A study Phoenix commissioned to settle disputes over public-employee compensation shows city workers earn slightly more in total pay and benefits than a combined average of competitive peers in both the public and private sectors.
But when benefits are stripped from the equation, Phoenix workers make far less in base pay compared with private sector entities and about the same as local public-sector peers.
The findings are contained in a study from the Segal Group that the Phoenix City Council will review today. Phoenix paid $430,000 for the 300-plus page report, and there is already disagreement about what the report says.
Developing consensus over the study's data will be important, as the city plans to use the information to drive labor negotiations currently under way with five employee unions.
Employee costs make up about 60 percent of the city's $2.45 billion operating budget for the current fiscal year.
"We want to be known as an employer of choice, so it is important to be competitive when it comes to our pay," Phoenix Human Resources Director Janet Smith said. "But the city also recognizes that we have to be a responsible steward of public funds."
Locally, most major cities in Maricopa County were included along with data on state employees. Private-sector information came from published databases and a survey of seven local companies or utilities.
The study shows Phoenix is roughly competitive with the public sector and 19 percentage points below market compared with the private sector when it comes to base salary. The report based its findings on the city's current labor contracts, which included a 1 percent wage cut that has been in place for two consecutive fiscal years.
"The citizens of Phoenix should realize that they're getting a lot of bang for their buck because we're getting 19 percent below the private sector," said Frank Piccioli, president of the American Federation of State, County and Municipal Employees Local 2960. "I hope that shuts up people who have misrepresented the facts."
Total compensation -- factoring in health care, dental and retirement benefits -- "is the primary consideration for determining the city's overall market competitiveness," according to the study.
But Councilman Sal DiCiccio, who has frequently complained about the cost of city employees' pay and benefits, said the report focuses too much on base pay. The private sector was underrepresented in the study, he said.
The total compensation for general employees hits about 1 percentage point above what is considered the top of competitive range for average market pay and 6 percent above the middle of the scale. Total pay and benefits for sworn public-safety workers lands about 5 percentage points above the top of the range and 10 percent above the middle.
Compared with the private sector alone, total compensation for Phoenix employees is barely at market.
The city's "generous retirement benefits" drive up employee compensation, according to the Segal Group.
Based on the study, if Phoenix goes through with its current plan to reform the pension system, it likely will put the city in equal footing with its peers. Phoenix created a pension-reform task force to review retirement benefits to public employees after a study by The Arizona Republic showed the cost to fund city pensions increased 277 percent, to $88.1 million a year in the past decade.
The study also found that:
Phoenix's tuition-reimbursement program offers about $9,200 per employee, while other organizations tend to have a maximum of $5,000.
The city's dental and health-care benefits are more generous than other cities in most cases.
Most Phoenix employees, except for firefighters, have slightly more combined time off from vacation, sick leave, holiday time and personal leave than other private- and public-sector entities.
Smith said the city intentionally increased the number of sick days employees are eligible for because Phoenix doesn't offer short-term disability. But the city's sick-leave policies have come under fire as employees are allowed to bank unused days and cash them out upon retirement.
The cost of accrued sick leave can be used in final calculations to determine lifetime pension payouts, creating a liability for the city with taxpayers footing the bill.
Out of 139 job classifications in the city, excluding public safety, Phoenix pays a little more than 60 above market in total compensation.
Jim Tierney, president of the American Federation of State, County and Muncipal Employees Local 2384, said officials should use the study to strike a balance between attracting and maintaining quality employees while saving money for Phoenix. Tierney's union represents electricians, mechanics and other "skilled trade" employees, and added his union is willing to work with the city to adjust pay scales on both ends.
Compensation for rank-and-file police officers and firefighters falls right in line with competitor cities. But Will Buividas, chief negotiator for the Phoenix Law Enforcement Association, said that isn't necessarily a good thing. PLEA has asked for raises in the current round of labor talks.
"My guys deserve to be paid above market because we're the sixth largest city in the United States," Buividas said. "It's a dangerous city."
The study also found that middle managers and executives were generally paid below the market. But Ron Ramirez, president of the Administration, Supervisory, Professional and Technical Employees Association representing managers, said that doesn't necessarily mean the group will ask for a raise.
"We're not looking to be greedy," Ramirez said. "We're looking to work with the city in harmony and partnership."
But when benefits are stripped from the equation, Phoenix workers make far less in base pay compared with private sector entities and about the same as local public-sector peers.
The findings are contained in a study from the Segal Group that the Phoenix City Council will review today. Phoenix paid $430,000 for the 300-plus page report, and there is already disagreement about what the report says.
Developing consensus over the study's data will be important, as the city plans to use the information to drive labor negotiations currently under way with five employee unions.
Employee costs make up about 60 percent of the city's $2.45 billion operating budget for the current fiscal year.
"We want to be known as an employer of choice, so it is important to be competitive when it comes to our pay," Phoenix Human Resources Director Janet Smith said. "But the city also recognizes that we have to be a responsible steward of public funds."
Benefits drive up cost
The study, released recently, based its findings on data averaging information from both the private and public sector. Cities used in the study for comparison included San Diego, Los Angeles, Philadelphia and Houston.Locally, most major cities in Maricopa County were included along with data on state employees. Private-sector information came from published databases and a survey of seven local companies or utilities.
The study shows Phoenix is roughly competitive with the public sector and 19 percentage points below market compared with the private sector when it comes to base salary. The report based its findings on the city's current labor contracts, which included a 1 percent wage cut that has been in place for two consecutive fiscal years.
"The citizens of Phoenix should realize that they're getting a lot of bang for their buck because we're getting 19 percent below the private sector," said Frank Piccioli, president of the American Federation of State, County and Municipal Employees Local 2960. "I hope that shuts up people who have misrepresented the facts."
Total compensation -- factoring in health care, dental and retirement benefits -- "is the primary consideration for determining the city's overall market competitiveness," according to the study.
But Councilman Sal DiCiccio, who has frequently complained about the cost of city employees' pay and benefits, said the report focuses too much on base pay. The private sector was underrepresented in the study, he said.
The total compensation for general employees hits about 1 percentage point above what is considered the top of competitive range for average market pay and 6 percent above the middle of the scale. Total pay and benefits for sworn public-safety workers lands about 5 percentage points above the top of the range and 10 percent above the middle.
Compared with the private sector alone, total compensation for Phoenix employees is barely at market.
The city's "generous retirement benefits" drive up employee compensation, according to the Segal Group.
Based on the study, if Phoenix goes through with its current plan to reform the pension system, it likely will put the city in equal footing with its peers. Phoenix created a pension-reform task force to review retirement benefits to public employees after a study by The Arizona Republic showed the cost to fund city pensions increased 277 percent, to $88.1 million a year in the past decade.
The study also found that:
Phoenix's tuition-reimbursement program offers about $9,200 per employee, while other organizations tend to have a maximum of $5,000.
The city's dental and health-care benefits are more generous than other cities in most cases.
Most Phoenix employees, except for firefighters, have slightly more combined time off from vacation, sick leave, holiday time and personal leave than other private- and public-sector entities.
Smith said the city intentionally increased the number of sick days employees are eligible for because Phoenix doesn't offer short-term disability. But the city's sick-leave policies have come under fire as employees are allowed to bank unused days and cash them out upon retirement.
The cost of accrued sick leave can be used in final calculations to determine lifetime pension payouts, creating a liability for the city with taxpayers footing the bill.
Next steps
"Clearly our benefits are rich and we're above market," Councilman Bill Gates said about retirement and health-care benefits. "That's something we need to look at."Out of 139 job classifications in the city, excluding public safety, Phoenix pays a little more than 60 above market in total compensation.
Jim Tierney, president of the American Federation of State, County and Muncipal Employees Local 2384, said officials should use the study to strike a balance between attracting and maintaining quality employees while saving money for Phoenix. Tierney's union represents electricians, mechanics and other "skilled trade" employees, and added his union is willing to work with the city to adjust pay scales on both ends.
Compensation for rank-and-file police officers and firefighters falls right in line with competitor cities. But Will Buividas, chief negotiator for the Phoenix Law Enforcement Association, said that isn't necessarily a good thing. PLEA has asked for raises in the current round of labor talks.
"My guys deserve to be paid above market because we're the sixth largest city in the United States," Buividas said. "It's a dangerous city."
The study also found that middle managers and executives were generally paid below the market. But Ron Ramirez, president of the Administration, Supervisory, Professional and Technical Employees Association representing managers, said that doesn't necessarily mean the group will ask for a raise.
"We're not looking to be greedy," Ramirez said. "We're looking to work with the city in harmony and partnership."
- Lynn Bui
*As always, if you locate any Piccioli's Points in your daily searches that I have missed, please send them to me so I can add them!*
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