MEMORANDUM 07-120

TO: Mayor Hornaday and City Council

THRU: Walt Wrede, City Manager

FROM: Sheri Hobbs, Personnel

DATE: July 16, 2007

RE: Salary Wage Scale

The City's current wage scale has 9 merit steps A-I that are given annually based on satisfactory performance evaluations and 6 steps J-O that are merit/longevity steps which are given every two years.

We currently have 40% of the city workforce in the merit/longevity steps. 23% of this amount is below a range 12. Revising the wage scale will allow the employees in the lower ranges to receive annual merit increases. We are requesting to revise the wage scale effective 1-1-07 so that all 15 eligible employees in the 2007 year would receive an increase. The revision to the wage scale for the 2007 year would be $19,035.67.

During the last five years the City's hiring process has undergone drastic changes. In some positions the applications received have dropped over 50%. We have difficulty attracting qualified applicants in certain key positions. City wages for key positions have always been low but the majority of our key positions are long term employees at the end of the wage scale. As these positions become vacant we have been required to increase our starting salaries significantly to attract qualified applicants. In certain positions it is not a matter of hiring inexperience employees and training them, certifications are required State law. By starting these positions in the middle of the wage scale they reach longevity steps quickly and only receive merit increases every two years. The City has always had an advantage in our recruitment due to our health and retirement benefits. In 2006 with the change to the PERS system one of our most important benefits was eliminated for new hires.

We need to adjust our wage scale to annual merit increases. This will provide a 15 year wage scale. In the 2005 Salary and Benefit survey the average wage scale in other cities was 10-15 years.

RECOMMENDATION: Approve Ordinance 07-26 to revise the wage scale to annual merit increases

FISCAL IMPACT: 2007 budget increase of $12,221.12 to General Fund, $4,659.72 Water and Sewer Fund, $2,154.84 to Port and Harbor Fund. Total budget increase for 2007 $19,035.67. 2008 estimated costs are $20,000.