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6. SR 03-13-1995
~11~ \Ri ITEM 6. MEMORANDUM ver TO: Mayor and City Council FROM: Pat Klaers, City Admi o DATE: March 13, 1995 J SUBJECT: Comparable Worth BACKGROUND: In the early 1980s, the Local Government Pay Equity Act was passed into law. Most people refer to this act as the Comparable Worth (CW) law. In the mid 1980s, the City was a participant in the Metropolitan Area Management Association (MAMA) study that was done in order to help cities comply with this law. At the end of 1992, the City submitted its CW plan to the State and in early 1993 Elk River was found to be in compliance with this. law. • MAMA has recently updated its CW Study, and we are using this new study as a basis for updating our City CW Plan. The next submission date of our plan to the State is 1/31/96. THE COMMITTEE: In order to update our City CW plan to stay in compliance with State law, I established afour-member committee. The committee members are City Clerk, Sandy Thackeray; Assistant City Administrator, Lori Johnson; Police Chief, Tom Zerwas; and Street/Park Superintendent, Phil Hals. This committee has done an enormous amount of work over the past year and from my review of their work, they have put together a completely objective and unbiased proposal. I sincerely appreciate the work and effort that these members have dedicated to this very difficult task. The first assignment for the committee was to evaluate all of the positions in Elk River and to establish a point ranking for these positions. The committee used the MAMA consultants (PDI) in putting together the Elk River point rankings. This was the major task of the committee. The second assignment for the committee was to establish a pay plan that would keep the City in compliance with the CW law. The pay plan that is being recommended to the City Council is an expansion of our existing plan and mirrors pay plans in 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425 Comparable Worth Memo Page 2 March 13, 1995 • other governmental units. The originally proposed plan is a ten-step pay plan for each pay range. The point rankings and pay plan proposals will be distributed at the 3/13 worksession. (I have recently been advised that an additional four pay steps are being considered at the starting pay level for the non-exempt employee positions. These additional steps should not affect the City being in compliance with the CW law as the law is based on top pay. These additional steps would make more of a distinction between exempt and non-exempt City employees. Fourteen (14) steps to get to the top can be a long time if people are hired at the lowest pay level. Additionally, we may not be able to hire very many employees for the lowest wages that are listed. Most of the higher ranking non-exempt positions may have to be paid in the middle of their pay range to start). It should be noted again that the City is currently in compliance with the CW law. The committee could have made a recommendation to not change our existing pay plan. However, based on the City Council's concern over the top pay of the top management employees, and based on my concern over hiring and retaining good employees, the committee has looked at changing our pay plan. Just because the pay plan is changing does not mean we have to change the current pay for any employees. More comments on pay changes will be offered later in this memo. No Council action is necessary on 3/13/95. The Council may need a number of weeks to digest all of the information that will be presented. However, it is my recommendation to the City Council that it approve the Comparable Worth point rankings for all the City positions as submitted by the committee and that the Council approve the ten (10) step pay plan and ranges as originally submitted by the committee. The pay ranges are a key component to compliance with the Comparable Worth law, and if one range changes, (regardless if the change is in the ten (10) step or the fourteen (14) step proposal), it will require other ranges to be changed in order to remain in compliance. The proposal in the pay plan reflects a goal of Elk River paying ninety-five percent (95%) of the wages in comparable metropolitan communities. In reality, the tops of the pay ranges listed are closer to 90% of the top for similar metro positions. In addition to the point rankings and pay ranges, on 3/13 the committee will also be making recommendations on some title changes and some changes in the exempt/non-exempt classification of a few positions. These • recommendations are offered in order for the titles and positions to more accurately reflect the actual duties being undertaken by the employees. After Comparable Worth Memo Page 3 March 13, 1995 • review of the committee's findings, I concur with the changes that will be recommended. One final item the committee will discuss with the Council on 3/13 is a point ranking appeal process. An appeal process is required by law. WAGE ADJUSTMENTS: I felt it would have been unfair to request the committee to make recommendations on any individual pay adjustments. Actual pay for employees is set at the discretion of the City Council, and it is my responsibility to make recommendations on this issue. Now that the committee has completed its work, I am ready to offer the City Council my comments on wages. The basis of my comments are the results of the City CW Plan (point rankings and pay ranges). Regarding actual pay adjustments, many factors come into play. The most important factors include being fair to all employees, and to treat all employees consistently. Additionally, we also have to keep in mind public • perception regarding "over paid" municipal employees (everyone from laborers and secretaries to department heads) and the fact that most employees are paid with tax dollars. Finally, the municipal budget for 1995 has already been set and a substantial change in 1995 would cause the use of City reserves and could significantly impact the increase in next year's budget. My recommendation for wage adjustments as it relates to comparable worth is a conservative one. We are currently in compliance with the law and, accordingly, I am recommending that all employees be simply slotted into their new proposed pay range. If the employees fall above the pay range, their only increase in future years will be for cost of living. The only employees who would receive an immediate wage adjustment would be those who fall below the starting level of their pay range. I am recommending that these individuals be put at the first step of their pay range. These employees would then move to the next step of their pay range on 1/1/96. I am suggesting no retroactive pay increases. By slotting all of the employees into their pay range at their existing wage, the City is not increasing anybody's wage nor are we freezing anybody's wage. All employees, if they are not at the top of their pay range, are eligible • to receive a step increase each year until they are at the top. This is a step increase in addition to cost of living increases. Accordingly, most employees Comparable Worth Memo Page 4 March 13, 1995 • will be receiving wage increases in the seven percent (7%) range (cost of living plus a step) for at least two years. Some employees will be receiving this type of wage increase for more than two years, while a few employees will see this type of increase for only one year. When "slotting" the employees into the proposed pay plan at their current wage level, the City Council should not think of each pay step in a range as being equivalent to a year of service. We should look at the situation as being the adoption of a brand new pay plan. If we had to pay employees according to the pay plan based on longevity or their years of service, it could get very difficult to be fair or consistent. If we are to pay a 'few employees at the top of their pay range simply because they have been with the City for more than ten (10) or fourteen (14) years, then we could also have a problem with the pay of other employees who are near the top but which have only been with the City a year or two. If we look at the pay steps as years when slotting the employees, some employees would receive only inflationary increases for two to three years until their Elk River years of service match their pay step. Just because an employee has only been with the City for a year or two doesn't mean that he/she hasn't had numerous years of similar experience in another community. By slotting all of the employees at their • existing pay into their proposed range and then allowing the employees to move up a step each year, everyone is being treated the same. We should look at this proposal as the beginning of a new pay plan and the steps being equal to years only after the employees are placed into the plan. Currently, twenty-eight (28) of our top paid thirty-two (32) employees are at the top of their pay plan. Under the current adopted pay plan, the only pay increase these employees would receive in the future is for cost of living reasons. By approval of a new pay plan, and slotting of these employees into their pay range, only three (3) employees will receive just cost of living increases in the future. All the other employees will receive at least a step and a cost of living increase for the next few years. However, in five years we will be back to our current status where most employees are at the top of their range. The Council should note that during our 1995 budget discussions, it was stated that the three percent (3%) cost of living increase translated into approximately $63,000 worth of increases. This figure includes a few step increases. In 1996, if either new pay plan is approved, and the slotting process is approved, the three percent (3%) increase, plus all the steps, will cost the City approximately $145,000, ($63,000 for cost of living and $82,000 • for steps). We will be seeing similar total increases for the next few years until the employees reach the top of their pay ranges. Any increase given Comparable Worth Memo Page 5 March 13, 1995 • now, in 1995, will increase this 145 000 fi ure for 1996. Please note that $ g the amounts in this paragraph are estimates and more accurate figures will be offered on 3/13. The City budget cannot afford significant changes in the current pay for its employees. Also, it may not be fair to single out a few employees and treat them differently than the vast majority. All our employees work hard, have responsible and important duties, and are adequately being compensated for their work. The pay ranges (either ten (10) or fourteen (14) steps) and point ranking approach being recommended by the committee keeps the City in compliance with the Comparable Worth law. My wage recommendation does not treat anyone unfairly and allows for future wage increase above inflation for most employees.. The revised pay plan costs the City some money in the future, but this is done over time and keeps us competitive and comparable to other cities. Anything other than a conservative financial approach to implementing the new pay plan would limit the Council's flexibility in its 1995 budget and in future budget years. I look forward to a worthwhile discussion of the comparable worth issues on 3/13. No action needs to be taken by the City Council at this meeting and we • can continue this worksession to a future date for more deliberation. s: \council\cwccme mo. doc 1r u .~ J ( ~` • City of ~~ EIk • River TO: FROM: DATE: MEMORANDUM a All City Employees Pat Klaers, City Administrator March 8, 1995 SUBJECT: Comparable Worth In the early 1980s a new law was passed that required pay equity for all positions in local governmental units. This became known as the Comparable Worth Law. In order to comply with this law,. the Metropolitan Area Management Association (MAMA) undertook a study to determine the relative comparable worth between typical or benchmark municipal positions. Elk River was a participant in this study. Through a lot of effort in the late 1980s and early 1990s, the City finally adopted a Comparable Worth Plana • The City's Comparable Worth Plan was submitted to the State on 12/31/92. In early 1993, we were notified that the City was in compliance. Since the original MAMA study, there has been discussion by municipal officials -about .some of the inequities in this study. As a result of some of these concerns, MAMA updated its analysis of benchmark positions using the consulting services of PDI. This study was completed in late 1993 and gave all municipalities an opportunity to update their comparable worth plans prior to the next State certification date of 1/31/96. In early .1994, after the .revised MAMA study was completed, I appointed an Elk. River. Comparable Worth Committee. The committee members were -City Clerk, Sandy Thackeray; Street/Park Superintendent, Phil Hals; Police Chief, Tom Zerwas; and Finance Director, Lori Johnson. r1 LJ The main purposes of this committee was two-fold. First,. the Committee was charged with establishing comparable worth point rankings for all employee positions within the City of Elk River. Secondly, once the point rankings of the employee positions were established, then the Committee had. to come up with an overall pay plan so that the City would be in compliance with the Comparable Worth Law. 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • (612) 441-7420 • Fax: (612) 441-7425 i~ The Committee has completed a tremendous amount of work and has done a very good job in completing this work assignment. They took this assignment very seriously and to the best of their ability, were completely objective in their analysis. The Committee went the extra step whenever possible in order to obtain employee input into the process. I cannot express my appreciation enough for the hard work that this Committee has completed. They met for over twenty-five (25) times in the past year to complete this project. The Committee is now ready to present its findings to the City Council. This will take place .during. a Council worksession on Monday, 3/13/95. The Committee will then meet with individual staff members throughout the day on Tuesday, March 14, 1995. The Committee will then present to the staff the Comparable Worth findings along with any feedback they receive. from the City Council. By State law there is an appeal process for the employee to appeal their point ranking that is in the City Comparable Worth Plan. The City Council will establish the point ranking appeal committee. The Committee was not charged with the responsibility of making recommendations on any pay adjustments. This will be a City Council decision and I will be making a recommendation on this issue to the City Council. There are many factors to take into consideration in making this recommendation and I will try to offer a recommendation that deals with all employees on a fair and consistent basis. My recommendation will not freeze any wages for employees, but also I will not be recommending any immediate pay increases. The one exception to this statement is for the employees whose wages fall below their pay range. s:\council\c~~empme m. doc • • SECRETARY/CLERICAL SALARY SURVEYRESULTS Public (Local) Receptionist $10.67 Secretary/Payroll Clerk $1.1.10 Senior Secretary $11.54 Private (locate Receptionist $7.00 - $9.00 Private (local, Receptionist/Secretary $9.23 - $9.80 Secretary $I0.38 -.$13.27 Receptionist $7.79 - $11.54 Secretary $8.66 - $12.98 Admn. Secretary $10.67 - $15.86 Private (local) Private -Taken from Star Tribune Receptionist $7.72 Receptionist/Secretary $9.02 Secretary/General $8.74 • Points 1 Pat Klaers 132 2 Lori Johnson 115 3 Tom Zerwas 113 4 Phiiip Hals 103 5 Bruce West. 97 6 Steve Ach 96 7 Steve Rohlf 95 8 Bill Rubin g 1 9 Lori Ziemer 90 10 Darrell Mack 85 1 1 Gary Schmitz 84 12 Cliff Skogstad 84 13 Fritz Dolejs 82 14 Sandy Thackeray 81 15 Mark Thompson 79 16 Terry Zajac 78 i 7 Dennis Anderson 78 18 Austin Whitford 63 19 Gary Leirmoe 63 20 Joan Frick 62 21 Brenda Ebner 62 22 Kathy Anderson 61 23 Alice Heinecke 61 *24 Terry Mack 61 • *25 Dennis Jenson 61 *26 Eldon Lee 61 *27 Milt Tuttle 61 '28 Terry Bye 61 29 Mike Donais 60 30 Michelle Cunz 60 31 Cheryll Edinger 60 32 Amy Borst 58 33 Sue Kostanshek 57 34 Deborah K{eckner 57 35 Geryl Rogers 57 36 Linda. Johnson 54 37 Kristy Mansfield 54 38 Shari Peterson 54 39 Tammi Fields 51 40 Robert Swenson 49 4i Joe Pipenhagen 47 42 Steve Tillman 43 43 Brent Serhns 43 44 Part Time Clerks 42 'These positions designated by an * • h ~"> N LD O W N op M M N cD W M W M tD t0 N 00 ~ .- h t~ N 0 M M h h h CO O N Z O ~- N M c'o ~!' 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