City Council Meeting


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  H.2.       
Meeting Date: 12/07/2021  
Contact: Kathleen Shields, Managing Director of Human Resources

COUNCIL ACTION
AGENDA ITEM:
Consider approving an Ordinance amending the FY 2022 Budget to provide funding for a Classification & Compensation Study
BACKGROUND:
Compensation is a critical component of the Human Resources function. Direct compensation generally defines recruiting and retention, and the City of DeSoto strives to regularly review the market for salary competitiveness. Pay plan salaries and movement within pay grades affect DeSoto's workforce training and planning, department budget allocations, and performance management. Some elements that require regular review for an effective pay plan include: 
  • Definition of the competitive market and establishment of the external equity philosophy
  • Differences in the internal equity of positions
  • Determination of external competitiveness
  • Handling of internal equity
  • Ability to attract and retain the highest quality and best fit applicants
  • Management of turnover and related fiscal liabilities
  • Program of adjustment as appropriate for external market conditions
To ensure the validity of the City's pay plan structure, it is necessary to study the comparable market to determine DeSoto's overall standing. Due to the proximity of cities in the Dallas/Fort Worth region, the City must include smaller and larger organizations because they are geographically aligned. Failure to adequately study the City's comparable market will result in a loss of employees to surrounding employers. DeSoto last completed a compensation study in 2018, which identified new placement in the pay structure for all positions and defined movement through the pay structure. DeSoto's job classifications will be evaluated internally as well as externally for comparison. 
FINDINGS:
A Classification & Compensation Study was not anticipated or budgeted for in FY 2022. However, due to rising turnover in City departments, and a perceived separation from comparable market organizations, City staff recommends that the study be expedited and completed during FY 2022 with the goal of implementing necessary changes in the FY 2023 Budget. The market study is necessary to establish new midpoints for DeSoto positions, to ensure internal and external equity, and to create a new pay plan structure that allows employees to move through pay grades more effectively than the current program allows. 
FINANCIAL IMPACT:
The estimated cost of the Classification & Compensation Study is $120,000. This budget amendment will appropriate the requested funds from the General Fund fund balance for expenditure from the professional services line item of the Human Resources General Fund budget.

The cost to implement any study recommendations will need to be considered during the FY 23 Budget process.  Further, should Council approve this amendment, staff will be issuing a Request For Proposals to identify interested, available, and qualified firms.  The actual price of the study will be negotiated with the selected firm and brought before Council for approval consistent with the City's purchasing policies.
RECOMMENDATION:
Staff recommends that the City Council approve the Ordinance amending the FY 2022 Budget to provide funding for a Classification & Compensation Study in the amount of $120,000. 
MANAGEMENT REVIEW
Attachments
Ordinance
Budget Ordinance Exhibit A


    

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