HOWARD LAKE, MN David Drown, of David Drown and Associates, presented results of a classification and compensation study during the Howard Lake City Council meeting Aug. 21.
The city engaged the company in March to complete a classification and compensation study to update job descriptions for all full-time employees, review current pay structure for internal and market equity, and update or re-create a grade-step compensation structure for the entire organization using updated job titles and descriptions, which hasn’t been done in almost two decades.
The first thing Drown addressed was job descriptions. He and his associates reviewed current job descriptions and went through a process to evaluate them.
This involved a system that separates them into seven factors to deal with things such as responsibility, and the impact of one’s decision.
“The process is a numerical rating that’s used to rank jobs internally,” Drown explained.
Full-time employees were engaged in recommending and approving updates to their job descriptions, to the satisfaction of the council.
While the public works job descriptions were approved at the July meeting, all remaining descriptions still need to be approved.
Drown recommended changing the pay system, keeping things fair for male-orientated jobs and female-orientated jobs, and keeping things consistent internally, as well as competitive externally.
The lowest-ranked job was the public works position, and the highest ranked was the city administrator.
Drown found that the salary system was lagging behind the wages paid in the marketplace, with a few exceptions.
He suggested that to stay competitive, some adjustments need to be made.
Howard Lake is relatively competitive in its overall benefits; however, areas that need to be improved on compared to benchmark communities include life insurance, short-term disability, long-term disability, and voluntary employees’ beneficiary association (VEBA) plan.
Pay plan recommendations included implementing a pay system that grades the jobs, and then has salary steps that, with satisfactory performance, progress over time. Refining the grade system was also recommended.
Drown recommended a 10-step system with a 35 percent spread. Currently, the council is working with an 11-step plan with a 34 percent spread. The new plan also increases the number of pay grades from eight to 12. This finer gradation will provide the city greater flexibility to make adjustments to pay grades, as well as job duty changes or new jobs added in the future.
In terms of implementation, each of the city positions will have to be assigned a salary that matches with a step in the new system.
Having everything implemented by 2019 would total about a $20,000 increase in terms of budget impact. It also assumes each employee will receive no less than a 2 percent cost of living adjustment (COLA) increase in their salary.
Mayor Pete Zimmerman had some questions for Drown.
• Doesn’t this plan add steps to other positions?
• Do other cities that use this step system adjust their scale manually?
Drown said yes, but this plan is dynamic and can guarantee better success, plus step increases will remain unchanged.
Overall, Drown noted that he felt the old system was good for a long time, but has started to show signs of being out of date, and this new plan is what would be best to guarantee a future of better successes within positions and jobs.
Following the discussion, the council approved:
• the classification and compensation report and implementation plan;
• new job descriptions for full-time positions; and
• a new 10-step structure plan.
City Administrator Nick Haggenmiller noted after the meeting that over the last three years, the city has been transitioning organizationally with key retirements. This included the creation of assistant city administrator and accountant/treasurer positions. Determining how those positions fit in terms of compensation and classification was a goal of this project.
Haggenmiller also noted the last time the city formally updated job descriptions and completed a compensation analysis was in 1997. Best practices recommend doing so every three to five years.
“In terms of compensation, the study largely confirmed that we are compensating our staff appropriately when measured internally and within the external job market compared against peer cities,” Haggenmiller stated. “The only position that will require actual adjustment is the police chief.”
The overall implementation of the changes will take place with the fiscal year 2019 budget.
Odds and Ends:
In other business, the council:
• heard an audit report. Nothing unusual was presented, and everything seems to be going fine.
• heard from resident Jim Peterson about concerns of a trail. Drainage concerns and positive slopes were brought into discussion, as well. The city council concluded Peterson should bring in actual plans, for the council to take action.
• Approved a school resource officer (SRO) agreement between the city and Howard Lake-Waverly-Winsted Schools. The school district will pay $20,000 for this service.
The council ended the meeting with a closed session to discuss the terms and conditions for the proposed real estate transaction for the successful redevelopment of 925 6th Street.