City to Study Compensation Rates

Written by Neil Farrell

Neil has been a journalist covering the Estero Bay Area for over 27 years. He’s won numerous journalism awards in several different categories over his career.

July 15, 2022

The City of Morro Bay is seeking proposals to conduct a survey of its pay scale, benefits, and job classifications seeking to stay competitive with similar towns.

On July 8 the City released a notification to “qualified firms with expertise performing classification, compensation and benefits studies for local municipalities,” the notice said. “The study will compare the City’s total compensation rates across all position types with other similar communities within California’s Central Coast, Bay areas, and along the U.S. 101 Interstate corridor.”

The work order is extensive, as the City wants the consultant to “determine the necessary number of benchmark classifications (anticipated to be no more than 40), data points (at a minimum, top step salary, employer contributions to health insurance, retirement formulas, and employee contributions), and approximately 10-12 comparison agencies. Paid time off benefits and anticipated cost of living adjustments may be gathered if it can be delivered within the timeline and budget constraints.”

Ironically, the City Council just approved new 2-year contracts for most of its employee groups and everyone so far is getting a raise.

On June 14 they approved contracts for the Service Employees International Union (SEIU), the department heads and middle managers that totaled $464,000 in salary and benefits costs for Fiscal Year 2022/23 (which started July 1) and $916,000 for 2023/24 (starting July 1, 2023). All together, the increases top $1.38 million.

The SEIU employees — the City’s biggest employee union — get the most with $244,700 this year and $487,000 next year.

Department heads account for $84,000 this year and $165,000 for a total of $249,900. It should be noted that there are only a half dozen or so department heads in the City’s employ.

Management — fire captains, police sergeants, maintenance supervisors, etc. — are getting $113,500 collectively this year and $220,000 next year. 

And confidential employees, the smallest employee type, will get $21,700 this year and $42,600 next.

The Police union also got a new contract, with similar bumps. On June 24, the Council approved a 2-year contract with the Morro Bay Peace Officers’ Association for an additional $150,000 in total compensation for this year but the report didn’t enumerate the amount for next year.

City Manager Scott Collins’ report to Council said, “One outfall from the pandemic is the “great resignation” or “great reshuffling” in the labor market as employees quit their jobs at rates far greater than the pre-COVID-19 period. Whether employees grew overwhelmed with the challenges of working during the global pandemic or sought better working conditions or better pay in different organizations, or changed careers, we are now experiencing a very low unemployment rate nationwide and quit rates remain high. This is creating labor shortages and intense competition for talent in all sectors and volatility, for organizations.”

Local governments are apparently having a hard time finding good employees, and keeping the ones they’ve got.

“The public sector,” Collins said, “particularly state and local government, has been hit hard by the labor shortage, and the trend could worsen in the near-term. According to a December 2021 survey by Mission Square Research Institute, more than half of state and local workers said they were considering leaving their positions to retire, change jobs, or leave the workforce entirely. It is becoming harder to hire talent and keep talent in local government.”

As for the new compensation study, according to the RFP, the City last did one in 2016 and this new one will be more involved, to include comparing the City’s total compensation rates “with other similar communities across all position types will provide the necessary data to begin addressing internal and external equity issues, inform discussions with employee groups regarding compensation and benefits, and provide key information for the City’s long-term financial forecast.” 

According to the City’s time schedule, proposals are due by 5 p.m. July 28 with a contract awarded on Aug. 17. The study is slated to get underway by Sept. 6 and the City anticipates the study will be done by Jan. 6, 2023.

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