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Santa Monica Council to Take Up "Compensation Philosophy"


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By Jorge Casuso

July 19, 2018 -- With employee compensation and staffing rapidly becoming a major political issue in Santa Monica, the City Council on Tuesday will take up a proposed "Compensation Philosophy" to guide future polices and decisions.

The 464-word draft document was prompted by a recent audit by the accounting firm Moss Adams LLP prompted by criticism of the City's high employee pay and benefits.

Among the audit's key findings was that 60 percent of the City employees -- particularly in management -- were compensated well above those in peer cities ("Outside Audit of Employee Pay at Santa Monica City Hall Heads to Council," May 7, 2018).

The consulting firm recommended the City adopt a Compensation Philosophy that "explicitly spells out the goals and factors to be weighed in establishing, administering and modifying the compensation system for City staff," according to the staff report.

The document, however, "is not a specific policy so it is intentionally broad," staff said.

It is "designed to capture the philosophy of the City as an 'employer of choice' in the 21st Century who also has a responsibility to its citizens to be fiscally responsible and transparent."

In evaluating competitive compensation, the City will take into account:

* The City’s financial forecasts and revenue projections

* The “relevant labor market” primarily defined by geographic region

* “Internal Relationships” referring to the relative value of classifications by comparing "responsibilities, skill level, knowledge, ability and judgment."

* Unforeseen economic, regulatory or service changes.

The City will publicly disclose "the components of workforce compensation" and give the public "adequate advance notice of material policy changes," according to the draft Compensation Philosophy.

"Ideally, every five years, the City will evaluate its compensation structure, programs and policies to assess market competitiveness, effectiveness and compliance with applicable State and federal law," according to the draft document.


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