FY 2019 CITY MANAGER’S PROPOSED BUDGET

BFAAC and CompensationApril 18, 2018

Strategic Plan Theme Areas

• Distinct & Vibrant Neighborhoods• Inclusive City• Well-Managed Government• Safe & Resilient Community• Flourishing Arts, Culture & Recreation• Strong Economy• Thriving Children & Youth• Environmental Sustainability• Healthy Residents• Multimodal Transportation

1

Agenda

• Budget and Fiscal Affairs Advisory Committee (BFAAC)

• Well-Managed Government• Compensation and Benefits

• Public Safety Recruitment and Retention Capabilities

• Summary of FY 2019 Employee Compensation Funding

• Supplemental Retirement Lump Sum Reform• Living Wage Increase• Health Insurance and Health Insurance Stop Loss• New Proposed City Paid Parental Leave

2

Presentation by the members of the Budget and Fiscal Affairs Advisory

Committee

3

Public Safety Recruitment and Retention Capabilities

The Process

• City Manager placed $1.5M as contingency in the FY 2019 Proposed Budget

• Public Safety Work Groups have been meeting regularly to review and discuss comparator data and recruitment and retention strategies

• Public Safety Work Groups prepared recruitment and retention proposals and electronically submitted them to the City Manager on April 13th

• Public Safety Work Groups presented their proposals to the City Manager on April 16th and April 17th

4

Public Safety Recruitment and Retention Capabilities

5

Sheriff’s Office PSWG Compensation Proposal

Sheriff PSWG Recommendations:• Market Competitiveness provides the ASO the ability to RECRUIT

and RETAIN the best employees

• We are lagging behind our comparator jurisdictions in retirement benefits and salary

• ASO is the only Sheriff’s Office in VA without a 25 year retirement

• Recommend modifying retirement from 30 to 25 years of service at age 50 (Cost approx. $1,000,000)

• Recommend Grade Reallocations for Deputy I, Deputy II, Lieutenants, and Captains (Cost approx. $371,644.39)

• Total cost approx. $1.37 million

• These improvements will help retention, reduce attrition, and recruit a highly talented and skilled workforce

6

Public Safety Recruitment and Retention Capabilities

Police PSWG Compensation Proposal

7

Police PSWG:a

Current Police Benchmarking showing deficit at midpoint of 6.22%

8

Police PSWG:Projected deficit effective July 01, 2019

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Averaged deficit is 7.65% based on FY 2019 projected numbers

Top red line is comparator jurisdictionsBottom red line is Northern VA jurisdictions only

Police PSWG: Short Term

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• FUND $2,444,501 for Police pay in FY 2019

• applied in July it is 6.25%

• applied in October it is 8.15%

Police PSWG: Long term

• Involving PSWG in budget guidance process

• Examine pay philosophy for officers within their first five years

• Examine the structure of the pay scale

• Examine the police incentive pay program

• Non fiscal ideas for recruitment and retention

11

Public Safety Recruitment and Retention Capabilities

12

Fire PSWG Compensation Proposal

FIRE PSWG: IMMEDIATE NEED

• 2 Million Dollars for:

• 5% increase on Fire and EMS pay scales at all ranks

• Correct officer pay compression and leap frogging

• Increase Firefighter/Paramedic Incentive (dual role) at all ranks

13

FIRE PSWG: LONG TERM NEEDS

• Work on long term solution to bring us to the pay philosophy of 100% of average

• Present during FY2020 process for implementation

14

Public Safety Recruitment and Retention Capabilities

Summary

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Pay Scale FY 2019 FY 2020

Sheriff $1.0M $1.4M

Police $2.4M $3.2M

Fire/Medic $2.0M $2.7M

Total $5.4M $7.3M

Public Safety Recruitment and Retention Capabilities

Next Steps

• Public Safety Work Groups will continue to meet with staff to review and understand proposals and to ensure there are no unintended consequences

• PSWGs will prioritize key items to address recruitment and retention

• City Manager will work with PSWGs and consider various options

• City Manager will provide recommendations in September for October implementation

16

Supplemental Retirement Plan Lump Sum Reform

 $22.8M

2017 $15.3M2016 

$5.6M2015

17

Lump Sums Payments as Percentage of Total Pension Fund Assets2015 – 2017

• New proposed schedule – extended to 2022• Retirement Board and City Manager recommended

phase in 1. Per the May 4, 2017 plan amendment, the lump sum interest rate for

employees hired after May 4, 2017 will be calculated at 7.25%2. Rate will increase if the 30-year treasury rate rises above the adopted

rate3. Rate will be adjusted if the Plan’s assumed rate of return changes from

7.25%

Supplemental Retirement Plan Lump Sum Reform

2018 Proposal

Retirement Dateafter

January 1

FY 2018 Proposal

Employees hired before

May 4, 20171

2018 5.00% 5.00%2019 6.00% 5.5% 2

2020 7.25% 6.0% 2

2021 7.25% 6.5% 2

2022 7.25% 7.25% 3 18

• Five City Manager townhall budget presentation to employees (300+ attendees)

• Six townhall-style meetings across the organization (58 attendees)

• One-on-one discussions with Pension staff

• Timeline to follow 2017 implementation

Supplemental Retirement Plan Lump Sum Reform

2018 Outreach

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Living Wage

• Increase the Living Wage paid to applicable City service contractors’ employees from $14.13 to $15.00/hr

• Increase the wage floor for City employees from $14.13 to $15/hr

• Fiscal impact of +$0.87/hr = $0.2M

20

Health Insurance Premiums

• Kaiser Permanente plans will remain constant with a 0% rate increase

• All United Healthcare plans will increase by 2.22% (+$0.8M)

• 80% employer/ 20% employee premium cost sharing unchanged

21

Purchase Health Insurance Stop Loss

• Stop loss health insurance is an opportunity for the City to buy protection against having to pay more than a certain amount for a health insurance claim

22

Purchase Health Insurance Stop Loss

Value to Employers• Health insurance stop loss tempers the

erratic and potentially costly fiscal impact to the City of large medical insurance claims

• $1M in health insurance stop loss ensures that the City will not be responsible for any single claim costs above $1M.

• Health insurance stop loss premium is estimated at $150K annually for claims exceeding $1M

23

City Paid Parental Leave• Proposing six weeks of paid Parental Leave

for City employees who become parents (birth, adoption, or foster care placement)

• Available to either or both parents

• Will enable new parents not to have to use annual and sick leave for the first six weeks

• Employees would still be entitled to use sick or annual leave for a total of up to 12 weeks of leave

• Cost estimated at $0.7M per year24

Budget Work Session Schedule

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Tuesday, February 20, 2018 Proposed Budget Presentation and Worksession #1: RevenuesCity Hall (301 King Street), City Council Chambers (7:00 PM)

Thursday, February 22, 2018 Public Budget PresentationBeatley Library, 5005 Duke Street (7:00 PM)

Monday, February 26, 2018 Worksession #2: Alexandria City Public SchoolsACPS Headquarters, 1340 Braddock Rd. (1st Floor Board Room) (7:00 PM)

Wednesday, March 7, 2018 Worksession #3: Capital Improvement ProgramCity Hall (301 King Street), Sister Cities Room #1101 (7:00 PM)

Monday, March 12, 2018 Budget Public HearingCity Hall (301 King Street), City Council Chambers (4:00 PM)

Wednesday, March 14, 2018 Worksession #4: Accountable, Effective & Well Managed GovernmentCity Hall (301 King Street), Sister Cities Room #1101 (7:00 PM)

Wednesday, March 14,2018 Set the Maximum Property Tax Rates City Hall (301 King Street), City Council Chambers(No earlier than 8:30 PM)

Budget Work Session Schedule

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Wednesday, April 4, 2018 Worksession #6: Safe, Secure & Just Community City Hall(301 King Street), Sister Cities Room #1101 (7:00 PM)

Wednesday, April 11, 2018 Worksession #7: Healthy & Thriving ResidentsCity Hall (301 King Street), Sister Cities Room #1101 (7:00 PM)

Saturday, April 14, 2018 Tax Rate Public HearingCity Hall (301 King Street), City Council Chambers (9:30 AM)

Tuesday, April 17, 2018 Worksession #5: Livable, Green & Prospering CityCity Hall (301 King Street), Sister Cities Room #1101 (7:00 PM)

Wednesday, April 18, 2018 Worksession #8: Follow-up TopicsCity Hall (301 King Street), Sister Cities Room #1101 (7:00 PM)

Tuesday, April 24, 2018 Preliminary Add/Delete List Discussion City Hall (301 King Street), City Council Workroom (6:00 PM)

Monday, April 30, 2018 Final Add/Delete List Discussion City Hall (301 King Street), Council Chambers (7:00 PM)

Thursday, May 3, 2018 Budget AdoptionCity Hall (301 King Street), City Council Chambers (7:00 PM)

Questions?