HomeMy WebLinkAbout13.E.1. Pay Plan Update
City of Shakopee /3. E./.
Memorandum
TO: Mayor and City Council
. Mark McNeill, City Administrator
FROM: Kris Wilson, Assistant to the City Administrator
SUBJECT: Pay Plan Update
DATE: April 26, 2006
Introduction
The Councilisasked to authorize work on an update to the Pay Plan in order to have the results
available in time for the 2007 budget process.
Background
The City's current Pay Plan, which groups all full-time positions into one of 13 pay grades, was
established in 2001 with the assistance of consultant Rod Kelsey ofRDK Associates. The pay
plan is established based on an evaluation of the position duties and responsibilities, and a
market analysis or comparison to what other cities pay for similar positions. Since the pay plan
was adopted in 2001, the only changes have been to apply annual Cost of Living Adjustments
and the occasional re-evaluation of particular positions when the job duties change.
The City's 2006 budget includes funding for a Pay Plan update, with the idea that the analysis
would be done during 2006. Implementation of the updated plan, including any necessary pay
adjustments for City staff, would be considered as part of the 2007 budget process.
At this time, the Council is asked to authorize moving forward with updating the Pay Plan and to
provide direction on three specific issues.
1. Benchmark Cities. To establish the current Pay Plan, the City compared itself to 10
other metropolitan-area cities. They were: Woodbury, Lakeville, Andover, Oakdale,
Savage, Chanhassen, Champlin, Chaska, Prior Lake, Lino Lakes. After reviewing
this list and considering how these cities currently compare to Shakopee in terms of
size, stage of development and location, it has been suggested that the list of
benchmark cities be changed to add Apple Valley, Cottage Grove and Inver Grove
Heights and drop Oakdale, Champlin and Lino Lakes. This would result in the
following comparison group:
1. Woodbury 6. Andover
2. Lakeville 7. Savage
3. Apple Valley 8. Chanhassen
4. Cottage Grove 9. Chaska
5. Inver Grove Heights 10. Prior Lake
2. . Target for Shakopee Salaries. At the time the current pay plan was established, a
policy decision was made that Shakopee would set its salary levels at the 60th
percentile of the benchmark cities. If the council wishes to change this policy, it
should direct staff accordingly.
3. . Exempt Compensation. The federal Fair Labor Standards Act (FLSA) establishes
categories of positions that may be declared exempt from the Act's overtime
regulations. For the City, this applies primarily to individuals in supervisory
positions, including all department heads.
Current City policy is that exempt employees receive 40 additional hours of vacation
per year in recognition of the hours worked in excess of 40. Recent changes to the
FLSA at the federal level include changes to regulations regarding exempt employees
and will need to be reviewed for their impact on the City's policies. The Council is
asked to authorize that the study include a review this policy, research into the
exempt compensation provided by the other benchmark cities and recommendations
as to continuing or amending. the. City's policy.
Budget Impact
The 2006 budget includes $15,000 for the consulting work necessary to prepare a Pay Plan
update. At this time, we do not expect to utilize this entire amount. After speaking with Mr.
Kelsey, it appears that some new survey tools provided to us by the League of Minnesota Cities
will allow us to do a significant portion of the research and data collection in house, thereby
reducing the amount of paid consultant work.
Theresults of the Pay Plan update will be presented to the Council in August, at which time the
.Council may incorporate this information into decisions regarding the City's 2007 budget.
Relationship to Vision: An updated Pay Plan will contribute to a vibrant, resilient and stable
community (GoalD), by ensuring that we can attract and retain qualified staff.
Requested Action: If the Council concurs, it should offer a motion to authorize proceeding with
an update to the City's Pay Plan, to include a review of exempt compensation, a comparison of
Shakopee's pay structure to that of the 10 cities listed above, and a goal of establishing City
salaries at the 60th percentile of the comparison group.
ji~IS~~
Assistant to the City Administrator