ࡱ>   bjbjVV 2,<<-   8A] $qL> E$G$G$G$G$G$G$$h& )Dk$mmmk$$   mpE$ mE$  V"#݉p # 1$$0$# N)k@N)##N)#HZP@ 4k$k$^$mmmmN) :   To: University of AV̳ Board of Regents cc: President Gamble Beth Behner, Chief Human Resource Officer From: Staff Alliance Compensation Working Group Date: October 25, 2010 RE: Staff Compensation: FY12 Increase Recommendations The University of AV̳ Staff Alliance Compensation Working Group would like to thank the University of AV̳ Board of Regents and President Gamble for inviting our input into the staff compensation for the FY 2012 budget. During our meetings, the committee was able to identify several specific concerns and recommendations that will be outlined in this letter. Concerns The University of AV̳ has not replaced the step increases, which were discontinued in FY09, with a mechanism that would reflect longevity or any staff increase not related to the CPI. In the past, these step increases could be reliably counted on for staff budget planning purposes at approximately 2.6%, with additional cost of living increases possible at the Boards discretion based on the CPI. The across the board increase of 3% in the current fiscal year (FY11) did not completely offset the increase in staff health care contribution requirements. Past health care premium increases disproportionately affect UA mid-range and lower wage earners, some of whom had less take-home pay in FY11 than in FY10 after the implementation of the higher health care premiums. The University of AV̳ is considering additional employee health care contribution increases for FY12, due to health care cost increases and Federal legislation. Recent economic data from the AV̳ Department of Labor ( HYPERLINK "http://labor.alaska.gov/research/col/col.pdf" http://labor.alaska.gov/research/col/col.pdf) is significantly different than the current University of AV̳ Regional cost differentials ( HYPERLINK "http://www.alaska.edu/files/classification/FY11%20Staff%20Salary" http://www.alaska.edu/files/classification/FY11%20Staff%20Salary %20Schedule.pdf), suggesting that a review of regional pay differentials may be needed to improve pay equity. Staff layoffs at UAF in FY10 in response to legislative cuts to the University of AV̳ budget have increased uncertainty among the employees in the UA System. Overall, the staff morale is waning due to the above concerns and economic pressures. Recommendations Despite our concerns, the University of AV̳ staff recognize the economic and political realities facing the University System for FY12. It is clear that a large across the board increase is unrealistic. However, the staff would also like to point out that staff salary and the cost of living increase associated with the salary is not a complete picture of compensation. Therefore, the Staff Alliance Compensation Working Group recommends that the University of AV̳ Board of Regents: Implement a minimum 3% across the board adjustment for FY12 (CPI plus increase to offset health care premium costs), and Consider staff salaries and benefits in concert as the total compensation package for employees rather than as separate entities. Recommendation Rationale Given inflation, recent increases in employee health care premiums and the loss of employee step increases, this committee feels that an increase of up to 5% would normally be an appropriate request. However, this committee also recognizes the realities resulting from the current economic climate. Therefore, we recommend a minimum 3% across the board increase with hopes for a 3.5% increase. Our rationale for this request extends from the August 2010 AV̳ Department of Labor report in which the Anchorage CPI was reported to be 2.5% for the year ( HYPERLINK "http://labor.alaska.gov/research/col/col.pdf" http://labor.alaska.gov/research/col/col.pdf). Using the 2.5% CPI as a base, the committee felt that an additional increase of .5% to 1% is justified to offset some of the costs associated with employee contributions to the UA Health Care plans expected in FY12. Even with the additional 1% across the board increase the higher premiums would not be offset. Furthermore, it should be noted that this recommendation ignores the loss of step increases, which previously averaged about 2.6%. Therefore, in the spirit of compromise, we recommend a minimum of 3% across the board increase with hopes that the UA BOR will find a way to fund a full 3.5% across the board increase to account for this years CPI and increased health care premium costs. While this committee is still concerned about the loss of our step increase, we are suspending our step increase request for this fiscal budget. Other Comments and Considerations During our meetings, the Staff Alliance Compensation Working Group grew concerned about the impacts of recent changes to the University of AV̳ compensation system. As a result, this committee will be researching the following: The specific impacts of health care and benefit changes to take-home pay of employees across different grades and benefit plan options, The current geographic cost differentials issued by the AV̳ Department of Labor in relation to current geographic pay differentials, How the loss of the step increases have affected staff retention, and How benefit changes can be implemented in a more equitable manner so that no staff member suffers a net pay cut due to benefit premium increases. You can expect that members of this committee will return to report on this research at a future Board of Regents meeting. We thank President Gamble and the University of AV̳ Board of Regents for this opportunity to present staff concerns and recommendations. Should additional information be needed, our best contact is our Committee Chair, Maria Russell, via email at  HYPERLINK "mailto:mtrussell@alaska.edu" mtrussell@alaska.edu or by phone at 907-474-7172.      Phone: (907) 450-8040 | | Fax: (907) 450-8041 tc "Phone\: (907) 474-7323 | | Fax\: (907) 474-5131 " P.O. Box 757780 | | Butrovich Building Rm 105 | | Fairbanks, AV̳ 99775 tc "P.O. 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