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Methodology

In July 2011, The Segal Company conducted a total compensation study to evaluate the market competitiveness of employer costs of pay and benefits offered to City of Phoenix employees.

Scope of Work

The market survey included:

601 benchmark jobs (pay data) which represent 95% of City employees

Pay practices (longevity, shift differentials, structure design, etc.)

Paid leave (vacation, sick, holiday and personal days)

Disability insurance

Retirement benefits (DB1 and DC)

Retiree health

Health benefits (medical, dental and vision)

Competitive market information was gathered from a variety of sources as follows:

A comprehensive custom market survey including:

National public and local private sector peer employers were identified. These were determined as either similar in size and/or services provided, or as an entity the City competes with for talent

Pay information covering 25% of the City’s job titles (250)

Pay practices and benefits (paid time off, pay practices, health benefits, defined benefit and defined contribution retirement plans, disability insurance and retiree health plans)

The Job Information Management System (JIMS) database (601 benchmarks), which is a database where local public sector entities report their job titles, salary ranges and job descriptions

A Segal Phoenix database covering pay practices and benefits (paid time off, pay practices, health benefits, defined benefit, defined contribution plans, disability insurance and retiree health plans) for those entities identified in JIMS

Published survey sources for private data on 601 benchmarks and benefit data for employers of comparable size (primarily private sector data)

1 This study reviewed at a high level DB plans in the market with the understanding The Pension Reform Task Force

reviewed the defined benefit plan extensively in order to make recommendations.

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Survey Peers

The Segal Company surveyed 25 public and 13 private sector organizations, both locally and nationally

29 out of 38 entities responded to the survey

Public sector:

Three (3) did not participate

Four (4) of the 25 were unable to participate in full due to the size of the study and availability of staff to commit to completing the survey1

Private sector:

Seven (7) of the 13 responded (The names of private sector respondents have been de-identified in order to protect each individual company’s confidential information.)

Details by survey participant can be found in Table 1 shown on the following pages.

1 The Segal Company supplemented partial responses by collecting data from these public sector organizations’

websites.

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TABLE 1 SURVEYED EMPLOYERS

Comparator* Responded to Survey

Compensation Benefits

Public Sector Custom Survey Responses

State of Arizona (6.4M) Yes Yes

City of Austin, TX (790,000) Partial No

City of Dallas, TX (1.2M) Yes Yes

City of Houston, TX (2M) Yes Yes

City of Indianapolis, IN (820,000) No No

City of Jacksonville, FL (820,000) Yes Yes

City of Los Angeles, CA (3.8M) Partial Partial

City of Philadelphia, PA (1.5M) Yes Yes

City of San Antonio, TX (1.3M) No No

City of San Diego, CA (1.3M) Yes Yes

City and County of San Francisco, CA (805,000) Yes Yes

City of San Jose, CA (946,000) No No

Local Public Sector Responses

City of Avondale (76,000) Partial No

City of Chandler (236,000) Yes Yes

City of Flagstaff (66,000) Yes Yes

Town of Gilbert (208,000) Yes Yes

City of Glendale (227,000) Yes Yes

City of Goodyear (65,000) Yes Yes

Maricopa County (3.8M) Partial No

City of Mesa (439,000) Yes Yes

City of Peoria (154,000) Yes Yes

City of Scottsdale (217,000) Yes Yes

City of Surprise (118,000) Yes Yes

City of Tempe (162,000) Yes Yes

City of Tucson (520,000) Yes Yes

City of Phoenix (1.4M) Yes Yes

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Comparator* Responded to Survey

Compensation Benefits

Private Sector Custom Survey Responses

Private Employer 1 (NA) Yes Yes

Private Employer 2 (NA) Yes Yes

Private Employer 3 (NA) Yes Yes

Private Employer 4 (NA) Yes Yes

Private Employer 5 (NA) Yes Yes

Private Employer 6 (NA) Yes Yes

Private Employer 7 (NA) Yes Yes

Private Employer 8 (NA) No No

Private Employer 9 (NA) No No

Private Employer 10 (NA) No No

Private Employer 11 (NA) No No

Private Employer 12 (NA) No No

Private Employer 13 (NA) No No

Published Survey Sources

In order to supplement the custom survey data, Segal collected data from a number of published survey sources and databases, including:

Airports Council International Compensation Survey

Bureau of Labor Statistics (BLS)

CompTrack (Towers Watson)

Economic Research Institute

JIMS (Job Information Management System)

Milliman Arizona Compensation Survey

PayMonitor (Mercer)

Segal’s Phoenix Office Benefits Database

Adjustments for Geographic Differences in the Cost of Labor

To reflect the geographic differences in salaries between the metropolitan areas of surveyed peer entities/surveys and Phoenix, Arizona, we adjusted the reported salaries using the Geographic Wage & Salary Differentials reported by the Economic Research Institute (ERI) Geographic Assessor, effective as of July 2011. Each quarter, ERI updates its Geographic Wage & Salary Differentials to reflect differences in the supply and demand for labor between geographic areas.

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This allows organizations to compare pay based on unique labor market conditions in a given location.

Appendix A, Table A-1 shows the specific geographic adjustments that were applied to the pay data for employers located outside the Phoenix metropolitan area.

Survey Topics

Segal worked with the City to develop a customized market survey document that included questions that would allow for a review of total compensation. Topics included questions related to the subjects found below in Table 2.

TABLE 2

SURVEYED TOPICS

Survey Categories

Compensation

# of Full-time Equivalencies (FTEs)

Actual Average Salaries

FLSA Status

Range Minimums & Maximums

Union Status

Benefits

Medical Benefits

Dental Benefits

Vision Benefits

Other

Short-Term Disability

Long-Term Disability

Retirement

Defined Benefit Plans

Defined Contribution Plans1

Retiree Medical Insurance

Paid Time Off

Holidays

Personal Leave

Sick Leave

Vacation/Annual Leave

Carry Over/Cash-out of Paid Time Off

Pay Practices

Additions to Base Pay

Pay Adjustments

Pay Plan Design

Pay Progression

Perquisites

Salary Budget Increases

Tuition Reimbursement

1 Defined benefit programs are under review by the Pension Reform Task Force.

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Survey Benchmarks

Working with the City’s Human Resources Department, we identified 601 job titles that are representative of the City as illustrated below:

Benchmark Representation by Employee Category

There are 11 employee categories, including bargaining units and other groups such as Confidential Staff, Middle Managers, Executives, etc.; all are represented

Benchmark Representation by FLSA Status

Exempt – 2,066 employees (95% of Exempt staff)

Non-Exempt – 12,454 employees (98% of Non-Exempt Staff)

Benchmark Representation by Occupational Group

32 occupational groups (i.e. Administrative Support, Engineering, Fiscal, etc.) were created to cover all the City’s job titles; each group is represented

Benchmark Representation by Job Title

601/1,000 (60% by job code; 79% when considering title/role such as Secretary II which may be found in multiple job codes due to union representation)

Benchmark Representation by Salary Grade

109/122 (89%; nine (9) of these pay grades do not have jobs assigned to them)

Tables in Appendix B show market position for not only benchmarks by occupational group, employee category, and job title but are also differentiated between public sector and private sector data.