Consider approval of a revised FY2022 budget recommendation that non-represented employees at the top of their pay range receive a lump-sum equivalent to 100% of the approved merit increase, instead of the previously requested 50%.

Approve the revised budget recommendation. (Julie Karins, City Manager)

Lump Sum Cost Comparison: 2.5% versus 5.0%

Lump Sum Type	# of Employees	2.5%	5.0%
Full Lump Sum (Non-Sworn)	42	$99,610	$199,220
Partial Lump Sum (Non-Sworn)	31	$65,294	$90,903
Totals	73	$164,904	$290,123
Cost Difference: 2.5% versus 5.0%	$125,219

Funding for this action is available within the FY2022 budget as the budget was developed and adopted using a 5.0% increase for all non-sworn employees.

Each position in the city is assigned to a pay range that identifies minimum and maximum pay rates. Employees move through the pay range via merit increases. Once an employee reaches the maximum of their pay range they are no longer eligible for merit increases. In lieu of merit increases, it is common for employers to offer lump sum payments to those at the maximum of their pay range to reward successful performance without growing their base pay.

Policy 200 – Employee Compensation provides for compensation increases for employees at the maximum of the range and states the following: “a lump sum salary increase may be recommended for employees who are at the maximum of their range based on budgeted funds. Lump sum salary increases are not added to the employee’s base pay and will be equal to the raise an employee would have received had they not been at the maximum of the range.”

Over the past seven years, Goodyear employees at the maximum of the range have received a lump sum salary increase of one-half the amount they would have received if they were not at the maximum of the range. This practice started as we emerged from the recession and reinstituted annual merit increases, and has been recommended and approved by Council during each of these budget cycles. As the language in the policy specifically states that lump sum payments were subject to budgeted funds, the payments made over the past years have been within policy.

Although we are currently embarking on a comprehensive compensation study, upon review of the policy, practice and history behind lump sum payments for those employees at the top of their pay range, we are recommending for FY2021/2022 retroactively returning to a normative pre-recession state of lump sums being equivalent to the amount that would have been received if the employee was at the maximum of the range. Applying the recommended change retroactively will adjust the lump sum increases for those employees not covered by the MOU who received one-half the lump sum on the payroll of July 1, 2021.  The retroactive step supports a proactive approach to retain employees, guard against poaching, and allows focus on recruitment of new positions that are necessary to sustain our pace of continued growth.