8.1. SR 06-06-2005
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MEMORA~DUM
TO:
Mayor and City Council
FROM:
Pat Klaers, City A1J:i1~to,..' r
June 6, 2005 IJ,/t rI~
DATE:
SUBJECT:
Consider Pay Plan and Pay Riate Adjustments
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On January 22, 2002, the City Council approved the pay equity implementation and
compliance reports that were due to the state on J ftnuary 31, 2002. At that time the city was
in compliance with the state pay equity law. (The qity is scheduled to report again by January
31,2007.)
On January 28, 2002, the City Council approved "I... to increase each of the building
inspectors wage by $3,000 effective February 1, 2d02..." Ever since the City Council
provided this increase there have been pay equity compliance concerns.
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On August 9, 2004, the City Council addressed sotne general competitive pay issues and
some specific pay equity concerns. Action by the ~ity Council followed a report and
recommendations by the Personnel Committee or). wages and the city pay plan. The City
Council approved an across the board pay plan intrease of 2.5% for exempt employees and
4% for non-exempt employees. The City Council ~lso approved wage increases consistent
with the above figures for everyone except the building inspectors.
After this August 2004 action by the City Council~ the building inspector's wages were still
slighrly above their pay grade. Today, due to the mspectors being in both pay grade 13 and
14, and due to the cost of living increases being p~ovided in 2003,2004, and 2005, the top
pay of the housing/building inspectors (pay grade I 13) is 1.98% above the top of their pay
grade and the top pay of the lead and plumbing in~pectors (pay grade 14) is 1.704% above
the top of their pay grade.
When the annual cost of living adjustments (COLiA) were discussed by the Council on
December 20, 2004, the pay equity or comparablelworth concerns and the building inspector
positions were again discussed. At that meeting th~ City Council directed staff to provide
options to address the pay equity compliance con4erns before July step increases are given.
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s: \ Council\Pat\200S \Pay Adjust.doc
In February 2005, the Personnel Committee met ro review the pay equity issues. The
Committee is recommending to the City counCilfat the pay plan increase 1.7% and that a
pay increase of 1.7% be given to all employees, e cept the building inspectors, effective at
the beginning of the first full pay period in August. (This timeframe is one year from when
the wage increase was provided in 2004.) i
I support and agree that increasing the pay plan ajJ.d providing a pay increase is the most fair
and logical way to address our pay equity compliapce issues. I support this solution because I
believe that we can afford this increase and that i~ is appropriate when comparing Elk River
to other communities. However, I believe the increase should be 1.98% and not 1.7%. From
my point of view, this addition of .28% should eli!minate any concerns regarding fairness and
being in compliance with the comparable worth l~w.
Another option for the city to be in compliance ~ith the pay equity law is one which the City
Council has rejected in the past. Nonetheless, it isi an option, and this is to hold back the
housing/building inspectors and the lead and pluJ!nbing inspectors (by approximately 1.98%
and 1.704%, respectively) when the COLA is provided on January 1, 2006.
The cost to the city for the 1.98% for all city emp~oyees for five months is approximately
$35,000. This compares to approximately $29,500 if the increase was based on 1.7% for five
months. Funding for this expense in 2005 will cOJine from the allocation of the 2004 General
Fund Balance. City Council took action on this a4ocation on April 4, 2005 and reserved
approximately $114,500 for pay adjustments and q:apital equipment. This wage increase will
then have to be factored into the 2006 budget. This increase will slightly reduce our
flexibility in 2006 for adding staff and adding eq~pment into the General Fund budget.
Recommendation
It is recommended that the City Council adjust thb pay plan by 1.98% and provide wage
increases of 1.98% (or have employees go to the ~op of the pay range, whichever is less)
effective at the beginning of the first full pay peri~d in August. The housing/building
inspectors are excluded from the wage increase.
s: \ Council\pat\2005 \PayAdjust.doc