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2024-07-02 VII. E. Ex 12 City• of Okeechobee , -� ; �oz4 rc 11 Pfni yr I Provided by: India Riedel. Finance Director piS-f-rihtI /L4 7/2/2024 * r ' • Implementation of Class Parity based on Evergreen Solutions Compensation Study Proposed Budget Impact Full cost of Class Parity with 3.4% COLA $ 186,787 33% of Class Parity with 3.4% COLA $ 128,630 Full cost of Class Parity with 4% COLA $ 202,480 33% of Class Parity with 4% COLA $ 144,333 Changes in personnel at PD Change Lieutenant to Major $ 5,000 Change Officer to Corporal $ 2,500 S:\INDIA\BUDGET\2025 Budget\Salary Info\Salary Options cost rev 2024 07 02 ljer4ViI.E. b�rste� Katie Rogers , IZ ca yi SAticity From: Heather Prince Sent: Tuesday, July 2, 2024 8:46 AM To: Lane Gamiotea Cc: Katie Rogers Subject: FW: [EXTERNAL]FW: City of Okeechobee Final Report P1232 Attachments: FR - 6-25-24 - COMPENSATION STUDY FOR THE CITY OF OKEECHOBEE.pdf Lane, Attached is the final report for the compensation study completed by Evergreen. Heather Prince 1 Human Resources Generalist CITY OF OKEECHOBEE 55 SE 3RD AVENUE, OKEECHOBEE, FL 34974 PHONE: (863) 763-3372 EXT. 9796 FAX: (863) 763-1686 Under Florida law, email addresses are public records. If you do not want your email address released in response to a public records request, do not send electronic mail to this entity. Instead, contact this office by phone or in writing, Florida Statute 668.6076. CITY OF OKEECHOBEE ELECTRONIC DEVICE DISCLAIMER: Florida has a very broad public records law. Most written communications to or from local officials regarding city business are public records available to the public and media upon request. Your correspondence via e-mail, text message, voice mail, etc., may therefore be subject to public disclosure. From: Rob Williamson <Rob@consultevergreen.com> Sent:Tuesday,June 25, 2024 1:22 PM To: Gary Ritter<gritter@cityofokeechobee.com> Cc: Heather Prince<humanresources@cityofokeechobee.com>;Jacqueline Boer <executiveassistant@cityofokeechobee.com>; India Riedel <iriedel@cityofokeechobee.com>; Rob Williamson <Rob@consultevergreen.com>; Karl Fuchs<Karl@consultevergreen.com>; Daniel Tejada <dtejada@consultevergreen.com> Subject: [EXTERNAL]FW: City of Okeechobee Final Report P1232 Gary, Attached is the Final report,with the Benefits Survey Summary folded into the report with the suggested changes. I added a specific recommendation related to benefits that speaks to the family coverage issue. I hope this is what you are looking for. With gratitude, Rob Williamson Project Manager Evergreen Solutions, LLC 850-565-0658 rob_AcQs_uitevergreen.com 1 • • From:Jackie Barnes<Jackie@consultevergreen.com> Sent:Tuesday,June 25, 2024 10:42 AM To: Rob Williamson<Rob@consultevergreen.com> Cc: Karl Fuchs<Karl@consultevergreen.com>; Daniel Tejada<dtejada@consultevergreen.com>; Brenda Whurr <Brenda@consultevergreen.com> Subject: RE: City of Okeechobee Final Report P1232 IT'S ATTACHED. Jackie Barnes .4 Office Manager Evergreen SQ_lution , LLC 2528 Barrington Circle, Unit 201 Tallahassee, FL 32308 Office: (850) 383-0111 Evergreen Cell: (850) 688-4456 Solutions Email: jackieCaconsultevergreen.com Partnering with public-sector clients to effect positive change From: Rob Williamson <Rob@consultevergreen.com> Sent: Monday,June 24, 2024 4:35 PM To:Jackie Barnes<Jackie@consultevergreen.com> Cc: Rob Williamson<Rob@consultevergreen.com>; Karl Fuchs<Karl@consultevergreen.com>; Daniel Tejada <dtejada@consultevergreen.com>; Brenda Whurr<Brenda@consultevergreen.com> Subject: City of Okeechobee Final Report P1232 Jackie, Please use the attached chapters to make a Final Report. With gratitude, Rob Williamson Project Manager Evergreen Solutions, LLC 850-565-0658 rob@consu ltevergreen.com 2 • Compensation Study for the City of Okeechobee, FL FINAL REPORT ilt t, ,11,.r tP4. it am` 4 t, 40 . -*„.,. t* .s.' . , y bil - _- s, m • -.., ) t It If ,4-r1 i *-it Evergreen Solutions. LLC June 25, 2024 • • EVERGREEN SOLUTIONS, LLC Table of Contents PAGE 1.0 INTRODUCTION 1-1 1.1 Study Methodology 1-1 1.2 Report Organization 1-2 2.0 ASSESSMENT OF CURRENT CONDITIONS 2-1 2.1 Analysis of Pay Plan 2-1 2.2 Classification Range Analysis 2-3 2.3 Quartile Analysis 2-5 2.4 Compression Analysis 2-8 2.5 Summary 2-11 3.0 MARKET SUMMARY 3-1 3.1 Market Data 3-3 3.2 Salary Survey Results 3-4 3.3 Salary Survey Conclusion 3-8 4.0 BENEFITS SURVEY RESULTS 4-1 4.1 Employee Insurance Coverages and Miscellaneous Benefits 4-2 4.2 Health Plans 4-2 4.3 EAP,Tuition Reimbursement, 529 Plans, and Financial Planning 4-7 4.4 Retirement 4-8 4.5 Employee Leave, Holidays, and Compensatory Time 4-9 4.6 Summary 4-12 5.0 RECOMMENDATIONS 5-1 5.1 Classification Recommendations 5-1 5.2 Compensation Recommendations 5-2 5.3 Compensation and Classification System Administration 5-7 5.4 Summary 5-10 • • EVERGREEN SOLUTIONS, LLC Chapter 1 - Introduction The leadership of City of Okeechobee, FL (the "City") in keeping with its commitment to attracting and retaining the employees necessary to provide high quality services determined that its current compensation system and structure needed to be updated to better reflect best practices and improve market competitiveness. Evergreen Solutions, LLC ("Evergreen") was selected by the City during August of 2023 as its partner to in order to accomplish this goal. This engagement sought to evaluate the strengths and weaknesses of the City's current system, conduct a job and pay grade analysis to study internal equity, collect peer salary data to study external equity, and adjust the current compensation system to better reflect the market. This study and the analysis contained within provides City leadership with valuable information related to their employee demographics, opinions, and market data, as well as internal and external equity. The primary focus of this study was to reestablish external equity. External equity relates to the differences between how an organization's classifications are valued and the compensation available in the marketplace for the same skills, responsibilities, and duties. This component of the study aims to address how the City is positioned in the market relative to other local area government organizations with similar positions and to develop recommendations that allow the City to recruit and retain quality employees. 1.1 STUDY METHODOLOGY Evergreen Solutions combines qualitative and quantitative data analysis to produce recommendations that maximize the fairness and competitiveness of an organization's compensation structure and practices. It is important to note that the data utilized in the study represents a snapshot in time.As market conditions can change rapidly, it is important for the City to conduct regular market surveys to ensure their external market position does not decay. A full compensation and classification review is recommended approximately every three to five years. Some examples of project activities included: • Conducting a project kick-off meeting • Conducting an external market salary survey • Conducting a benefits survey • Developing recommendations for compensation management • Developing recommendations for compensation changes • Creating draft and final reports Evergreen Solutions,LLC Page 1-1 • • Chapter 1-Introduction Compensation Study for the City of Okeechobee,FL Kickoff Meeting The kickoff meeting provided an opportunity to discuss the history of the City,finalize the work plan, and begin the data collection process. Data collection included the gathering of relevant background material including existing pay plans, organization charts, policies, procedures, training materials, classification specifications, and other pertinent material. Salary Survey The external market for this study was defined as identified local government organizations with similar positions as well as similar characteristics, demographics, and service offerings. Specific benchmark positions in the City were surveyed, although not all positions had matching positions at the peer organizations. The data were then analyzed comparing City classifications to the jobs performing the same duties at peer organizations to gain a fuller understanding of their market position. Benefits Survey The benefits chapter provides a comprehensive comparison of the employee benefits offered by the City of Okeechobee, FL to the approved market peers.This deliverable was added after the conclusion of the classification and compensation study and uses the same market peers. This chapter is designed to give a clear understanding of how the various benefits available to city employees compare to the local labor market to aid in determining a compensation strategy based on the total compensation offered by the City by emphasizing the value these benefits add to their overall compensation package. The Benefits Summary portion, in particular, highlights the core components of the benefits program, including health insurance, retirement plans, leave policies, and other supplementary benefits. This summary serves as a concise guide, presenting key information in an accessible manner to help employees and stakeholders appreciate the full spectrum of benefits provided by the City.The goal of this survey is to gain a clearer understanding of the competitive market position the City occupies and underscore the City's commitment to the well-being and financial security of its employees, reflecting the broader goals of fostering a supportive and attractive work environment. Recommendations Evergreen developed recommendations for the City to consider in order to help maximize the effectiveness and efficiency of its current compensation structure. Evergreen provided the City with a variety of recommendations for the future at various costs. Plans ranged from minor tweaks to the current compensation system to wholesale changes to the entire organizational structure. These plans were designed to fix the issues identified in this report, while continuing to build on the strengths the City currently exhibits. 1.2 REPORT ORGANIZATION This report includes the following additional chapters: Evergreen Solutions,LLC Page 1-2 • • Chapter 1-Introduction Compensation Study for the City of Okeechobee,FL • Chapter 2 - Assessment of Current Conditions • Chapter 3 - Market Summary • Chapter 4 - Benefits Summary • Chapter 5 - Recommendations Chapter 2-Assessment of Current Conditions An assessment of current conditions was conducted to help Evergreen better understand the current standing of the City pay plan, demographics, and compensation structures. This assessment should be considered a snapshot in time and is reflective of the conditions present within the City upon the commencement of this study. By leveraging this information, Evergreen was able to gain a better understanding of the strengths and weaknesses of the current compensation system. When combined with the market results, the Assessment of Current Conditions helped provide a basis for recommendations. A full summary of the Assessment of Current Conditions can be found in Chapter 2 of this report. Chapter 3- Market Summary A salary survey was designed by Evergreen and approved by the City's human resources department.The external market was defined by Evergreen and approved by the City's Project Leadership Team made up of the City Manager, HR Director and Finance Director. After the results were received, the data were analyzed to compare the City to the overall results. Combined with the Assessment of Current Conditions, the market survey gave Evergreen the information needed to understand the City's position relative to its labor market. A full summary of the market results can be found in Chapter 3 of this report. Chapter 4 - Benefits Summary A benefits survey was designed by Evergreen and the external market was defined in collaboration with the City's Project Leadership Team made up of the City Manager, HR Director and Finance Director. After the results were received, the data were analyzed to compare the City to the overall benefits offerings. This benefits summary is meant to provide valuable information the City can use when determining total compensation and desired position in the local market.A complete summary of the benefits data can be found in Chapter 4 of this report Chapter 4 - Recommendations During the recommendations phase, Evergreen provided several different solution options based on their current relationship to market.Solutions were provided that only require minor tweaks to the current compensation system, as well as some solutions that would require more significant changes to the City's current structure. Evergreen has provided the City with recommendations that can both leverage the current compensation structure and also help expand its ability to recruit and retain talent in the most competitive classifications. A full explanation of the recommendations can be found in Chapter 5 of this report. Evergreen Solutions,LLC Page 1-3 • • EVERGREEN SOLUTIONS, LLC •s Chapter 2 — Assessment of Current k Conditions The purpose of this chapter is to provide a statistical analysis of the compensation system in place at the City of Okeechobee at the start of this study. The assessment is divided into the following sections: 2.1 Analysis of the Pay Plan 2.2 Classification Range Analysis 2.3 Quartile Analysis 2.4 Compression Analysis 2.5 Summary The analysis represented in this chapter represents a snapshot in time - this chapter was built off employee information collected in August of 2023. Every organization changes continuously, so this chapter is not meant to be a definitive statement on continuing compensation practices in the City. In fact, while the study was going on, there were several classification changes and employee roster changes that occurred. As a result, some of the classification titles included in this chapter may differ from those found later in this report. This Assessment of Current Conditions(AOCC) is meant to represent the conditions that were in place when this study began. The data contained within provide the baseline for analyses through the course of this study but are not sufficient cause for recommendations in isolation. By reviewing employee data, Evergreen gained a better understanding of the structure and methods in place and identified issues for both further review and potential revision. 2.1 ANALYSIS OF THE PAY PLAN The purpose of analyzing the pay plan used within the City is to help gain an overview of the compensation philosophy as it existed when the study began. The City had a system in place that categorized classifications by level and type of work. This system used classifications instead of pay grades to represent classifications of varying level and responsibility. Exhibit 2A displays the City's pay plan summarized for ease of comparison. The exhibit provides the name; each classifications pay range on the plan; the value of each pay grade at minimum, midpoint, and maximum; the range spread for each classifications pay range - which is a measure of the distance between the minimum and maximum of the range; the midpoint progression between ranges; and the number of employees per classification. The City's pay plan includes 26 occupied classifications that hold 57 employees. The pay range spreads are set to a static 44.3 percent. y Evergreen Solutions,LLC Page 2-1 • • Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee,FL D(HIBIT 2A PAY PLAN SUMMARY Pay Plan Grade Minimum Midpoint Maximum Range Employees Spread General Account Supervisor $ 43,238 $ 51,624 $ 62,434 44% 1 General Admin Secretary $ 37,882 $ 45,221 $ 54,664 44% 3 General Admin Sect/Occ $ 38,618 $ 46,100 $ 55,731 44% 1 General Chief of Police $ 71,968 $ 85,975 $ 104,121 45% 1 General City Clerk/Personnel $ 56,288 $ 67,228 $ 81,371 45% 1 General Code Enforcement $ 42,162 $ 50,337 $ 60,873 44% 2 General Crossing Guard $ 38,618 $ 46,100 $ 55,731 44% 1 General Deputy City Clerk $ 38,618 $ 46,100 $ 55,731 44% 1 General Dispatcher 1 $ 36,409 $ 43,460 $ 52,527 44% 3 General Equipment Mechanic I $ 39,808 $ 47,523 $ 57,458 44% 1 General Executive Assistant $ 41,979 $ 50,119 $ 60,608 44% 1 General Finance Director $ 58,034 $ 69,315 $ 83,904 45% 1 General Gen Svcs Coordinator $ 43,057 $ 51,408 $ 62,172 44% 1 General Lead Operator $ 42,667 $ 50,942 $ 61,607 44% 1 General Maintenance Foreman $ 47,452 $ 56,663 $ 68,550 44% 1 General Maintenance Operator $ 37,882 $ 45,221 $ 54,664 44% 6 General Police Detective 80 $ 49,160 $ 61,162 $ 71,027 44% 4 General Police Detective:84 $ 49,160 $ 61,162 $ 71,027 44% 11 General Police Lieutenant $ 57,073 $ 68,165 $ 82,481 45% 2 General Police Officer 1 $ 49,160 $ 61,162 $ 71,027 44% 2 General Police Records Clerk $ 39,246 $ 46,851 $ 56,643 44% 1 General Police Sergeant $ 54,297 $ 64,846 $ 78,481 45% 4 General Police Sgt Detective $ 54,297 $ 64,846 $ 78,481 45% 1 General Police Svcs Coord $ 43,238 $ 51,624 $ 62,434 44% 1 General Police/Fire Dispatch $ 36,409 $ 43,460 $ 52,527 44% 4 General Public Works Dir $ 77,181 $ 92,207 $ 111,684 45% 1 Total - - - - - 57 Comparing the summary data in Exhibit 2A to best practices, several observations can be made regarding the City's pay plan. Based on the analysis of the pay plan,the following facts can be observed: • The City range spreads are slightly narrower than you would typically see in the market today. • The classifications are not assigned into pay grades, rather, they each have their own individual pay ranges. The number of employees in each classification is widely varied. Multiple classifications have a single incumbent while others have more than ten. • The minimum pay within a range is $36,409 while the maximum of any pay range is $111,684. 4 Y. , Evergreen Solutions,LLC Page 2-2 • • Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee,FL 2.2 CLASSIFICATION RANGE ANALYSIS The City lacks an established pay plan and so we used the individual classifications and their ranges to make determinations about where certain employees landed within their specific ranges. First, however, we made note of the groups of classifications that had the same or similar ranges. Exhibit 2B displays the grouping of the classifications in which we found the same or similar ranges. The exhibit shows the groupings of classifications such as "Dispatcher 1" and "Police/Fire Dispatch" having the same range of $36,409 - $52,527. This range contains a total of 7 employees between the two classifications. We also showed groupings of classifications with very similar ranges (midpoints that are within $1,000 of one another.) An example is the classifications "Police Record Clerk" and "Equipment Mechanic I" whose ranges only differ by$672 at the midpoint. EXHIBIT 2B CLASSIFICATIONS WITH SAME/SIMILAR RANGES Range Employees Pay Plan Classification Minimum Midpoint Maximum Employees Spread per range General Dispatcher1 $ 36,409 $43,460 $ 52,527 44% 3 7 General Police/Fire Dispatch $ 36,409 $43,460 $ 52,527 44% 4 General Admin Secretary $ 37,882 $45,221 $ 54,664 44% 3 General Maintenance Operator $ 37,882 $45,221 $ 54,664 44% 6 9 General Crossing Guard $ 38,618 $46,100 $ 55,731 44% 1 General Admin Sect/Occ $ 38,618 $46,100 $ 55,731 44% 1 3 General Deputy City Clerk $ 38,618 $46,100 $ 55,731 44% 1 General Police Records Clerk $ 39,246 $46,851 $ 56,643 44% 1 2 General Equipment Mechanic I $ 39,808 $47,523 $ 57,458 44% 1 General Executive Assistant $ 41,979 $50,119 $ 60,608 44% 1 General Code Enforcement $ 42,162 $50,337 $ 60,873 44% 2 4 General Lead Operator $ 42,667 $50,942 $ 61,607 44% 1 General Gen Svcs Coordinator $ 43,057 $51,408 $ 62,172 44% 1 General Account Supervisor $ 43,238 $51,624 $ 62,434 44% 1 3 General Police Svcs Coord $ 43,238 $51,624 $ 62,434 44% 1 General Maintenance Foreman $ 47,452 $56,663 $ 68,550 44% 1 1 General Police Detective 80 $ 49,160 $61,162 $ 71,027 44% 4 General Police Detective:84 $ 49,160 $61,162 $ 71,027 44% 11 17 General Police Officer 1 $ 49,160 $61,162 $ 71,027 44% 2 General Police Sergeant $ 54,297 $64,846 $ 78,481 45% 4 General Police Sgt Detective $ 54,297 $64,846 $ 78,481 45% 1 5 General City Clerk/Personnel $ 56,288 $67,228 $ 81,371 45% 1 General Police Lieutenant $ 57,073 $68,165 $ 82,481 45% 2 3 General Finance Director $ 58,034 $69,315 $ 83,904 45% 1 1 General Chief of Police $ 71,968 $85,975 $ 104,121 45% 1 1 General Public Works Dir $ 77,181 $92,207 $ 111,684 45% 1 1 7 Evergreen Solutions,LLC Page 2-3 • • Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee,FL In addition to assessing the number of employees at minimum and maximum, an analysis was conducted to determine the number of employees below and above their ranges midpoint. The percentages refer to the percentage of employees in each classifications pay range that are above and below midpoint. Exhibit 2C displays the results of this analysis: a total of 42 employees are compensated below their pay range midpoint-which is 73.7 percent of all employees for the City. There are 15 employees compensated above the midpoint of their pay range, which is 26.3 percent of all employees. EXHIBIT 2C EMPLOYEES ABOVE AND BELOW MIDPOINT BY CLASSIFICATION Grade Employees #<Mid %<Mid #>Mid %>Mid Account Supervisor 1 1 100.0% 0 0.0% Admin Secretary 3 3 100.0% 0 0.0% Admin Sect/Occ 1 1 100.0% 0 0.0% Chief of Police 1 0 0.0% 1 100.0% City Clerk/Personnel 1 0 0.0% 1 100.0% Code Enforcement 2 2 100.0% 0 0.0% Crossing Guard 1 1 100.0% 0 0.0% Deputy City Clerk 1 1 100.0% 0 0.0% Dispatcher 1 3 3 100.0% 0 0.0% Equipment Mechanic I 1 0 0.0% 1 100.0% Executive Assistant 1 1 100.0% 0 0.0% Finance Director 1 0 0.0% 1 100.0% Gen Svcs Coordinator 1 0 0.0% 1 100.0% Lead Operator 1 1 100.0% 0 0.0% Maintenance Foreman 1 0 0.0% 1 100.0% Maintenance Operator 6 6 100.0% 0 0.0% Police Detective 80 4 3 75.0% 1 25.0% Police Detective: 84 11 9 81.8% 2 18.2% Police Lieutenant 2 0 0.0% 2 100.0% Police Officer 1 2 2 100.0% 0 0.0% Police Records Clerk 1 1 100.0% 0 0.0% Police Sergeant 4 2 50.0% 2 50.0% Police Sgt Detective 1 1 100.0% 0 0.0% Police Svcs Coord 1 0 0.0% 1 100.0% Police/Fire Dispatch 4 4 100.0% 0 0.0% Public Works Dir 1 0 0.0% 1 100.0% Total 57 42 73.7% 15 26.3% ....M* Evergreen Solutions,LLC Page 2-4 • • Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee,FL 2.3 QUARTILE ANALYSIS The last part of the Classification Range Analysis is a detailed look at how salaries are distributed through pay ranges, through a quartile analysis. Here, each pay range is divided into four segments of equal width, called quartiles. The first quartile represents the first 25 percent of the pay range; the second quartile represents the part of the range above the first quartile up to the mathematical midpoint; the third quartile represents the part of the range from the midpoint to 75 percent of the pay range; and the fourth quartile represents the part of the range above the third quartile up to the pay range maximum. Employees are assigned to a quartile within their pay range based on their current salary. The quartile analysis is used to determine the location of employee salary clusters. Quartile analysis helps identify whether clusters exist in specific quartiles of pay ranges. Additionally, the amount of time the employee has spent at the organization is also analyzed, to observe any relationship between organizational tenure and salary progression.This information,while not definitive alone, can shed light on any root issues within the current compensation and classification plan when combined with market data and employee feedback. Exhibit 2D shows the number of employees that are in each quartile of each range, as well as the average overall tenure (i.e., how long an employee has worked for the City) by quartile. Overall, data provides that 70.2 percent of employees fall into Quartile 1 of their respective range; 8.8 percent fall into Quartile 2; 14.0 percent fall into Quartile 3; and 7.0 percent fall into Quartile 4. While this distribution does not lead to a conclusion, data for average tenure do lead to determinations on the relationship between tenure and salary. Specifically, overall average tenure increases as quartile increases; the average tenure in Quartile 1 is 4.3 years; in Quartile 2 is 10.6 years; in Quartile 3 is 19.3 years; and in Quartile 4 is 25.3 years. This would seem to indicate that employees are moved through their pay ranges equitably, or at the very least a positive linear relationship exists between tenure and pay. Exhibit 2E displays a graphical representation of the data contained in Exhibit 2D. Each pay range is divided into up to four sections representing the percentage of employees, in those classifications pay range, who belong in each quartile. For example, Supervisor has zero employees in Quartiles 2, 3, or 4. That classification is represented by a 100 percent red bar, showing that 100 percent of the Account Supervisor employees are in Quartile 1. The classification "Police Detective: 80" has employees in three quartiles, however, and is consequently represented with bars displaying all three colors, corresponding to the percentage of employees for each pay range in each quartile. %y _. • Evergreen Solutions,LLC Page 2-5 Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee EXHIBIT 2D QUARTILE ANALYSIS AND TIME WITH THE ORGANIZATION GRADE Total Average 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Employees Tenure #Employees Avg Tenure #Employees Avg Tenure #Employees Avg Tenure #Employees Avg Tenure Account Supervisor 1 8.7 1 8.7 0 - 0 - 0 - Admin Secretary 3 2.8 3 2.8 0 - 0 - 0 - Admin Sect/Occ 1 0.1 1 0.1 0 - 0 - 0 - Chief of Police 1 26.7 0 - 0 - 1 26.7 0 - City Clerk/Personnel 1 34.1 0 - 0 - 0 - 1 34.1 Code Enforcement 2 2.6 2 2.6 0 - 0 - 0 - III Guard 1 9.0 1 9.0 0 0 0 - Deputy City Clerk 1 1.2 1 1.2 0 - 0 - 0 - Dispatcher 1 3 15.7 3 15.7 0 - 0 - 0 - Equipment Mechanic I 1 11.8 0 - 1 11.8 0 - 0 - Executive Assistant 1 0.8 1 0.8 0 - 0 - 0 - Finance Director 1 17.7 0 - 0 - 1 17.7 0 - Gen Svcs Coordinator 1 11.8 0 - 0 - 1 11.8 0 - Lead Operator 1 8.4 1 8.4 0 - 0 - 0 - Maintenance Foreman 1 23.1 0 - 0 - 1 23.1 0 - Maintenance Operator 6 1.4 6 1.4 0 - 0 - 0 - Police Detective 80 4 4.6 2 0.9 1 1.3 1 15.2 0 - Police Detective:84 11 5.5 9 2.6 0 - 1 17.2 1 19.9 Police Lieutenant 2 23.4 0 - 0 - 1 19.5 1 27.3 Police Officer 1 2 9.3 2 9.3 0 - 0 - 0 - Police Records Clerk 1 11.8 0 - 1 11.8 0 - 0 - Police Sergeant 4 12.4 2 4.6 1 17.0 1 23.3 0 - Police Sgt Detective 1 14.9 1 14.9 0 - 0 - 0 - Police Svcs Coord 1 19.9 0 - 0 - 0 - 1 19.9 • Police/Fire Dispatch 4 1.8 4 1.8 0 - 0 - 0 - Public Works Dir 1 10.9 0 - 1 10.9 0 - 0 - Overall 57 8.4 40 4.3 5 10.6 8 19.3 4 25.3 Evergreen Solutions,LLC Page 2-6 Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee EXHIBIT 2E QUARTILE PLACEMENT BY CLASSIFICATION 'co, cU 80% �o•�o 60% 50% 40% 30% {I 20% bur? 10% �% III oc c A & •(e & c` c� c'1 •(.> c` oc o f toc a o O .. cti\ ti c'• e ca r . '` ccl‘5e9 ��O c e oa e re 5ca e& a� cae <a` se i c ace ye ia c:° po as SO e ` c `� 4ce V � `` r `7 ` \ e c e w 1 `e '�` a co e S c� oQ e 5e o 6 c• o ` ae PO oc OQ Qo OQ e eO ce cf, cc, O. ho � t ,`o \o �Q a eee �e .` e �, tee ccee & � FS oy0 Oc`� l, eac c,, eace cCeO Oe Qo a" � 5% e , �o co P P \ ncee 9 (eee 1. 4 ce \\0 .4., o ` Qe (.1 .oe QJ o` QQp` L` o Oe .Q + c ` Sco Q �c \ Q Q o C Oe � �Q 4 •1ST QUARTILE ■2ND QUARTILE •3RD QUARTILE ■4TH QUARTILE Evergreen Solutions,LLC Page 2-7 • • Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee Studying the data from the following exhibits can reveal certain patterns. One thing that can be observed is that there are very few employees who have reached the 4th quartile. This can indicate a younger workforce that has not progressed fully through their pay range. You will also notice that many of the employees are in the first quartile,which can indicate many newer employees. This can be an indication of high turnover, so it is a good idea to take a deeper look at the specific positions that are primarily in quartile one. 2.4 COMPRESSION ANALYSIS Pay compression can be defined as the lack of variation in salaries between employees with significantly different levels of experience and responsibility. Compression can be seen as a threat to internal equity and morale. Two common types of pay compression can be observed when the pay of supervisors and their subordinates are too close, or when the pay of highly tenured staff and newly hired employees in the same job are too similar. According to the Society for Human Resources Management (SHRM), specific examples of actions that may cause pay compression include the following: • Reorganizations change peer relationships and can create compression if jobs are not reevaluated. • In some organizations, certain departments or divisions may be relatively liberal with salary increases, market adjustments, and promotions while others are not. • Some employers have overlooked their Human Resources policies designed to regulate pay, paying new hires more than incumbents for similar jobs under the mantra of"paying what it takes to get the best talent." • Many organizations have found it easy to hire people who have already done the same work for another organization, eliminating the need for training. Rather than hiring individuals with high potential and developing them for the long term,they have opted for employees who could "hit the ground running"—regardless of their potential. Exhibit 2F indicates the ratio of subordinate to supervisor salaries by classification graphically and Exhibit 2G displays these results numerically. Employees were grouped into categories reflecting whether their actual salary was less than 80 percent, less than 95 percent, or greater than 95 percent of their supervisor's salary. Less than 80 percent would indicate that the ratio of an employee's salary to his supervisor's salary would yield a result of less than 0.8. For example, an employee with a salary of$79,000.00 and a supervisor with a salary of $100,000.00 would yield a ratio of 0.79 and be placed into the Less than 80 percent category. An analysis of the data would quickly reveal that while most positions in the City are in a great position, with plenty of space between employee and supervisor salaries,there are still some employees with salaries more than 95 percent of their supervisor's salary. Anywhere red appears on Exhibit 2F is somewhere that warrants an examination of supervisor vs. employee salary. Evergreen Solutions,LLC Page 2-8 Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee EXHIBIT 2F EMPLOYEE TO SUPERVISOR SALARY RATIO BY PAY CLASSIFICATION 100% 90% 80°4, 70% • 60% 50% 1 II III 40% 30% 20% 10% 0% • 0, �0 LL o•,., e 0 ~ .. ` 0, 0, 0, 0, .,<, ok qO 0�' l� Cs' .Je la r O`� �a \O 0ce ,it, oe• ec` ;a ` a� i` 'DKe e' Oa ce C>e e Lt> 00 aC eJfieec 0 eQ0e`C` ra `y e O l ce eJ ce ` a . eC oQ ce` he ,,cr 6c( � e- a e P' 0ok09cco OQ & 6, eoO cf., pe ( cp .lo �� eo •`eQ c�o `,‘,` � ,c5:Q ,� Je ` Loasoece ` e�e e\ \ce eo ,ce , i Je c o a� a� `r `c, ae� co , ec J� caocc, \e cac e �O •cQoiP \`` \ , coP P LOeQ ce F` SI ,ce `ee cz 0 -< \`cQo ,ee <z Pc � LO ?� � �+� eo .cso Q Qo Qo Qo Qo �Q L � a■Less than 80% 80%<X<95% ■95%<X< 100% •Greater than 100% Evergreen Solutions,LLC Page 2-9 • • Chapter 2-Assessment of Current Conditions Compensation Study for the City of Okeechobee EXHIBIT 2G EMPLOYEE TO SUPERVISOR SALARY RATIO BY PAY CLASSIFICATION Grade Less than 80% 80%<X<95% 95%<X<100% Greater than 100% Account Supervisor 1 0 0 0 Admin Secretary 3 0 0 0 Admin Sect/Occ 1 0 0 0 Chief of Police 0 0 0 0 City Clerk/Personnel 0 0 0 0 Code Enforcement 2 0 0 0 Crossing Guard 1 0 0 0 Deputy City Clerk 1 0 0 0 Dispatcher 1 3 0 0 0 Equipment Mechanic I 0 1 0 0 Executive Assistant 0 0 0 0 Finance Director 0 0 0 0 Gen Svcs Coordinator 0 0 0 0 Lead Operator 1 0 0 0 Maintenance Foreman 1 0 0 0 Maintenance Operator 6 0 0 0 Police Detective 80 1 3 0 0 Police Detective: 84 5 6 0 0 Police Lieutenant 0 2 0 0 Police Officer 1 2 0 0 0 Police Records Clerk 1 0 0 0 Police Sergeant 2 1 1 0 Police Sgt Detective 1 0 0 0 Police Svcs Coord 1 0 0 0 Police/Fire Dispatch 4 0 0 0 Public Works Dir 0 0 0 0 Total 37 13 1 0 4' Evergreen Solutions,LLC Page 2-10 • • Chapter 2-Assessment of Current Conditions Compensation Study for City of Okeechobee 2.5 SUMMARY There were many observations made with respect to the City's compensation system in place at the beginning of the study. • Range spreads, generally recommended to be between 50-70 percent, vary across several classifications and ranges. The City's pay plan have range spreads of 44 to 45 percent. • More than half of employees are paid below their pay ranges midpoint. • More than half of employees (70.2 percent) are in Quartile 1 of their classifications pay range. This can indicate a workforce with a high turnover or that has recently expanded with many new hires. Further analysis is required to determine the cause of this imbalance. • Most City employees are paid less than 80.0 percent of their supervisors' salaries. This analysis acts as a starting point for the development of recommendations in subsequent chapters of this report. Paired with market data, Evergreen can make recommendations that will ensure that the City's compensation system is structurally sound in terms of best practice, competitive with the market, and treats all employees equitably moving forward. 7 .t Evergreen Solutions,LLC Page 2-11 • • EVERGREEN SOLUTIONS, LLC Chapter 3 - Market Summary The purpose of the market summary chapter is to benchmark the City's compensation practices against those of its market peers; in order to establish how competitive the City is with the market. To complete this market study, Evergreen compared pay ranges of select benchmark positions that the City possesses against the compensation of positions performing those same duties within peer organizations. By aggregating the differences in pay ranges across all the positions, a reasonable determination is made as to the City's competitive position within the market. It is important to note that individual salaries are not analyzed in this methodology, since individual compensation can be affected by a number of variables such as experience and job performance. For this reason, Evergreen looked at average pay ranges across the entire classification to make the most accurate comparison.The results of this market study should be considered reflective of the current state of the market at the time of this study; however, market conditions can change rapidly. Consequently, it is necessary to perform market surveys of peer organizations at regular intervals in order for an organization to consistently monitor its position within the market. Furthermore,the market results detailed in this chapter provide a foundation for understanding the City's overall structural standing to the market. The rates reflected in this chapter, while an important factor, are not the sole determinant for how classifications were placed into the proposed salary ranges outlined in Chapter 5. Evergreen conducted a comprehensive market salary survey for the City, which included soliciting 21 target peer organizations (13 cities and eight counties) for all the City's benchmark positions. Of the 21 total organizations contacted, 14 responded and provided data for the benchmark positions. Target peers were selected based on a number of factors, including geographic proximity, resource level,job overlap,and size.Target organizations were also identified for their competition to the City for employee recruitment and retention efforts. Only the targets highlighted in bold provided data for the purpose of this study. The list of market peers that provided data for the purpose of this study is highlighted in bold type and included with all approved peers in Exhibit 3A. 44' Evergreen Solutions,LLC Page 3-1 • • Chapter 3-Market Summary Compensation Study for the City of Okeechobee EXHIBIT 3A APPROVED MARKET PEERS Market Peers City of Avon Park Highlands County Indian River County DeSoto County City of Clewiston City of Sebastian Martin County City of Sebring City of Wildwood City of Stuart Okeechobee County City of Arcadia City of Port St. Lucie City of Lakeland City of LaBelle Town of Lake Placid City of Palatka City of Vero Beach Glades County Hardee County St. Lucie County Gilbert Motors Because the data collected for the market summary was from various regions, it was necessary to adjust peer responses relative to the City based on cost-of-living. For all organizations that fell outside the City's immediate region, a cost-of-living adjustment was applied to the reported pay ranges to ensure a market average was attained in terms of the spending power an employee would have in the City's local area. Evergreen utilizes cost-of- living index information from the Council for Community and Economic Research. The City is set as the foundation from which all other peers are compared so there is no cost-of-living factor for the City in the exhibit. The cost-of-living index figures for the City and each of the market peers are located in Exhibit 3B. Evergreen Solutions,LLC Page 3-2 • • Chapter 3-Market Summary Compensation Study for the City of Okeechobee EXHIBIT 3B RESPONDENTS WITH COST-OF-LIVING ADJUSTMENTS Market Peers Cost of Living COL Index Factor City of Okeechobee 96.4 City of Arcadia 92.8 1.039 City of Avon Park 95.6 1.008 City of Clewiston 91.5 1.054 City of LaBelle 91.5 1.054 Town of Lake Placid 95.6 1.008 City of Lakeland 95.0 1.015 City of Palatka 94.1 1.024 City of Port St. Lucie 97.8 0.986 City of Sebastian 110.7 0.871 City of Sebring 95.6 1.008 City of Stuart 115.0 0.838 City of Vero Beach 110.7 0.871 City of Wildwood 99.3 0.971 Okeechobee County 96.4 1.000 DeSoto County 92.8 1.039 Glades County 95.8 1.006 Hardee County 95.5 1.009 Highlands County 95.6 1.008 Indian River County 110.7 0.871 Martin County 115.0 0.838 St. Lucie County 97.8 0.986 3.1 MARKET DATA The results of the market study are displayed in Exhibit 3C, which includes the benchmark job titles and the market average salaries for each position at the minimum, midpoint, and maximum points of the pay ranges. Also included within the exhibit are the percentage differentials of the City's pay ranges at each respective point, relative to the market average pay. A positive percent differential is indicative of the City's pay range exceeding that of the average of its market peers; alternatively, a negative percent differential indicates the City's compensation for a given position lagging behind the average of its peers. The exhibit also includes the average pay range for the market respondents for each position, as well as how many responses each benchmark received. We have only included all positions observed to market but only those classifications returning at least five responses can we included in the overall market calculations. The market position is presented at the 60th percentile placing the pay ranges slightly above the market average. _„e14f Evergreen Solutions,LLC Page 3-3 • • Chapter 3-Market Summary Compensation Study for the City of Okeechobee EXHIBIT 3C MARKET SURVEY RESULTS Survey Avg Classification Survey Minimum Survey Midpoint Survey Maximum #Resp. Range Average %Diff Average %Diff Average %Diff ACCOUNT CLERK $ 33,674.97 13% $ 43,747.95 5% $ 55,115.40 1% 56% 8 ADMINISTRATIVE SECRETARY $ 33,287.63 12% $ 42,627.33 6% $ 51,839.16 5% 58% 12 CITY CLERK $ 72,539.86 -29% $ 95,421.70 -42% $ 118,303.53 -45% 57% 7 CODE ENFORCEMENT OFFICER $ 42,019.47 0% $ 53,728.72 -7% $ 66,649.23 -9% 54% 12 DISPATCHER $ 36,631.83 -1% $ 47,340.53 -9% $ 58,475.23 -11% 54% 7 EQUIPMENT MECHANIC I $ 35,505.75 11% $ 46,939.91 1% $ 57,064.33 1% 55% 11 EQUIPMENT MECHANIC II $ 40,451.58 13% $ 51,342.53 8% $ 62,750.96 7% 54% 9 EXECUTIVE ASSISTANT $ 42,986.77 -2% $ 54,808.32 -9% $ 66,629.86 -10% 55% 8 FINANCE DIRECTOR $ 75,479.62 -30% $ 98,191.28 -42% $ 121,129.70 -44% 54% 7 MAINTENANCE FOREMAN $ 41,771.94 12% $ 54,723.23 3% $ 66,526.45 3% 58% 5 MAINTENANCE OPERATOR $ 33,128.93 13% $ 42,338.50 6% $ 53,884.73 1% 62% 6 POLICE LIEUTENANT $ 69,166.50 -21% $ 84,577.08 -24% $ 99,753.15 -21% 43% 7 POLICE OFFICER $ 49,904.35 -2% $ 64,363.75 -5% $ 79,792.81 -12% 63% 8 POLICE RECORDS CLERK $ 33,320.34 15% $ 44,194.70 6% $ 53,727.22 5% 59% 10 POLICE SERGEANT $ 59,200.82 -9% $ 72,067.49 -11% $ 86,481.38 -10% 46% 6 POLICE/FIRE DISPATCH $ 36,631.83 -1% $ 47,340.53 -9% $ 58,475.23 -11% 54% 7 PUBLIC WORKS DIRECTOR $ 83,009.07 -8% $ 107,127.34 -16% $ 131,245.60 -18% 55% 10 Overall Average -0.7% -8.2% -10.0% 3.2 SALARY SURVEY RESULTS Market Minimums It is important to assess where an organization is relative to its market minimum salaries, as they are the beginning salaries of employees with minimal qualifications for a given position. Organizations that are significantly below market may experience recruitment challenges with entry-level employees.As seen in Exhibit 3C,the City is currently.7 percent behind the market average minimum, when considering positions with sufficient responses. The City's benchmark positions ranged from 30 percent below to 15 percent above at the market minimum. The following points are regarding the City's position relative to the market average minimum: • Of these 17 positions, nine were below market, averaging 11 percent below. These nine classifications represent roughly 65 percent of the surveyed positions that met the criteria for inclusion. • Of the nine positions below market, five were more than 5 percent below the average market minimum. These positions are displayed in Exhibit 3D. Evergreen Solutions,LLC Page 3-4 • • Chapter 3-Market Summary Compensation Study for City of Okeechobee EXHIBIT 3D CLASSIFICATIONS MORE THAN 5 PERCENT BELOW THE MINIMUM Classification Survey Minimum Average % Diff FINANCE DIRECTOR $75,479.62 -30.1% CITY CLERK $72,539.86 -28.9% POLICE LIEUTENANT $69,166.50 -21.2% POLICE SERGEANT $59,200.82 -9.0% PUBLIC WORKS DIRECTOR $83,009.07 -7.6% • Of these 17 positions,seven were above market, averaging 13.0 percent above.These seven classifications represent roughly 41 percent of the surveyed positions that met the criteria for inclusion. • Of the seven positions above market, all were at least 10 percent above the average market minimum. These positions are displayed in Exhibit 3E. EXHIBIT 3E CLASSIFICATIONS ABOVE THE MINIMUM Classification Survey Minimum EQUIPMENT MECHANIC I $ 35,505.75 11% MAINTENANCE FOREMAN $ 41,771.94 12% ADMINISTRATIVE SECRETARY $ 33,287.63 12% MAINTENANCE OPERATOR $ 33,128.93 13% ACCOUNT CLERK $ 33,674.97 13% EQUIPMENT MECHANIC II $ 40,451.58 13% POLICE RECORDS CLERK $ 33,320.34 15% Market Midpoints The market midpoint is exceptionally important to analyze,as it is often considered the closest estimation of market average compensation. As employees acquire important job skills, experience and needed certifications to improve competencies, they become more marketable in a competitive labor market. Maintaining a competitive market position at the midpoint is vital for employee retention.As seen in Exhibit 3C,the City is currently 8.2 percent below the market average midpoint, when considering positions with sufficient responses. The City's benchmark positions ranged from 42 percent below to 8 percent above at the market midpoint. The following points are regarding the City's position relative to the market average midpoint: -� Evergreen Solutions,LLC Page 3-5 • • Chapter 3-Market Summary Compensation Study for City of Okeechobee • Of these 17 positions, 10 were below market, averaging 17 percent below. These 10 classifications represent roughly 59 percent of the surveyed positions that met the criteria for inclusion. • Of the 10 positions below market, five were more than 10 percent below the average market minimum. These positions are displayed in Exhibit 3F. EXHIBIT 3F CLASSIFICATIONS MORE THAN 10 PERCENT BELOW THE MIDPOINT Classification Survey Midpoint Average % Diff CITY CLERK $95,421.70 -42% FINANCE DIRECTOR $98,191.28 -42% POLICE LIEUTENANT $84,577.08 -24% PUBLIC WORKS DIRECTOR $107,127.34 -16% POLICE SERGEANT $72,067.49 -11% • Of the 17 positions, 7 were above market, averaging 7 percent above. These seven classifications represent roughly 41 percent of the surveyed positions that met the criteria for inclusion. • Of the seven positions above market,four were more than 5 percent above the average market midpoint. These positions are displayed in Exhibit 3G. EXHIBIT 3G CLASSIFICATIONS MORE THAN 5 PERCENT ABOVE THE MIDPOINT Classification Survey Midpoint Average %Diff EQUIPMENT MECHANIC II $ 51,342.53 8% MAINTENANCE OPERATOR $ 42,338.50 6% ADMINISTRATIVE SECRETARY $ 42,627.33 6% POLICE RECORDS CLERK $ 44,194.70 6% Market Maximums The pay range maximum averages, and how they compare to the City's, are also detailed in Exhibit 3C. As seen in Exhibit 3C, the City is currently 10 percent below the market average maximum, when considering positions with sufficient responses. The City's benchmark positions ranged from 45 percent below to 7 percent above the market maximum. Evergreen Solutions,LLC Page 3-6 • • Chapter 3-Market Summary Compensation Study for City of Okeechobee The following points are regarding the City's position relative to the market average maximum: • Of these 17 positions, nine were below market, averaging 19 percent below. These 9 classifications represent roughly 53 percent of the surveyed positions that met the criteria for inclusion. • Of the 9 positions below market, seven were more than 10 percent below the average market maximum. These positions are displayed in Exhibit 3H. EXHIBIT 3H CLASSIFICATIONS MORE THAN 10 PERCENT BELOW THE MAXIMUM Classification Survey Maximum Average % Diff CITY CLERK $118,303.53 -45% FINANCE DIRECTOR $121,129.70 -44% POLICE LIEUTENANT $99,753.15 -21% PUBLIC WORKS DIRECTOR $131,245.60 -18% POLICE OFFICER $79,792.81 -12% DISPATCHER $58,475.23 -11% POLICE/FIRE DISPATCH $58,475.23 -11% • Of these 17 positions, seven were above market, averaging 3 percent above. These seven classifications represent roughly 41.2 percent of the surveyed positions that met the criteria for inclusion. • Of the seven positions above market,three were 5 percent or more above the average market maximum. These positions are displayed in Exhibit 31. EXHIBIT 31 CLASSIFICATIONS 5 PERCENT OR MORE ABOVE THE MAXIMUM Classification Survey Maximum Average %Diff EQUIPMENT MECHANIC II $ 62,750.96 7% ADMINISTRATIVE SECRETARY $ 51,839.16 5% POLICE RECORDS CLERK $ 53,727.22 5% Evergreen Solutions,LLC Page 3-7 • • Chapter 3-Market Summary Compensation Study for City of Okeechobee 3.3 SALARY SURVEY CONCLUSION The local labor market for the Okeechobee area is evolving and shows consistent challenges. Continued population growth, ongoing construction in support of needed infrastructure improvements, housing affordability and increased demand for services key among them. To reestablish a competitive market position, the City will need to place pay ranges where the market is going instead of where it is today. Historically, the City has established a market competitive position only to see that immediately erode as the market continues to outpace compensation policies placing the City in a constant state of reacting to ongoing, well- established regional trends. The standing of individual classifications pay range relative to the market should not be considered a definitive assessment of actual employee salaries being similarly above or below the market; however, such differentials can, in part, explain symptomatic issues with recruitment and retention of employees. The main summary points of the market study are as follows: • The City's pay ranges are lagging the market average at the minimum, midpoint and maximum of the range. approximately. • These market positions place the City at a competitive disadvantage in the local and regional labor market. • The City is particularly vulnerable at the midpoint of the salary range, making it more difficult to retain tenured employees in the future. The results of the market summary chapter are pivotal in the formulation of recommendations by Evergreen Solutions. By establishing the City's market position relative to its peers, Evergreen is better able to propose recommendations that enable the City to occupy its desired competitive position. Evergreen Solutions,LLC Page 3-8 • • EVERGREEN SOLUTIONS, LLC is ''1 Chapter 4 - Benefits Survey Results As an added component of this compensation study, Evergreen analyzed the key benefits offerings for the City of Okeechobee. A benefits analysis, like a salary evaluation, represents a snapshot in time of what is available in peer organizations. The Benefit Survey can provide the organization with an understanding of the total compensation(salary and benefits)offered by its peers. It is important to realize that there are intricacies involved with benefits programs that are not captured by a benefits survey alone. This information should be used as a cursory overview and not a line-by-line comparison since benefits can be weighed differently depending on the value to the organization. It should also be noted that benefits are sometimes negotiated and acquired through third parties, so one- to-one comparisons can be difficult. The analysis in this chapter highlights aspects of the benefits survey that provide pertinent information and had high completion rates by target peers. When the benefits data is aggregated, observations and reasonable findings can be determined to help with forming recommendations to improve total compensation for the City. The data and findings in this chapter should be used as a guide to reduce or eliminate any compensation practices that place the City at a competitive disadvantage. The ultimate goal is providing a total compensation framework this is equitable and competitive. Exhibit 4A provides a list of the 21 target peers from which full or partial benefits data were obtained for this analysis. EXHIBIT 4A BENEFITS SURVEY RESPONDENTS Target Name City of Arcadia City of Avon Park City of Clewiston City of LaBelle Town of Lake Placid City of Lakeland City of Palatka City of Port St.Lucie City of Sebastian City of Sebring City of Stuart City of Vero Beach City of Wildwood Okeechobee County DeSoto County Glades County Hardee County Highlands County Indian River County Martin County St.Lucie County 1 ' Evergreen Solutions,LLC Page 4-1 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL 4.1 EMPLOYEE INSURANCE COVERAGES AND MISCELLANEOUS BENEFITS Exhibit 4B displays a basic overview of peer organization size, benefits as a percentage of total compensation, and the average number of health plans offered. Market peers have an average of 881 full-time employees, 133 part-time employees and 2.3 health plans offered (HMO, PPO, High or Low, or any other type of plan). Comparatively, Okeechobee has 54 full- time employees, 5 part-time employees and two health plans, one PPO plan and a Health Savings Account. EXHIBIT 4B OVERALL BENEFITS INFORMATION Organization Demographics Peer Average City of Okeechobee Full-Time Employees 881 86.90% 54 91.50% Part-Time Employees 133 13.10% 5 8.50% Benefits as a Percentage of Total Compensation 29.70% - Average Number of Health Plans Offered 2.3 2 4.2 HEALTH PLANS Exhibit 4C displays data on the types of health plans offered by peers. As can be seen, 7.7% of peers offer a HMO plan, 38.5 percent offer a PPO plan, 18.2 percent offer a Health Savings Account plan, and 75.0 percent offer some other type of plan. Individual employee's premium paid by the employer is, on average, 94.2 percent for PPO plans, 84.9 percent for HMO plans, and 84.5 percent for other plans. For employee plus child plans, employers contribute 69.0 percent and in employee plus spouse plans, employers contribute 66.3 percent for PPO plans in each instance. Regarding an HMO plan,for employee plus child plans, employers contribute 51.5 percent and in employee plus spouse plans, employers contribute 44.2 percent in each instance For employee plus family plans, employers contribute 61.5 percent for PPO plans, 31.2 percent for HMO plans, and 80 percent for other plans. Shown at the bottom of Exhibit 4C, Evergreen surveyed respondents for health plan deductible and co-pay amounts. Evergreen Solutions,LLC Page 4-2 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL EXHIBIT 4C OVERVIEW OF HEALTH PLANS OFFERED BY PEERS Health Plan Premiums&Deductibles Peer HMO Peer PPO Peer MA Other Plans Average Average Average Average Percentage of peers offering each plan 7.70% 38.50% 18.20% 75.00% DOLLAR AMOUNT(monthly)of employee premium $852.15 $902.46 $741.59 paid by employer PERCENTAGE(monthly)of employee premium paid by employer 84.90% 94.20% 84.50% DOLLAR AMOUNT(monthly)of employee premium paid by employee $151.57 $53.22 $27.08 $130.29 PERCENTAGE(monthly)of employee premium 15.10% 5.80% 15.50% paid by employee Individual Maximum Deductible in Network - $1,186.67 $2,000.00 $1,290.63 Individual Maximum Deductible Out of Network $2,103.33 $5,000.00 $2,285.71 DOLLAR AMOUNT(monthly)of employee plus $852.15 $1,215.73 - $1,162.43 child premium paid by employer PERCENTAGE(monthly)of employee plus child 51.50% 69.00% 74.30% premium paid by employer DOLLAR AMOUNT(monthly)of employee plus child premium paid by employee $801.40 $572.05 $201.11 $370.34 PERCENTAGE(monthly)of employee plus child 48.50% 31.00% 25.70% premium paid by employee Employee Plus Child Maximum Deductible In $2,791.67 $4,000.00 $2,685.71 Network Employee Plus Child Maximum Deductible Out of Network $5,645.83 $6,850.00 $4,807.14 DOLLAR AMOUNT(monthly)of employee plus spouse premium paid by employer $852.15 $1,224.72 $1,279.58 PERCENTAGE(monthly)of employee plus spouse 44.20% 66.30% 72.90% premium paid by employer DOLLAR AMOUNT(monthly)of employee plus spouse premium paid by employee $1,074.85 $665.75 $548.51 $435.64 PERCENTAGE(monthly)of employee plus spouse 55.80% 33.70% 27.10% premium paid by employee Employee Plus Spouse Maximum Deductible in $2,791.67 $4,000.00 $2,685.71 Network Employee Plus Spouse Maximum Deductible Out of Network $5,645.83 $6,850.00 $4,807.14 DOLLAR AMOUNT(monthly)of employee plus family premium paid by employer $852.15 $1,377.23 $1,442.96 PERCENTAGE(monthly)of employee plus family 69.70/ premium paid by employer 31.20% 61.50% ° DOLLAR AMOUNT(monthly)of employee plus family premium paid by employee $1,876.34 $880.41 $681.89 $597.03 PERCENTAGE(monthly)of employee plus family premium paid by employee 68.80% 38.50% 30.30% Employee Plus Family Maximum Deductible in Network - $2,533.33 $4,000.00 $2,787.50 Employee Plus Family Maximum Deductible Out of Network $4,533.33 $6,850.00 $4,807.14 Evergreen Solutions,LLC Page 4-3 . Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL For comparison purposes, a summary of the plans offered by Okeechobee is displayed in Exhibit4D. Okeechobee offers two health plans one PPO plan and one High Deductible plan to all Full-Time employees as well as retirees. Okeechobee covers 100 percent of the premiums for individual coverage for both plans, 57 percent of the premiums for employee plus child for the PPO plan and 58.1 percent for the HSA plan. Okeechobee also covers 45.6% for employee plus spouse for the PPO plan and 46.4% for the HSA plan. Okeechobee covers 35.7 percent of the premiums for employees plus family for the PPO plan and 36.4 for the HSA plan. Initial review of the overall health care employer contribution shows Okeechobee lags the market average for each category except individual coverage. EXHIBIT 4D HEALTH PLANS OFFERED BY THE CITY OF OKEECHOBEE City of Okeechobee Hearth Plan Premiums&Deductibles PPO HSA Which employee groups or bargainingunits are covered by each health plan? FT/Retirees FT/Retirees PERCENTAGE (monthly)of Employee premium paid by 100% 100% employer DOLLARAMOUNT (monthly)of Employee premium paid by employer $1,089.27 $942.42 PERCENTAGE (monthly)of Employee Plus Child premium 57% 58.10% paid by employer DOLLARAMOUNT (monthly)of Employee Plus Child premium paid by employer $1,239.27 $1,092.42 PERCENTAGE (monthly)of Employee Plus Spouse premium paid by employer 45.60% 46.40% DOLLARAMOUNT (monthly)of Employee Plus Spouse premium paid by employer $1,239.27 $1,092.42 PERCENT (monthly)of Employee Plus Family premium paid 35.70% 36.40% by employer DOLLARAMOUNT (monthly)of Employee Plus Family premium paid by employer $1,239.27 $1,092.42 Individual maximum Deductible $500.00 $2,500.00 Employee Plus Child maximum Deductible $1,500.00 $5,000.00 Employee Plus Spouse Maximum Deductible $1,500.00 $5,000.00 Employee Plus Family Maximum Deductible $1,500.00 $5,000.00 Evergreen surveyed peers' dental, vision, short-term disability, long-term disability, and life insurance coverages. Exhibit 4E shows that 46.2 percent of peers offer an employer paid dental insurance for employees, while 100.0 percent offer one or more employees paid dental plan options. The average monthly cost to peers for employee only dental coverage is $17.28. The employee's Evergreen Solutions,LLC Page_.. .alk' g 4-4 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL premiums for optional employee paid plans averaged $24.56 for employee only coverage while the average employee cost for employee plus dependent coverage is $78.54. Okeechobee does not offer an employer pay dental option; however, it does offer a separate employee paid option. EXHIBIT 4E DENTAL COVERAGE QUESTIONS City of Okeechobee City of Okeechobee Peer Percentage Offcering a Peer Percentage Offering Offering a Separate Question Separate Employer Paid Plan OffePaidring OptionEmployer Employee Paid Option Employee Paid Option Does your organization offer employees Dental 46.20 4 No 100% Yes insurance?(%Yes) Monthly Cost to Employer $17.28 $24.56 $31.79 for Individual coverage? Monthly Cost to Employer for Employee Plus - - $78.54 $83.99 Dependent coverage? Exhibit 4F shows that 21.4 percent of peers offer an employer paid vision insurance for employees, while 100 percent offer one or more employees paid vision plan options. The average employer cost for employee plus dependent coverage is $6.13. The employees' premiums for optional employee paid plans averaged $7.43 monthly for employee only coverage. Okeechobee does not offer employer paid vision insurance but does offer employee paid vision insurance. The Okeechobee employees' monthly premiums for optional employee paid plans for employee plus dependent coverage is $16.16. EXHIBIT 4F VISION COVERAGE QUESTIONS Peer Percentage City of Okeechobee City of Okeechobee Peer Percentage Offering a Offering a Question Separate Employer Offering Employer Offering Employee Separate Employee Paid Paid Option Paid Plan Paid Option Does your organization offer employees Vision insurance?(%Yes) 21.40% No 100'- Yes Monthly Cost to Employer for $6.13 $7.43 $5.24 Individual coverage? Monthly Cost to Employer for $5.24 $16.16 Employee Plus Dependent coverage? Evergreen Solutions,LLC Page g 4-5 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL For short-term disability coverage, 25.0 percent of responding peers offer an employer paid plan and 58.3 percent offer an employee paid plan as displayed in Exhibit 4G. Okeechobee does not offer employer paid short-term disability coverage but does offer employee paid short-term disability coverage. The monthly cost to Okeechobee for employer paid employee only coverage depends on salary. EXHIBIT 4G SHORT-TERM DISABILITY COVERAGE QUESTIONS Does your Monthly Cost to What Percent of Short-Term Disability organization offer Employer for Salary Does the following? Individual coverage? Employee Receive? Employer Paid 25.00% - 60% City of Okeechobee No - Coverage Plans Employee 60/° Paid 58.30% ° City of Yes - 60% Okeechobee Like short-term disability coverage, 33.3 percent of responding peers offer an employer paid long-term disability plan and 67 percent offer an employee paid plan as displayed in Exhibit 4H. On average, employer paid plans pay 60 percent of salary at the time of a disability and employee paid plans paid an average of 60 percent of salary. Okeechobee provides an employer paid long-term disability plan that gives employees 60 percent of salary. EXHIBIT 4H LONG-TERM DISABILITY COVERAGE QUESTIONS Does your Monthly Cost to What Percent of Long-Term Disability organization offer Employer for Salary Does the following? Individual coverage? Employee Receive? Employer Paid 33.30% - 60% City of Coverage Okeechobee Yes 60% Plans Employee Paid 67% - 60% City of Okeechobee No Exhibit 41 summarizes the life insurance offerings of responding peers and Okeechobee. Overall, 100 percent of the responding peers offer life insurance and 100 percent indicated that they offer optional dependent coverage. Regarding the cost to the employer for individual coverage, it depended on the peer. One stated it gave up to $9 and another said 3 cents for every thousand dollars. Okeechobee offers employer-paid life insurance and additional dependent coverage. Evergreen Solutions,LLC Page 4-6 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL EXHIBIT 41 LIFE INSURANCE Peer Life Insurance Percentage Peer Average City of Okeechobee Yes Is employer-paid life insurance offered? 100.00% Yes Cost(monthly)to employer for individual coverage - Depends on Peer $29.95 Dollar amount of death benefit - $28.571.43 $75,000 Is Optional dependent coverage offered? 100.00% - Yes Can the employee purchase(additional)life insurance if desired? 100.00% - Yes *In some cases,ranges were provided;cannot be averaged. 4.3 EAP, TUITION REIMBURSEMENT, 529 PLANS, AND FINANCIAL PLANNING Exhibit 4J displays specific information on Employee Assistance Programs. As shown, 100 percent of participating peers offer EAP. For 100 percent of respondents, benefits are available to family members in addition to the employee. On average, peers provide 5.8 EAP visits per year. Okeechobee offers EAP with 5 annual visits and allows the benefits to be available to family members in addition to the employee. EXHIBIT 4J EMPLOYEE ASSISTANCE PROGRAMS EAP Peer Peer Average City of Percentage Yes Okeechobee Is an EAP offered? 100.00% - Yes Are benefits available to family members as well as the employee? 100.00% Yes Number of Annual EAP Visits Provided - 5.8 5 Exhibit 4K Tuition Reimbursement. 42.9 percent of the responding peers indicated that they have provisions to provide some type of tuition reimbursement for employees. On average, peers' tuition reimbursement limit was$2,000.00. Okeechobee offers tuition reimbursement with an undisclosed reimbursement limit. EXHIBIT 4K TUITION REIMBURSEMENT Peer City of Tuition Reimbursement Percentage Yes Peer Average Okeechobee Is Tuition Reimbursement offered? 42.90% - Yes Tuition Reimbursement Limit - $2,000.00 N/A Evergreen Solutions,LLC Page g 4-7 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL 4.4 RETIREMENT Exhibit 4L displays that the average number of plans offered by peers is 2.3 while Okeechobee has 2 plans. EXHIBIT 4L NUMBER OF RETIREMENT PLANS City of Retirement Plans Peer Average Okeechobee How many types of retirement plans/systems are used by your 2.3 2 organization? Exhibit 4M provides retirement details. On average, participating peers offer 5.2 years to fully vest.COLA is offered to retiree pensions for 50 percent of participating peers.This COLA varies for all participating peers. As shown, 25 percent of participating peers' retirement plans offer a disability provision. For participating peers, organization contribution to this retirement option varied by job type while the employee contributes, on average, 13 percent of their salary. Like the market peers, Okeechobee offers a retirement plan to employees. However, Okeechobee requires 10 years for Police to become fully vested. The City also seems to be lagging the market slightly related to the percentage of salary employees contribute to their retirement which lands between 5-6% depending on the department, whereas, on average, peers only contribute 2.5%. Okeechobee should consider reducing the time it takes for employees to get vested in the retirement plan, if allowed, and increase the employer contribution to the retirement plan as a way to immediately create an advantage in the market. EXHIBIT 4M RETIREMENT DETAILS Retirement Plans Peer Average City of Okeechobee Years to Fully Vest 52 5 years. 10 years for Police COLA Offered to Retiree Pensions(%Yes) 50.00% Police:0.5%every other year Does the organization's retirement plan offer 25.00% Yes a disability provision?(%Yes) What percent of salary does the organization contribute to this retirement option? 13.00% Varies What percent of salary does the employee 5%for Public Safety 2.50% contribute to this retirement option? 6%for General Employees Evergreen Solutions,LLC Page 4-8 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL Exhibit 4N shows that 66.7 percent offer additional retirement options. Of respondents, all peers provide their employees with a D.R.O.P. retirement option. All peer respondents offer a 401k,401a,403(b), 457, or similar plan. Okeechobee does offer a D.R.O.P. retirement option but does not offer 457 Plans. EXHIBIT 4N RETIREMENT OPTIONS Employers If so,how Retirement Provisions Peer Percentage contribute much City of Yes to these percentage is Okeechobee options? contributed? Do you provide additional retiremei options? 66.70% Yes Is D R 0 P.offered? 100 00"c - Yes Is a 401k.401a.403(b).or 457 offered? 100.00% - Yes Is a type of plan other than a 401k. 0% No 401a.403(b)or 457 offered? Exhibit 40 All participating peers offer health, dental and life insurance to retired employees. Okeechobee offers health, dental, and life insurance to retired employees. EXHIBIT 40 INSURANCE FOR RETIREES Peer City of Insurance for Retirees Average Okeechobee Does your organization offer health insurance to retired 100.00% Yes employees? Does your organization offer dental insurance to retired employees? 100.00% Yes Does your organization offer life insurance to retired employees? 100.00% Yes 4.5 EMPLOYEE LEAVE. HOLIDAYS, AND COMPENSATORY TIME Exhibit 4P provides the average minimum and maximum accrual rates—the average years of service required to achieve the maximum accrual rate for Personal Leave, Sick Leave, Annual/Vacation Leave, and Paid Time off(PTO) leave for respondents. Evergreen Solutions,LLC .� Page 4-9 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL EXHIBIT 4P LEAVE TIME ACCRUAL Peer Years of service Minimum Years of service Maximum Maximum Leave Accrual Organization Percentage required to begin Accrual Rate required to begin Accrual Rate Accrual in Yes accruingthe in Hours accruingthe in Hours Hours Days minimum rate? (Monthly) maximum rate? (Monthly) (Cap) Peer Average 27.30% 0 8 - 8 Personal Leave City of Okeechobee Yes Peer Average 87.50 0 7.5 3.3 8.6 191.9 Sick Leave City of Okeechobee Yes 0 8 0 8 960 Annual/ Peer Average 86.70% 0.1 6.4 17.4 15.3 222.33 Vacation Leave City of ,,s 0 8 15 13.3 272 Okeechobee Peer Average 30.00 0 14 19 21.3 256.1 Paid Time Off City of Okeechobee No - - - - As shown, 27.3 percent of peers reported that employees accrue personal leave while 30.0 percent of peers reported that employees accrue paid time off.87.5 percent of peers reported offering sick leave and 86.7% of peers reported offering annual/vacation leave. Okeechobee offers sick leave, personal leave, and annual/vacation leave and does not offer paid time off. It would seem the City is slightly ahead of market when comparing total leave and accrual. Exhibit 4Q summarizes respondent policies regarding sick and vacation leave payout. Sick leave is paid out upon voluntary in 77.8 percent of responding peer organizations. No peers count unused sick leave towards retirement. Vacation leave is paid out upon voluntary separation in 87.5 percent of responding peer organizations, and vacation leave is paid out upon involuntary separation in 28.6 percent of responding peer organizations. Okeechobee does pay out sick leave upon voluntary but not upon involuntary separation. Okeechobee does pay out vacation leave upon voluntary but not upon involuntary separation. Evergreen Solutions,LLC Page 4-io • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL EXHIBIT 4Q SICK AND VACATION LEAVE PAYOUT Sick and Vacation Leave Policies Peer Peer City of Percentage Yes Average Okeechobee Is unused sick leave paid out upon voluntary separation? 77.80 i Yes Max hours of sick leave paid out upon voluntary separation 1888.1 Is unused sick leave paid out upon 14.30% No involuntary separation? Max hours of sick leave paid out upon 0.3 involuntary separation Can unused sick leave count towards 0.00% - retirement? - Max hours of sick leave that can count towards retirement Is unused annual/vacation leave paid 87.50% - Yes out upon voluntary separation? Max hours of annual/vacation leave - 333.3 240 paid out upon voluntary separation Is unused annual/vacation leave paid out upon involuntary separation? 28.60% No Max hours of annual/vacation leave 360 - paid out upon involuntary separation The specific paid holidays are shown in Exhibit 4R. On average, peers offer 11.4 holidays to employees, compared to 12 offered by Okeechobee. EXHIBIT 4R HOLIDAYS Holidays Observed by Peer Percentage Cityof Peer Organizations Yes Okeechobee New Year's Day 100.00% Yes New Year's Eve 25.00% No Martin Luther King.Jr.Day 100.00% Yes Lincoln's Birthday 0.00% No Washington's Birthday/Presidents Day 25.00% No Good Friday 0.00% Yes Memorial Day 100.00% Yes Independence Day 100.00% Yes Labor Day 100.00% Yes Veteran's Day 93.80% Yes Thanksgiving Day 100.00% Yes Day after Thanksgiving 93.80% Yes Christmas Eve 100.00% Yes Christmas Day 100.00% Yes Personal Holiday 40.00% No Employee Birthday 13.30% Yes Total Number of Holidays 11.4 12 Evergreen Solutions,LLC Page 4-11 • • Chapter 4-Benefits Survey Results Compensation Study for City of Okeechobee,FL Exhibit 4S shows that all participating peers offer longevity pay and merit raises. None offer merit bonuses. Okeechobee offers merit raises and longevity pay but does not offer merit bonuses or any other incentive pay programs. EXHIBIT 4S INCENTIVE PAY PROGRAMS Types of Longevity Pay, Bonuses, or Peer Percentage Yes City of Incentive Pay Programs Okeechobee Does your organization offer: Longevity Pay? 100.00% Yes Does your organization offer: Merit Raises? 100.00% Yes Does your organization offer: Merit Bonuses? 0.00% No Does your organization offer: other programs? - - 4.6 SUMMARY The City of Okeechobee's total benefits offerings are generally comparable to those of neighboring cities and approved public sector market peers solicited in this benefits survey in terms of overall coverage options. However, when analyzing individual benefits, it was observed Okeechobee is slightly below market peers in some key areas. Specifically, the City would seem to be at a competitive disadvantage to the market when it comes to employer health care contributions for family and dependent-care coverage. Notably, in family health plan coverage, Okeechobee contributes 35.7% towards employee and family PPO plans, which is significantly lower than the market average of 61.5%. Additionally, Okeechobee lacks an employer-paid dental plan, which is a standard benefit in the market. A benefits specific recommendation is provide in Chapter 5 of this report. It is essential for Okeechobee to integrate benefits offerings into its overall compensation strategy to maintain competitiveness. While competitive salaries are crucial, benefits that fall behind market standards can erode the value of the salary and undermine the City's ability to attract and retain talent.The shrinking gap between public and private sector benefits further emphasizes the need for Okeechobee to enhance its benefits packages to stay competitive in the recruitment landscape. Evergreen Solutions,LLC Page 4-12 • • EVERGREEN SOLUTIONS, LLC Chapter 5 - Recommendations After reviewing the information provided in the preceding sections of this report, Evergreen developed recommendations to improve the City of Okeechobee's(City)current compensation and classification system. The recommendations, as well as the findings that led to each recommendation, are discussed in detail in this section.The recommendations are organized into three sections: classification, compensation, and administration of the system. 5.1 CLASSIFICATION RECOMMENDATIONS An organization's classification system establishes how its human resources are employed to perform its core services. The classification system consists of the titles and descriptions of the different classifications, or positions, which define how work is organized and assigned. It is essential that the titles and descriptions of an organization's classifications accurately depict the work being performed by employees in order to ensure equity within the organization and to enable comparisons with positions at peer organizations. While the primary focus of this study was to prioritize the market competitiveness of the City, recommendations to modernize current classifications were also offered. The purpose of the classification analysis is to identify such issues as incorrect titles, outdated job descriptions, and inconsistent titles across departments. Recommendations are then made to remedy the identified concerns based on human resources best practices. In the analysis of the City's classification system, Evergreen Solutions worked closely with the City Project Leadership Team to identify classification changes needing an update to better align with essential functions and best practices.The recommended improvements would not have been possible without the diligent efforts of the City Project Leadership Team who was engaged throughout the process. FINDING The classification system being utilized by the City was generally accurate and the titles described the work being performed by employees. However, there were several classifications observed in the study process and in collaboration with staff where Evergreen is recommending updated titles. Additionally, several of the City's classifications require some modification to better describe the work being performed to ensure the work is consistent with essential job functions. RECOMMENDATION 1: Update existing class description to reflect the new classification titling. During the internal equity assessment, consideration of the relationships between and the type of work being performed by the City's employees in their classifications was reviewed and Evergreen Solutions,LLC Page 5-1 • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL analyzed. Specifically, titling was evaluated to identify roles that may no longer be consistent with HR best practices. This work helped identify areas for improvement within the current classification structure and titling. In conjunction with the City making the proposed title changes, Evergreen recommends the City update classification descriptions to ensure they accurately reflect the work being carried out by employees. Following the implementation of the recommended title changes, an updated FLSA status for the roles based on the new, updated content contained within the description should be completed. Overall,there were 7 classifications recommended for a title change or a new classification was added to the pay plan as a result of the study. These recommendations are provided in Exhibit 5A. EXHIBIT 5A RECOMMENDED CLASSIFICATION CHANGES Classification Recommended Title ADMINISTRATIVE SECRETARY ADMINISTRATIVE ASSISTANT ADMINISTRATIVE SECRETARY/OCC ADMINISTRATIVE ASSISTANT/OCC POLICE/FIRE DISPATCH CERTIFIED DISPATCHER CODE ENFORCEMENT CODE ENFORCEMENT OFFICER GENERAL SERVICES COORDINATOR GENERAL SERVICES DIRECTOR DISPATCHER 1 POLICE DISPATCHER POLICE/FIRE DISPATCH POLICE DISPATCHER II 5.2 COMPENSATION RECOMMENDATIONS The compensation analysis consisted of two parts: an external market assessment and an internal equity assessment. During the external market assessment,the City's compensation for all benchmark classifications was compared to average compensation offered by peers in the City of Okeechobee labor market. The external assessment consisted of comparing the City against its peer organizations within its market and revealed the City is currently lagging the market at the 60th percentile. Given the unique characteristics and location of the Okeechobee labor market, Evergreen recommends the City modernize their compensation philosophy to place salaries slightly above the average at the 60th percentile of the market. In effect, to place compensation where the market is trending instead of where the market is today. This philosophy will help the City take a more proactive versus reactive approach to compensation to aid in recruitment and retention. Evergreen Solutions,LLC Page 5-2 • • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL FINDING The City currently maintains a pay plan with pay ranges lagging the market and Evergreen found there were instances of wage compression based on years in current classification and years of service to the City. RECOMMENDATION 2: Adopt a new, market responsive compensation structure and assign all positions to it equitably. Evergreen has provided an updated pay plan for the City's consideration. The new structure consists of creating numeric pay grades and a slight increase in the pay ranges to more strategically align classifications with the current market. The proposed pay plan offers consistent market competitive pay ranges and progression between pay grades of 6-10%. Evergreen is recommending slightly wider pay ranges of 50% to better align with the market response.The details of the proposed plans are located in Exhibits 5B-5F. EXHIBIT 5B PROPOSED PAY PLAN ANNUAL Grade Minimum Midpoint Maximum Range Midpoint Spread Progression 101 $ 38,229.45 $ 47,786.81 $ 57,344.18 50.0% - 102 $ 40,523.22 $ 50,654.02 $ 60,784.83 50.0% 6.0% 103 $ 42,954.61 $ 53,693.26 $ 64,431.92 50.0% 6.0% 104 $ 45,531.89 $ 56,914.86 $ 68,297.83 50.0% 6.0% 105 $ 48,263.80 $ 60,329.75 $ 72,395.70 50.0% 6.0% 106 $ 51,159.63 $ 63,949.53 $ 76,739.44 50.0% 6.0% 107 $ 54,229.21 $ 67,786.51 $ 81,343.81 50.0% 6.0% 108 $ 57,482.96 $ 71,853.70 $ 86,224.44 50.0% 6.0% 109 $ 60,931.94 $ 76,164.92 $ 91,397.90 50.0% 6.0% 110 $ 67,025.13 $ 83,781.41 $ 100,537.69 50.0% 10.0% 111 $ 73,727.64 $ 92,159.55 $ 110,591.46 50.0% 10.0% 112 $ 81,100.41 $ 101,375.51 $ 121,650.61 50.0% 10.0% 113 $ 89,210.45 $ 111,513.06 $ 133,815.67 50.0% 10.0% 114 $ 98,131.49 $ 122,664.36 $ 147,197.24 50.0% 10.0% 115 $ 107,944.64 $ 134,930.80 $ 161,916.96 50.0% 10.0% 116 $ 118,739.10 $ 148,423.88 $ 178,108.66 50.0% 10.0% UNG - - - - - Evergreen Solutions,LLC Page g 5-3 • • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL EXHIBIT 5C PROPOSED PAY PLAN HOURLY Range Midpoint Grade Minimum Midpoint Maximum Spread Progression 101 $ 18.38 $ 22.97 $ 27.57 50.0% - 102 $ 19.48 $ 24.35 $ 29.22 50.0% 6.0% 103 $ 20.65 $ 25.81 $ 30.98 50.0% 6.0% 104 $ 21.89 $ 27.36 $ 32.84 50.0% 6.0% 105 $ 23.20 $ 29.00 $ 34.81 50.0% 6.0% 106 $ 24.60 $ 30.74 $ 36.89 50.0% 6.0% 107 $ 26.07 $ 32.59 $ 39.11 50.0% 6.0% 108 $ 27.64 $ 34.55 $ 41.45 50.0% 6.0% 109 $ 29.29 $ 36.62 $ 43.94 50.0% 6.0% 110 $ 32.22 $ 40.28 $ 48.34 50.0% 10.0% 111 $ 35.45 $ 44.31 $ 53.17 50.0% 10.0% 112 $ 38.99 $ 48.74 $ 58.49 50.0% 10.0% 113 $ 42.89 $ 53.61 $ 64.33 50.0% 10.0% 114 $ 47.18 $ 58.97 $ 70.77 50.0% 10.0% 115 $ 51.90 $ 64.87 $ 77.84 50.0% 10.0% 116 $ 57.09 $ 71.36 $ 85.63 50.0% 10.0% UNG - - - - - EXHIBIT 5D PROPOSED POLICE PAY PLAN PD1 $ 49,900.00 $ 62,375.00 $ 74,850.00 50.0% - PD2 $ 52,395.00 $ 65,493.75 $ 78,592.50 50.0% 5.0% PD3 $ 58,500.00 $ 69,423.38 $ 87,750.00 50.0% 6.0% PD4 $ 67,000.00 r$ 83,750.00 $ 100,500.00 50.0% 10.0% PD5 $ 73,700.00 $ 92,125.00 $ 110,550.00 50.0% 10.0% PD6 $ 81,070.00 $ 101,337.50 $ 121,605.00 50.0% 10.0% UNG - - - - Evergreen Solutions,LLC Page g 5-4 • • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL EXHIBIT 5E PROPOSED POLICE PAY PLAN HOURLY(2184 HOURS) PD1 $ 22.85 $ 28.56 $ 34.27 50.0% - PD2 $ 23.99 $ 29.99 $ 35.99 50.0% 5.0% PD3 $ 26.79 $ 31.79 $ 40.18 50.0% 6.0% PD4 $ 30.68 $ 38.35 $ 46.02 50.0% 20.6% PD5 $ 33.75 $ 42.18 $ 50.62 50.0% 10.0% PD6 $ 37.12 $ 46.40 $ 55.68 50.0% 10.0% UNG - - - - - EXHIBIT 5F PROPOSED POLICE PAY PLAN HOURLY(2080 HOURS) PD1 $ 23.99 $ 29.99 $ 35.99 50.0% - PD2 $ 25.19 $ 31.49 $ 37.78 50.0% 5.0% PD3 $ 28.13 $ 33.38 $ 42.19 50.0% 6.0% PD4 $ 32.21 $ 40.26 $ 48.32 50.0% 20.6% PD5 $ 35.43 $ 44.29 $ 53.15 50.0% 10.0% PD6 $ 38.98 $ 48.72 $ 58.46 50.0% 10.0% UNG - - - 0.0% - Implementation of the new compensation structure requires two steps. First, all positions were assigned to an appropriate pay grade within the overall plan. To determine what pay grade each position was assigned, Evergreen used the following factors: analysis of the current compensation structure, the results of the market study, recommendations from the City Project Leadership Team as well as consideration for both existing and newly created internal relationships between classifications.Assigning pay grades to classifications requires a balance of internal equity and desired market position, and recruitment and retention concerns also played a role in the process. Thus, the market results discussed in Chapter 3 were a primary factor but not the sole criteria for the proposed pay ranges. The placement of classifications into the plan was done by prioritizing market competitiveness and fiscal responsibility while maintaining internal equity. RECOMMENDATION 3: Evergreen recommends the City adopt the Bring to Minimum methodology to transition employee salaries into the proposed pay plan taking the first step to reestablishing a market competitive position. The second step in implementing the proposed structure is to transition employee salaries into their new recommended pay ranges. This step can be taken via a variety of methods, each with their own strengths and drawbacks. Evergreen discussed several options to help Evergreen Solutions,LLC Page g 5-5 • • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL reduce or eliminate wage compression and bring employees to a competitive position in the market. Evergreen recommends a parity option to reduce wage compression and establish a new pay plan that is fair and competitive. The implementation options and associated costs are for base salary adjusted for cost of living. These costs are shown in Exhibit 5G. EXHIBIT 5G IMPLEMENTATION OPTIONS AND COST SUMMARY Number of Average Total Salary- Adjustment for %of Implementation Option Employees Only Cost Adjusted Impacted Payroll Employees Bring to Min $ 23,631.86 18 $ 1,312.88 0.8% Tenure Parity $ 220,459.67 45 $ 4,899.10 7.7% Bring to Minimum This methodology places employees into the new pay ranges at the minimum of the proposed pay range. If an employees' current annual salary exceeds the new minimum, no adjustment is given;and,as such, no employee salary is reduced as a result of this implementation option. The benefit of this option is that employees are moved into new, market competitive pay ranges.The negative is this option does not correct any instances of wage compression which currently exist throughout the City. In some instances, wage compression could be exacerbated from only implementing the Bring to Minimum option. The cost to implement this option is$23,531.86 and impacts 18 employees. 30-Tenure Parity 30-Year Tenure Parity - This option consists of placing employees into their proposed pay ranges based on their "Tenure years." The parity effectively divides the pay range by 30 and places employees within their range based on their overall organizational tenure. For example, an employee who has been with the City for fifteen years would be placed at the midpoint of the range. If an employee's current salary is higher than their tenure parity projected salary, no adjustment is made, and as such, no salaries are decreased as part of this adjustment. This methodology seeks to re-align employee salaries on the basis of years of overall tenure and can space out compressed employee salaries along the range based on this factor. The cost to implement this option is $220,459.67 and impacts 45 employees. FINDING The City's overall benefits offerings, when compared to the market, place the City at a competitive disadvantage to the market. RECOMMENDATION 4: Evergreen recommends the City increase the employer contribution for all health care coverage options equitably and utilize the market data provided in Chapter 4 of this report to modernize all key benefits offerings. Evergreen Solutions,LLC Page 5-6 • • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL The results of the Benefits Survey added to this project following the completion of the salary survey revealed the City is lagging the market for some key benefits. For total compensation to be competitive in the market, pay and benefits must be considered equally with a goal of providing equitable compensation for all employees. For example, the City currently provides competitive benefits for employees with individual coverage but lags the market for dependent coverage creating an external equity deficit, For those employees requiring dependent care coverage, their total compensation erodes considerably compared to employees performing a similar role for market peers and this places the City at a competitive disadvantage. When considering the external market surveys for compensation and benefits reveal the City is lagging the market in both areas, the City could anticipate the following impacts: increased turnover, extended vacancies, a reduced pool of qualified applicants, reduced productivity, burnout and lower employee engagement. As it relates to benefits, there are many factors today's employees consider when making a decision to maintain employment or see employement elsewhere. Some of these factors include annual salary, health and retirement benefits, including employer vs employee contribution to those benefits. Other factors include career development opportunities, the volume and intensity of work, workplace diversity, flexible scheduling, work/life balance and employee recognition. Organizations with compensation policies that align with the demands of today's workforce have better employment engagement, higher retention, more qualified applicants and ultimately provide better services to citizens. 5.3 COMPENSATION AND CLASSIFICATION SYSTEM ADMINISTRATION Any organization's compensation and classification system will need periodic maintenance. The recommendations provided in this chapter were developed based on conditions at the time the study was conducted. Without proper upkeep of the system, the potential for recruitment and retention issues may increase as the compensation and classification system becomes dated and less competitive. What follows are recommendations for the City to consider when evaluating policies related to compensation and how employees would progress within the plan. RECOMMENDATION 5: Conduct small-scale salary surveys as needed to assess the market competitiveness of hard-to-fill classifications and/or classifications with retention issues and adjust pay grade assignments if necessary. As the South Florida labor market continues to evolve, a small number of classifications' pay grades may need to be reassigned more frequently. If one or more classifications are exhibiting high turnover or are having difficulty with recruitment, the City should collect salary range data from peer organizations to determine whether an adjustment is needed for the pay grade of the classification(s). RECOMMENDATION 6: Conduct a comprehensive classification and compensation study every three to five years. While small-scale salary surveys can improve the market position of specific classifications, it is recommended that a full classification and compensation study be conducted every three to five years to preserve both internal and external equity for the City. The scope of work for Evergreen Solutions,LLC Page g 5-7 0 • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL this compensation study provided a broad assessment of the classification structure for the City. Regular evaluation and updates to compensation is important and equally important is constantly looking for changes to classification that occur over time. While the increments of change may seem minor, they can compound over time potentially placing the City in a poor position for recruiting and retaining quality employees. While the previous two recommendations intend to maintain the competitiveness over time of the classification and compensation structure as a whole, it is also necessary to establish procedures for determining equitable pay practices for individual employees. Policy modifications should be linked to desired organizational outcomes and an established compensation philosophy set forth by the elected City Council. What follows are suggestions for the City to consider in an effort to keep improving and establishing itself as a leading public sector employer. RECOMMENDATION 7: Revise policies and practices for moving employees' salaries through the pay plan, including procedures for determining salaries of newly hired employees and employees who have been promoted, demoted, or transferred to a different classification. Evaluation and updating of current compensation policies is necessary as pay plans can evolve over time and the desired compensation philosophy of the City may change as well. The method of moving salaries through the pay plan and setting new salaries for new hires, promotions, demotions, and transfers depends largely on an organization's compensation philosophy. However, it is important for the City to have established guidelines for each of these situations and that they are followed consistently for all employees. Common practices for progressing and establishing employee salaries are outlined below. The current policies may differ from the proposed policies outlined in this section so consideration should be given to modernizing existing policies to meet the demands of a growing City in a dynamic labor market. Employment Policy should strive to find a balance between accountability and flexibility. The City Council should use their role to create policies that give staff the flexibility to achieve desired outcomes while simultaneously fostering a culture of accountability and operational excellence. City leadership should take action to achieve Council approved goals and policies and be given the autonomy to recognize and reward higher performers and remove poor performers from the organization. Salary Progression As outlined above, Evergreen recommends City enact the second phase of implementing the new pay plan which would involve a one-time salary adjustment for employees to ensure they are placed in the proper percentile of their new market competitive salary range. Evergreen is recommending Hybrid Parity as the preferred implementation option to bring employees into their new, market competitive pay ranges while also minimizing instances of wage compression. While this major adjustment should be performed when the City has the financial resources to do so, the City should continue to adjust salaries annually when financially feasible. Evergreen offers the following recommendation for the City to consider that would serve as the basis for salary adjustments in the future at three distinct levels. • Structural: Adjustment to the ranges should be made annually and with the aim of adjusting for the changes in cost of living. Evergreen recommends the City tie the annual compensation structure movement to the local change in the Consumer-Price- Evergreen Solutions,LLC Page 5-8 • • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL Index(CPI). This annual adjustment will ensure the City's pay ranges do not rapidly fall out of line with that of its peers; however, when conducting the small-scale surveys referenced above, the City should also collect pay plan movement and anticipated movement from its peers to gauge if market movement is keeping pace with CPI movement. • Classification:As a result of the market surveys,the City may identify classifications or job families that are experiencing considerable market movement and as a result, reassignment of the pay grades should be considered when this occurs. Alternatively, if the City identifies classifications that have become hard to recruit and retain, pay grade reassignment should also be considered to ensure the City is competitive for both recruiting new talent and retaining existing employees. • Individual:To tie into the adjustment of the structure, Evergreen recommends the City adjust employee salaries annually for Cost-of-living adjustment (COLA). This adjustment would be done for all employees who receive a satisfactory performance evaluation,and the percentage adjustment would need to be at least 1.0 - 2.0 percent more than the movement of the compensation structure in any given years, in order to allow for employee progression into the range. Moreover, based on the feedback from employees and the City's desire to recruit and retain a high-quality workforce, Evergreen recommends the City grant additional adjustment to employees who receive above average performance evaluations. The City should exercise a differentiated percentage for high performers that meet the financial constraints of the budget while still providing a meaningful incentive for high performance. This may require adjustments to the current performance evaluation system. Continued training of City leadership responsible for performing these annual reviews is critical to ensure consistency and linkage to Council approved operational and service outcomes. Bottom line, a performance based annual review and adjustment is only effective if aligned with Council approved operational and service goals. This linkage allows the Council to focus on policy and employees to focus on day-to-day operations. New Hires A new employee's starting salary largely depends on the amount of education and experience the employee possesses beyond the minimum requirements for the job. Typically, an employee holding only the minimum education and experience requirements for a classification is hired at or near the classification's pay grade minimum. An upper limit to the percentage above the minimum that can be offered to a new employee with only the minimum requirements should be established, where approval is needed to offer a starting salary that is a higher percentage above minimum. Another threshold should be established as the maximum starting salary possible without approval for new employees with considerable experience and/or education above the requirements for the position. It is common for the midpoint to be used as the maximum starting salary for most classifications. Once the City has performed the initial implementation adjustment for current employee salaries, new employee starting salaries should take into consideration internal equity, meaning that new hires should be offered comparable salaries to existing employees in the classification with similar levels of education and experience. Another important consideration for a City of Okeechobee 's size is a City policy of how outside experience will be valued when recruiting new employees. Evergreen recommends the City modernize the policy pertaining to Evergreen Solutions,LLC Page g 5-9 • • Chapter 5-Recommendations Compensation Study for the City of Okeechobee,FL experience gained outside of Okeechobee by assigning a percentage value to the verified outside experience a potential new hire brings with them to the City. By valuing outside experience based on an established policy, it would allow the City to expand the pool of applicants when recruiting to fill open positions. RECOMMENDATION 8: Evergreen recommends the City implement a critical classification program and compensate those classifications that qualify 10 percent above their current base rate of compensation. Critical Classifications The City's leadership team should assess all classifications each year to determine those that should be categorized as "critical" based on market data collected for that year,turnover and evolving organizational priorities. In the first year, it is recommended that the critical class supplement be 10 percent for those classifications with more than 30 percent turnover and/or a market rate percent difference of 20 percent or more (after accounting for the new salary range assignments). Furthermore, if adopted by the City, a critical class supplement could be increased to a larger percent of base pay. For example, if the City in the future experiences considerable competitive pressure in hiring candidates for a specific classification. Some of the pressure may relate to the pay ranges, but other factors such as the available supply of labor, compared to demand of experienced candidates may also be present and/or benefits offerings. As a result, the base pay of the associated classification would be increased so long as the external market pressures remain prevalent. 5.4 SUMMARY The City and the surrounding area continue to undergo a period of considerable growth and this will continue to impact the local labor market and available resources. The City should be commended for its desire and commitment to provide not only competitive and fair compensation for its employees but to help resolve any compensation issues keeping the City from achieving leaderships desired operational outcomes. Okeechobee, with continued improvement, will set the standard for fiscally responsible public sector employment in the region. Throughout this study the City project leadership team were engaged, and their collaboration was instrumental in delivering defensible recommendations and results. The new pay plan places a higher priority on market competitiveness due to the current conditions and trends in the labor market but also includes key classification changes that will modernize operations.The recommendations in this report establish a new market competitive pay plan, externally and internally equitable classification titles and pay grade assignments, and system administration practices that will provide the City with a responsive compensation and classification system for years to come. While the upkeep of this recommended system will require effort, the City will find that having a competitive compensation system that encourages strong recruitment and employee retention is worth this commitment. With the implementation of these proposed changes,the City will move one step closer to establishing itself as the standard for municipal employment in the region. Evergreen Solutions,LLC Page 5-io