ITEM 3.3 Classifcation and Compensation Study0tsTe� o
MINNrsOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR:
MEETING DATE:
Administration
City Administrator/Finance Director Flaherty
February 24, 2020
PRESENTER(s)
REVIEWED BY:
ITEM #:
Consent
3.3
STRATEGIC VISION
MEETS:
THE CITY OF OTSEGO:
Is a strong organization that is committed to leading the community through innovative
communication.
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
X
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council accept a proposal to conduct a Classification and
Compensation Study.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
Yes
No
BACKGROUND/J USTI FI CATI O N:
The City Council approved budgeted funds in the 2020 budget to conduct a Classification and
Compensation Study. The City last conducted such a study in 2015, with implementation in 2016.
Best practices identify a 5 to 7 years' timeline for conducting compensation studies; however, the
guidelines for the time frame are adjusted dependent on current market and financial conditions. If the
market is strong or rapidly changing, or if an organization is experiencing recruitment or retention issues,
this time frame moves to 3 to 5 years. Alternately, if there were an economic downturn or poor market
conditions, the timeline extends to 7 to 10 years.
City staff has worked with BakerTilly (formerly Springsted) to develop a work plan, which includes:
- Market Survey: Wages, Benefits, PTO, Holidays, Etc.
- Job Descriptions: Evaluation of some job descriptions within SAFE System.
- Development of Compensation Plan and Implementation Options.
- Options to add on site visits with City Staff and/or City Council.
Prior to BakerTilly commencing the work plan, City staff will:
- Conduct a project conference call with BakerTilly to maximize efficiency of the study.
- Supervisors will meet with Staff to identify job descriptions that need to be re-evaluated.
- City Council approval of any respective job description modifications.
Upon commencement of the work plan, BakerTilly approximates a three-month completion timeframe,
which is subject to modifications from the City. The goal of City staff is to have this study completed in time
for inclusion within the 2021 budget review process.
The Administrative Subcommittee reviewed the proposal at the February 12, 2020 meeting and
recommended the proposal be placed on a future agenda for Council approval.
'ORTING DOCUMENTS ATTAC
• BakerTilly Proposal
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to accept the proposal from BakerTilly to conduct a Classification and Compensation Study.
BUDGET INFORMATION
FUNDING:
BUDGETED:
General Fund — Human Resources
101-41800-390
Yes
bakertitty
nowjoined with
Springsted and Umbaugh
Baker Tilly Virchow Krause, LLP
380 Jackson Street, Suite 300
St. Paul, MN 55101
651.223.3000
651.223.3046
February 5, 2020
Mr, Adam Flaherty
City Administrator
City of Otsego
13400 901h Street NE
Otsego, Minnesota 55330
Re: Proposal to Conduct a Classification and Compensation Study
Dear Mr. Flaherty:
Baker Tilly is pleased to submit our work, plan to conduct a classification and compensation study for the
City of Otsego.
Our firm has assisted numerous jurisdictions in the Midwest and throughout the United States in addressing
their classification, compensation and human resources issues, and in performing specialized management
studies. We have created an extensive management consulting services practice that provides in-depth study
and analysis on a variety of topics. Baker Tilly has the staff, facilities and expertise in assisting and advising
local governments on critical and important human resources issues. Our vast experience in the areas of
human resources administration will be an advantage to your organization.
We look forward to working with the City of Otsego and its employees on this important project.
Respectfully submitted,
oqnn 8. 04ntonien
Ann S. Antonsen
Director
City of Otsego, Minnesota
February 5, 2020
Work Plan
Market Survey.
Baker Tilly will conduct a salary survey to update the market survey information which was collected
during the comprehensive classification and compensation study completed for the City, by Springsted
(now Baker Tilly), in 2015. Baker Tilly will review the comparable agencies utilized in the study in the
area labor market which were approved in the 2015 study to determine the appropriate market
comparables. External market comparisons for positions were based on similar organizational structure,
population, geographic location, job responsibilities, scope of authority, financial, socio-economic, growth,
and other relevant factors. The survey data collected will relate to organizations comparable to the City of
Otsego, those organizations with which the City competes with for employees and represent the
appropriate labor market. The study team will consult with City management to determine if other sources
of data should be included in the market updates.
Job Evaluation. While salary and benefits survey data will assist the City in establishing its position in
the competitive market, job evaluation is the mechanism that ensures that internal relationships are
equitable. Baker Tilly has developed and copyrighted a job evaluation system known as the Systematic
Analysis and Factor Evaluation (SAFE®) System. The SAFE® system is a unique job evaluation method
designed to measure job factors that apply specifically to local government. This system has been
successfully used for many years throughout the Country, is periodically updated to account for changes
in technology, etc., and has been reviewed by the United States Circuit Court, in conjunction with an
Equal Employment Opportunity (EEO) suit, and found acceptable to the Court. The system has also been
accepted by the State of Minnesota under the Local Government Pay Equity Act.
The system rates and ranks jobs based on various skill levels and work factors. The result is an
equitable and consistent method of evaluating jobs and relating positions to the compensation plan.
The system facilitates proper and equitable comparisons between and among classes and minimizes the
appearance of favoritism in evaluating, rating and ranking jobs.
Each position will be evaluated and placed within the proposed compensation plan based on the job
evaluation system and the market rates paid by survey participants.
The elements considered in determining the relative value of classifications are:
• Training and Ability • Education and Experience
• Level of Work • Human Relations Skills
• Physical Demands • Working Conditions/Hazards
• Independence of Actions • Impact on End Results
• Supervision Exercised
The City implemented the SAFE System in the completion of the study in 2015. Since that study the
City has established new positions and various positions have undergone changes in job responsibilities
and/or job requirements. Baker Tilly will review the job evaluation factors for up to 5 positions within
the scope of this work plan.
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City of Otsego, Minnesota
February 5, 2020
Development of Compensation Plan and Implementation Options. Based on the market wage and
benefits data analysis and the job evaluation system, Baker Tilly will propose revisions to the City's
compensation plan. The compensation plan will be revised in accordance with information obtained from
the City regarding its pay philosophy as well as goals and objectives established for its compensation
program, including the option for a performance based component. The proposed plan will incorporate
market conditions, recognize the tenure of current employees and coordinate with labor agreements in
effect in the City.
Baker Tilly will propose a plan to implement the study recommendations that coincide with the financial
and budgetary requirements of the City of Otsego and the needs of employees. Estimates of the cost of
implementation will be provided.
Timeline
Baker Tilly takes pride in meeting its time commitments. The schedule to commence this project
coincides with Balser Tilly's completion of other studies. This will ensure that the proposed staff
members will be available to concentrate on this study for the City of Otsego. Baker Tilly is prepared to
initiate the study within two (2) weeks after receiving the official notice to proceed and will complete the
study within three (3) months after project initiation.
There are factors that impact meeting the schedule that are beyond the consulting team's control.
The proposed time frame is contingent upon a timely decision, the receipt of the data from the
survey participants when requested, the availability of employees to complete position analysis
questionnaires and participate in interviews and the timely receipt of feedback and comments on
the submitted preliminary data.
Cost
The market survey update and analysis of the information, job evaluation, preparation of updates to the
compensation plan and preparation of a summary report shall be conducted for a not -to -exceed fee of
$5,750.00. In addition to the professional fee, Baker Tilly would bill the City for out-of-pocket expenses.
This fee does not include on -site visits or presentation of results to the City Council.
Baker Tilly is willing to work with the City to modify the work plan to meet the City's needs and budget.
If the City decides to modify the proposed work plan, Baker Tilly will adjust the proposed fee
appropriately.
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