Council work progressing on adopting new compensation and classification review

By John McLoone

The Hastings City Council continues work on the employee compensation and classification study that it contracted for with the accounting firm of Abdo Solutions earlier this year.

In late July, the council sent the study to its administrative committee – comprised of city councilmembers Trevor Lund, Lori Leifeld and Jen Fox – for review. The full council held a workshop on the study and how to implement it on Monday prior to the city council meeting.

City Administrator Dan Wietecha said that the council could see it on an agenda for approval at its Sept. 6 meeting at soonest.

“I think we’re making progress,” he said. “We’re not there yet.”

Abdo Solutions studied similar wages at comparable communities throughout the Twin Cities area. The city last studied its wages and job classifications in 19992000.

The city budgeted for some expected adjustments as a result of the study this year. The council is working to decide if the new pay system is put into place immediately or phased in. Wietecha has said the goal of the study was to make sure city job descriptions are up to date and to make sure wages are consistent and competitive in the marketplace.

Wietecha presented to the council that implementing the study presented would cost $343,767 for half of 2022, and $687,534 for a full year in 2023. In addition, the cost of employees moving additional steps in 2023 would be $37,500, and a 3 percent cost of living adjustment would run $21,751. Total projected 2023 cost with the city share of payroll taxes are benefits included was projected at $882,583.

The city council was expected to consider phasing the plan in over twothree years, so it wouldn’t have as much of an impact on what is already considered a tight budget for years to come.

When the council authorized the study early this year, it was noted that some employees have left for competitive wage reasons, and it’s difficult to attract new hires in some instances.

“The city last conducted a formal independent position classification and compensation study many years ago and has experienced changes in its workforce and operations, challenges finding and retaining skilled employees and increased market competition for employees from neighboring cities,” the Abdo Solutions presentation to the city states. “In recent years, the city has experienced a change in workforce and challenges finding skilled workers which have impacted both the job duties and wage demands for many positions. Also, current market wage pressure and competitive recruiting offers in many positions contributes toward an employee perception that the city may not be offering wages in line with the comparable market. In light of these organizational changes and challenges, the City of Hastings determined that a formal, independent, systemwide position reclassification and market wage analysis was necessary to assist executive leadership in establishing a new, logical and justifiable employee wage and salary framework to build upon into the future.”

As part of the study, each position was scored and ranked on knowledge required for the position, problem solving skills required, accountability and special conditions.

“These categories are intended to measure and rank the level of knowledge, skills, influence and impact on city operations for each position,” the study states.

The 65 ranked positions earned scores of 97 for a building services worker on the low end to 736 for the city administrator position.

The city has an ordinance on file that identifies comparable government entities for looking at wages. The ordinance states, “City of Hastings employee compensation schedule will be based upon a comparison of cities with populations from 15,000 to 35,000 in the sevencounty Metro region and the cities of Cannon Falls, Cottage Grove, Northfield and Red Wing.”

“The City of Hastings is within 40 miles of both St. Paul and Minneapolis and in close proximity to many other large metro cities. As a result, the city is actively competing for talented employees with these larger southeast metro communities. The city should consider a competitive compensation scale to attract and retain qualified employees that have the knowledge, skills and abilities to provide service levels expected within the community, particularly considering the current labor market,” the study states.

The market data compiled shows that most jobs are paid below the comparable communities and recommended a new salary scale based on the scoring system and the comparables. On average, the pay range minimums for each position were .64 percent below the market minimum. On the maximum end, wages were, on average, 5.42 percent below the market minimum.

The study also noted that while union employees were included in the market study, wages will have to be negotiated independently, not as part of the study.

“Adoption of the proposed compensation model would approve the scoring for these union positions but would not place them in the proposed salary structure unless otherwise agreed upon through collective bargaining,” the study states.

The study recommends a step and grade pay model with eight steps and 20 grade levels. Under the study, the minimum pay level for the proposed nonunion employees would be, on average, 3.59 percent above market minimum on the low end of the scale and 1.86 percent above market on the high end of the scale.

For example, a position that graded on the low end, grade one would have a starting wage of $17.50 per hour. The highest level for that position, step eight, would earn that employee $21.91 per hour.

The study also showed that Hastings City Council members are paid less than their nearby peers. City councilmembers earn $7,200 annually, which is 7 percent less than comparable communities. The mayor earns a salary of $9,400, which is 6 percent less than in comparable communities.