5.a) Staff Report-Employee Pay Plan �r~ t�'�� /���� ��-�
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SCANDIA �
Staff Report
Date of Meeting: June 11, 2013
To: City Council
From: Kristina Handt, Administrator
Re: Pay Plan
Agenda Item #: S.a)
Background:
At the March work session, the Council directed staff to begin preparing a grade and step pay plan.
The plan was to include many steps with smaller increases.
At the April work session the Council agreed that Columbus, Bayport, Rush City, Lindstrom,
Newport and Chisago City would be used as comparable cities for the purposes of establishing the
maximum market value for each job classification. Staff contacted those cities and used the
information to create the proposed Appendix A to the Compensation Plan.
Also at the April work session, staff provided a listing of point assignments for each position based
upon the State Job Match Evaluation System. After contacting the comparable cities staff learned,
that they do not include the temporary, seasonal positions in their pay plans. Instead what is most
common is for the Council to establish a range for all seasonal workers(Chisago City for example is
$8-12/hr, DOQ) and then have the Council determine the amount within that range at the time of
hire. Therefore the seasonal positions were removed from the job classification and point system.
Issue:
Should the City Council adopt the proposed compensation plan?
Proposal Details:
Included in your packet is the proposed City of Scandia Compensation Policy. It includes a brief
introduction and notes the goals of the policy.
The compensation structure is then described in more detail. Consistent with the comments
made by the Council at the March work session, staff is proposing an 11 Step system where each
step is equal to approximately 2%. Per the League of Minnesota Cities memo reviewed at the
April work session, most cities set the steps at 2-5%. Additionally, the maximum rate for each
grade was determined by taking the average of the maximum rates in the comparable cities for
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each position. Furthermore, the starting pay for each position is roughly 80% of the maximum
rate. Again this was the figure suggested in the League memo. Depending on the Council's .
philosophy they may want to adjust this. However, staff would note that most of the comparable
cities had step plans that allowed for the position to reach the maximum pay rate within 8 years.
If the City of Scandia chooses to start positions at a lower rate the Council should consider
increasing the percentage between steps rather than adding additional steps given that the
proposal already includes many more steps than the comparable cities. For example, the Council
could decide that the starting pay would be at 75% of maximum but then staff would suggest 3%
step increases and only 10 steps.
*Note Regarding Fire Dept Pay: The Fire Chief requested that the Fire Dept personnel be
treated the same as other city employees in regards to wage adjustments. The proposal before
you is not consistent with the policy described above (i.e. minimum rate equal to 80% of market
rate) because in order to do so would reduce fire department personnel compensation by nearly
50%. Instead staff made the minimum pay rate equal to the current rate and applied a 2%
increase for each step. Another pay grade may need to be added for those who are in their
second year but have not attained any certifications. Below are fire department compensation
information received from the comparable cities established by the Council.
Rush City: Annual Stipend:
Fire Chief $3,100
1 St Assistant Chief �1,600
2"a Assistant Chief $950
Captain: $S50
Lieutenant: $550
Sec/Treas: $950
$10.00 per training meeting
$12.00 per fire
$6.00 each additional hour after 2 hours
Chisago Citv:
Chief $1,300
1 S`Asst: $800
2"d Asst: �800
3`'d Asst: �800
Captain: $100
Captain: $100
Captain: $100
Secretary: $S00
$100 Annual Mileage Reimbursement �refighters not paid on call)
Newport:
Volunteer Fire Chief $999.50 plus $7
Volunteer Firefighters: $6
Bayport:
Fire Chief �S,000
Chief Assist.• $3,D00
Dep Chief Asst: $3,000
Offtcers: $100/quarter
$11.00 per training
$10.DO per medical call
$11.00 per fire call
$11.00 per rescue
Whenever possible, new employees would be hired at the minimum but could start as high as
Step 4 if the Council approved. This would allow the Council to advertise a range for the
position and possibly offer more than the minimum rate if an employee was bringing more
experience to the position.
An employee would be eligible for their first step increase after the six month probationary
period, provided they received a satisfactory review from their supervisor, subject to Council
approval.
The policy also outlines actions to take to maintain the plan. Any updates to the plan or step
scale would need to be approved by the City Council on an annual basis during the budgeting
process.
Implementation:
The policy could become effective as soon as the Council adopts it at a regular meeting. I would
propose those staff currently below the minimum of the proposed range would be placed at the
minimum for their position effective on their next anniversary date. Employees whose current
wages falls within the proposed range would be placed at the step closest to their current wage,
without an employee receiving a decrease to their current wage. This wage increase would be
effective on their next anniversary date.
Fiscal Impact:
If implemented as described above the impact to the 2013 budget would be approximately
$1,347.64. The impact to the 2014 budget would be approximately $9,161.89.
Options:
1) Direct staff to place policy on the June 18th Council meeting for adoption.
2) Amend the policy and then direct staff to place it on the June 18t" Council meeting for
adoption.
3) Do not move forward with adopting the policy at this time.
Recommendation:
Option l.
City of Scandia Compensation Policy:
The City of Scandia intends to establish, administer, maintain and regularly update an
internal job evaluation hierarchy that is consistent with the Local Government Pay Equity
Act. The city also intends to establish, administer, maintain and regularly update a pay
structure that is appropriate to the breadth and depth of services being offered to and
provided for the community being served and is also affordable within available
resources. Finally, the city intends to maintain supplemental benefits (insurance,
holiday/paid time off schedules, etc)that are competitive and also affordable within
available resources.
This policy establishes the guidelines for all city positions with the exception of elected
officials and temporary or seasonal positions. Compensation for seasonal and temporary
employees will be set by the City Council at the time of hire, or on an annual basis.
This policy is directed at three primary goals:
➢ To attract and retain qualified and responsible personnel for the positions covered
under this policy;
➢ To create and maintain internal equity between positions compliant with the
Minnesota Local Government Pay Equity Act and all other applicable local, State
and Federal laws and regulations; and
➢ To do so efficiently and effectively thereby being fiscally responsible to the
interests of the taxpayer.
Compensation Structure:
Compensation is based on wage/salary grades and steps within the salary grade. For any
position subject to this policy, compensation must be assigned using an eleven-step grid
within each salary grade, with an increase of 20% from the minimum to the maximum
step equally distributed among these steps. In determining or evaluating compensation
levels, the City Administrator must maintain a schedule of comparative compensation
amounts for all positions covered under the policy. The City Council will determine the
appropriate market to be used in developing this schedule and in supplemental
compensation reviews.
A new employee must be hired at the pay grade minimum whenever possible. The City
Administrator or appropriate department head may recommend the new employee be
hired at a rate up to and including Step 4 of the pay grade for his/her classification,
subject to approval by the City Council.
A probationary employee may advance to the next pay step after satisfactorily completing
six months of employment which meets performance expectations, subject to approval of
the City Council. Every year thereafter, subject to approval by the City Council, on the
employee's anniversary date, an employee may advance to the next pay step after
satisfactorily completing another year of employment which meets the performance
expectations until he or she reaches the grade maximum. Determination of satisfactory
performance must be recommended by the immediate supervisor on forms prescribed by
the City Administrator and subject to final approval of the City Council.
Actions Taken to Review, Update and Maintain the Plan:
Elements of the plan will be reviewed annually to determine the degree o which it remains
consistent with the city's total compensation philosophy. Actions to be taken may include:
1. Review, verification, and any required updating of job descriptions for all
positions covered by this policy.
2. Review, verification and any required updating of job evaluations on all positions
covered by this policy, following established reclassification policies and
procedures.
3. Review, verification and consideration of current market survey data collected
from the cities selected for comparison, ensuring that there are no questionable
data that may give an incorrect pattern of pay for one or more positions.
4. Review and consideration of appropriate changes to the established base pay
structure based on patterns of current market survey data, ensuring that there will
be continuing integrity in administration of the current or revised pay structure.
5. Review and consideration of changes to the city's supplemental benefits covering
paid time off.
6. Review and consideration of required and/or appropriate changes to the written
description of the plan.
The pay grades and rates established by this policy must be annually confirmed by the City
Council through adoption of the budget and resolution establishing the grades and steps for each
job classification.
General Provisions:
Nothing within this policy is a guarantee of employment and compensation, and nothing is to be
construed as a commitment to continue the City of Scandia Compensation Policy for more than
one calendar year at a time. All components of this policy are set forth as guidelines to assist in
establishing appropriate compensation. The provisions of this policy supersede all other
compensation considerations. Compensation schedules will be maintained and updated as
appendices to this policy in accordance with policy provisions.
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