Palo Alto's drive to give its group of managers of professionals a 2 percent raise this year hit a speed bump Monday night when the City Council decided that the compensation level of these employees should be studied in greater detail before a final decision is made.
The council discussed on Monday an ongoing effort by Human Resource Department to bring the salaries of this employer group in line with what they would get in other cities. The group of about 200 employees, which includes engineers, attorneys, department directors and mid-level managers, is the only major labor unit that does not belong to a union.
The group is slated for a 2 percent raise under a proposed 2014 budget that City Manager James Keene unveiled last week and that the council's Finance Committee is scheduled to start scrutinizing tonight. Ultimately, staff hopes to find the median salary for each of the 114 classifications in the group and make sure that each employee falls within 20 percent of the median in his or her classification.
"We recognize that we do exist within a marketplace and we want to make sure we're able to recruit and retain capable staff to be able to work in the city," Keene told the council. "This is what the pay plan is designed to do."
An analysis that has already been conducted found that most Palo Alto's managers and professionals already have compensation at or above the market median, particularly when their benefits are factored in (a few, however, fall below the median line). A study conducted by Koff & Associates, which collected data for 82 out of 114 classifications, found that Palo Alto's benefit package is greater by about 10 percent than that of the comparator group taken as a whole.
The group of 14 cities against which Palo Alto was compared includes Alameda, Anaheim, Berkeley, Burbank, Fremont, Hayward, Long Beach, Mountain View, Redwood City, Redwood City, Roseville, San Jose, San Mateo, Santa Clara and Sunnyvale.
The council didn't have any major issues with this rethinking of salaries, though members decided that the issue is sufficiently sensitive to merit further analysis before any decisions are made. The council voted 7-1, with Gail Price dissenting and Liz Kniss absent, to send the item to its Finance Committee for further discussion.
Most members agreed with Councilman Larry Klein, who proposed sending the item to Finance for further study.
"Last thing we want to be doing is recruiting folks, investing in them, training them and then having them jump to another city that pays more," Klein said. "And that's a real possibility, especially if we're out of touch with the market."
His colleagues agreed that while an adjustment is probably worthwhile, it should be scrutinized in greater detail. Councilman Marc Berman said it would be "prudent" to look closer at the data in the smaller committee and Councilman Greg Schmid called the study "very rich in data and implications" and said it would be useful to have a more detailed discussion.
Price agreed, though she argued that this discussion should not impact the fiscal year 2014 budget, which the council is set to approve in June. Price advocated approving the staff recommendation and giving managers a 2 percent increase for 2014. The adjustment staff is proposing is justified by the study conducted thus far, she said.
"In the future, it would be important to bring it back to finance," Price said. "I think for this particular cycle, I don't think it's appropriate."
The Finance Committee is scheduled to consider the subject on June 10.