REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Amending the City's Salary Resolution and the Schedule of Pay to Increase the Salary Range for the Director of NOVA Workforce Services
Report
BACKGROUND
Unclassified department directors (pay plan category F) are at-will employees, appointed by the City Manager. They are not organized and do not negotiate for any changes to their wages, hours, and/or other terms and conditions of employment. Instead, the City Manager makes recommendations to the City Council regarding such changes on behalf of this employee group. In September 2017, a compensation program was approved by the Council (RTC No. 17-0872) that adjusted salary ranges for department director classifications to address gender equality pay, attract talent, retain highly qualified employees, and to resolve salary compaction with bargaining unit represented positions. The exception is the Director of NOVA Workforce Services who has a separate salary range due to the salary cap of the federal Workforce Innovation and Opportunity Act (WIOA) guidelines.
With the salary increases of bargaining units and increases to the salary range of department directors outpacing the federal salary cap increases over the years, the salary range of the Director of NOVA Workforce Services has become out of alignment with bargaining unit represented management subordinates and department director peers.
This report recommends adjusting the salary range of the Director of NOVA Workforce Services to minimize compaction with bargaining unit represented management subordinates and to narrow the salary range gap with other department directors. Adjusting the salary range does not result in a direct compensation increase but enables increased compensation to be considered by the City Manager based on performance.
EXISTING POLICY
Council Policy 7.3.1 Legislative Management - Goals and Policies, Goal 7.3D: Maintain a quality work force, Consistent with state and federal laws, City Charter, and adopted policies in order to assure that City services are provided in an effective, efficient, and high quality manner.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
DISCUSSION
Although NOVA Workforce Services is a City department, it is a nonprofit, federally funded agency that provides workforce development services to a consortium of eight jurisdictions, composed of the County of San Mateo, and the Santa Clara County cities of Cupertino, Los Altos, Milpitas, Mountain View, Palo Alto, Santa Clara, and Sunnyvale.
Since NOVA is a federally funded program, its positions are subject to a separate salary range determined by the Workforce Innovation and Opportunity Act (WIOA) guidelines. Although the Public Law 109-234 sets the limit on compensation for individuals paid by funds appropriated to the Employment and Training Administration (ETA) at a rate equivalent to no more than Executive Level II, the law does not restrict the compensation amount an individual can earn with other funding sources. The City has historically limited the salary range and the actual earnings of the Director of NOVA Workforce Services to not exceed the federal salary cap.
Internal Compaction Challenges
Management subordinates represented by the Sunnyvale Managers Association (SMA) have negotiated salary increases outpacing the federal salary cap increases over the last several years, resulting in salary compaction between the Director of NOVA Workforce Services and SMA represented direct reports. Since 2018 (the year after the compensation program was established), SMA received a total of 25.5% in salary increases, while the federal salary cap had a total of 17.38% in increases.
|
Year |
Federal Executive Level II Increase |
SMA Salary Increase |
|
2018 |
1.39% |
2.00% |
|
2019 |
1.42% |
3.00% |
|
2020 |
2.60% |
4.00% |
|
2021 |
1.01% |
3.00% |
|
2022 |
2.21% |
3.00% |
|
2023 |
4.12% |
6.50% |
|
2024 |
4.62% |
4.00% (effective July 7, 2024) |
|
Total |
17.38% |
25.50% |
|
Average |
2.48% |
3.64% |
The current salary differential between the Director of NOVA Workforce Services and immediate SMA subordinates (Business Operations Manager and Senior Manager of Workforce Development) is 19.73%. In July 2024 when SMA receives the 4% negotiated salary increase, the differential will be 15.12%.
|
Job Title |
Salary Range Minimum |
Salary Range Maximum |
Effective Date |
|
Director of NOVA Workforce Services (Grant Funded) |
$184,917 |
$ 221,900 |
2/4/2024 |
|
Business Operations Manager (Grant Funded), Senior Manager of Workforce Development (Grant Funded) |
$ 148,272 |
$185,340 |
7/9/2023 |
|
|
$ 154,202 |
$192,753 |
7/7/2024 |
Pay Equality Challenges
All department directors, including the Director of NOVA Workforce Services, serve as the City Manager’s executive team responsible for: managing the operations for the respective departments, driving vision and purpose of their portfolio, working in a strategic manner that delivers results, maintaining the City’s culture while building a team, managing the fiscal resources of their department, and upholding the delegated authority from the City Manager.
Increases to the salary range of department directors, except the Director of NOVA Workforce Services, have outpaced the federal salary cap increases over the years, resulting in a significant salary range differential between the Director of NOVA Workforce Services and other department directors. Since 2018 (the year after the compensation program was established), the salary range of department directors received a total of 22.29% in increases, while the federal salary cap had a total of 17.38% in increases.
|
Year |
Federal Executive Level II Increase |
Department Director Salary Ranges Increase |
|
2018 |
1.39% |
0.00% |
|
2019 |
1.42% |
5.46% |
|
2020 |
2.60% |
3.97% |
|
2021 |
1.01% |
3.37% |
|
2022 |
2.21% |
2.91% |
|
2023 |
4.12% |
6.58% |
|
2024 |
4.62% |
not scheduled |
|
Total |
17.38% |
22.29% |
|
Average |
2.48% |
3.72% |
The current salary differential between the Director of NOVA Workforce Services and the other department directors is 57.65%. This significant pay gap is caused by limiting the salary range of the Director of NOVA Workforce Services to the amount of the federal salary cap.
|
Job Title |
Salary Range Minimum |
Salary Range Maximum |
Effective Date |
|
Director of NOVA Workforce Services (Grant Funded) |
$184,917 |
$ 221,900 |
2/4/2024 |
|
Other department directors |
$291,515 |
$349,818 |
7/23/2023 |
Recommended Changes
This report recommends increasing the salary range of the Director of NOVA Workforce Services to achieve the following goals:
• Address internal compaction and pay inequity issues.
• Provide the City Manager flexibility for merit increase adjustments.
• Provide salary growth opportunity for the Director of NOVA Workforce Services.
• Remain compliant with the salary cap of the federal WIOA guidelines.
Recommended amendments to the compensation program and philosophy for the Director of NOVA Workforce Services are as follows:
• The Director of NOVA Workforce Services shall continue to have a separate salary range due to the salary cap of the federal WIOA guidelines.
• The minimum of the salary range shall be 10% below the current federal Executive Level II rate.
• The maximum of the salary range shall be 20% above the current federal Executive Level II rate.
• Actual salary exceeding the federal salary cap shall only be granted by the City Manager if other sources of grant funding are available and eligible to be used to fund the director salary.
• Actual salary exceeding the federal salary cap shall not result in reduction in force of other employees in the situation of reduction or loss of grant funding.
Based on recommended amendments to the compensation program, this report recommends increasing the annual salary range of the Director of NOVA Workforce Services from the current minimum of $184,917 to a new minimum of $201,717, and from the current maximum of $221,900 to a new maximum of $266,280.
Director of NOVA Workforce Services Salary Range:
|
|
Salary Range Minimum |
Salary Range Maximum |
Effective Date |
|
Current |
$184,917 |
$221,900 |
2/4/2024 |
|
Recommended |
$201,727 |
$266,280 |
5/12/2024 |
Salary range changes will not automatically change an incumbent’s salary unless the incumbent’s salary falls below the new range minimum, or a merit increase is awarded.
FISCAL IMPACT
The salary for the Director of NOVA Workforce Services is fully funded by grants and is included in the City’s budget. The amount above the federal cap would be cost allocated against philanthropic, corporate, and state funding (e.g., James Irvine, Google/Tides Foundation, etc.). The Director of NOVA Workforce Services salary is cost allocated against some grants currently, with the allocation listed as a percentage of the total grant amount, rather than a dollar amount.
The grant funding will likely change each year and as new grants are awarded. In general, the City’s increases in salaries will out pace the adjustment in allowable increases under the WIOA cap. As such, over time, the percent that is funded outside the cap will grow. In the unlikely event that there is no funding available outside of Federal grants, other funding sources would have to be identified.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Adopt a Resolution Amending the City’s Salary Resolution and Schedule of Pay to Increase the Salary Range for the Director of NOVA Workforce Services Effective May 12, 2024.
2. Do not Adopt a Resolution amending the City’s Salary Resolution and Schedule of Pay to Increase the Salary Range for the Director of NOVA Workforce Services.
3. Provide alternative direction to Staff.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Adopt a Resolution amending the City’s Salary Resolution and Schedule of Pay to increase the Salary Range for the Director of NOVA Workforce Services effective May 12, 2024.
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
A check or “Y” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract
_Y_ Labor or personal employment
___ General policy and legislative actions
Staff
Prepared by: Vienne Choi, Principal Human Resources Analyst
Reviewed by: Tina Murphy, Director, Human Resources
Approved by: Sarah Johnson-Rios, Acting City Manager
ATTACHMENTS
1. Resolution