When you take the proposed one-time salary adjustment of 4% for FY 2019/20 plus the proposed 2.5% to 3% annual merit increase, the increases will average about 6.5%. Keep in mind that every time an employee’s pay goes up (whether by the annual cost-of-living raise or via a merit raise) the Town’s contribution into the Arizona State Retirement System also goes up.
The current Town contribution per employee is 11.8% of the employee’s salary. [Source: Arizona State Retirement System website – www.azasrs.gov]
Example: If an employee makes $100,000 a year, the Town contributes $11,800 a year into ASRS. When that employee gets a 6.5% raise ($6,500), he/she now earns $106,500 per year and the Town’s contribution into ASRS increases to $12,567 a year.
