More than 200 managers and professionals in Palo Alto received raises on Monday night under a plan that also sets a cap on the city's contribution for employee medical benefits.
The new compensation package, which the City Council unanimously approved Monday, mirrors the salary and benefit adjustments that the council approved in March for the city's largest union, the Service Employees International Union (SEIU), Local 521. Much like the roughly 600 workers represented by the SEIU, the members of the managers group will receive a 4.5 raise over two years, with 2 percent coming in the first year (effective July 1) and another 2.5 percent added in July 2015.
About 10 percent of the workforce will see further salary as part of an effort by the city to more closely align local salaries with those of other comparable cities.
In February, the city commissioned a study that evaluated Palo Alto's salaries with those of 14 other cities, including including Berkeley, Mountain View, San Jose, Santa Clara and San Mateo. The study confirmed that overall the city's compensation for its managers is "competitive," according to a report from city staff, but it also prompted officials to adjust salaries for 19 position to bring them to within 5 percent of the median market (as with the SEIU, the realignment included no downward salary adjustments). In some cases this meant shifting the position into a higher salary tier, or grade.
The realigned positions include deputy fire chief, public safety manager, planning manager, chief building official, chief transportation official and supervisor of facilities management supervisor.
"Recruitment and retention of managers and professionals is key to reaching the City's goals of providing innovative, effective, high quality work," a report from Human Services states. "Offering a competitive compensation plan that brings current salary ranges and benefits within 5 percent of the market median is necessary to recruit and retain talent."
The new plan also sets a cap for the city's contributions for medical premiums. In the past, the city's portion of medical expenses was a percentage of the total. Starting in January, it will be a flat figure, ranging from $708 for an employee-only plan to $1,840 for a family plan.
The salary and benefit adjustments are expected to add a total of $3.7 million to the city's expenses over the two-year period. This represents about 6.2 percent of the budgeted total compensation, according to the Human Resources report.
The council approved the new compensation package swiftly and with little discussion. Councilwoman Gail Price, who made the motion to approve the new contract, thanked the employees for their work and stressed the importance for having competitive salaries.
"This will help recruit and retain employees for the City of Palo Alto," Price said.
Earlier in the meeting, the council also approved 5 percent increases for City Manager James Keene and City Attorney Molly Stump, raising their respective salaries to $275,353 and $246,688. These contracts were approved on the council's consent calendar, with no discussion or dissent.