COMPENSATION COMMISSION MEETING        
June 19, 2000
Barrett Building Conference Room
Cheyenne, WY

Members Present: Representative Wayne Johnson, John McBride, Linda Sweeney, Joe Jelaca and Senator April Brimmer Kunz

Others in attendance: Dennis Smyth, Danny Walker, Kate Selby, Jim Pew, Bob Sutter, Dean Fausset, Kirsten Fanning, Guy Noe, Brian Foster, Kelley Pelissier, Rosie Weston, Charles Rando, Cheryl Fiechtner, Thomas Mann, Cheryl Koski, Mary Kronberger, Leslie Levengood, Elmer Gall, Barbara Blaker, Pat Green, Rich Marble, Lori Narva, Donna Griffin, Valerie Rumpf, Karen Mylland, Jan Batson, Sharon Garland, Floyd Esquibel, Bill Lu, Betty Beardsley, Connie Glassman, Danny Romero, Dewey Long, Ron Ewald, Ernie Johnson, Roger Nelson, Ron Pinther, Darald Dykeman, Sylvia Hackl, Frank Galeotos, Chris George, Bill Luckett and Lana Bradley.

Introductions:
Wayne Johnson, Chairman of the Compensation Commission, called the meeting to order at 9:00 a.m. and asked everyone in attendance to introduce themselves. Wayne Johnson asked for approval of the December 29, 1999 Compensation Commission meeting minutes. Joe Jelaca made a motion to approve the minutes as written. Seconded by John McBride. All were in favor.

Chairman Johnson updated the Commission concerning items that came out in Chapter 76 of the Appropriations. Section 003, the State Auditor, there was $7.5 million General Fund, $2.3 million and $2.9 million for $12.7 million which is to be distributed to Executive Branch agencies proportional to the amount contained in each agency's 100 series budget for the market adjustments for salaries in the 2001-2002 biennial budget. Section 319, authorizing the Compensation Commission to conduct a study of state employees pay and all associated benefits for the purpose of developing a total compensation package for state employees which is commonly referred to as the cafeteria plan. The Compensation Commission will report its findings to the Joint Appropriations interim committee and the governor by December 1, 2000. Section 312, pertaining to longevity pay increases, $40 per month for each 5 years of service, or an overall increase of $10 per longevity. Section 301, increasing the State's contribution for the state health insurance plan by $25 per month for each qualifying employee beginning July 1, 2000.

Teton County Housing Allowance for Fiscal Year 2001
Kate Selby reported that the Compensation Commission approved giving a housing allowance to employees working in Teton County in 1995. The first year it was $200 per month, the second year a formula was developed for evaluating how much the housing allowance should be (Attachments 1, 2 and 3). In 1999 the housing allowance was $562.50. The recommended housing allowance effective July 1, 200 is $678.75. This allowance is not funded by the Commission, it is funded out of existing agency budgets. Joe Jelaca made a motion to approve the Teton County Housing for Fiscal Year 2001 for recommendation to the Governor. Seconded by Linda Sweeney. All were in favor.

Chairman Johnson asked Darald Dykeman if the $25 increase for health insurance was approved. Darald Dykeman reported it was and employees will see the effects of the $25 in the June pay check.

Chairman Johnson asked where the additional money for the longevity increase would come from. Mr. Dykeman reported that longevity has been $30 for every 5 years of service for state employees. $10 was added in Section 312 of the Appropriations Act which will have to be absorbed within the agency budget for this biennium only.

Market Pay Distribution

Funding Distribution
Darald Dykeman referred everyone to the 2001 - 2002 Market Pay Fund Distribution Example (Attachment 4). Mr. Dykeman explained the availability of the $12,777.927. He also explained the example of the two distributions, 75% of the funds in 2001 and 25% in 2002. The logic behind this is 75% can be used for salary increases based on market methodology over a 24 month allocation. The 25% would be for a 12 month period making your dollars worth more when the budget is captured.

A question was asked if there would be employees that would not see an increase based on this distribution. Sylvia Hackl responded that not every employee will see a pay raise. The 75% and 25% is a suggestion for the Commission for dividing the $7.5 million. It is based on a recognition that market calculations per classification across state government may well not result in a pay raise for every employee depending upon where that employee stands in relationship to market today. By holding back a percentage of the total amount available for market pay, the market pay can be reevaluated in another 12 months.

Ron Pinther asked how will the information be disseminated so that employees know how they are going to be treated for pay increases. Mr. Dykeman answered that HR has been working with the cabinet, separate operating agencies and the market pay advisory group. Upon the Governor's approval, the method of distribution will be posted on the web site. At this time the information is not available.

John McBride reminded everyone that at the last Compensation Commission meeting the market pay methodology was approved by the Commission and is included in the handout. (Attachment 5) That information became public information after it was approved.

Ron Ewald said the concerns he hears from state employees are that if this money is used for market pay adjustments will it be fair and equitable from agency to agency for all employees, not just certain groups.

Market Pay Methodology
Sylvia Hackl gave a presentation to explain the Market Pay Methodology. (Attachment 5) She stated last year funds were made available by the legislature with footnotes indicating a desire to bring employees up to 80% of market then 90% and with funds left over to be directed otherwise. There was disparity among the agencies as to how that money was distributed despite efforts through meetings. A group of agency heads volunteered to work with Human Resources staff to come up with a uniform market pay methodology and to develop a definition of market pay which reflects the philosophy of the State of Wyoming. Market pay is defined as a wage and salary rate paid for a specific job, that is determined by continual and consistent analysis of the competitive job market. The sources of information for determining market pay are the Wyoming Wage Survey and the Central States Survey.

Ms. Hackl explained Human Resources sent a survey out to all agency heads with every classification in their agency. They were asked for their opinion of which market should be used to find comparable pay for their employees. This information was then collated by classification. Most of the information was consistent in the selection of the market. The Market Pay Advisory Group made a decision to use the local or regional survey only when agencies did not agree. Agencies were then notified of the decision. If they disagreed, they came back to meet with a second committee, the Pay Management Committee which includes Sleeter Dover, Sylvia Hackl, Mike Geesey, Judy Uphoff and Frank Galeotos.

Ms. Hackl said the final issue which agencies are addressing is the determination of which of the three levels do you match the position in the agency. There are three levels within each class, an entry level, journey level and experienced level. (Attachment 6) Ms. Hackl explained the definition of levels. Joe Jelaca asked if state employees were aware of which level they were. Ms. Hackl said that information had not been made available yet. Frank Galeotos commented we have to go through the process, then after the Commission review it goes to the Governor for his review. There will be a time when every employee will be informed where they fall within these market rates.

(Senator April Brimmer Kunz entered the meeting)

In closing Ms Hackl said in theory the system developed by the Human Resources Division and the agency heads Market Pay Advisory Group will allow the Compensation Commission to recommend a consistent uniform pay methodology to the legislature which will then produce a consistent market pay cost from year to year and then it is up to the rest of the process to deal with that recommendation.

Mr. Ron Pinther asked when employees will be informed and involved with the market pay. Will the employee have an appeal process? Ms. Hackl answered that State employees have been kept involved all along. Market Pay Methodology has already been made available by a memo to all agencies. Employees will not have appeal rights based on a market determination of their job. Danny Romero confirmed Ms. Hackl's response. He said those things that are grievable under the law are those things that are addressed in the Personnel Rules. Some discussion followed.

John McBride made a motion to approve the Market Pay Methodology as presented by Chair Sylvia Hackl of the Market Pay Advisory Group, and forward the recommendations of the Compensation Commission for approval to the Governor. Seconded by Linda Sweeney. All were in favor.

Joe Jelaca asked for comments on the motion from state employees as to recommendations to the Commission. Ron Pinther commented that in his opinion it is important to have a comment period for state employees rather than go through a grievance process before the market pay system is put into place. Connie Glassman commented she was in full support of the market pay methodology. Danny Walker commented that the discussion today addresses most of the concerns of WPEA. He distributed a handout to the Commission on WPEA's background on the market pay concept (Attachment 7).

John McBride made a motion that the Compensation Commission allocate the market pay at 75%-25% distribution. 75% being distributed on August 1, 2000 or soon thereafter as reasonable data becomes available. 25% to be held for the second year of distribution. Linda Sweeney seconded the motion. All were in favor.

Total Compensation Study

Enrolled Act 34, Section 319
Darald Dykeman explained during the last budgetary period he expended money from his budget for the Compensation Commission. Approximately $18,000 is left. Mr. Dykeman would like to encumber, with permission from the Compensation Commission, the $18,000 and carry it forward for the study. Wayne Johnson said the Commission would like Mr. Dykeman to encumber the $18,000. (Attachment 8)

What is a "cafeteria plan"
Mr. Elmer Gall, Director of the Group Health Insurance Plan, explained that the State Employee Compensation Study's purpose was to develop a total compensation package for State employees, commonly referred to as a "cafeteria plan". Total compensation is the total benefit the employee receives from the employer. The cafeteria plan is a method that the employer provides to the employee for more choices in terms of how he/she wants to spend the state contribution of $225. Currently, the employee has a limited choice. They can buy health, dental, or life insurance. Mr. Gall said we provide the opportunity for the employee who has to pay out of pocket for the insurance through a flexible spending account which is part of the flexible3 benefit plan, a program which allows the employee to pay on a pre-tax basis for the benefits they are buying. Other choices could be added for the employee to pick from such as orthodontic care, long term disability, short term disability, long term care, vacation, legal, etc. Not all could be on a pre-tax basis, however, the employee would have a choice of how to spend the $225. The cafeteria plan is nothing more than providing the employee with more options of spending the dollars that the employer provides. Joe Jelaca commented that he liked the idea of the cafeteria plan, however, his concern is before it would be implemented can the Auditor's office handle it. April Brimmer Kunz added that her concern is that the State is famous for getting computer systems and software that hasn't worked out. Linda Sweeney said in her opinion the legislature is asking for the Compensation Commission to look at the study, come up with the information, potential, the possibilities and what would and would not work for the State of Wyoming. Tom Mann of the Retirement System asked that the Commission work with the legislative liaison that is assigned to the Retirement System on any types of changes the Commission is looking at.

Chairman Johnson requested a representative from Deferred Compensation to make a presentation to the Compensation Commission. Bob Sutter, Chairman of the Deferred Compensation Board, explained that the Board administers the program for the State of Wyoming. It is made up of five members, three from the private sector and two state employees. Mr. Sutter said the plan has a participation level of 20% of those that are eligible. One of the problems with the low level of participation is communication. As a reminder, the Deferred Compensation meetings are now posted on groupwise as well as the newspaper. Mr. Sutter said his point is, that if through the Commission and the legislative process, funding a small match for employees would result in a dramatic increase in the level of participation and a dramatic increase over time in the wealth of the participants. Some discussion followed. Mr. Galeotos said it would be a good idea to send out a survey to employees and ask what benefits they would like to see. Chairman Johnson asked Mr. Galeotos if he would volunteer to have A&I conduct the survey. Mr. Galeotos agreed.

Ron Pinther made a recommendation that the Compensation Commission consider enlarging itself similar to the State of Colorado, eleven members, five of the members are elected by state employees.

Meeting adjourned at 12:30 p.m.

Note:  Attachments are available at the A&I Human Resource Division, Emerson Bldg., 2001 Capitol Building, Cheyenne, WY on weekdays between 7 a.m. and 5 p.m..  This document complete with attachments can be viewed as a PDF file by clicking here.