TOWN STAFF REPORT RECCOMENDATIONS
title
Receive a presentation on a completed salary survey for the Town of Westlake and consider making the recommended mid-year adjustments to the pay scale, salaries, and the budget as presented; and take appropriate action (Wade Carroll, Town Manager/Sandy Garza, Director of Human Resources)
body
At the February 5, 2024 Council meeting the Fire Department gave their annual report which included the turnover in the fire department in the last 4 years and the current loss of 20% of their shift personnel due to noncompetitive pay. Council requested that we look at the possibility of giving them up to a 20% pay increase to stop the turn over.
During the FY24 budget process staff was instructed to complete a salary survey for all Town and Academy positions. The salary survey is a look at defined comparison cities and districts that are in direct competition for employees and towns/cities that have similar demographics and therefore similar expectations for service delivery. The salary survey for the Academy was completed with the budget process with beginning teachers’ salaries at the average of the comparison districts of HEB, Grapevine ISD, Northwest ISD, Keller ISD, Louisville ISD and Southlake Carroll ISD. HR staff began working towards a salary survey for Town employees during the first quarter of FY24. The Town uses the following 10 comparison cities; Colleyville, Keller, Southlake, Roanoke, Trophy Club, and Flower Mound which are in direct competition with Westlake for our employees or potential employees, and Bellaire, Highland Park, Highland Village, and University Park which are similar to Westlake demographically (higher average household income levels). All comparison cities have like services provided to their citizens.
DISCUSSION:
The salary survey found that Westlake’s minimum or starting salaries are on average 3% below the 50th percentile for our comparison cities starting salaries, our mid-range is 7% lower and our max ranges are 13% lower than our comparison cities. The greatest disparity was found in the Fire Department. This pattern shows that our current salary ranges are too low but primarily too narrow with an average of 30% change from minimum to maximum salary when the industry standard is 45%. This is demonstrated by the smaller disparity between starting pays but the increasing disparity between mid and max salaries.
Turnover in Town staff has been 24% over the past 2 years. The Fire Department has seen a turnover of 2/3 of their department over the past 4 years and have lost 3 of 15 shift personnel in the last 45 days causing a strain on other firefighters to cover minimum staffing and therefore a strain on the department’s overtime budget. Exit interviews all mention employees leaving for much higher salaries in neighboring departments. These firefighters are being allowed to start in other cities above starting salaries due to the training and experience they gain here in Westlake. It costs $62,335.60 to replace a firefighter paramedic and $160,631.23 if we must send a newly hired firefighter to paramedic school. Costs associated with the replacement of other town staff is not as high as replacing firefighters however it is hard to put a price on the loss of institutional knowledge when we lose a tenured employee. As stated in the first paragraph the highest differential in pay in Westlake and our surrounding cities is in our tenured positions.
The salary survey was completed for every position in Westlake with the exception of the Town Manager, Town Secretary and Town Attorney which work directly for Council by contract and are generally discussed during their annual reviews, at the conclusion of their contracts or at the direction of Council.
Staff is asking Council for direction in the placement of Westlake’s pay plan as compared to our comparison cities. Often, recruiting and retention of good employees depends on having a pay structure that competitive and rewards longevity. HR researched the cost to raise all positions to the median starting salary with a pay plan that contains the industry standard of a 45% range from minimum to maximum salary. Staff used the median rather than the average due to the clustering of salaries above the average meaning the majority of the cities in our area pay above the average with the exception of a few lower with much lower salaries that tainted the average.
Council will be presented with the costs of having all position meet the median salaries, meet a range that’s beginning salary is 5% above the median and the cost to fund a starting salary 10% above the median.
Raising starting salary and adjusting pay scales alone without addressing tenure causes compression of tenured employees. As starting salary increase and pay scales move current employees are squeezed between the new starting salary of employees and their current salary which punishes employees for staying in Westlake and not taking their experience and institutional knowledge with them for more pay at another city. To combat this trend tenure should be addressed with pay scale movements.
Staff looked at both a 2% per year and a 3% per year cost of living adjustment for all positions within the salary survey.
Example:
An employee’s current salary that has 4 years of tenure within their current position (not total tenure with Westlake) is compared to the proposed starting salaries of that same position with 2% per year adjustment. If the current salary of the employee is equal to or greater than the new pay scale plus the annual adjustment, that employee does not get an increase in pay. If the current employee is making less than the proposed starting salary plus the adjustment, they are “made whole” or adjusted to the new number. All employees were capped at a $12,000 increase.
FISCAL IMPACT:
Mid-year Cost to Implement Salary Adjustments
Median + 2% of COLA per year = $64,660
Median + 3% of COLA per year = $91,790
Over Median by 5% + 2% COLA per year = $111,208
Over Median by 5% + 3% COLA per year = $141,600
Over Median by 10% +2% COLA per year = $154,000
Over Median by 10% +3% COLA per year = $171,009
Yearly Additional Cost to Implement Salary Adjustments
Median + 2% of COLA per year = $129,320
Median + 3% of COLA per year = $183,580
Over Median by 5% + 2% COLA per year = $222,416
Over Median by 5% + 3% COLA per year = $283,200
Over Median by 10% +2% COLA per year = $307,801
Over Median by 10% +3% COLA per year = $342,017
If Council so chooses the increase in salary would be funded through a transfer from the $1,019,324 FY 24 budgeted general fund surplus to salaries and benefits in the FY24 budget on April 1, 2024. Next year we conservatively estimate an increase in ad volarum revenue of $100,000 and an increase in sales tax of $600,000. This is a conservative estimate that normalizes the one-time revenues seen in FY23.
STAFF RECOMMENDATION:
To be more competitive with our immediate neighboring cities in the Fire Department staff is recommending moving the fire department ranges to 10% over median with a 2% COLA adjustment to attract and retain Firefighters. This will place our starting salaries within ______ of our immediate neighbors of Southlake and Roanoke. Salary Adjustment can be discussed tonight and approved for mid-year FY 24 implementation.
Staff also recommends approval to move Town salary ranges and to 5% over median with a 2% COLA adjustment to attract and retain the best employees.
Finally, staff recommends moving the Academy to a similar structure in their approved pay plan for FY25 if the need arises to retain employees.
ATTACHMENT(S):
• Comparison Data
• Budget presentation
TOWN COUNCIL ACTION/OPTIONS:
1) Motion to approve salary range adjustments for the Fire Department to 10% above the median with a 2% COLA annually for each year of service in their current positions as presented.
2) Motion to approve the salary range adjustments for both the Fire Department and Town positions as presented.
3) Motion to amend with the following stipulations (please state stipulations in motion)
4) Motion to table
5) Motion to deny