HomeMy WebLinkAbout5D Organizational Hierarchy and Pay Structure Report
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: AUGUST 7, 2017
AGENDA #: 5D
PREPARED BY: LORI OLSON, ASSISTANT CITY MANAGER
PRESENTED BY: LORI OLSON, ASSISTANT CITY MANAGER
AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION IMPLEMENTING
PROPOSED ORGANIZATIONAL HIERARCHY AND PAY STRUCTURE
FOR NON-UNION EMPLOYEES
DISCUSSION: Introduction
The city recently conducted an analysis of the city’s compensation
program. The analysis was led by an external consultant, the Keystone
Compensation Group, with significant experience in evaluating municipal
classification and compensation structures. Staff recommended using a
consultant using a well-established methodology for the assessment to
ensure a neutral, unbiased review of the city’s compensation program. In
February 2017, the City Council approved staff’s recommendation to enter
into a contract with the consultant. The purpose of this agenda item is to
seek approval to implement an organizational hierarchy and pay structure
for non-union employees.
History
The goal of the compensation study was to evaluate the city’s existing job
classification system (organizational hierarchy) and master salary plan
(grades and steps) to ensure that our pay structure is consistent with the
market and compliant with pay equity requirements. The last such study
was conducted in 2007, and city positions had not been evaluated since
that time.
With the help of employees and supervisors, all job descriptions were
thoroughly reviewed and evaluated using the following criteria:
• Responsibility and Accountability – 35%
• Competence, Knowledge and Skills – 20%
• Contacts and Interpersonal Communication – 20%
• Complexity and Mental Effort – 15%
• Working Conditions and Environment – 10%
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
4646 Dakota Street SE
Prior Lake, MN 55372
Jobs were assigned points based on the factors above; and total job points
are reflected in the proposed new grade levels. Positions were then
benchmarked against similarly sized cities in the metro area for
compensation comparisons. The most significant change due to this study
was establishing grades for all city jobs relative to each other and
establishing pay ranges that are in line with the market while maintaining
internal equity.
Current Circumstances
In August, we presented the findings from this analysis to the City Council
at a work session. The study found that although Prior Lake is within range
of comparable cities, the maximum of the city’s pay scale is below market
largely because the city has not kept pace with equivalent salary increases
in comparable cities.
During the work session, staff recommended implementation of the new
pay structure for non-union employees effective fourth quarter 2017. Staff
also recommended that, for employees whose positions require an
adjustment, that the employee move to the next closest step to his/her
current hourly wage within the new grade without taking a salary reduction.
Councilors were generally supportive of the staff recommendation.
Staff did not recommend changes to union position grades and pay
structure because those items are mandatory subjects of labor
negotiations. The city’s current labor agreements expire on December 31,
2017. Negotiations of the new labor agreements are expected to begin
early this fall. The City Council will meet in a closed session to discuss the
specifics of these negotiations, including compensation.
The City Council Bylaws and Compensation working group also met to
review and discuss the study’s findings and staff recommendations. Given
that 21 percent of the city’s workforce retired or resigned over the last two
years, the working group stressed the importance of retaining and
recruiting city employees. The working group observed that the tight job
market and low unemployment rate has resulted in fewer qualified
applicants applying for open city positions, which was another reason to
implement the hierarchy and pay structure.
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
4646 Dakota Street SE
Prior Lake, MN 55372
Therefore, staff seeks approval to move forward with the implementation of
the organizational hierarchy and pay structure for non-union employees
(attached) effective October 1, 2017. Approval of this item would impact 22
employees with annual pay increases ranging from $0 to $1,800 annually.
FINANCIAL
IMPACT:
The cost of implementing the pay scale for non-union employees in
2017is approximately $24,000. Funding would come from the 2017
payroll/benefit budget, which has unspent funds due to numerous
position vacancies in 2017.
ALTERNATIVES:
1. Motion and second as part of the consent agenda to approve the
attached resolution implementing the proposed non-union
organizational hierarchy and pay structure.
2. Motion and second to remove this item from the consent agenda for
additional discussion.
RECOMMENDED
MOTION:
Alternative #1
4646 Dakota Street SE
Prior Lake, MN 55372
RESOLUTION 17-___
A RESOLUTION APPROVING A 2017 CITY OF PRIOR LAKE ORGANIZATIONAL
HIERARCHY AND PAY STRUCTURE FOR NON-UNION EMPLOYEES
Motion By: Second By:
WHEREAS, The City of Prior Lake is a Statutory Plan B City operating under Minnesota
Statutes Chapter 412; and,
WHEREAS,
Under the “Council-Manager” form of government the direct responsibility for
personnel in all respects rests with the city manager; and,
WHEREAS, The Prior Lake City Council approves basic policies, including personnel policies,
as recommended by the city manager and exercises general oversight over
administrative activities; and,
WHEREAS, The City of Prior Lake has established jobs, job descriptions, departments, a
hierarchy for accountability purposes, personnel policies and compensation
system; and,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
The City Council desires to recruit and retain well trained, qualified and motivated
employees to accomplish the work of the city efficiently, effectively and with
customer service in mind; and,
The City of Prior Lake’s organizational structure and pay structure for non-union
employees had not been examined for a decade and may no longer be in
compliance with pay equity laws or in line with comparable communities in terms of
actual wages and earnings potential; and,
The City Council authorized the completion of a comprehensive compensation
study to review and update job descriptions, survey wages in 25 comparable cities,
and evaluate the city’s existing job classification system and master salary plan
(grades and steps) to ensure that our pay structure is consistent with the market
and compliant with pay equity requirements; and,
State Statutes and the Public Employee Labor Relations Act (PELRA) mandate
that wages and benefits for the union employees be established through good faith
collective bargaining, and so those positions will not be incorporated in the
organizational or pay structures until collective bargaining is successfully concluded
for each union group.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
C:\Users\aschroeder\Desktop\17-XXX Pay Structure.docx 2
2. The 2017 Prior Lake Organizational structure and point values for non-union positions are
hereby approved.
3. The 2017 Prior Lake Pay Structure for non-union employees is hereby approved.
4. The 2017 organizational structure for non-union employees is effective immediately.
5. The implementation of the pay structure for non-union employees is to be effective on
October 1, 2017.
6. The anticipated costs for implementation of the pay structure are provided in the 2017
budget.
7. The city manager is responsible for the ongoing administration hereof.
Passed and adopted by the Prior Lake City Council this 7th day of August 2017
VOTE Briggs McGuire Thompson Braid Burkart
Aye ☐ ☐ ☐ ☐ ☐
Nay ☐ ☐ ☐ ☐ ☐
Abstain ☐ ☐ ☐ ☐ ☐
Absent ☐ ☐ ☐ ☐ ☐
______________________________
Frank Boyles, City Manager