Title
Adoption of Resolution Amending the Executive Management Salary Schedule Effective June 5, 2024 to Reflect an Approximately 22% Increase to the General Manager - Alameda Municipal Power Classification. (Human Resources 10025060)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The General Manager - Alameda Municipal Power (AMP) position was recently vacated with the incumbent accepting a new role with a competitor agency. In preparation for an executive recruitment, Human Resources evaluated the current salary of the classification and initiated a total compensation review. Human Resources staff conducted a total compensation survey of comparable cities with electric utility departments and like or similar classifications to that of the General Manager - AMP. The results of the survey showed that the classification of General Manager - AMP was approximately 15% below median within the market. To bring to median, stay competitive with comparator agencies, and to attract and retain highly qualified candidates, it is recommended to increase the General Manager - AMP’s salary by approximately 22%, resulting in a $63,104 increase to the range, effective the first full pay period following adoption, June 5, 2024. AMP’s Fiscal Year (FY) 2025 budget is not yet finalized; however, it is estimated that the impact of this increase to the FY 2025 budget will be 0.06% of total operating budget, and 0.49% of total labor budget. There would be minimal impact on the FY 2024 budget as the position is currently vacant. This increase is exclusive of the 2.5% Cost-of-Living-Adjustment (COLA) effective July 1, 2024, which has been factored into the FY 2025 budget. It was determined that there are sufficient funds within the current proposed AMP budget, and this proposal does not result in any need to increase rates for AMP customers. The updated Executive Management Salary Schedule is provided in Exhibit 1 and a summary of the salary and total compensation survey is attached as Exhibit 2.
BACKGROUND
A critical function of Human Resources is to regularly collect compensation data, analyze classification compensation against internal and external factors, and assess competitive standing with comparable organizations. The total compensation review process ensures that the City of Alameda (City) is maintaining internal equity and market alignment, both of which greatly impact the recruitment process, and the ability to attract and retain high performing, diverse individuals with the knowledge and skill necessary to lead the City. This process is particularly significant for executive management classifications, which serve as department heads and leaders within the City and require knowledgeable and experienced individuals to effectively lead their units and/or departments.
The General Manager - AMP position was recently vacated with the incumbent accepting a new role with a competitor agency. In preparation for an executive recruitment, Human Resources evaluated the current salary of the classification and initiated a total compensation review. This review looked at comparable classifications at four comparator agencies with an electric utility department, and considered factors such as base salary, CalPERS contributions, employer contributions to health plans, and fringe benefits such as flex dollars or deferred compensation match by the employer. Human Resources used the following cities in the survey as they are previously identified comparator agencies with a municipal electric utility department: City of Lodi, City of Roseville, City of Palo Alto, and City of Santa Clara. The results of the survey showed that the City of Alameda fell more than 15% below the median.
In previous situations, when City classifications are below market, City Council has acted to bring total compensation for the classification to market median with the most effective correction being an adjustment to the compensation range and increasing the salary of the classification.
DISCUSSION
In preparation for the General Manager - AMP executive recruitment, Human Resources conducted a thorough compensation review for the classification of General Manager - AMP. City of Lodi, City of Roseville, City of Palo Alto, and City of Santa Clara were the comparator agencies used as all of these cities have a municipal electric utility department and like classifications to the position of General Manager - AMP. Factors such as base salary, CalPERS contributions, employer health contributions, and compensable fringe benefits were used in the total compensation survey. At the completion of the survey, it was determined that the classification of the General Manager - AMP fell approximately 15% below median.
Due to the results of the total compensation survey, Human Resources is recommending an approximately 22% increase to the General Manager - AMP’s salary, resulting in a $63,104 increase to the range. This increase reflects the very specialized knowledge and skill required to perform as the General Manager - AMP. The increase in salary will ensure the City remains competitive and desirable to highly qualified candidates with the special skill and knowledge needed to lead an electric utility, as well as match current rates of comparable agencies. If adopted the increase will be effective June 5, 2024. The recommended increase is exclusive of the 2.5% COLA scheduled for July 14, 2024.
If adopted the salary effective June 5, 2024, will be as follows:
AMP finance was consulted on the fiscal impacts the salary increase would have on FY 2024 and FY 2025 budget. It was determined that there are sufficient funds within the budget to absorb the impact. As such, the salary increase would not result in a rate increase for AMP customers.
When salary ranges are adjusted or increased, it is a practice within Human Resources to analyze internal equity against other classifications and/or differential between subordinate classifications. Human Resources did review the salary range of the Assistant General Manager (AGM) classifications, which are subordinate classes to that of the General Manager -AMP, and include the positions of AGM - Administration, AGM - Customer & Energy Resources, and AGM - Engineering & Operations. Following review, it was determined the salary range for the AGM classifications is sufficient within the market and maintain an appropriate differential to the General Manager - AMP classification.
ALTERNATIVES
City Council may consider a number of alternatives, including:
• Approve the resolution as recommended. This action would align salary to the median, enhancing future recruitment efforts and the City’s ability to attract and retain high quality candidates.
• Deny the resolution. Staff does not recommend as the compensation is for an executive level classification is significantly below the median which will impact a high-quality candidate pool, increase the difficulty of retaining high performing staff, and would make the City of Alameda less competitive.
FINANCIAL IMPACT
There are sufficient funds in AMP’s budget for the approximately 22% increase, which results in a $63,104 increase to the salary range. AMP’s FY 2024 budget would have minimal impact, as the position is currently vacant an increase is within AMP’s FY 2024 budget. AMP’s FY 2025 budget has yet to be finalized; however, it is estimated that the impact of the increase to the total budget would be an increase of 0.06% and an increase of 0.42% to the labor budget. As there are sufficient funds within AMP’s budget, the salary increase will not result in an increase in rates for AMP customers.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the City’s Strategic Plan, Project No. GOV7 (“Review and update employee classification specifications”).
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a resolution amending the Executive Management Salary Schedule effective June 5, 2024 to reflect an approximately 22% Increase to the General Manager -AMP classification.
Respectfully submitted,
Jessica Romeo, Human Resources Director
By,
Noelle White, Senior Human Resources Analyst
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibit
1. Executive Management Salary Schedule
2. Total Compensation Survey, May 2024