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<br /> <br />City of Elk River Item Number <br />REQUEST FOR COUNCIL ACTION 5.7. <br />Agenda Section I Meeting Date Prepared by <br />\\1 orksession October 9, 2006 Lori Tollnson, City i\chninistrator <br />Item Description Reviewed by <br />Pay Plan Reclassification Study. <br /> <br />Introduction <br />-L\t sev-eral previous meetings tlle Cit)T Council has re\Tie\ved a proposed Ilierarcll)' and pay plan prepared <br />by Rod I(elsey of Riley, Dett1nann, and I(elsey. Tile third step in tile process is to dev'elop an <br />impleluentation plan. <br /> <br />.i\gain, it is important to relnember tllat dus study \vas done to address internal issues in dle city's pay <br />stlucture due to tile reorganization and to clleck our pal; against tile market and to adjust it accordingly. <br />Tile study cOlnpleted by ~lr. I(elsey produced a proposed pay plan tllat provides internal balance and <br />places tile city.'s pay in tlle 60th percentile of dle comparable cities used for dle market study. i\S a result, <br />pay range adjustlnents \"vere lnade to lnost positions. <br /> <br />Discussion <br />TIle Council has already re\Tie\ved tlle proposed hierarcITY and pay plan and recei\Ted copies of proposed <br />rev'isions to bodl dle hierarcI1Y and dle pay plan. TIle rev"ision to tlle pay plan addresses tlle concern of <br />SOlne Councillnen.lbers about tlle pay for tlle finance director and tlle police chief. <br /> <br />The Council has also recei\Ted information on a proposed itnplelnentation plan. Tile city Ilas modified its <br />pay plan sev'eral times in dle past. TIle proposed implelnentation plan for tile 2007 pay plan is consistent <br />\VitIl past itnplelnentations. In sUlnmary, tllat lneans tllat elnployees recei\Te a cost of living increase on <br />January 1 (a tlltee percent CaLL\. is built into tlle proposed 2007 pay plan); elnployees continue to recei\Te <br />steps on July 1 if tlleir performance is satisfactory, including elnployees \vl10 \vere at tile top of tlleir pay' <br />range but no longer are because tlleir pay range Ilas increased; no employee llas his/ller pay reduced <br />belo\v last year's pay rate ev.en if tlle reclassification caused lus/ller pay range to decrease; and employees <br />\vl10 are abo've tile pay plan continue to recei\Te a pay increase equi\Talent to tile cost of liv'ing increase <br />\vitll one-llalf of it being applied to tlleir base pay. -L~dditionally, unlike in tile past, tllere are se\Teral <br />employees \vl10 are currel1tly paid belo\v tile bottoln of dleir ne\v pay grade. -LL\fter exploring se'veral <br />options to deal \vidl this issue, tlle Personnel COlmmttee is recolmnending that tllese employees recei\Te <br />step lllcreases on J anua!y and July as long as needed to bring tllelll up to Step ..t\. of tlle pay plan. <br /> <br />Ob'viously, there are many \'lays to itnplement dle pay plan; eacll \v.itll a different cost. On the lo\v side, <br />tile total cost for ilnplementing based on one \Tal1.ation is approxilnately $36,000, \\lhile on tile higll end it <br />could range up to $141,000 or lnore. Using tlle approacll reconunended by dle Personnel Committee, tlle <br />cost is approximately $68,000 (including benefits) for all affected employees. TIle actual cost \'lill cllange <br />depending upon tlle adjust1nents tIle Council makes to tile proposed itnplementation. <br /> <br />S:\Council\Lori\200G\Pay Plan Study 1009 GG.doc <br />