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HomeMy WebLinkAbout2015_0914_Minutes Open_APPROVEDCOUNTY OF KAUAI Minutes of Meeting OPEN SESSION Approved as circulated 10/5/15 Board /Committee: SALARY COMMISSION Meeting Date September 14, 2015 Location Mo'ikeha Building, Meeting Room 2A /213 Start of Meeting: 10:30 a.m. End of Meeting: 11:45 a.m. Present Chair Charles King; Vice -Chair Sheri Kunioka -Volz. Members: Robert Crowell; Michael Machado; Lenie Nishihira; Jo Ann Shimamoto Also: Deputy County Attorney Matt Bracken; Boards & Commissions Office Staff. Support Clerk Barbara Davis, Administrator Jay Furfaro Excused Member Cammie Matsumoto Absent SUBJECT DISCUSSION ACTION Call To Order Chair King called the meeting to order at 10:30 a.m. with 6 members present Approval of Minutes Open Session Minutes of August 19, 2015 Mr. Machado moved to approve the minutes as circulated. Mr. Crowell seconded the motion. Motion carried 6:0 Business SC 2015 -02 Information gathering, review, discussion and possible decision - making with regard to establishing the maximum cap for salaries for the fiscal year 2016/2017 for Councilmembers and all officers and employees included in Section 3 -2.1 of the Kauai County Code (On- going) a. Comparison of Executive Pay Rates for Counties, revised 8/24/15 Mr. King b. Base Compensation for Firefighters and Police Officers C, Review of Draft Resolution 2014 -1 rejected by the County Council on January 7, 2015 d. Resolution 2012 -1; Resolution 2012 -2; Resolution 2012 -3; Resolution 2013 -1; Resolution 2013 -2 as relates to the salaries of _ County officers and employees Chair King stated the Comparison he sent out earlier included the CPI, as well as an accumulative CPI from 2010. The last page reflects Mr. King's Salary Commission Open Session September 14, 2015 0M SUBJECT DISCUSSION ACTION work and information from the Bureau of Labor Statistics from 2010 through 2014 and adds up to 11.2 %. Taking the 2010 figures and multiplying that by 2011 the cumulative effect is 11.7 %. This gives a basis for discussion when talking just CPI. Ms. Rapozo has also provided the base salary information for fire and police effective 2015, 2016, and 2017, and includes the different allowances. Mr. Furfaro added that in prior meetings he had given the definition of Consumer Price Indexes and identified that the closest area to reconcile with was the City and County of Honolulu. He also looked into the other premium pays that were associated with particular job duties, which touches on allowances for the Mayor and for the Council, both for gas and telephone; it also covers allowances for the Chief and Deputy Chief of Police, which equals an allowance for conduct as a fixed amount each year of $7,900, and allowances for gun maintenance and uniform. The Fire Chief gets an allowance for his uniform in addition to his pay. The County Attorneys can qualify for up to about $504 a year for their bar license fees. There are some particular notes for the various Counties in comparing job tasks; the salary for the City Clerk in Honolulu is set solely by the Council — there is no Salary Commission recommendation. The amount allocated for the head of the Honolulu Liquor Commission is set by the Budget Director. The salary for the clerk of the Liquor Commission on Maui is solely set by the Council by way of Resolution. In the City and County of Honolulu the salary for the Water Department Chief Engineer is set solely by the Water Board — no Salary Commission. As far as ranges, in discussion with many of the different Counties the Salary Commissions recommend these caps, but other than the Prosecuting Attorney Deputies and the County Attorney Deputies, who all seem to be at the cap, the ranges all seem to come within a range of about $18,000 of that recommended cap. Mr. Furfaro pointed out that somewhere in the history of all this the Prosecuting Office of Attorneys has about $3,000 greater reach than the Deputy Count Salary Commission Open Session September 14, 2015 01M SUBJECT DISCUSSION ACTION Attorney and the County Attorney. Those are some of the variances Mr. Furfaro was asked to look into. Whatever amounts the Commission comes up with for the package are subject to PTE with the additional costs associated with the benefits. Those percentages for the current period, with the exception of the Police and Fire Department which are a little higher, average 44.95% of increases in salary that have impact on the PTE or payroll taxes and benefits. Mr. Furfaro exited the meeting to retrieve the Allowance chart for the Commission. Attorney Bracken wanted to address a couple of questions that were posed to him at the last meeting. The definition of compensation came up and according to the State there is case law in which the definition for compensation is remuneration and other benefits received in return for services rendered, which is basically wages and benefits that are considered compensation. The other question he was asked was about the current caseload and to quantify the amount of money that goes out in lawsuits from management issues. The County Attorney's Office does track the cases by the kind of cases they are, so if they are an employment related case they are tracked, but we do not keep track of the exact cause of the case. Attorney Bracken further explained they cannot quantify current cases that are pending as it is unknown if there will be a settlement or a lawsuit. Ms. Kunioka -Volz asked if the County Attorney's Office did not use that for budgeting purposes to which Attorney Bracken said they use the number of cases for budgeting purposes, but not the reasons. Attorney Bracken said the other difficult thing is some of the cases could be directly related to management issues, but it is not always a poor management choice that creates a case; it could be a good management choice that the employee disagrees with and ends up in some sort of litigation. Further discussion ensued on whether worker's comp cases end up in litigation or are handled in a different manner. Salary Commission Open Session September 14, 2015 I'._- AI SUBJECT DISCUSSION ACTION On the spread sheet provided by Chair King, Ms. Nishihira asked for clarification if the percent increase was the actual pay rates for the outer islands. Chair King said that was 2012 over 2014, but he does not have any history as to when their previous increase was. Mr. Crowell said he was interested in comparing Kauai with the Big Island, and looked at the Salary Commission of the Big Island. He said they did increase some of the positions and not others; in the minutes of one of their Salary Commission meetings it appears that those salaries that were increased was to bring it above any subordinates in those department. It appears those that did not receive an increase was because none of their subordinates were equal to what they were getting at the time. Mr. Crowell said he would like to look at more of the minutes, but that was a statement he picked up when they recommended the increases. Mr. Crowell suggested asking HR if there are in fact inversions now with the increases for the Big Island. They also mentioned in their minutes that Parks and Rec is one of the larger departments, but that was not one that got increased; and they are one of the lower paid. At the same time they raised the salary for their Mayor and their Managing Director, Mr. Furfaro returned to the meeting and distributed the Allowance chart he referenced earlier in the meeting. Chair King questioned that the increases were only for the top 3 to which Mr. Furfaro said that is how it looks. Chair King said he did not see anything about the inversion. Mr. Furfaro said at the time he got the chart he was focused on Police and the County Engineer, especially dealing with the County Engineer's situation because the Big Island has no trash service in the community. The second sheet distributed was the allowance report for 2015, which is salary plus the additional reimbursements. Chair King said the information from Ms. Ra ozo on the amounts for Police and Fire Salary Commission Open Session September 14, 2015 01M SUBJECT DISCUSSION ACTION should have been included in that amount. Mr. Furfaro said they should have been, but the comparisons on the sheet were base salary and they need to make a footnote that the next summary sheet should be the salaries plus allowances. The Mayor's salary does not reflect the $7,800 for auto and fuel allowance. Mr. Furfaro said he would send a request to the County Attorney asking them to look at the section in the HRS which references that the Mayors of all the Counties should have total expenses related to automobile covered, not by allowance. Chair King asked Attorney Bracken to repeat for Mr. Furfaro what he found on remuneration. Attorney Bracken said the question had come up on what the definition of compensation is, and according to Hawaii case law compensation is remuneration and other benefits received in return for services rendered, so basically wages and benefits are considered compensation. Mr. Furfaro said for his clarification the interpretation of a benefit is sick days, HMSA medical coverage and so forth, but allowances for expenses are not compensation. Mr. Furfaro said all of the allowances are put into the payroll for councilmembers and the Chiefs, and therefore are taxed. Mr. Machado said this is above and beyond their base salary, so is it to be looked at as to what is included in their salary? Chair King said that is not the way he interprets it; this would be outside this Commission's purview. Ms. Nishihira thought it came up originally because if the Commission could not get the base pay raised then perhaps we could increase the benefits somehow. Mr. Furfaro said it is very clear in the HRS that the Mayors, Police Chiefs, and he believed the Fire Chiefs, and the Governor are allowed total coverage for those allowances and how do you determine that when you give them a fixed amount. The other question that came up is if you want to cover a larger portion of the medical plan then there is inequity with the non - salary reviewed managers, as well as the rank and file who negotiate their premiums by way of contract; it could create a little challenge. Ms. Shimamoto questioned one of the handouts for Salary Commission Open Session September 14, 2015 I'._- • SUBJECT DISCUSSION ACTION Hawaii County that stated effective July 1, 2014, the following positions will be the salary rates designated below, and asked if they determine the actual salary rather than a cap? Mr. Furfaro said he interprets that as you could pay someone who has less time, exposure and experience up to that, but that is not how it reads. Ms. Shimamoto said it also says the Commission may authorize a higher salary rate for a position if someone requests it with their justification. Mr. Furfaro said he would have to refer that procedure to HR because that basically opens the door for someone to lobby for their own salary. Mr. Crowell was not sure that was what it read saying the Commission may authorize a higher salary for a position upon request by the appropriate appointing authority, and said this Commission has entertained the Police Commission coming in because they are the appointing authority and requested for the Chief's pay. Chair King said he was looking at the second paragraph that says they will be paid these salaries, and did not think this Commission wanted to set salaries but rather caps for salaries. Mr. Furfaro said his research was more focused on comparing engineering and the police schedule. Attorney Bracken clarified for compensation it appears the benefits of the use of a car, cell phone, and for police officers firearm and uniform allowances are not considered compensation, but they are included in their paychecks. Ms. Nishihira said vehicle allowance is included in the W -2 and the IRS makes a differentiation to which further discussion ensued. Chair King said the Commission's job is to figure out the salary, and he did not think understanding the tax consequences on mileage and code of conduct was necessary to that determination. Ms. Nishihira said the Resolution does include verbiage on allowances. Ms. Kunioka -Volz said if they don't consider allowances all the information received about the inversion is like comparing apples and oranges. Ms. Shimamoto asked to clarify that compensation is just the salary and benefits, but the allowance are not considered compensation. Ms. Kunioka -Volz said compensation is benefits and wages, and if an allowance is a benefit it would be compensation. Salary Commission Open Session September 14, 2015 01M SUBJECT DISCUSSION ACTION Attorney Bracken said there are wages and benefits, and the allowance is separate from that. Mr. Machado said if you extrapolate out the cost of the benefits it would far exceed what is there now because with the cost of medical, life insurance, etc., the actual cost would be greater. There was discussion on whether the allowances should be part of the salary cap or in addition to that cap. Ms. Nishihira thought it muddled it because for any allowance there is an off - setting cost to the employee, so it is basically reimbursement. There was also discussion on how overtime in the Police Department impacted the inversion rate. Mr. Furfaro asked if the Commission would like him to look at overtime comparisons from year to year to which it was decided not to look at the overtime, but only compare the base pay to base pay. Mr. Furfaro pointed out that since the Chief has been successful in filling vacancies the gross overtime, one would assume, has been reduced. Chair King asked how to get the Assistant Chief to step up to be the Chief if he has to take a cut in pay; then there is a management inversion if it is a Captain. Mr. Furfaro said the three parts that were put in the first worksheet was retention, continuity and consumer price index. Attorney Bracken said the Police Department's current structure is a good example of that. Currently they have an Executive Assistant Chief specifically to avoid the inversion of having Deputy Chiefs. Mr. Furfaro pointed out that across the board for Engineers, Mr. Dill handles wastewater and landfills and the County of Maui has a whole different department for that called Environmental Engineering. Mr. Machado asked if the Commission would approach this with something like 2% or 4% on top of everything, or work it on an individual basis. Would it be safe to go across the board with an increase on the cap? Chair King said using the CPI index would get them from where they were in 2010 to where they are now just in terms of spending. Ms. Nishihira said she was a little Salary Commission Open Session September 14, 2015 01W SUBJECT DISCUSSION ACTION familiar with the BLS and the flip side might be to show the salaries have not kept up with inflation, so they have actually taken a cut in pay; $1.00 in 2014 is worth $0.88 today and the Mayor's pay in real dollars is $101,000. Mr. Furfaro reiterated the three issues that should be presented to the Council are the Consumer Price Index, continuity in having people want to move up in the ranks, and retention. Ms. Nishihira stressed the importance of having statistics they can cite to help make the Commission's case when they appear before the Council. Chair King said the other point is looking at the County's total budget of $158 million (plus the CPI budget), and this was a total increase in salaries of not even $180,000 at the 11.7% accumulative rate. At 15% you are looking at $230,000 and $307,000 at 20 %, which when you look at the total budget these are the people you are asking to manage it, so it doesn't seem like a lot. Mr. Furfaro said he took Mr. King's exercise and made sure everyone was included that is in the Salary Commission's range, and that number came up to $301,000; the Council, the Auditor, the Prosecutor, and Transportation were missing. Chair King pointed out it was also 5 years of no raises, so this does not seem unreasonable. Chair King asked rather than putting something like this in the Resolution would it be better going as an exhibit to which Mr. Furfaro recommended it as an exhibit. Mr. Furfaro further recommended having exhibits as talking points; the key result areas and the rationale behind it, separate from the Resolution. Asked if the Resolution should be submitted early so if there are any concerns or questions they could submit it back to the Salary Commission prior to Council approval, Mr. Furfaro shared again that the CAFR is the key piece and will determine if there is money in the way of surplus. From that Council will talk about whether to set any money aside for a reserve and to say there is or is not money in the surplus, and suggested they should not make a presentation until after the CAFR, which is December 15. By Charter they must submit the Salary Resolution by Salary Commission Open Session September 14, 2015 I'._-' SUBJECT DISCUSSION ACTION March 15 to the Council. Asked if they should send the Resolution with recommendations to the Council, or if they needed to make a presentation to the Council Mr. Furfaro said that was a discussion for the Commission, but stating their point is part of making a presentation. Chair King suggested reworking the Comparison Chart with all of the positions in there for the next meeting. Ms. Nishihira questioned why the Managing Director position does not have an allowance, and would it be reasonable to look at adding that, as well as the Deputy. SC 2015 -03 Memo dated 8/27/15 from the Charter Review Commission requesting nput from the Salary Commission on Article XXIX of the Kauai County Charter Chair King did not know if the Commission was ready to make any recommendations directly at this point. Mr. Furfaro said he would bring the critical path dates for the Charter Review so they can see what their deadlines are as those dates have to be reflected at the Council to get on the ballots. Ms. Kumoka -Volz said one of the things they questioned before were some of the positions that come under the Commission. Mr. Furfaro said the County Attorney can provide what is covered by the Charter (Ordinance) on what positions as there has been dialogue about Transportation, Elderly, and Civil Defense. Staff noted those positions are not so much Charter as they are by Ordinance from the Council. Mr. Furfaro said Boards and Commissions and the Auditor were done on different vehicles. This item was deferred by the Chair to the October meeting. Mr. Crowell said in the Resolution that was rejected by the council he noticed that the Human Resources Department head was increased to one of the higher department head levels, and asked if they were in agreement with that. If so, that should be laid out in the spread sheet. Ms. Shimamoto said Salary Commission Open Session September 14, 2015 01M SUBJECT DISCUSSION ACTION that came up because of the restructuring of the Department. Chair King said for the next meeting they would put together a salary schedule, which may not have all the different islands on it, consider an allowance for the Managing Director and the Deputy and consider the HR position increase to a higher managerial level position. Announcements Next Meeting: Monday, October 5, 2015 — 10:30 a.m. Adjournment Mr. Machado moved to adjourn the meeting at 11:45 a.m. Ms. Nishihira seconded the motion. Motion carried 6:0 Submitted by: Barbara Davis, Support Clerk O Approved as circulated. O Approved with amendments. See minutes of Reviewed and Approved by: meeting. Charles King, Chair