The President's Pay Agent

Locality Pay Areas

Under 5 U.S.C. 5304(e)(2)(A), the Federal Salary Council made a recommendation to the Pay Agent on the composition of locality pay areas for 2007. This recommendation was transmitted to the Pay Agent in a memorandum dated October 21, 2005. (See Appendix I.)

New Locality Pay Areas

The Council reviewed pay gaps for Austin, Buffalo, Louisville, Memphis, Phoenix, and Raleigh again this year. These data are from small-scale surveys BLS conducts as part of its data collection for the RUS locality pay area. While we asked BLS to expand the sample in these areas, they have not yet been able to do so. Because these are small-scale RUS surveys, the sample size is generally smaller than would be the case if BLS had conducted full-scale locality pay surveys in each of these areas. Pay Agent staff asked BLS to include these areas in a separate model with the existing locality pay areas and produce model-filled data files for review.

The pay gaps for these areas using the small-scale NCS surveys with model fills for missing jobs are shown in the table below.

Table 1.

Pay Gaps in Six New Area

The Council concluded that we should continue with our plans to make Buffalo, Phoenix, and Raleigh locality pay areas in 2006, but that Austin, Memphis, and Louisville should remain in the RUS locality pay area. We agree with the Council's recommendation and plan to complete implementation of the new locality pay areas for Buffalo, Phoenix, and Raleigh.

Please note that the RUS data used in this report include data from the six areas identified above, as specified by the Pay Agent in our 2003 and 2004 reports. These surveys are included in the RUS data because data from these areas represent other areas in BLS' RUS sampling scheme. We have adjusted the RUS pay gap in a cost neutral fashion to net out the new Buffalo, Phoenix, and Raleigh locality pay areas. The RUS data BLS provided this year already included Kansas City, St. Louis, and Orlando, so there is no need to combine the pay gap data for these locations with RUS data. Finally, the Raleigh survey was canceled last year as part of a budget reduction, so we used the same data this year, appropriately aged. We encourage BLS to expedite renewal of its salary survey in the Raleigh area.

Defining Locality Pay Areas

OPM published a proposed rule in the Federal Register on June 20, 2005, on behalf of the Pay Agent to implement changes in locality pay areas recommended by the Federal Salary Council in 2004 (70 FR 35383). These changes included merging the Kansas City, St. Louis, and Orlando locality pay areas with the RUS locality pay area and creating new locality pay areas for the Buffalo-Niagara-Cattaraugus, NY Combined Statistical Area (CSA), the Phoenix-Mesa-Scottsdale, AZ Metropolitan Statistical Area (MSA), and the Raleigh-Durham-Cary, NC CSA. The changes will become effective in January 2006.

We also evaluated areas adjacent to the three new locality pay areas for possible inclusion in the locality pay area under criteria recommended by the Council. The criteria previously recommended by the Council are as follows:

1.  For adjacent MSAs and CSAs: To be included in an adjacent locality pay area, an adjacent MSA or CSA currently in the RUS locality pay area must have at least 1,500 GS employees and an employment interchange measure of at least 7.5 percent.


2.  For adjacent counties that are not part of a multi-county MSA or CSA: To be included in an adjacent locality pay area, an adjacent county that is currently in the RUS locality pay area must have at least 400 GS employees and an employment interchange measure of at least 7.5 percent.


3.  For Federal facilities that cross locality pay area boundaries: To be included in an adjacent locality pay area, that portion of a Federal facility outside of a higher-paying locality pay area must have at least 750 GS employees, the duty stations of the majority of those employees must be within 10 miles of the separate locality pay area, and a significant number of those employees must commute to work from the higher-paying locality pay area.



The Employment Interchange Measure is defined by the Bureau of the Census as the sum of the percentage of employed residents of the smaller entity who work in the larger entity and the percentage of the employment in the smaller entity that is accounted for by workers who reside in the larger entity.

Based on these criteria, there are no additions to the Buffalo and Phoenix locality pay areas, but the Raleigh locality pay area will include the Fayetteville, NC MSA and the Goldsboro, NC MSA.

The Federal Salary Council also recommended, and we approve, a change in the criteria for evaluating Federal facilities that cross locality pay area boundaries in order to ensure that all of the Federal Correctional Complex, Butner, NC, is included in the Raleigh locality pay area. The Council's recommended change is shown in italics below:

3.  For Federal facilities that cross locality pay area boundaries: To be included in an adjacent locality pay area, the whole facility must have at least 500 GS employees, with the majority of those employees in the higher-paying locality pay area, or that portion of a Federal facility outside of a higher-paying locality pay area must have at least 750 GS employees, the duty stations of the majority of those employees must be within 10 miles of the separate locality pay area, and a significant number of those employees must commute to work from the higher-paying locality pay area.

Under the new criterion for facilities that cross boundaries, all of the Federal Correctional Complex, Butner, NC, will be included in the Raleigh locality pay area in 2006.

Locality Pay Areas for 2007

The Pay Agent intends to provide for the same locality pay areas in 2007 as planned for 2006:

1. Atlanta-Sandy Springs-Gainesville, GA-AL Combined Statistical Area;

2. Boston-Worcester-Manchester, MA-NH Combined Statistical Area, plus the Providence-New Bedford-Fall River, RI-MA Metropolitan Statistical Area, Barnstable County, MA, and Berwick, Eliot, Kittery, South Berwick, and York towns in York County, ME;

3. Buffalo-Niagara-Cattaraugus, NY Combined Statistical Area;

4. Chicago-Naperville-Michigan City, IL-IN-WI Combined Statistical Area;

5. Cincinnati-Middletown-Wilmington, OH-KY-IN Combined Statistical Area;

6. Cleveland-Akron-Elyria, OH Combined Statistical Area;

7. Columbus-Marion-Chillicothe, OH Combined Statistical Area;

8. Dallas-Fort Worth, TX Combined Statistical Area;

9. Dayton-Springfield-Greenville, OH Combined Statistical Area;

10. Denver-Aurora-Boulder, CO Combined Statistical Area, plus the Ft. Collins-Loveland, CO Metropolitan Statistical Area and Weld County, CO;

11. Detroit-Warren-Flint, MI Combined Statistical Area, plus Lenawee County, MI;

12. Hartford-West Hartford-Willimantic, CT Combined Statistical Area, plus the Springfield, MA Metropolitan Statistical Area and New London County, CT;

13. Houston-Baytown-Huntsville, TX Combined Statistical Area;

14. Huntsville-Decatur, AL Combined Statistical Area;

15. Indianapolis-Anderson-Columbus, IN Combined Statistical Area, plus Grant County, IN;

16. Los Angeles-Long Beach-Riverside, CA Combined Statistical Area, plus the Santa Barbara-Santa Maria, CA Metropolitan Statistical Area, and Edwards Air Force Base, CA;

17. Miami-Fort Lauderdale-Miami Beach, FL Metropolitan Statistical Area, plus Monroe County, FL;

18. Milwaukee-Racine-Waukesha, WI Combined Statistical Area;

19. Minneapolis-St. Paul-St. Cloud, MN-WI Combined Statistical Area;

20. New York-Newark-Bridgeport, NY-NJ-CT-PA Combined Statistical Area, plus Monroe County, PA, and Warren County, NJ;

21. Philadelphia-Camden-Vineland, PA-NJ-DE-MD Combined Statistical Area, plus Kent County, DE, Atlantic County, NJ, and Cape May County, NJ;

22. Phoenix-Mesa-Scottsdale, AZ Metropolitan Statistical Area;

23. Pittsburgh-New Castle, PA Combined Statistical Area;

24. Portland-Vancouver-Beaverton, OR-WA Metropolitan Statistical Area, plus Marion County, OR, and Polk County, OR;

25. Raleigh-Durham-Cary, NC Combined Statistical Area, plus the Fayetteville, NC Metropolitan Statistical Area, the Goldsboro, NC Metropolitan Statistical Area, and the Federal Correctional Complex, Butner, NC;

26. Richmond, VA Metropolitan Statistical Area;

27. Sacramento--Arden-Arcade--Truckee, CA-NV Combined Statistical Area, plus Carson City, NV;

28. San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area;

29. San Jose-San Francisco-Oakland, CA Combined Statistical Area, plus the Salinas, CA Metropolitan Statistical Area and San Joaquin County, CA;

30. Seattle-Tacoma-Olympia, WA Combined Statistical Area;

31. Washington-Baltimore-Northern Virginia, DC-MD-VA-WV Combined Statistical Area, plus the Hagerstown-Martinsburg, MD-WV Metropolitan Statistical Area, the York-Hanover-Gettysburg, PA Combined Statistical Area, and King George County, VA; and

32. Rest of U.S.-consisting of those portions of the continental United States not located within another locality pay area.

 

Component counties of MSAs and CSAs are identified in lists 2 through 5 of OMB Bulletin 05-02, which is available on the Internet at http://www.whitehouse.gov/omb/bulletins/fy05/b05-02.html