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1/26/2007
Information about the NCC compensation report

On January 22, 2007, members of the Financial Future Task Force met to receive and review a study of New Castle County's compensation system.  This study, conducted by Kennedy & Rand, benchmarked 30 different job categories from across the county government, comparing salaries, health care, pension, leave, severence and other benefits here to other regional governments, national information and the private sector.
 
A copy of the compensation study presentation is available online (http://www.co.new-castle.de.us/countyfinances/home/webpage8.asp) and copies of news articles concerning the study are included below to provide additional information about initial response to the report.
 
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From the News Journal:
 
Working for NCCo a good deal, report says
By ANGIE BASIOUNY, The News Journal Posted Tuesday, January 23, 2007
 
New Castle County employees earn salaries that are competitive with -- or slightly better than -- other public employees' and private-sector workers' in comparable positions across the region, according to a study presented Monday.
 
Combined with generous benefits, including a health care plan in which employees pay less than 5 percent of costs, the county's compensation package is one of its greatest expenses, accounting for about two-thirds of the $230 million operating budget.
 
Maryland-based Kennedy & Rand Consulting examined pay and benefits for 60 county positions and compared them with similar jobs in the state government, federal government, private sector and nonprofits to determine how county employees' compensation stacks up.
 
Officials hoped to use the findings to decide whether cutting compensation can help the county bring its spending under control and bail it out of a budget deficit expected to reach $45 million by 2009.
 
But the study provided no easy answers for officials trying to corral the budget deficit.
 
If the county slashed salaries and benefits to the average levels found in the study, it would save $8.8 million a year, according to figures from county finance officials.
 
County Councilman George Smiley said he's convinced that cutting salaries is not the answer.
 
"I hope no one thinks, based on this study, we can balance the budget on the backs of the employees," he said. "Even if we eliminate the entire Land Use Department, we'd still have a deficit."
 
Still, cuts should be considered, said Vincent D'Anna, a member of the Task Force on the Financial Future of New Castle County. The group, which formed in the fall to find innovative ways for the county to save money, commissioned the roughly $50,000 study.
 
"I think it's all on the table," D'Anna said. "The county is going to have to cut the employees' budget. The executive is going to have to cut his budget. The council is going to have to cut their budget. Hopefully, this process is about fairness."
 
About 85 percent of the county's 1,658-person work force is covered by union contracts that offer an average yearly raise of 3 percent. Those workers also get 5 percent step increases each year for the first 10 years of employment.
 
Most of the labor contracts expire in 2008, and the county will not be able to renegotiate pay until then.
 
Consultant Peter Kennedy said the county could freeze step increases, allowing the salary scale to fall back down to the averages found in the study.
 
"You see this going on all the time in governments," Kennedy said.
 
He said the study has its flaws, including some inconsistent data and indirect comparisons, because no two government agencies or private-sector companies are perfectly alike. In New Castle County, for example, nonpublic safety employees have a 35-hour workweek.
 
"What I take away from this study is that New Castle County employees overall are very competitively paid in relation to other government and private-sector employees," said County Executive Chris Coons.
 
He said it's too early to say whether the study will result in changes to the pay structure.
 
"The challenge is the rate of salaries and benefits is rising faster than the revenue," he said. "We have to find ways to rein in costs. It's part of an ongoing discussion about do people in this county value the services they're getting and how do we make changes."
 
In the last several months, Coons has announced a series of cost-cutting measures, including a hiring freeze for all positions excluding public safety, 10 percent across-the-board budget cuts and no nonemergency overtime. The measures, combined with money saved on fuel and other items, will save the county about $9 million this year.
 
Last week, Coons announced a pay freeze for the county's 55 appointed employees who are not covered by labor contracts. The freeze will save $250,000 this year.
 
Contact Angie Basiouny at 324-2796 or abasiouny@delawareonline.com.
 
NCCO COMPENSATION STUDY
 
* Average salaries, when aggregated, are about 13 percent higher than market medians.
* Nine percent of employees' compensation is below competitive level; 36 percent is at competitive level; and 55 percent is above competitive level.
* County pay increases have been very competitive during the last six years, particularly in 2002 and 2003, when almost everyone received a 3 percent cost-of-living adjustment and 5 percent merit/step increase.
* County employees pay between 0.5 percent and 3.9 percent of health insurance costs, compared with an average employee contribution of 19 percent in the public sector.
* County employees pay between 1.59 percent and 2.33 percent less than other public-sector employees for their retirement plans.
* Paid leave for younger, short-service employees is slightly less generous than other jurisdictions'. Leave for midcareer employees is competitive, while long-service employees get more time off than their counterparts.
* Employee turnover rate is 3 percent.

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