MEMORANDUM

DATE: April 26, 2011

TO: All City Employees FROM: Mayor Robert Walkup

SUBJECT: PUBLIC HEARING REGARDING FY 2012 COMPENSATION PLAN

On April 26, 2011, the Human Resources Director submitted her recommendations regarding the
FY 2012 Compensation Plan to the Mayor and Council. The Director’s recommendations to the
Mayor and Council are attached.

In accordance with Chapter VII, Section 2 of the City Charter, the Mayor is required to hold a
public hearing to afford all interested parties the opportunity to raise any salary disputes in
connection with the Compensation Plan recommendations.

The City Code allows for disputes to be raised with regard to the recommended adjustment to the
Compensation Plan and not the classification of positions or the assignment of classifications to
a salary range.

This year’s public hearing is scheduled for Friday April 29, 2011, at 5:00 p.m. in the Mayor
and Council Chambers. To ensure that any dispute raised is fully understood, all disputes must
be submitted in writing on the attached form either to the City Clerk’s Office or at the public
hearing itself. Each employee who wishes to present a dispute must sign the dispute and any
representative selected by an employee to represent him or her in the dispute process must also
sign.

Individuals submitting dispute materials prior to the public hearing scheduled for April 29,
2011, need not be present at the hearing. All disputes must be filed at the City Clerk’s Office by
the close of the public hearing on Friday, April 29, 2011.

Thank you.

Attachment
 MEMORANDUM
DATE: April 26, 2011

TO: Mike Letcher, City Manager FROM: Cindy Bezaury, Director

Human Resources Department

SUBJECT: Annual Compensation Plan Recommendation for Fiscal Year 2012

The City Charter requires the Human Resources Director, under the direction of the City
Manager, to present an annual recommendation to Mayor and Council regarding employee
compensation for the next fiscal year. In accordance with Tucson City Code and the Salary
Guidelines adopted by Mayor and Council, a total compensation survey has been completed and
was provided to Mayor and Council on April 13, 2011. Both the Tucson City Code and the
Salary Guidelines provide for a competitive posture in the relevant labor market subject to
available funding.

Employee Benefits. Previous communications addressed the Health Insurance premium rate
increases and the impact on employee premium contributions as recommended by the Benefits
Committee and approved by the City Manager. Recommendation on vision and life insurance
have been addressed during the April 20, 2011, Mayor and Council Study Session. Employer
contribution rates to pension have been addressed in the budget. No other changes to benefits
are recommended at this time.

Compensation Plan. The January to January Consumer Price Index is 1.6% for the U. S. City
Average, which would be the basis for a structural adjustment across all wage and salary
structures. Unfortunately the city does not project sufficient revenues to increase all salary
ranges by this amount, and it has not been reflected in the budget. Therefore, for Fiscal Year
2012, it is recommended that the City of Tucson not fund a structure pay adjustment or merit
increases, based on a lack of funds. Again, please note from the Total Compensation Survey,
this places nearly all occupational categories behind the relevant market. This will result in
significant challenges when recruiting for critical positions in all departments in the City, and we
will have to monitor to ensure that we are not creating pay inequities with existing employees.
This will be the fourth consecutive year without a pay increase for city employees.

Compensation Concessions. It is recommended that compensation concessions be implemented

as furlough days pending review and direction from Mayor and Council based on the Mayor and
Council Memorandum dated April 26, 2011.

At your direction, I recommend this proposal be moved to the Mayor's Public Hearing,
scheduled for April 29, 2011.

CB:als
042611
 CITY OF TUCSON
SALARY DISPUTE NOTICE
City Charter Chapter XXX Section 2 directs the Human Resources Director to annually recommend to the
mayor and council, a position compensation plan. Tucson Code Chapter 10 Sec. 10-31(2) directs that the
recommended compensation schedules of the compensation plan will retain a competitive posture in the
relevant labor markets subject to available funding and current economic trends. The labor market shall be the
basis for the annual compensation plan recommendation. City Charter Chapter VII – Section 2 affords
interested parties a reasonable time to discuss the proposed plan with the Mayor.

TO: Honorable Mayor and Council DATE:

FROM:
(Employee Name – please print or type) (Work location and telephone number)

I. Basis for Dispute

Provide a summary justification and critical key discussion points. NOTE: The structure and administration of the
annual compensation plan is not subject to the dispute process. The dispute process provides only the
opportunity to dispute:
• Recommendations concerning salary adjustments as proposed by the Human Resources Director based
on financial sustainability guidelines, market information and salary survey data. Mayor and Council will
determine the compensation plan in the context of the total financial outlook for the City.
All other disputes/disagreements do not qualify under this process.

II. Specific Supporting Documentation

(Please attach to this form)

III. Disputing Party Signature:

(If you are representing a group of employees, please identify the group and/or attach a listing of the employees
you are representing)

(Please retain one copy and submit the original to the City Clerk’s Office.)

04/11