Santa Barbara County 1998-99 Grand Jury Report

Employee Compensation
and Related Issues

Released March 23, 1999



Several letters from concerned citizens and citizen groups were received by the Grand Jury regarding salaries and benefits received by County employees. The issues addressed in the letters were the amount of salary and type of benefits received by various groups of employees and the classification structure of jobs as defined by the County. Other issues arose during the course of the investigation that the Grand Jury wished to include in their study. Those issues include the delivery systems for employee benefits, the process of negotiating memorandums of understanding with bargaining groups and a comprehensive plan for compensating employees at all levels.


To study in depth the job classification system, collective bargaining procedures, compensation and payroll simplification for the County of Santa Barbara.


In its investigation the Grand Jury interviewed various department heads as well as members of the Board of Supervisors and members of contract negotiations teams representing employees. In addition, assistant department heads, middle management, front-line staff and County members of the contract negotiation team were interviewed. The Grand Jury also reviewed information from the State of California’s Personnel Board relating to payroll broadband concepts and various job classification structures and pay ranges from other public agencies.


The County of Santa Barbara has more than 4,100 employees, which include approximately 700 extra-help employees and 70 contract employees. The number of employees has more than kept pace with the County population growth rate. This population has grown 10% since 1990 (from 369,000 to 405,000) while County employment has grown from approximately 3,600 to 4,100 in the same period. With the exception of most management staff and certain exempt employees and professionals, nine separate bargaining units represent the majority of the employees.

Job Classification

The initial study focused on the salary and benefits provided to employees. Santa Barbara County uses data from six coastal counties to compare wage levels for job classifications and salary increases. Those counties are Santa Cruz, Monterey, San Luis Obispo, Ventura, Orange and San Diego. In addition, local labor markets and other public entities are evaluated for competitive salary and benefit packages. In spite of recently approved raises many employees believe they are underpaid when compared to the private sector. In some cases this may be true; however, the County workforce enjoys greater job security than the private sector and has not suffered the layoffs and downsizing the private sector has undergone in recent years. The Grand Jury found the County’s salaries to be about at the median range when compared to other counties.

Salary adjustments are awarded through negotiations, job reclassification and creation of new job classifications. Negotiated memorandums of understanding (MOUs) provide for annual cost-of-living adjustments (COLAs) which are generally extended to all county employees. Under the current system, if there is a desire to increase the pay scale for an individual within a class, the entire class must receive the same raise. If the goal is to raise the salary of a single individual, a new classification must be created. The Board of Supervisors must approve all salary increases. This system strives for salary parity and does not reward individual performance. This practice is often at odds with a manager’s ability to manage and motivate.

Currently, the Personnel Department is charged with developing, reviewing and maintaining job classifications. When new classifications are created, the Personnel Department recommends salaries for those classifications for the Board of Supervisors’ approval. The County currently has more than 750 distinct job classifications. The class designation defines the qualifications, the job to be done and the salary for each class. With the exception of contract employees, all departments must apply through the Personnel Department when they wish to fill vacant positions or change the job classification of an employee.

When hiring new staff they must select an employee from a list maintained by the Personnel Department by classification. Employees may not change class without qualifying for the new class either through examination and/or advances in credentials. If a department head wishes to "promote" a current employee or raise his or her salary, the Personnel Department must either reclassify the job or add a new job classification with new salary ranges and job description. In order to fill a budgeted, vacant position, a department head must go through the Personnel Department process. This can take time—six months or more—depending on the type of position requested and the availability of eligible candidates. In the meantime, the position remains vacant and the duties are assigned to others, frequently leading to the complaint that employees are asked to "work out of class." The addition of a new position, not approved in the annual budget, requires approval of the Board of Supervisors. Once the position is approved, the Personnel Department helps the department fill the position. However, as noted above, this can be a time-consuming process.

The Grand Jury found the County’s salaries and benefits were equitable but the method of arriving at those salaries and benefits needed restructuring. The current system of employee classification has been in place for many years. It arose out of civil-service requirements and negotiated MOUs designed to protect employees and the public against employment abuses, and most public entities use similar classification structures. The main criticisms of these traditional classification systems are:

In addition to the 750 job classifications noted above, there are more than 150 separate earning types that add pay incentives for certain employees. For instance, there are nine different educational allowances, four bilingual allowances, and twenty-four different codes for Fire Department pay. Sixty-four percent of these earnings types are not included in employee retirement calculations. These issues have been addressed by past Grand Juries, and attempts to streamline the system were made by the Auditor-Controller and previous County Administrator in 1994, but to no avail. The complexity of the job classification system, coupled with the many earning types, makes the system costly to implement and fraught with potential for errors, particularly when calculating retirement benefits.

While the economy is rebounding from earlier depressed levels, County revenues still fall short of meeting all needs in the County. To change government so that it is at once responsive and flexible, new strategies must be implemented to maximize all available resources. This may require significant cultural change at many levels. This does not happen overnight but must start somewhere. The Grand Jury suggests that streamlining the classification and salary structure in the County is one place that this change may begin. There are models available that use a variety of methods for structuring job classes. The State of California has a model based on the concept of broadbanding. Broadbanding includes skill sets and other competencies in its descriptions, widens the scope of job opportunities for the employees, provides more flexibility for the manager and has the potential to help change the culture of the government.

If the County’s goal is integrated government with flexible staffing to maximize the human resources available, it is desirable that some review of the current job classification structure be undertaken. A broader classification scheme selects employees based on a generalized skill set criteria. It recruits new employees based on a broad base of generalized skills that may require more formal training and education, and it trains the present workforce to achieve a broader set of individual skills, including computer usage, planning/project management and financial/budget training. This broadened structure empowers individuals by expanding their authority and responsibility both laterally and vertically. It will enable employees to be rotated within the departments and encourage cross training for other jobs. In the ideal job structure, supervision becomes a non-management position, not differentiated from line staff. The advantages of a broader classification structure are:

Creating a new classification structure is not an easy task. It takes a countywide commitment and a real desire to improve the workforce structure. During our study we were told that unions are one of the primary obstacles to effecting this change. Unions have negotiated intricate agreements over the years, which rely on the job-classification structure as an integral part of their negotiation strategy. However, there are broadbanding models available that take into account civil-service rules and union negotiating rights, however even at the State level, the model broadbanding program has received strong opposition from the unions.

Recently, the County Administrator and the Personnel Director presented a proposal to the Board of Supervisors which would have been a step toward reducing the number of job classifications for executives and establishing new pay ranges for those classifications. Unfortunately, the proposal was understood only as a proposed pay increase and reported as such in the community. Because of unfavorable community response, the proposal has been placed on hold with no date specified for rehearing.

It is not necessary to maintain archaic classification systems as long as any new system treats employees fairly with equitable results and supports effective work accomplishment and achievement of the County’s mission.

Collective Bargaining:
The Memorandum of
Understanding Process

The Meyers-Milias-Brown Act, adopted by the State in 1968, established the rights and duties of local public employers, their employees, and employee organizations. In brief, this act gives all county employees the right of representation in negotiations to establish pay scales, working conditions and numerous special considerations for unusual job requirements, such as uniform allowances, flexible hours, overtime pay, and many other circumstantial benefits. These negotiations result in a memorandum of understanding (MOU) which has a negotiated lifetime, usually two or more years.

Within the County of Santa Barbara, nine bargaining units represent employees, resulting in nine negotiations and nine MOUs. Usually, the major negotiated benefits and pay scales are extended to all non-represented County employees. As a result of several requests, the Grand Jury investigated the MOU process and found that, of approximately 4,100 employees, 3,400 are actually represented by bargaining units, and of these, only 1,800 are actually dues-paying members of their respective bargaining units. Employees do not have to be a dues-paying members to be represented by the union; however, non-members cannot vote on the MOU.

The Grand Jury reviewed each of the nine MOUs, most of which were recently signed, and found these MOUs were remarkably similar in content but not in form. For example, all negotiated union agreements contain a section which gives the unions the ability to request the County review the salary placement of a specified number of classifications each year for the purpose of increasing the salary of those classes, an increase that is in addition to other raises specified in the MOU. The unique areas of each MOU dealt with special job necessities such as uniform allowances and other special allowances.

During the interviews the Grand Jury also determined that, although several factions believed strongly in the MOU process, many supervisors and department managers believed that the process was adversarial and hurt employee morale. Rank and file employees agreed. It should be noted that the County uses legal assistance from an outside law firm in MOU negotiations, together with representatives of the County Personnel Department. The unions send their representatives to the bargaining table with the authority to negotiate an agreement that they can take back to their members for ratification or rejection. The Board of Supervisors send representatives to the bargaining table that do not always have the authority to negotiate an agreement that they can take back to the Board of Supervisors for ratification or rejection. This gives the Union representatives and employees the impression the County is not bargaining in good faith, which leads to acrimony and adversely affects negotiations. Sending County representatives to the negotiations without the authority to agree to terms may seem prudent for the County; however, the Grand Jury found it to be a frustrating and time-consuming process, not only for both negotiating teams but also for the employees awaiting the results of their bargaining team 's progress. According to interviewees there is no master contract for the County, nor is there any comprehensive plan for compensation and benefits from the County.

Collectively, negotiated compensation agreements have a fiscal impact on the County that extends beyond the year in which the agreements are negotiated. No model exists to forecast the collective impact negotiated agreements will have on the County in the future.

Payroll System

Another related issue currently facing the County involves the replacement of the existing payroll system. The Auditor Controller, the Director of Personnel and the County Administrator agree that a new system is necessary. However, there is no agreement over selection of a new system to replace the antiquated one. In fact, one aborted attempt to replace the payroll system has already been made, costing the County between $400,000 and $600,000. The current system has been modified over the years to reflect an increasingly complex payroll (largely a result of negotiated agreements), and opportunities for errors exist because of that complexity. The central issue appears to be whether to have a single, fully integrated payroll and human resources system or a modular system comprised of software developed in-house that has the capability to interface with other software applications. A steering committee has been formed to address the issue.


The three areas addressed above—job classification structure, collective bargaining (MOUs) and payroll simplification—are separate but related issues. Each one impacts the other with significant results and because they are dynamic by nature it is difficult to assess at any given time which one is the driving element. The overriding concerns of the Grand Jury, however, are that these processes be treated as integral parts of a whole and that the County strive to achieve some much needed simplification in these areas .

Because of the need to replace the payroll system, the opportunity exists at this time to arrive at a consensus for restructuring the job classification system as well as the entire delivery system for wages and benefits. To do this effectively, the County should develop a comprehensive plan to address all the issues presented. The plan should address the job classification structure, the development of a standard or "master" MOU and a payroll/human resources system to deliver wages and benefits as well as provide information to more efficiently allocate human resources countywide.

The County itself states in its Information System Plan, adopted in 1992, that "it has become apparent that the County could better accomplish its mission by harnessing its disparate information resources." Ultimately, a mobile workforce that is strategically positioned to provide service in areas of need will maximize the efficiency of County government and at the same time create a workforce that is well informed and productive.


Finding #1

There are numerous narrowly defined job classifications that create a rigid and cumbersome workforce structure.

Recommendation #1

The Board of Supervisors should authorize a workforce flexibility pilot project which would create a model for grouping jobs by skill-sets, taking into account rules and regulations related to civil service and negotiated MOUs.

Finding #2

An opportunity exists to make innovative changes in the job classification structure because of the need to implement a new payroll system. A consensus plan for restructuring the job-classification structure does not exist.

Recommendation #2

(a) The Personnel Department, the Auditor-Controller and the County Administrator should appoint a project team that is technically and operationally qualified to investigate, develop and implement an automated system for human resources, payroll and related areas which is either fully integrated or utilizes modules which interface easily with all other modules.

(b) The Board of Supervisors should direct the County Administrator and the Payroll Steering Committee to have a consensus plan for job classification restructuring prior to making any decisions on payroll/human resources software for the County.

Finding #3

There is no requirement or schedule to regularly review all job classifications to determine if they are current and meet the needs of the departments.

Recommendation #3

The Personnel Department should establish a regular review process for all job classifications to determine if the job description meets current employment requirements, or if the classification can be eliminated or combined with another similar classification. Input from affected departments should be required.

Finding #4

Issues related to compensation and benefits, job classification structure and collective bargaining are addressed by the County only periodically, usually just prior initiating the collective bargaining process.

Recommendation #4

The Board of Supervisors should develop a comprehensive plan for addressing issues that include, but may not be limited to, job classification structure, compensation and benefits and a master MOU.

Finding #5

The collective bargaining process is seen as unnecessarily adversarial and time consuming, resulting in a lowering of morale and excessive cost to the County of Santa Barbara in part because the County sends negotiators to the bargaining table without authority to negotiate a contract.

Recommendation #5

(a) The Board of Supervisor should consider taking proactive steps prior to MOU negotiations to formulate a single "master" MOU.

(b) The Board of Supervisors should authorize its negotiating team to negotiate a contract that can be brought back to the Board of Supervisors for ratification or rejection.


Board of Supervisors

Finding 1, 2, 4, 5

Recommendation 1, 2(b), 4, 5(a), 5(b)

County Administrator

Finding 2

Recommendation 2(a), 2(b)


Finding 2, 5

Recommendation 2(a), 2(b)

Personnel Department

Finding 2, 3,

Recommendation 2(a), 2(b), 3