In its quest to clarify areas of concern in the city's present and future financial situation, the Ione City Council discussed employee compensation and benefits Tuesday night.

Katie Kaneko of Koff Associates, Human Resource Consultants, of Emeryville, appeared before the council to review her company's recently completed Final Report on the Total Compensation Study.

The report states that the purpose of the study stems from agreement of Ione "management and City Council that employees should be recognized for the level and scope of work performed and that they are paid on a fair and competitive basis that allows the city to recruit and retain a high-quality staff."

As "comparator agencies," Kaneko chose the county of Amador, Amador Water Agency, Mule Creek State Prison, and the cities of Angels Camp, Grass Valley, Isleton, Jackson, Lincoln, Placerville, Rio Vista, Sonora and Sutter Creek. By employing medians and averages from these other entities, Kaneko was able to produce a complete report, with side-by-side comparisons, existing compensation figures and proposed salaries for positions not presently on the city's payroll.

In considering Ione's standing on the compensation ladder, other factors that were taken into consideration included costs to the employer for health insurance, vacation pay, sick leave, uniforms, education incentives and others.

What the study uncovered was largely that no one on Ione's existing payroll is paid more than the average or median of the other agencies. In fact, except for a non-existent accounting technician, all of Ione's employees are paid less than the average in the other agencies. For example, Ione's chief wastewater plant operator is paid 26 percent less than the average for such a position at other agencies, while police officers and sergeants are paid about 21 percent less than the average.

Dollar amounts for city employees who are earning less than their counterparts at other agencies include police officers, who are paid $3,905 a month in Ione and $4,754 elsewhere, and the chief plant operator, who is paid $4,873 by Ione and $6,146 by others.

The study goes on to recommend that such differences be eliminated over a three-year period in order to aid the city in future pursuit of qualified personnel.

One area of the compensation study, Post Retirement Medical Benefits, was investigated in greater detail by Jeff Kischuk of Total Compensation Inc.

Kischuk explained the situation facing the city in providing sufficient funds to pay for health benefits for retiring city employees. The Governmental Accounting Standards Board has issued new standards that require governmental entities switch from cash to accrual accounting for retiree health benefits. By his firm's calculations, the city would need to have accumulated nearly $779,000 to be prepared for such benefits.

Given that the city has not put this money aside, the next step would be to begin to put money into an account that will eventually hold enough to comply with the new accounting standards. The amount that would be required to do that would be $34,500 annually for 30 years.

When combined with the normal cost associated with health insurance for this year, the city may need to budget $147,000 for retiree health benefits.

No decision has been made on this yet and no decision is absolutely necessary until June 2011. For now, the city is forming a committee made up of two city council members, representatives from the city's labor bargaining units and the city manager to further analyze the situation and the options.

"We have choices," said City Manager Kim Kerr. "We can do nothing or we can ask ourselves if we are going to do it at all or, if we are going to do it, will we fund it?"

The council voted to approve the agreement with Service Employees International Union Unit 1021 for a new contract covering July 1, 2008 to June 30, 2011 with a Jan. 1, 2009 effective date for salary increases. The agreement was hammered out over a six-month period beginning in May. The city will be following the recommendation from the compensation study and giving the raises over a three-year period, as mentioned earlier.

The first immediate result of the compensation study and its recommendations will be a change in the city's pay period from semi-monthly to bi-weekly. Rather than pay on the 15th and again on the last day of the month, Ione will begin to write its paychecks every two weeks. This will eliminate some guesswork and payroll oddities that have proven problematical under the present system, which has had to deal with months of different lengths.