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TOPIC: Compensation considerations in the upcoming budget

Compensation considerations in the upcoming budget 1 year 5 months ago #279

Dear colleagues,

Welcome back after the 4th of July Holiday! I hope everyone had a restful and rejuvenating time with friends and family.

I am blind-copying all the members of the Court. And, I have placed this communication on the Bulletin Board in case any members of the Court would like to discuss it prior to tomorrow’s Special Voting Session.

As we move into the FY 2017-18 budgeting process, we are fortunate that Travis County remains in sound financial shape, among the best of all Texas counties. That is in large part because of your efforts. Together, we have done well collaboratively planning for compensation and benefits, retirement and leave provisions, staffing needs, and other needs of the public service workplace.

We are still challenged with the following:

  1. Plugging funding gaps already created by the recently concluded regular session of the Texas Legislature.
  2. Additional funding gaps that may be created in the Special Session of the Texas Legislature that is poised to consider unbalanced property tax relief that could tie Travis County’s hands in managing our revenues.
  3. Additional funding gaps that could flow from federal proposals for deep cuts in funding that support Travis County services. As well, our costs for employee benefits are influenced by the ongoing chaos and confusion around the future of health care and health insurance.
I believe the Court should hold this year’s budget and tax rate to an impact of no more than the $36 on the average taxpayer that was set as a guidepost early in our budget process (recall we have kept the impact to zero for the last three years). If we are disciplined in our approach to budget requests not recommended by staff (e.g. outside the preliminary budget and not sponsored at the executive or elected level), I believe we can make a $10.3M investment in compensation and stay within those parameters. Still, we will have to make some tough decisions.

The Commissioners Court heard about the impact on our fellow Travis County employees of rising health care costs and stagnating wages. In response to these impacts, I have directed the Planning and Budget Office to front-load classified employee compensation priorities in the preliminary budget including compensation, compression and bench-marking to the market. To facilitate this front-loading, I have directed PBO to identify three funds - 1. A Classified Employees Compensation Fund; 2. A Compression Mitigation Reserve Fund; and 3. A Benchmark Study Fund. We will be negotiating the details of these 3 funds over the coming weeks. Preliminarily, I propose these funds operate as follows:

  1. Establish a 2% Compensation Allocation Fund (approximately $5M) to be applied to classified employees who have been with Travis County for a year or more and are not on a performance improvement plan. Employees making the median Travis County salary or above will receive 2% and employees below the median Travis County salary will receive a flat-dollar amount equivalent to 2% of the median.
  2. Establish a Compression Remediation Reserve Fund (approximately $2.5M) to bring classified employees to the appropriate place within their pay grade relative to their years of service within the pay grade and the market.
  3. Establish a Benchmark Study Fund (approximately $1M) to continue calibrating the classified employee pay grades to the midpoint of the market in advance of the overall market salary survey in 2019.
PBO will lay out the funding options reasonably available to the Commissioners Court. The Human Resources Department will lay out the inter-relation of these funds on our overall compensation policy and procedures. HR will also solicit input from the Compensation Committee regarding prioritization of the various compensation requests including. I’m spit-balling that these 3 funds together will require approximately $8.5M (1/2 of a penny on the tax rate and about $15 on the average taxpayer’s bill).

Consider carefully the following additions above the $8.5M. We have already elected to buy back sick time from employees on the Peace Officer Pay Scale (approximately $1.8M in one-time money this year and $4M over the three years of the buy-out). PBO will also include the annual step increase for POPS employees in the preliminary budget (approximately $2M on-going). And, we are awaiting firm numbers on these remaining compensation considerations - elected officials’ salaries, minimum pay for temporary and seasonal employees, and shift differential to POPS and other appropriate job families.

Again, to keep the tax rate impact to no more than the $36 on the average taxpayer we will need to be disciplined in our approach and make some tough decisions in the weeks ahead. Thank you in advance for your careful deliberation.

– SE
Travis County Judge Sarah Eckhardt
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