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8.e Consultant memo re wage studyMay 9, 2019 Mr. Neil Soltis, City Administrator City of Scandia 14727 - 209th Street Scandia, Minnesota 55073 Dear Mr. Soltis: � b a ke r t i t ty nowjoined with Springsted and Umbaugh Baker Tilly Virchow Krause, LLP 380 Jackson St., Ste 300 St. Paul, MN 55101 United States of America T: +1 (651) 223 3000 F: +1 (651) 223 3046 bakertilly.com Baker Tilly has completed a classification and compensation study for all City of Scandia position classifications, as well as an analysis of market salary data. Through these efforts, the City has taken an important step toward ensuring that pay is competitive with other cities in the region, and that the rates of pay for City employees are equitable. The system developed by Baker Tilly will offer the following added value to the organization: o Apply to all City positions professionally, consistently and objectively o Incorporate employee input and participation as an integral part of the process o Provide strategic implementation in accordance with best practices o Comply with the State of Minnesota Local Government Pay Equity Act During the study, Baker Tilly reviewed position descriptions and analyzed information gathered in Position Analysis Questionnaires (PAQs) completed by employees in all job classes at the City of Scandia. Next, Baker Tilly analyzed League of Minnesota Cities wage data for public organizations with positions like those of Scandia, so that we could obtain compensation information for matching positions in the immediate market. Attachment 1 provides the field of survey benchmarks, color - coded per data availability. Attachment 2 provides a snapshot of the survey results. On average, we found Scandia pay levels to be 13.05% below market minimum pay; 15.30% below market midpoint pay and 17.89% below market maximum pay. Baker Tilly reviewed the PAQs and existing job descriptions to analyze current job evaluation points for each position using the SAFE' System. The SAFE System provides an objective and systematic process for defining internal relationships among organizational positions. More details about the SAFE System are included in Attachment 3. To set up the pay plan, Baker Tilly linked the SAFE job evaluation scoring to the survey results, using a valid and reliable method of analysis. Attachment 4 shows a linear regression line that compares the survey compensation midpoint of each position to the SAFE job evaluation we performed for the position. The positions surveyed are reflected as dots on the line. An R squared factor of 1.0 would be considered a perfect correlation between the job evaluation and the survey midpoint. Note that this R squared factor of .997 demonstrates a high degree of accuracy linking the internal job evaluation to the market for each position. 1 of the 6 positions surveyed did not return valid market data, so is not represented here. It falls onto the pay plan based upon the internal job evaluation only. The proposed 2019 pay scale is included as Attachment 5. Amounts shown assume 1.0 full time equivalent status, working 2080 hours per year. The proposed pay plan is a 9 -step structure, which reflects what most market benchmarks use, along with similar variables for percentages between grades and steps. Attachment 6 denotes the title and grade for each position at the City, with dollar amounts reflecting 1.0 full time equivalency. This attachment highlights Scandia's position with the market against the 2019 Proposed Pay Scale. The new average midpoint is within 0.77% of the market average midpoint. Attachment 7 breaks down implementation to three options: Implementation Option 1 The first option for implementation of the study results involves moving employees whose current wage falls below the minimum of the proposed range for their position to the minimum of the range. Two (2) employees are currently compensated at a level that is below the proposed grade for their position. The annual cost to bring these employees to the minimum of the proposed grade is $18,857, or 4.86% of the City's total annual payroll. Implementation Option 2 The second option assumes implementation of Option 1 as a starting point, and in addition, moves employees whose current wage falls within the proposed grade for their position onto the scale based on the relationship of their current wage to the proposed range for their position. Of the City's 8 employees, six have a current wage which falls within the proposed range for their position. To move these employees onto the proposed wage scale, they are placed on the step closest to their current wage, without a decrease. The annual cost to move all employees onto the proposed compensation plan under Option 2 is $22,650, or 5.84% of the City's total annual payroll. Implementation Option 3 The third option accomplishes all aspects of Options 1 and 2, and awards employees step placement based on their years of service with the organization. The annual cost to move all employees onto the proposed compensation plan under Option 3 is $68,082, or 17.56% of the City's total annual payroll. It has been a pleasure working with you. Thank you for the opportunity to conduct this compensation and classification_tudy for the City of Scandia. ER TIVLY VIRCHOW KRAUSE, LLP Julie Urell, Director Enclosures Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP Attachment 1 di J LMC Survey Benchmarks Entities in bold print had LMC data available that was used as position matches; entities in green print did not have data matches. City (Minnesota) Population Aft Andover 35,937 Bayport 3,714 Centerville 3,916 Chisago City 5,109 Columbus 3,914 Corcoran 5,513 East Bethel 11,928 Elko New Market 4,700 Falcon Heights 5,418 Ham Lake 16,528 Hanover 3 ''^^ Independence 3,139 Lauderdale 2,456 Lexington 2,017 Lindstrom 4,532 Newport 3,582 Nowthen 4,443 Oak Grove 8,735 Osseo 2,752 Rockford 4,380 Rush City St. Francis 7,663 Watertown 4,226 0 bakerti lly nowpined with Springsted and Umbaugh City of Scandia, Minnesota Salary Survey Summary Attachment 2 J4 Sheet Position Surveyed Number of Respondents Average FTES Average Midpoint Lowest Minimum Salary Highest Average Midpoint Salary Lowest I Highest Lowest Maximum Salary Highest Average Min Diff % Scandia, MN Information Mid Diff % Max Diff % 1 City Administrator/Clerk 10 1.00 103,388.38 80,000.00 102,670.59 90,410.43 94,500.00 115,507.08 106,647.57 136,004.92 116,897.30 73,320.00 (17,090.43) -23.31% 82,485.00 (20,903.38) -25.34% 91,650.00 (25,247.30) -27.55% 2 Deputy Clerk 8 1.00 50,290.75 38,463.71 44,657.00 41,676.60 48,102.16 49,030.49 53,437.36 66,865.45 60,629.33 45,052.80 3,376.20 7.49% 50,315.20 24.45 0.05% 55,577.60 (5,051.73) -9.09% 3 Director of Public Works 9 1.00 89,315.41 77,040.33 85,683.31 79,930.45 84,804.35 95,083.93 92,513.84 104,484.56 98,702.68 58,437.00 (21,493.45) -36.78% 65,741.50 (23,573.91) -35.86% 73,046.00 (25,656.68) -35.12% 4 Maintenance Worker 12 1.00 53,858.87 40,455.96 51,452.67 46,901.31 50,961.83 56,926.58 56,339.71 65,153.46 60,907.66 45,052.80 (1,848.51) -4.10% 50,315.20 (3,543.67) -7.04% 55,577.60 (5,330.06) -9.59% 5 OffceAssistant - PT 5 1.00 39,214.95 30,601.00 38,463.71 34,936.07 34,991.50 43,250.00 39,382.00 48,036.29 43,493.83 32,177.60 (2,758.47) -8.57% 36,202.40 (3,012.55) -8.32% 40,227.20 (3,266.63) -8.12% 6 1 DNU-Treasurer- PT 4 1 1 1 1 1 1 1 38,251.20 1 43,035.20 1 47,819.20 Averages 8.00 1.00 (7,962.93) -13.05% (10,201.81) 15.30% (12,910.48) -17.89% DNU - did not use survey information % bakerti lly nowjoined with Springsted and Umbaugh Attachment 3 Components of the SAFE® Job Evaluation System The Systematic Analysis and Factor Evaluation (SAFE®) System ensures a consistent and equitable method of evaluating jobs. The basis for the system is an arrangement of job groupings predicated on Characteristics of Work. A series of job factors are then applied to the work characteristics in order to determine a numerical value for each position. The system ensures that each element of job responsibility and each work characteristic is given proper consideration. The total of the points assigned represents the rank of the position in relation to all other positions within the organization. Characteristics of Work Characteristics of work can be defined as the general character of the scope of the work performed by a position or class of positions that distinguishes it from other positions. There are 16 work characteristics that are grouped by skill level that, when used in conjunction with job factors, determine the value of a position as it relates to other positions within the organization. There are 6 skill levels. Following are the sixteen work characteristics (grouped by characteristic not skill level): Manual Semiskilled Skilled Trades Technical Skilled Technical Advanced Technical Job Factors Human Support Skilled Human Support Advanced Human Support Protective Services Advanced Protective Services Administrative Support Skilled Administrative Support Administrative Professional Executive There are 9 job factors which detail components of work that are present in most job classes. These factors are: Training and Ability: includes education and specialized training, licenses, certifications, and registrations which are Supervision: the responsibility for oversight or supervision over other employees The following factors are not considered in evaluating positions: Job performance Length of service Education or Degree unless it is a requirement of the job Current job evaluation rating Current rate of pay Market rates 0 bakertilly required of the position. Experience: the time usually required for a person with the required training and ability to develop the necessary skills and abilities to perform the job. Level of Work: is the position entry level of the type of work performed, intermediate level, advanced/supervisory level, or a mastery/managerial level. Human Relations: the responsibility of working with or through other people, and the extent, frequency, and purpose of the contacts. Physical Demands: the job requirements which induce physical fatigue through exertion or strain. Working Conditions and the extent of disagreeable or hazardous environmental or physical conditions or mental effort Hazards: and/or stress and the frequency and duration of the undesirable conditions. Independence of how much freedom or independence is allowed or required of the position. Actions: Impact of End the extent to which the job directly influences and affects actions impacting the end results, i.e. Results: how much do the decisions or actions of the employee impact the organization and what are the consequences. Supervision: the responsibility for oversight or supervision over other employees The following factors are not considered in evaluating positions: Job performance Length of service Education or Degree unless it is a requirement of the job Current job evaluation rating Current rate of pay Market rates 0 bakertilly City of Scandia, Minnesota 2019 Proposed Pay Schedule % Between Grades: 7% % Between Steps: 3.5% Range: 31.68% Starting midpoint: 32,900 Hourly - Step Step Grade 1 2 3 Pts Grade 1 2 3 4 1 6 7 8 9 0 - 87 1 28,670.45 29,673.92 30,712.50 31,787.44 32,900.00 34,051.50 35,243.30 36,476.82 37,753.51 88 - 106 2 30,534.03 31,602.72 32,708.81 33,853.62 35,038.50 36,264.85 37,534.12 38,847.81 40,207.48 107 - 126 3 32,518.74 33,656.90 34,834.89 36,054.11 37,316.00 38,622.06 39,973.83 41,372.92 42,820.97 127 - 147 4 34,632.46 35,844.59 37,099.16 38,397.63 39,741.54 41,132.50 42,572.13 44,062.16 45,604.33 148 - 169 5 36,883.57 38,174.49 39,510.60 40,893.47 42,324.74 43,806.11 45,339.32 46,926.20 48,568.62 170 - 193 6 39,281.00 40,655.84 42,078.79 43,551.55 45,075.85 46,653.51 48,286.38 49,976.40 51,725.58 194 - 219 7 41,834.27 43,298.46 44,813.91 46,382.40 48,005.78 49,685.98 51,424.99 53,224.87 55,087.74 220 - 246 8 44,553.49 46,112.86 47,726.81 49,397.25 51,126.16 52,915.57 54,767.62 56,684.48 58,668.44 247 - 275 9 47,449.47 49,110.20 50,829.06 52,608.07 54,449.36 56,355.09 58,327.51 60,368.98 62,481.89 276 - 306 10 50,533.68 52,302.36 54,132.95 56,027.60 57,988.57 60,018.17 62,118.80 64,292.96 66,543.21 307 - 339 11 53,818.37 55,702.02 57,651.59 59,669.39 61,757.82 63,919.35 66,156.52 68,472.00 70,868.52 340 - 374 12 57,316.57 59,322.65 61,398.94 63,547.90 65,772.08 68,074.10 70,456.70 72,922.68 75,474.98 375 - 411 13 61,042.15 63,178.62 65,389.87 67,678.52 70,047.27 72,498.92 75,036.38 77,662.66 80,380.85 412 - 450 14 65,009.89 67,285.23 69,640.21 72,077.62 74,600.34 77,211.35 79,913.75 82,710.73 85,605.60 451 - 493 15 69,235.53 71,658.77 74,166.83 76,762.67 79,449.36 82,230.09 85,108.14 88,086.93 91,169.97 494 - 538 16 73,735.84 76,316.59 78,987.67 81,752.24 84,613.57 87,575.04 90,640.17 93,812.58 97,096.02 539 - 586 17 78,528.67 81,277.17 84,121.87 87,066.14 90,113.45 93,267.42 96,531.78 99,910.39 103,407.26 587 - 637 18 83,633.03 86,560.19 89,589.79 92,725.44 95,970.83 99,329.80 102,806.35 106,404.57 110,128.73 638 1691 1 19 1 89,069.181 92,186.60 95,413.13 98,752.59 102,208.93 105,786.24 109,488.76 113,320.87 117,287.10 692 1749 1 20 1 94,858.671 98,178.73 101,614.98 105,171.51 108,852.51 112,662.35 116,605.53 120,686.72 124,910.76 750 - 1811 1 21 1 101,024.491 104,560.34 108,219.96 112,007.65 115,927.92 119,985.40 124,184.89 128,531.36 133,029.96 % Between Grades: 7% % Between Steps: 3.5% Range: 31.68% Starting midpoint: 32,900 % bakerti lly nawpined with Springsted and Umbaugh Hourly - Step Grade 1 2 3 4 5 1 6 7 8 9 1 13.78 14.27 14.77 15.28 15.82 16.37 16.94 17.54 18.15 2 14.68 15.19 15.73 16.28 16.85 17.44 18.05 18.68 19.33 3 15.63 16.18 16.75 17.33 17.94 18.57 19.22 19.89 20.59 4 16.65 17.23 17.84 18.46 19.11 19.78 20.47 21.18 21.93 5 17.73 18.35 19.00 19.66 20.35 21.06 21.80 22.56 23.35 6 18.89 19.55 20.23 20.94 21.67 22.43 23.21 24.03 24.87 7 20.11 20.82 21.55 22.30 23.08 23.89 24.72 25.59 26.48 8 21.42 22.17 22.95 23.75 24.58 25.44 26.33 27.25 28.21 9 22.81 23.61 24.44 25.29 26.18 27.09 28.04 29.02 30.04 10 24.30 25.15 26.03 26.94 27.88 28.85 29.86 30.91 31.99 11 25.87 26.78 27.72 28.69 29.69 30.73 31.81 32.92 34.07 12 27.56 28.52 29.52 30.55 31.62 32.73 33.87 35.06 36.29 13 29.35 30.37 31.44 32.54 33.68 34.86 36.08 37.34 38.64 14 31.25 32.35 33.48 34.65 35.87 37.12 38.42 39.76 41.16 15 33.29 34.45 35.66 36.91 38.20 39.53 40.92 42.35 43.83 16 35.45 36.69 37.97 39.30 40.68 42.10 43.58 45.10 46.68 17 37.75 39.08 40.44 41.86 43.32 44.84 46.41 48.03 49.72 18 40.21 41.62 43.07 44.58 46.14 47.75 49.43 51.16 52.95 19 42.82 44.32 45.87 47.48 49.14 50.86 52.64 54.48 56.39 20 45.61 47.20 48.85 50.56 52.33 54.16 56.06 58.02 60.05 21 48.57 50.27 52.03 53.85 55.73 57.69 59.70 61.79 63.96 % bakerti lly nawpined with Springsted and Umbaugh City of Scandia'Minnesota Attachment 6 Title and Grade J Averaees 0.78% 0.770 % bakerti lly nowpined with Springsted and Umbaugh Salary Survey vs Proposed Proposed - 2019 Department Division Title Min Points Department Division Title Grade 1 2 3 4 5 6 7 8 9 127.5 Administration N/A Office Assistant - PT 4 34,632.46 35,844.59 37,099.16 38,397.63 39,741.54 41,132.50 42,572.13 44,062.16 45,604.33 170 Administration N/A Treasurer - PT 6 39,281.00 40,655.84 42,078.79 43,551.55 45,075.85 46,653.51 48,286.38 49,976.40 51,725.58 242.5 Administration N/A Deputy Clerk 8 44,553.49 46,112.86 47,726.81 49,397.25 51,126.16 52,915.57 54,767.62 56,684.48 58,668.44 250 Administration N/A Maintenance Worker 9 47,449.47 49,110.20 50,829.06 52,608.07 54,449.36 56,355.09 58,327.51 60,368.98 62,481.89 540 Administration N/A Director of Public Works 17 78,528.67 81,277.17 84,121.87 87,066.14 90,113.45 93,267.42 96,531.78 99,910.39 103,407.26 683 Administration N/A City Administrator/Clerk 19 89,069.18 92,186.60 95,413.13 98,752.59 102,208.93 105,786.24 109,488.76 113,320.87 117,287.10 Averaees 0.78% 0.770 % bakerti lly nowpined with Springsted and Umbaugh Salary Survey vs Proposed Department Division Title Min % Diff Mid % Diff Max % Diff Administration N/A Office Assistant - PT 34,936.07 -0.88% 39,214.95 1.34% 43,493.83 4.85% Administration N/A Treasurer - PT Administration N/A Deputy Clerk 41,676.60 6.90% 50,290.75 1.66% 60,629.33 -3.34% Administration N/A Maintenance Worker 46,901.31 1.17% 53,858.87 1.10% 60,907.66 2.58% Administration N/A Director of Public Works 79,930.45 -1.79% 89,315.41 0.89% 98,702.68 4.77% Administration N/A City Administrator/Clerk 90,410.43 -1.51% 103,388.38 -1.15% 116,897.30 0.33% Averaees 0.78% 0.770 % bakerti lly nowpined with Springsted and Umbaugh Attachment 7 ■ Implementation Option 1 - Move to Min Option 2 - Next Step of StaffCurrent Current Salary Salary Proposed Salary Di erence ° Increase Totals 8 $ 387,646.48 $ 406,503.52 $ 18,857.04 4.86% Employee Below Min 2 $ 148,740.80 $ 167,597.84 $ 18,857.04 12.68% Employee Within Range 6 $ 238,905.68 $ 238,905.68 $ - Employee Above Max 0 $ - $ - $ -1 Option 2 - Next Step Option 3 - Yrs of Svc # of Staff Current Salary Proposed Salary Difference % Increase Totals 8 $ 387,646.48 $ 410,296.12 $ 22,649.64 5.84% Employee Below Min 2 $ 148,740.80 $ 167,597.84 $ 18,857.04 12.68% Employee Within Range 6 $ 238,905.68 $ 242,698.28 $ 3,792.60 1.59% Employee Above Max 0 $ - $ - I $ - Option 3 - Yrs of Svc % bakerti lly nowpined with Springsted and Urnbaugh of StaffCurrent Salary Proposed Salary Difference o Increase Totals 8 $ 387,646.48 $ 455,728.33 $ 68,081.85 17.56% Employee Below Min 2 $ 148,740.80 $ 182,874.46 $ 34,133.66 22.95% Employee Within Range 6 $ 238,905.68 $ 272,853.87 $ 33,948.19 14.21% Employee Above Max 01$ - $ - $ - % bakerti lly nowpined with Springsted and Urnbaugh Salary Curve Scandia, Minnesota y = 118.48x + 23542 Compensation Survey R2 =0.997 120,000 100,000 80,000 0 a 60,000 v L 40,000 20,000 0 0 100 200 300 400 500 600 700 800 SAFE Total Points (x) bakerti lly nowpined with Springsted and Umbaugh