CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office/Human Resources Division		Commission Meeting Date:  February 5, 2019
Staff Contact:	Lori Carnahan, Human Resources Manager Marlo Cohen, Compensation Analyst
Recommendations/Options/Action Requested:
Receive report from McGrath Human Resources Group on the Classification and Compensation Study and authorize an amendment to the 2019 Budget, if necessary, to implement the following recommended changes: Establish a new Primary Pay Plan Structure, including placement of positions within the pay plan; Establish new pay ranges for each position; and Provide salary adjustments for employees who are not at the minimum of their new pay grades to the minimum in 2019.
Executive Summary:		To maintain a highly qualified work force, one of the ongoing programs of the human resources division is to maintain a competitive compensation program. McGrath Human Resources Group (McGrath) was commissioned to conduct a comprehensive classification and compensation study for all positions to assess competitiveness of the City’s program.  Based on the age of the current structure and the competitive nature of an economy that is near full employment, the City’s human resources division suspected that the current compensation plan for non-MOU represented employees was falling behind when compared to its identified market.  The report submitted from McGrath confirmed the above.  The attached executive summary from McGrath outlines their findings with respect to the City’s compensation plan along with employee salaries.  McGrath has made recommendations for bringing both the plan and actual salaries into a market competitive position.  The plan calls for initial implementation in 2019 along with items for 2020-2023.  The human resources division recommends implementing the 2019 recommendations with the first pay period in the second quarter of 2019.  The cost to bring all employees who are not at the minimum of their new pay grade to the minimum of their new pay range in the second quarter of 2019 is approximately $412,814.  The funds to implement, if approved, would be a combination of: · $75,000 budgeted in 2019 for this purpose, · $83,193 budgeted in 2019 but not needed for longevity due to the formula change approved November 6, 2018 ($64,385) and staff turnover ($18,808), and · $254,621 funded through spending down 2018 fund balance or reducing other 2019 budgeted expenditures. It should be noted that fourth quarter 2018 and first quarter 2019 reclassifications and corresponding salary increases for Municipal Services and Operations, Information Technology, and City Manager’s Office are not included in the implementation total.  This amount, approximately $108,217, has already been funded. Implementation of recommendations in future years will be discussed as part of the annual budget and will be contingent on funding available.
Strategic Plan Critical Success Factor		Effective Governance/Professional Administration Sound Fiscal Stewardship
Fiscal Impact (Amount/Source):		This item was partially funding in the 2019 Budget; however, the cost of the consultant’s recommendations was unknown at the time of budget adoption.  Savings from changes to the longevity program in 2019 will also be redirected to fund implementation.  However, the fiscal impact of implementing the recommendations as outlined in the second quarter of 2019, is a net increase of $254,621 across all funds.  An amendment to the 2019 Budget maybe necessary and would be included as part of the process to build the 2020 Budget.
Attachments:		Human Resources Division staff memo McGrath Classification & Compensation Study Executive Report McGrath PowerPoint presentation

Reviewed By: (for CMO use only)

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