City Manager's Office Report to The Priorities and Finance Committee 2012 December 18 GENERAL MANAGER SALARY RANGE

2013 ECONOMIC INCREASE

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EXECUTIVE SUMMARY Approval is sought for the annual economic adjustment to the General Manager salary range. ADMINISTRATION RECOMMENDATION(S) That the Priorities and Finance Committee recommend Council approve a 3.5 per cent increase to the minimum and maximum of the General Manager salary range (rounded up to the nearest $500), effective 2012 December 31. RECOMMENDATION OF THE PRIORITIES AND FINANCE COMMITTEE, DATED 2012 DECEMBER 18: That the Administration Recommendation contained in Report PFC2012-0820 be approved.

PREVIOUS COUNCIL DIRECTION / POLICY This recommendation is being brought to Priorities and Finance Committee in compliance with Councils 2003 September 29 direction that any proposed amendments to senior management compensation ranges and/or pension policy be brought forward for the explicit review and approval by City Council. BACKGROUND A report to the Personnel and Accountability Committee has been prepared annually since 2003 regarding the annual economic adjustment to the General Manager salary range. Subsequent to the 2012 January 01 transition of Personnel and Accountability Committee to Priorities and Finance Committee, this annual report is now being prepared for the Priorities and Finance Committee. This report explains the recommended adjustment to the GM salary range. INVESTIGATION: ALTERNATIVES AND ANALYSIS Human Resources has reviewed current market reports and studies with respect to the local, provincial and national economic conditions and salary increase projections for 2013. National salary increases for 2013 are projected between 3.0 3.2 per cent. However, given the more positive economic conditions in Calgary and Alberta, local employers excluding oil and gas are projecting higher increases of between 3.2 and 3.8 per cent. The local oil and gas sector is projecting increases of 3.9 - 4.5 per cent. In addition, Human Resources commissioned an external consultant to review the overall compensation package for Directors and General Managers in 2012. Challenges experienced by the consultant in obtaining comparable information from other organizations has delayed completion of this review; however, preliminary analysis indicates that an increase between 3.2 and 3.8 per cent would keep the General Managers competitive on base salary. Therefore, Human Resources is recommending a 3.5 per cent increase to the minimum and maximum of the General Manager salary range for 2013. A 3.5 per cent increase aligns with the increase to the 2013 salary ranges of exempt employees / Directors and maintains the pay differential and internal relativity between the General Managers and Directors.
Approval(s): City Manager (Owen Tobert) concurs with this report. Author (Doris Wilson) City Clerks: (L. Ninkovich)

City Manager's Office Report to The Priorities and Finance Committee 2012 December 18 GENERAL MANAGER SALARY RANGE 2013 ECONOMIC INCREASE

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If the findings in the final consultant report identify recommendations for more substantive changes to the General Manager total rewards package, a report to Priorities and Finance Committee will be submitted at a later date. Stakeholder Engagement, Research and Communication Numerous economic reports, market studies and compensation reviews were used in the research that resulted in the recommended increase to the GM salary structure. Human Resources will ensure the approved General Manager salary range for 2013 is implemented and communicated accordingly. Should the report by the external consultant indicate more substantive amendments to the General Manager total rewards package are warranted, The City Manager will submit a follow up report to the Priorities and Finance Committee in 2013. Strategic Alignment General Managers are critical for achieving Councils Fiscal Plan, long-term plans such as the 2020 Sustainability Direction, Calgarys Municipal Development Plan (MDP) and the Calgary Transportation Plan (CTP), as well as for delivering City services that are valued by Calgarians. A competitive total rewards package aimed at attracting, motivating and retaining a competent, adaptable and resilient senior management team is essential to deliver Councils Priority Area 5 - Becoming a more effective and disciplined organization. Social, Environmental, Economic (External) No impacts identified. Financial Capacity Current and Future Operating Budget: A change in the General Manager salary range as recommended in this report increases the potential earnings of current and future General Managers. It does not change the actual earnings. A change to the actual earnings occurs when authorized by the City Manager, based on the individual performance of each General Manager and guided by the range approved by City Council. The base salary for a General Manager cannot exceed the range maximum established by City Council. Funding to support performance based movement of General Managers within the approved range for their position is included in Corporate Cost Program 861. Current and Future Capital Budget: There are no capital budget implications as a result of this report. Risk Assessment The proposed 2013 salary range adjustment keeps the compensation of the General Managers competitive with The Citys defined market and maintains an appropriate pay differential between the salary range of the General Managers and the salary range of the Directors. The recommended increase for the General Managers in 2013 is 0.5 per cent higher than the 3 per cent received by many of The Citys major unions in 2013. However, this greater increase in
Approval(s): City Manager (Owen Tobert) concurs with this report. Author (Doris Wilson) City Clerks: (L. Ninkovich)

City Manager's Office Report to The Priorities and Finance Committee 2012 December 18 GENERAL MANAGER SALARY RANGE 2013 ECONOMIC INCREASE

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2013 is not seen to constitute a significant risk given that the negotiated settlements contained in the Citys union contracts were all higher than the annual economic increases approved for the exempt group, Directors and General Managers in 2009-11. REASON(S) FOR RECOMMENDATION(S): A 3.5 per cent increase to the minimum and maximum of the General Manager salary range, effective 2012 December 31 ensures that the General Manager salary range: 1. Remains competitive with The Citys defined external marketplace; 2. Is adjusted by an amount consistent with the approved salary increases for exempt employees and Directors; and 3. Maintains internal relativity and an appropriate differential with the Director salary range. ATTACHMENT(S) None.

Approval(s): City Manager (Owen Tobert) concurs with this report. Author (Doris Wilson) City Clerks: (L. Ninkovich)