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Council approves classification and compensation study implementation

The Austin City Council voted 6 to 1 in favor of implementing certain components of the classification and compensation study during its regular meeting Monday evening.

The study, conducted by Flaherty & Hood, P.A., was conducted to ensure that city employees are paid equally according to their job responsibilities while competing in a rapidly changing employment landscape. The council hoped to use the results to address past difficulties the city has faced in recruiting and retaining qualified employees.

The study assigned evaluation points to various city positions and compared how those positions were paid versus other Minnesota cities of comparable size to Austin. To determine the evaluation points, Flaherty & Hood took into account skill, effort, responsibility and work conditions. They then provided a base pay structure with pay grades the city can utilize, with an employee starting in a position being placed on any step at the city administrator’s discretion.

The study ranked the city administrator, public works director and police chief positions as the highest, with 940, 912 and 854 job evaluation points, respectively. Park and recreation clerk was ranked the lowest at 171 points.

City Administrator Craig Clark said it has been over 25 years since the last classification and compensation study was conducted.

Before the vote, Councilman Jeff Austin (At-large) pointed out a difference between the results the council had during the meeting versus the results they saw in September.

“The question was asked if anything had been changed to the comp and class study from when it was given to council in September,” he said. “We were told by the two people that put it together that nothing had changed, yet before us tonight in this document there are four positions (human resources director, street superintendent, sewer maintenance and building/ice custodian) whose points have changed from the September document.”

Austin noted that three of the positions point values went down, while one went up. He also said the document seen in September was supposed to be the final document and asked why the change was not brought to the council’s attention.

“I know that there were a couple of times that we did cover the proposed base plan structure; one was early in the process and one was a little further along in the process,” said Human Resources Director Trish Weichmann, who added that she did not recall the September document.

Clark did not recall the September document either and said it would have to be referred to Flaherty & Hood.

Councilman Jason Baskin (Second Ward), who cast the sole dissenting vote, said that while he believes city employees should be fairly paid, he opposed the plan’s implementation on three points:

• It could require a double-digit tax levy increase – “Property taxes increased nearly 60 percent in the four years before I was elected,” he said. “If we fully implement this comp plan it will likely require additional double-digit tax increases over the next 2-3 years to pay for it. This is not sustainable for our local residents and businesses.”

The most recent double-digit tax levy increase was a 15.69 percent increase for the 2019 fiscal year; part of that increase, $500,000, was an estimated amount set aside for the implementation of the study.

• Possible constraints on ability to make needed community investments – “Salaries and benefits are already the number one budget expense, accounting for 62 cents of every city dollar spent,” Baskin said. “Increasing this expense to nearly 70 cents on the dollar will constrain our ability to make needed investments in things like solving our housing shortage, economic development, and quality of life programs.”

Baskin confirmed to the Herald that the number was over $1 million, though he said the exact number is privileged information for the council.

• Possible 20-30 percent wage increases – “We have successfully set wages through the collective bargaining process for the past 30-plus years,” Baskin said. “This system has worked because it’s created deals that are mutually fair to taxpayers and employees. This study (using comp cities that have a higher average income and taxable economic base than Austin) now suggests that some departments should now get 20-30 percent increases, which is substantially higher than the past levels that both sides have agreed to year after year. While I am convinced that employees should be paid more, 20-30 percent increases are simply too much.”

Austin said he shared Baskin’s concerns, saying the report was a “flawed document” and was not comfortable passing it without getting an answer about the point changes, but felt there was not much of an option when it came to contract negotiations.

“Now that we have a contract that is tied to this document, I don’t know how we can expect to settle contracts without approving this comp and class study because that’s what our contracts are hinged on,” he said. “In the interest of moving forward on contract negotiations, I feel that this should be approved tonight.”

Councilman Steve King (Second Ward) said he disagreed with Baskin on the plan not being sustainable.

“I don’t think the city will be sustainable unless we approve this compensation plan,” he said. “I always put it on us; shame on us for not having a compensation plan for the last 20 to 25 years to get to this point. Being the fifth or seventh lowest taxed city with a population over 5,000 is nothing to be proud of. This is the result. We’re underpaying our employees by a significant amount and we just need to bite the bullet on this. I think most of the constituents would understand that we don’t want to balance the budget on the backs of lower paid employees.”

“This study has been over a year in the making,” said Mayor Tom Stiehm. “It was an impartial study; it told us that we’re not paying our workers what we should be paying and haven’t for a while. It’s going to be a real challenge putting together a budget this year, but at the same time, you still have to pay your people what they’re worth.”

“To me, the flaw in the study is the fact that yes, you can look at comparable cities, but we have a lower median income than a lot of those cities, so it’s not and apples-to-apples comparison,” Baskin said.

The council also unanimously voted in favor of approving a labor agreement and memorandum of agreements with the city and Law Enforcement Labor Services, Inc. The agreement runs from 2020-2022.