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  Agenda Item   14.    
City Council Meeting
Meeting Date: 02/21/2023  
FROM: Bill Gallardo

Award of Contract for Classification and Compensation Study 
It is recommended that the City Council approve a Professional Services Agreement with the Management Strategies Group (“MSG”) consulting division of the Sloan Sakai Yeung & Wong LLP law firm to prepare and conduct a classification and compensation study, and authorize the Mayor to execute a contract in the amount of $26,680.
The City is interested in conducting a classification and compensation study of the City’s General, Supervisory, and Management miscellaneous units and Police Management, Fire Association, and Fire Management safety units (The City recently negotiated a long term agreement with Police Association and they are not included in this study). The goal is to address changes in the City’s operations and staffing over past several years, which may have affected the type, scope, level and classification of work being performed by City personnel.  COVID-19 has accelerated significant changes in City operations and hiring of public sector staff has become a greater challenge.   
The primary goal of this study is to update salaries and job classifications to ensure they reflect the work performed and benchmark against other comparable cities’ job structures and compensation systems.  Classification and compensation studies should be conducted periodically to support operations and labor relations and to gather information of how other agencies structure their positions and compensate employees in similar situated positions. These studies provide the necessary tools for government agencies to remain competitive and make reasonable administrative, financial, human resources, and labor relations decisions.
The last time a comprehensive review of City classification practices was completed was in the late 1990’s, however, regularly conducted compensation studies have taken place in conjunction with the bargaining process.
The City’s objectives of this study also include to attract and retain qualified employees; ensure parity amongst positions (i.e. similar work with essentially the same level of complexity, responsibility, knowledge, skills, and abilities are classified together); align salaries commensurate with assigned duties; outline career paths and promotional opportunities; justify pay differential between individual classes; position the City in a competitive position with other comparable government entities within the same geographic areas; and take into consideration current employment trends, such as demographic shifts, flexible work schedules, digitization and workforce training.
In the last three years, the City has experienced significant organizational changes with staff retirements, higher than usual resignations and promotions. Recruitment and retention of qualified staff has become increasingly more challenging and the market place is more competitive.  A competitive and equitable compensation plan allows Brea to continues to attract top quality candidates and retain a qualified workforce.  The principal goal of the class and compensation study is to assist the City in developing a competitive pay and benefit structure, which is based upon market data to ensure that the plan is fiscally responsible, and that it meets the needs of the City with regard to recruitment and retention of qualified staff.
The methodology involves the benchmark of classifications.  The study will include at least twenty (20) job classifications for analysis and at least twenty-five (25) classifications will be selected in order to collect compensation data within the defined labor market.  Survey classifications that have the most consistent and useful survey data will be used as “benchmarks” in building the compensation plan.  Benchmark classifications are those classifications that are tied directly to market salary data during the salary setting process.  These classifications are used as a means of anchoring the City’s overall compensation plan to the market.  Other classifications not surveyed would be aligned on the proposed compensation plan using internal equity principles. Survey or benchmark classifications will include classes that are reasonably well known, and clearly and concisely described.  They will be commonly used classes such that other like-classes that may readily be found in other agencies can be used in order to ensure sufficient compensation data will be compiled.

The projected timeline for all miscellaneous units is as follows:

WORK TO BE COMPLETED                                                          FINAL DUE DATE* 
Agreement signed and submitted to the City                                   February 21, 2023
including all insurance documentation 
Survey Agency Recommendations submitted to the City               February 28, 2023
Draft Compensation Survey submitted                                            March 31, 2023          
Final Miscellaneous Compensation Study                                      April 14, 2023
Final Safety Compensation Study                                                   June 30, 2023                                                   
Final Classification Study Report                                                     July 31, 2023

*Work can be submitted prior to the final due date to expedite the process.  

The final product is expected to be an evolutionary system which will allow new positions to be incorporated into the new structure, as well as maintain classifications to remain competitive over time. The proposed classification and compensation study should follow methodology that is repeatable.
This action authorizes the City to enter into a Professional Services Agreement with the Management Strategies Group (“MSG”) to conduct a classification and compensation study. The financial impact of entering into this agreement is $26,680. If the scope of work is expanded (such as adding additional classifications to study), any additional work will be billed at the firm’s discounted public agency hourly rates of $260 for a Principal Consultant and $150 for a Research Assistant.  There will be no fiscal impact on the General Fund to award this contract. The cost for this study is already budgeted within the Human Resources operating budget for FY 2022-23.
William Gallardo, City Manager
Prepared by: Mario E. Maldonado, Human Resources Manager
Concurrence: Kristin Griffith, Director of Administrative Services
Class and Compensation Agreement
Exhibit A - Scope of Work

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