Washoe County Total Remuneration Study, Executive Summary Report

Washoe County Total Compensation Market Survey Executive Summary

AUGUST, 2012 Presented by:

Neville Kenning Vice President, Public Sector Consulting

and

Malinda Riley Benefits Consultant

Hay Group, Inc.

 Why Was the Survey Done?

 How Was the Survey Conducted?

 What Does the Analysis Show?

 What Are the Next Steps?

During 2011, the Board of County Commissioners (BOCC) requested that County leadership develop a three year strategy and plan for the creation of a new and sustainable compensation program. As an outcome of that request, a three year project plan was developed in August 2011

 It was determined that an analysis of current total remuneration for County employees was required in order to make sound and defensible compensation policy decisions

 This report includes the compensation and benefit market analysis and provides the basis for the County to determine the appropriate mix of compensation compared to the target market

The following steps have been undertaken:

 Initial planning and scoping meeting

 Mutual agreement on the benchmark positions, the constituency of the comparator market, and data to be collected

 Collection of current Washoe County salary data

 Design and distribution of customized salary survey instrument

 Intensive follow up with identified participants to optimize participation

 Analysis of salary and benefits data

 Analysis of overall outcomes

 Preparation of a preliminary report

 Preparation of a final report

To determine the current competitiveness of salaries and range maximums:  Washoe County’s salary range maximum (policy) and actual salaries (practice) were compared to survey average salary range maximum (market policy) − Analysis was done in comparison with the salary range maximums of the custom market due to the fact that the County, as well as the custom survey participants, pay the majority of their positions at the range maximum − The County’s overall compa ratio (actual pay to current range maximum) for the benchmark and premium pay positions is approximately 98% − Custom survey average compa ratio for all positions was 95% − Average salary range width (range minimum to maximum) for custom survey participants was 35% − The County’s average salary range width is 30%  In order to have a more comprehensive market database, data has been gathered from the Hay Group General Market database in addition to the custom survey

The context in which to understand the results:

 Since the basis of the current plan was adopted in late 2000, market reviews have been conducted in 2003, 2007 and now this study

− The 2003 and 2007 market studies showed that the Washoe County salary policy was within + or -2% of the custom survey market

− As shown on the next page, this survey shows the Washoe County salary policy lags the market by, on an aggregate basis, 7%

 One of the main contributors to this level of competitiveness is the tough but prudent fiscal decisions that the County has made as it has faced the challenging economic times over the past few years

 Data shows that over the past 10 years, Washoe County has not given excessive increases when “times were good” but has taken the “tough” decisions when “times were tough”

What does the analysis show? (cont’d)

Base Salary

Overall comparison of Washoe County to Custom Market cuts

Total Sample Nevada County Greater Reno

WC Practice WC Policy % WC Practice WC Policy % WC Practice WC Policy % WC Practice WC Policy % % from Mkt from Mkt % from Mkt from Mkt % from Mkt from Mkt % from Mkt from Mkt Policy Policy Policy Policy Policy Policy Policy Policy Non-Premium Pay Avg: -8% -6% -13% -11% -7% -4% -9% -7% Premium Pay Avg: -10% -10% -13% -15% -9% -9% -9% -10% Overall Avg: -9% -7% -13% -12% -7% -6% -9% -8%

Base Salary (cont’d) WASHOE COUNTY POLICY VERSUS 2012 CUSTOM SURVEY POLICY (Non-premium pay benchmarks)

Base Salary (cont’d)

Overall comparison to Hay Group General Market

 In comparing to General Market, it is important to note that the policy for Washoe County is set at the average of the market and this is the top of the pay range. In the private sector, the policy is typically set at the midpoint of the salary range and employee pay distribution is both above and below the policy position

 In addition, the constituency of the private sector market in Nevada needs to be taken into consideration Nevada Participants by Industry Sector Energy Hay Group General Market 6% 1%

WC Practice WC Policy 12% Healthcare % from Mkt % from Mkt Practice Practice Industrials/Manufacturing

Grade Z - Grade Q Average: -17% -17% 28% Insurance & Financial Services Grade P and Below Average: 7% 10% 45% All Grades Average: 3% 5% Retail/Restaurant Services 9%

Base Salary (cont’d)

Merit Increases

 Merit Increases were the most prevalent form of pay increase found among survey participants

 From 2008 through 2011 the County lead the market with a sustained 5% average merit increase Merit Increases 2008-2012

2008 2009 2010 2011 2012

Washoe County 5.0% 5.0% 5.0% 5.0% 5.0%

Survey Median 4.0% 3.8% 2.0% 2.0% 4.0%

 54% of survey respondents reported having merit increases based upon employee performance as opposed to “automatic” increases

Base Salary (cont’d)

Cost of Living Adjustments (COLA)

 In 2010 and 2011 the County had negative cost of living adjustments (COLAs), with no other cost of living adjustments in 2008, 2009 or 2012 (planned)

 In 2008, participants reported a 3.0% COLA (median). However, the median COLA for years 2009 through 2012 was 0.0%

− Excluding participants reporting 0% COLAs, the median adjustment was 2.9% in 2009 and 2.0% in 2010

− In 2011, two participants reported negative cost of living adjustments

COLAs 2008-2012 2012 2008 2009 2010 2011 Planned Washoe County 0.0% 0.0% -3.4% -1.0% 0.0% Survey Median 3.0% 0.0% 0.0% 0.0% 0.0% Survey Median -1.6% 3.2% 2.9% 2.0% N/A excluding 0% (avg)

Base Salary (cont’d)

Longevity Pay  The County’s longevity program for department heads and division managers was frozen from December 2011 to June 2012 at the amounts paid in Fiscal Year 2010/2011 − Two (2) of the 17 survey respondents reported discontinuing their previous longevity plans in recent years − Nine (9) of the 17 respondents report offering a longevity pay to employees covered by the survey going forward, which is 53% of the survey group  The County’s average years of service for those employees currently receiving longevity was just over 12 years for the positions covered by the survey  Participant longevity varies in years of service required for eligibility as well as amount of pay for such years of service. Therefore, longevity data was compiled for all custom survey participants offering longevity pay based on 12 years of service to ensure “apples- to-apples”

Benefits

 In order for compensation decisions to be made based on the competitiveness of total compensation, Hay Group has conducted additional analysis of the competitiveness of the benefits program offered by the County

 This analysis has been based on the benefits program information provided by the County for its current FY benefits program

 Hay Group used two comparator markets for the benefits analysis

− Public Sector Market – Select public sector organizations gathered through the custom survey conducted in December of 2011 and January of 2012 plus public sector organizations in the western US contained in our 2011 benefits database

− General Market – General Market organizations contained in our 2011 benefits database that have employees in the State of Nevada

What does the analysis show? (cont’d)

Benefits (cont’d)

 The County provides a full range of benefit programs to its employees that is below the market median compared to both public sector and NV general market organizations − Retirement, a primary driver of overall market competitiveness, is at or above market median relative to both the NV market (P75) and public sector market (P50) − Health care, another driver of overall market competitiveness, is below the market P50 relative to both the NV and public sector markets, driven primarily by high premium contributions for dependent coverage − Disability is competitive relative to both comparator groups; however, this benefit comprises a smaller portion of the total benefit package − Death and other benefits are at or below market, but contribute very little toward the total benefits value  The County is competitive when comparing individual benefit programs such as retirement and disability; however, when the value of statutory benefits is included, overall program competitiveness significantly decreases due to the County’s non-participation in Social Security  It is important to note that the decrease in competitiveness is relative to the private sector and non-Nevada based public sector. The prevalent practice in public sector Nevada organizations is to provide retirement benefits solely through PERS

What does the analysis show? (cont’d)

Benefits (cont’d)

 It is also important to note that the differences between P25, P50 and P75 in the public sector market are not as big as we typically see in other industries:

− Specifically, the cash equivalent difference between the market quartiles (P25, P50 and P75) ranges from 5% to 8% for most salary levels while the typical range in the general market is 10% to 15%

− Compression in public sector market values is common and demonstrates the significant similarities in benefit programs, especially retirement and health care

Benefits (cont’d)

EMPLOYER PAID TOTAL BENEFITS VALUES – Salary Levels $20,000 - $150,000 Public Sector Market 60,000

INCLUDING SOCIAL SECURITY – P75 P50 50,000 The market competitiveness of the County’s benefits program is below P25 compared to P25 public sector organizations

40,000 WC

30,000 Benefit Value Benefit

20,000

10,000

0 $20 $30 $40 $50 $60 $70 $80 $90 $100 $150

Benefits (cont’d)

EMPLOYER PAID TOTAL BENEFITS VALUES – Salary Levels $20,000 - $150,000 Public Sector Market 50,000

EXCLUDING SOCIAL SECURITY – 45,000 P75 The competitiveness of the County’s benefits program improves to P25 if Social P50 40,000 Security is excluded from the comparison WC P25

35,000

30,000

25,000 Benefit Value

20,000

15,000

10,000

5,000

0 $20 $30 $40 $50 $60 $70 $80 $90 $100 $150

Benefits (cont’d)

EMPLOYER PAID TOTAL BENEFITS VALUES – Salary Levels $20,000 - $150,000 General Market (NV) 60,000

INCLUDING SOCIAL SECURITY – The market competitiveness of the County’s 50,000 benefits program is at the P25 of the Nevada P75 general market organizations

P50 40,000 WC P25

30,000 Benefit Value Benefit

20,000

10,000

0 $20 $30 $40 $50 $60 $70 $80 $90 $100 $150

Benefits (cont’d)

EMPLOYER PAID TOTAL BENEFITS VALUES – Salary Levels $20,000 - $150,000 General Market (NV) 45,000

EXCLUDING SOCIAL SECURITY – 40,000 The competitiveness of the County’s benefits P75 program improves to P50 to P75 if Social WC Security is excluded from the comparison 35,000 P50

30,000

P25 25,000 Benefit Value

20,000

15,000

10,000

5,000

0 $20 $30 $40 $50 $60 $70 $80 $90 $100 $150

Benefits (cont’d) WASHOE COUNTY VS. PUBLIC SECTOR MARKET Benefit Market Key Findings Area Comparison Total < P25 The County’s non-participation in Social Security decreases the overall competitiveness of the benefits program, although individual benefit programs are quite competitive Benefits P25 – excl. SS The County participates in NV PERS, which provides a 2.5% benefit formula, which is at Retirement P50 the market median. 95% of the market continues to provide a DB plan

Health Market position is driven primarily by employee contributions, which are high for Below P25 dependent coverage at 50%. County employees pay 0% for single coverage, as does Care 35% of the market. The County’s disability program consists of a sick leave accrual and disability under the pension plan. Most public sector organizations provide sick leave and/or insured STD Disability P75 plus LTD. The County’s sick leave accrual is above the market with an annual accrual of up to 18 days and no accrual maximum. The County’s flat dollar benefit of $20,000 is below the market P25. The County provides $100,000 of coverage to eligible managers, which improves the market position Death Below P25 to P25. Public sector is split, with 58% providing a flat dollar benefit and 42% providing a benefit based on salary. Vacation / The number of paid holidays is consistent with other public sector organizations. The N/A * Holiday vacation schedule is above typical market practice. Limited offering of flexible spending accounts and tuition reimbursement puts the County Other P25 at the market P25

© 2012 Hay Group. All Rights Reserved *Hay Group’s benefit methodology uniformly excludes PTO from the total benefits valuation, in order to avoid 21 counting time off as salary as well as a benefit. Observations provided regardingWashoe County prevalence Exec Summary of Reportpractice Aug 2012 only What does the analysis show? (cont’d)

Benefits (cont’d) WASHOE COUNTY VS. GENERAL MARKET (NV) Benefit Market Key Findings Area Comparison Total The County’s non-participation in Social Security decreases the overall competitiveness P25 Benefits of the benefits program, although individual benefit programs are quite competitive Defined benefit plans are less prevalent in the market (32%), increasing the County’s Retirement Above P75 retirement market position. General market contributions lag the public sector, generating a slightly higher market Health Between P25 position for the County. County contributions for dependent coverage at 50% remains Care and P50 high; however, the County rate of 0% for single coverage is above market, as only 5% of the general market fully subsidizes employee coverage. The County’s disability program consists of a sick leave accrual and disability under the pension plan. Most general market organizations provide sick leave (60%), while 38% Disability P75 provide sick leave and STD. All provide LTD coverage The County’s sick leave accrual is above the market with an annual accrual of up to 18 days and no accrual maximum. The County’s flat dollar benefit of $20,000 is below the market P25. The County Death Below P25 provides $100,000 of coverage to eligible managers, which improves the market position to P25. 88% of the general market provides 1 to 2 times pay. Vacation / The number of paid holidays is above typical general market practice, while the vacation N/A * Holiday schedule is aligned with typical general market practice. Limited offering of flexible spending accounts and tuition reimbursement puts the County Other Below P25 at the market P25

© 2012 Hay Group. All Rights Reserved *Hay Group’s benefit methodology uniformly excludes PTO from the total benefits valuation, in order to avoid 22 counting time off as salary as well as a benefit. Observations provided regardingWashoe County prevalence Exec Summary of Reportpractice Aug 2012 only What does the analysis show? (cont’d)

Total Compensation

 The County’s total compensation program is not market competitive when compared to the public sector custom survey market, but is more competitive when compared to the NV private sector market. Below are key findings regarding specific aspects of the County’s compensation program: − Base salary competitiveness varies depending on market: − The County lags the custom public sector market by an average of 7% – higher paid employees lag the market by 9% and lower paid employees lag the market by 4% to 5% − The County exceeds the NV private sector market by 5% – lower paid employees are the primary driver of this figure, as they exceed the market by an average of 10%, while higher paid employees lag their private sector counterparts by 17% − Variable pay lags surveyed public sector organizations, as the County’s longevity pay is low relative to those that continue to pay this type of compensation. The County also lags the private sector, especially at higher salary levels, as annual incentive compensation typically comprises a larger percentage of salary − Benefits are at or below the market P25 of both markets for all employees driven by non-participation in Social Security and a less than market median health care program

Total Compensation (cont’d)

 Key findings, continued:

− Total Compensation is at or below the market P25 compared to the public sector at all salary levels, which is a result of less competitive cash compensation. Total compensation is between the market median and P75 compared to the NV private sector market, due to the higher relative salary position, with the exception of the highest salary level which is below P50 due to higher variable pay in the private sector

− Pay Mix for County employees varies against the market depending on salary

 The charts on the following pages illustrate the total compensation picture for Washoe County employees relative to the Public Sector market as well as the NV market

 Also included are pay mix charts that show the differences between the County’s compensation elements and the two markets

 “Statutory” refers to federal programs – Medicare and Social Security. However, for the Public Sector market, which is primarily NV organizations, only Medicare is included, as prevalent practice is to not participate in Social Security

Total Compensation (cont’d)

WASHOE COUNTY VS. PUBLIC SECTOR MARKET - $45,700 SALARY Total Compensation Comparison - $45,700 WC - $45,700 Benefit Mix $90,000 3% 1% 0% 0% 0% Salary $80,958 $80,000 Variable $652 17% $1,947 $74,292 Retirement $72,481 Health Care $508 $70,000 $412 $1,676 Death $67,328 $1,677 $14,950 9% $65,654 $313 Disability $1,892 $1,530$285 Other $13,182 $13,315 2% 68% $60,000 Executive Perqs $11,122 $7,470 $11,756 Statutory Statutory Executive Perqs $6,614 $2,898 $6,692 $50,000 $6,248 Other $1,918 $5,963 $2,125 $1,027 Disability $926 Death Market P50 - $46,626 Benefit Mix $40,000 Health Care 2% 1% 0% 2% Retirement 0% Variable Salary $30,000 Salary Variable 18% $51,112 Retirement $47,592 $45,700 $46,626 $43,392 Health Care $20,000 Death 9% Disability 65% $10,000 Other 3% Executive Perqs

Statutory $- WC P25 P50 P75 AVG

Total Compensation (cont’d)

WASHOE COUNTY VS. PUBLIC SECTOR MARKET - $53,600 SALARY Total Compensation Comparison - $53,600 WC - $53,600 Benefit Mix $100,000 3% 1% 0% 0% $93,420 0% Salary $652 $90,000 $2,360 $87,139 Variable $85,036 15% Retirement $509 $412 $2,032 Health Care $80,000 $2,035 $14,950 $76,681 $76,757 10% Death $313 $2,220 $285 Disability $1,873 $13,182 $13,315 1% $70,000 Other $9,022 70% $11,122 $11,756 Executive Perqs

$8,010 $3,353 $8,082 Statutory Statutory $60,000 $7,329 Executive Perqs $7,201 $2,227 $2,078 Other $1,069 $971 Disability $50,000 Death Market P50 - $56,305 Benefit Mix Health Care 1% 2% 2% $40,000 Retirement 0% 1% Variable Salary

Salary Variable $30,000 $60,970 16% $56,305 $56,677 Retirement $53,600 $52,712 Health Care $20,000 9% Death Disability

66% Other $10,000 3% Executive Perqs

Statutory $- WC P25 P50 P75 AVG

Total Compensation (cont’d)

WASHOE COUNTY VS. PUBLIC SECTOR MARKET - $70,100 SALARY Total Compensation Comparison - $70,100 WC - $70,100 Benefit Mix $140,000 0% 3% 0% 0% 1% $127,456 Salary 12% Variable $5,003 $120,000 $652 Retirement $114,575 $3,241 $114,475 10% Health Care $4,297 $4,644 Death $412 $14,950 $509 $2,812 $2,786 1% Disability $100,000 $96,168 $97,403 $13,182 $13,315 Other $313 $12,469 73% $2,903 $$2852,585 Executive Perqs Statutory Statutory $11,122 $11,756 $11,071 $4,948 $11,164 Executive Perqs $80,000 $2,606 $2,634 Other $9,585 $9,953 Disability $1,106 $899 Death Market P50 - $77,819 Benefit Mix Health Care $60,000 2% 2% Retirement 0% 0% Variable 4% Salary

Salary Variable $83,678 $40,000 12% $77,819 $76,968 Retirement $70,100 $68,690 Health Care

10% Death

Disability $20,000 2% 68% Other

Executive Perqs

Statutory $- WC P25 P50 P75 AVG

Total Compensation (cont’d)

WASHOE COUNTY VS. PUBLIC SECTOR MARKET - $100,400 SALARY Total Compensation Comparison - $100,400 WC - $100,400 Benefit Mix

0% 0% 0% 1% $180,000 $174,827 3% Salary 8% $6,269 Variable $652 $4,375 $160,000 Retirement $155,467 10% $151,112 $14,950 Health Care $5,115 2% $4,865 $509 Death $412 $3,780 $140,000 $3,866 Disability $132,959 $17,150 $13,331 $129,525 $313 $13,327 Other $4,159 76% $$2853,478 $6,479 Executive Perqs $11,122 $15,350 $120,000 $15,228 $11,756 Statutory Statutory $3,802 $13,729 $3,603 Executive Perqs $13,690 Other $100,000 $1,965 $1,222 Disability Death Market P50 - $107,031 Benefit Mix $80,000 Health Care 2% Retirement 3% 0% 0% Variable 3% Salary $60,000 $122,034 Salary Variable $107,031 $110,692 9% $100,400 $95,194 Retirement

$40,000 10% Health Care Death

2% Disability $20,000 71% Other

Executive Perqs

$- Statutory WC P25 P50 P75 AVG

Total Compensation (cont’d)

WASHOE COUNTY VS. NV PRIVATE SECTOR MARKET - $45,700 SALARY Total Compensation Comparison - $45,700 WC - $45,700 Benefit Mix $80,000 3% 1% 0% 0% 0% Salary $71,228 Variable $70,000 17% $67,328 $3,827 Retirement $$950313 $1,325 $1,892 $1,398 Health Care $62,340 Death 9% $59,254 $3,827 $60,000 Disability $11,122 $13,227 $980 $3,827 $1,225 2% 68% Other $1,068 $1,274 Executive Perqs

$50,000 $11,659 Statutory Statutory $6,248 $47,436 $3,846 $11,833 Executive Perqs $1,027 $3,827 $2,571 $625 $1,095 $2,673 Other $1,988 $40,000 $2,690 Disability $752 Market P50 - $37,604 Benefit Mix $10,149 Death

Health Care 2% $1,440 0% $30,000 $- 2% Retirement 0% 6% Salary

Variable Variable

$45,700 $44,776 Retirement $20,000 $39,754 $37,604 20% Health Care

$30,150 Death Disability $10,000 5% 64% Other

1% Executive Perqs

Statutory $- WC P25 P50 P75 AVG

Total Compensation (cont’d)

WASHOE COUNTY VS. NV PRIVATE SECTOR MARKET - $53,600 SALARY Total Compensation Comparison - $53,600 WC - $53,600 Benefit Mix $90,000 3% 1% 0% 0% $84,019 0% Salary $4,484 $80,000 Variable $76,681 $1,325 15% $1,730 Retirement $313$950 $2,220 $72,561 Health Care $69,543 10% $70,000 $13,227 $4,484 Death $11,122 $4,484 $980 $1,513 Disability $1,068 1% Other $1,573 70% $4,741 $60,000 $11,659 Executive Perqs $7,329 $56,623 $11,833 $3,295 Statutory Statutory $1,069 $4,484 $625 $3,276 Executive Perqs $50,000 $1,354 $3,225 $2,771 Other $924 $10,149 Disability Market P50 - $46,194 Benefit Mix $40,000 Death $1,769$- Health Care 0% 2% 2% Retirement Salary 0% 7% $30,000 Variable Variable $53,600 $54,919 Retirement $47,601 $46,194 17% Health Care $20,000 $38,061 Death

5% Disability

$10,000 66% Other 1% Executive Perqs

Statutory $- WC P25 P50 P75 AVG

Total Compensation (cont’d)

WASHOE COUNTY VS. NV PRIVATE SECTOR MARKET - $70,100 SALARY Total Compensation Comparison - $70,100 WC - $70,100 Benefit Mix $120,000 0% $116,095 3% 0% 0% 1% $6,043 Salary $1,325$- $2,510 12% Variable

Retirement $100,000 $96,168 $13,227 $97,048 $95,166 10% Health Care $313$950 $2,903 $6,043 Death $6,043 $980$- 1% $1,068$- $6,844 $2,193 Disability $11,122 $2,285 Other $78,562 $6,746 $11,713 73% $80,000 $11,833 Executive Perqs $9,585 $6,043 Statutory Statutory $625 $4,707 $1,106 $1,966 $4,528 Executive Perqs $2,510 $4,818 $10,149 Other $60,000 Disability $2,550 $147 Market P50 - $66,575 Benefit Mix Death

Health Care 1% 2% 0%

Retirement 0% 6% Salary $40,000 $78,985 Variable Variable $70,100 $66,575 $66,221 13% Retirement $56,835 Health Care

5% Death $20,000 3% Disability

70% Other

Executive Perqs

Statutory $- WC P25 P50 P75 AVG

Total Compensation (cont’d)

WASHOE COUNTY VS. NV PRIVATE SECTOR MARKET - $100,400 SALARY Total Compensation Comparison - $100,400 WC - $100,400 Benefit Mix $220,000 0% 0% $208,927 0% 1% $8,858 3% Salary $200,000 8% $9,756 Variable $1,325 $4,226 Retirement 10% $180,000 Health Care $13,271 $173,531 2% Death $161,988 $8,858 $11,839 Disability $160,000 $6,377 $8,858 $980 $3,689 Other $5,769 76% $1,068 $11,759 Executive Perqs $3,885 $26,140 $140,000 Statutory Statutory $132,894 $11,861 $8,113 $313$950 $4,159 Executive Perqs $121,130 $7,568 $14,974 $120,000 $11,122 Other $8,858 $11,200 $625 Disability $13,729 $3,186 Market P50 - $111,270 Benefit Mix $100,000 $1,900 $10,163 Death $4,263 $1,476 Health Care 2% 1% $80,000 Retirement 5% Salary 0% 4% Variable Variable $132,836 7% Retirement $60,000 $118,196 $111,270 Health Care $100,400 5% $90,868 Death $40,000 7% Disability

69% Other $20,000 Executive Perqs

Statutory $- WC P25 P50 P75 AVG

Total Compensation (cont’d)

 It is very important to understand the impact a salary that is less than competitive with the market has on the competitiveness of total career earnings

 In addition, total compensation competitiveness must be seen in terms of workforce demographics; current and future workforce

 While salary is a known value, benefits is perceived value

 There is a perception that often exists in the Public Sector that “our benefits, particularly our retirement plan, are so competitive we don’t need to be competitive on base salary”

 Public Sector employees sacrifice salary now (lower salary compared to market) in return for reward later (above market retirement and possibly post retirement medical)

 Any reduction to any component of the compensation package, such as increased premium contributions for health care or elimination of post retirement health care, must be considered in the context of total compensation, as that change disrupts the balance outlined above – sacrifice now for reward later

 The key decisions to be considered are not only about the level of compensation but also about the mix of compensation

This survey has provided a “stress test” of the current compensation plan and it is the opinion of Hay Group that the County’s plan has passed the test

 As stated previously, the current market competitiveness is primarily driven by a combination of sound fiscal decisions that the County has made during both the “good and not so good” economic times and the decisions made by other public entities during those times

 The current level of salary policy competitiveness, when seen in conjunction with the recent decision to stop an approximate 3.44% cost reduction in compensation for employees, provides a sound basis from which to now give consideration to some key components of your compensation plan. These include:

− A review of your compensation philosophy, such as market policy and pay delivery

− The salary range structures; should the market policy position continue to be the top of the range? Should the salary ranges be redesigned?

− How should pay move? Should it continue to be step based or should there be open ranges with a minimum, a market policy position and a range maximum?

− Should there be a strengthening of the linkage between pay and performance?

− Should there continue to be longevity pay?

− Should premium pay for jobs that continue to lose market position be reviewed for further adjustment?

 In 2011, the Board directed Washoe County leadership to develop a sustainable compensation plan that would be based on strengthening the alignment between revenue and compensation costs

 This market analysis and the recent salary decision provides a sound basis upon which leadership, in consultation and partnership with its employees and their representatives, can continue to address these key compensation policy decisions within the context of developing a sustainable compensation plan

Participant Lists Custom survey participants

City of Carson, NV* Solano County, CA City of Henderson, NV Sonoma County, CA City of Las Vegas, NV Spokane County, WA City of Reno, NV* State of CA City of Sparks, NV* State of Nevada* Clackamas County, OR Summit Engineering Corp, NV* Clark County, NV University of Nevada, Reno (NV)* Clark County, WA Washington County, OR Lane County, OR Washoe County School District, NV* Placer County, CA Reno-Sparks Convention & Visitors Authority, NV* Sacramento County, CA Reno-Sparks Regional Transportation Commission, NV* Santa Cruz County, CA

* Participants included in "Greater Reno" Market Cut

.7-Eleven .Bridgestone Americas .CIGNA .Abercrombie & Fitch .Build A Bear Workshop .CNH Global .Abercrombie & Fitch -- Outlets .Cabela's .Coach .Aetna .Calgon Carbon .Colgate-Palmolive .Air Liquide America .Carson Tahoe Regional Healthcare .Collective Brands .Air Products and Chemicals .Carter's .Compass Group -- NAD .Akzo Nobel - Car Refinishes .Carter's -- OshKosh B'Gosh .Constellation Brands -- Crown .Allianz Life Insurance of North .Caterpillar Imports America .Charles River Labs .Cooper Industries .American Eagle Outfitters .Charlotte Russe .COUNTRY Insurance & Financial .American Family Insurance Group .Charming Shoppes -- Catherine's Services .Amerigroup .Charming Shoppes -- Fashion Bug .Coventry Health Care .Andersons, The .Charming Shoppes -- Lane Bryant .Crawford .Anheuser-Busch InBev -- Anheuser- .Charming Shoppes -- Outlets .Cytec Industries Busch .Chico's -- Chico's .D&B .Aramark .Chico's -- Soma Intimates .Daiichi Sankyo .Ashland .Chico's -- White House/Black Market .Day & Zimmermann .AutoZone .Children's Place, The .Dean Foods .Bacardi Limited -- Bacardi USA .CHW -- St. Mary's Regional Medical .Deere .Barnes Group Inc. Center .Department of Veterans Affairs .BASF .CHW -- St. Rose Dominican Hospitals .Diageo North America .Best Buy - De Lima Campus .Dick's Sporting Goods .Big Lots .CHW -- St. Rose Dominican Hospitals .Dollar Tree .Boehringer Ingelheim - San Martin Campus .Dr Pepper Snapple Group Pharmaceuticals .CHW -- St. Rose Dominican Hospitals .Bombardier Transportation Holdings - Siena Campus USA .CIGNA © 2012 Hay Group. All Rights Reserved 38 Washoe County Exec Summary Report Aug 2012 Hay Group all organizations – Nevada participants cont’d

.E. I. du Pont de Nemours Hospital Works .Eaton .HCA Healthcare -- Summit Medical .Limited Brands -- Victoria's Secret .Express Center Stores .Express Scripts .HCA Healthcare -- Sunrise Hospital .Limited Stores .Family Dollar and Medical Center .Liz Claiborne .FedEx .Health Net .Lowe's .FedEx -- FedEx Express .Heineken USA .LVMH Moet Hennessy Louis Vuitton .FedEx -- FedEx Office and Print .Helzberg Diamonds .LVMH Moet Hennessy Louis Vuitton - Services .Hershey Foods - Fendi .Fidelity Investments .HMS Host .LVMH Moet Hennessy Louis Vuitton - .Foot Locker .Home Depot - Moet Hennessy USA .Forest Laboratories .Hot Topic .Macy's .Fossil .J.Crew .Macy's -- Bloomingdale's .Galderma Laboratories .jcpenney .Magellan Health Services .Gap -- Banana Republic .Kindred Healthcare -- Kindred .Magellan Health Services .Gap -- Gap Outlet Hospice .Maidenform Brands .Gap -- Gap Stores .Kindred Healthcare -- Kindred Long .Margaritaville - Jimmy Buffett's .Gap -- Old Navy Term Care .MetLife .GNC .Kindred Healthcare -- Kindred .Michaels Stores .Graceway Pharmaceuticals Rehabilitation .Moog .Granite Construction .Knowledge Learning Corporation .Movado Group, Inc. .Gymboree .Kohl's .Nike .Hallmark Cards -- Retail .Laureate Education .Nordstrom .HCA Healthcare -- Montgomery .Lhoist North America .Nordstrom -- Nordstrom Rack Regional Hospital .LifeCare -- Tahoe Pacific Hospitals .Novo Nordisk .HCA Healthcare -- Mountainview .Limited Brands -- Bath & Body

.Office Depot .Sonic Automotive .UHS -- Spring Mountain Treatment .OfficeMax .Southwest Gas Center .Panda Restaurant Group .St. John Knits International .UHS -- Spring Valley Hospital Medical .Penske Truck Leasing .Stage Stores -- Peebles Center .Pernod Ricard SA -- Pernod Ricard .Staples .UHS -- Summerlin Hospital Medical USA .Starbucks Center .PETCO .SuperValu .UHS -- Valley Hospital Medical Center .PETsMART .Takeda Pharmaceuticals North .Unilever US .Philips Electronics -- North America America .UnitedHealth Group .Pier 1 Imports .Target .UnitedHealth Group .PRA International .Tekni-Plex .VA Medical Center - Ioannis A. .Praxair .Teva Pharmaceuticals USA Lougaris Campus .Purdue Pharma L.P. .Tiffany & Co. .VA Medical Center - Southern Nevada .Ralph Lauren .Tipp Enterprises -- Novamex Campus .Retail Brand Alliance -- Brooks .TJX .Valley Services Brothers .Tory Burch .Walgreens .Ritchie Bros. Auctioneers .Toys R Us .Walmart Stores -- Sam's Club .SABIC Innovative Plastics US .Tronox .Walmart Stores -- Stores and Super .Safeway .Tween Brands Stores .Saks .UHS -- Centennial Hills Medical .Watson Pharmaceuticals .Saks -- Off 5th Center .William Grant & Sons .Sanofi Pasteur .UHS -- Desert Springs Hospital .Williams-Sonoma .Sears Medical Center .Skyy Spirits .UHS -- Northern Nevada Medical .Sodexo -- Sodexo Center .Solutia .UHS -- Spring Mountain Sahara