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  Agenda Item No. G.5.       
Meeting Date: 01/18/2022  
Item Requested By: Amy Brown
Staff Contact: Tarah Mayerhofer
Contact Phone Number: 928-668-0508  
Type of Agenda Item: New Business
STRATEGIC PLAN
This project addresses the below Priority Area(s) and relates to the listed Specific Initiative(s):
People, Places, and Projects
Human Capital:
  • Balance the need for increased staffing levels to address the growing population with the responsibility to invest in existing employees through compensation, training, and promotional opportunities.
  • Plan for employee compensation demands outside the Town’s control, including voter-mandated minimum wage increases and changes in national health insurance policy.

AGENDA ITEM:
Presentation, Discussion, and Possible Action to Authorize Staff to enter into contract with a firm to conduct a Classification and Compensation Study for a not to exceed amount of $70,000 from General Fund Contingency - Tarah Mayerhofer, HR Manager
BACKGROUND INFORMATION:
The Human Resources Director or the person or agency employed for that purpose shall prepare a pay plan covering all classes or positions in the classified service. In arriving at salary rates or ranges, consideration shall be given to prevailing rates of pay and consideration of working conditions for comparable work in other public and private employment, to current costs of living, to suggestions of department heads, to the Town’s financial condition and policies, and to other relevant factors. The Human Resources Director, or the person or agency employed for that purpose, shall thereafter make such further studies of the pay plan as may be requested by the Town Council.

Identified in the Strategic Plan for Council two priority areas are to 1. Balance the need for increased staffing levels to address the growing population with the responsibility to invest in existing employees through compensation, training, and promotional opportunities. 2. Plan for employee compensation demands outside the Town’s control, including voter mandated minimum wage increases and changes in national health insurance policy.

The last employee classification and compensation study was conducted in 2001, with some findings being implemented in 2005. In 2019, Council gave direction to conduct an internal compensation (only) review. Staff conducted the review using market comparison of other municipalities salary scales, the League of AZ Cities and Town’s Salary & Benefit Survey and a compensation study completed by Chino Valley in 2018. The review resulted in the following changes:
  • Subject to 2% increase
    • Current wage is within the proposed salary scale
  • Increase to minimum of proposed salary scale, plus 0.5% for each year of service
    • Based only on current position
    • Must have a full year by 6/30/19 to receive 0.5% for FY 19/20
  • Plus $2.50 or $3.50 or minimum
    • Specific to first responders only
    • Plus $3.50 or minimum for Police Sergeants & Fire Captains
    • Plus $2.50 or minimum for all other first responders
While this paved the way for the future it also created compression within. Since, Council has authorized merit-based pay increases, focused on performance. In turn, the salary scale has not been adjusted to keep up with the Cost of Living, creating further lag.

Again, only compensation was reviewed, not classification. Government bodies use occupational classification systems to organize work into formal job categories. A study has not been done since 2001 to review the development of classification concepts and structures, job audits, allocation of positions into the appropriate classification and the development or revision of classification specifications.

An internal audit of benchmark positions has proven we are lagging in the market. While not all positions change within the market at the same rate and some positions are in much higher demand now or are generally paid at a higher rate than they had been previously. The higher demand is driving up the competitive market in those job areas. It is important to keep competitive in the market to be able to fill our open positions timely with qualified, competitive applicants.

When searching for a firm to conduct this study, we will be looking for a firm who can review current classification and compensation systems to ensure internal equity, survey peer organizations to ensure external equity, and produce recommendations to provide the organization with a classification and compensation system that is equitable, both internally and externally.
SUGGESTED MOTION:
I move to authorize staff to enter into a contract with a firm to conduct a classification and compensation study and approve funding from General Fund Contingency in an amount not to exceed $70,000.
Attachments
Presentation

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Form Review
Form Started By: Amy Brown Started On: 01/13/2022 02:59 PM
Final Approval Date: 01/13/2022

    

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