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<br />525 Park Street | Suite 470 | St. Paul, MN 55103 | 651-225-8840 | Fax 651-225-9088 | FH@flaherty-hood.com <br />QUOTE <br /> <br />To: Nicole Miller, City Administrator, City of Lake Elmo <br /> <br /> From: Ethan T. Rundquist, Compensation and HR Analyst <br /> Brandon M. Fitzsimmons, Shareholder Attorney <br /> <br />Date: February 20, 2026 <br /> <br />Re: Quote for Compensation Update <br /> <br />- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - <br />Flaherty & Hood, P.A. hereby submits this quote to conduct a Compensation Update for the City of <br />Lake Elmo, which includes a description of the purpose, and need for the update, the scope of services <br />to be provided, and costs. <br /> <br />Purpose and Need <br /> <br />A governmental unit’s success depends on its employees’ performance. To recruit and retain a <br />productive and reliable workforce, governmental units need to appropriately value and compensate <br />employees internally and externally. In establishing employee compensation, governmental units must <br />ensure that each job in the governmental unit interrelate to each other so that a governmental unit can: <br />optimize achievement of the governmental unit’s mission, goals and objectives; determine the relative <br />worth and appropriate pay rate for jobs; and comply with the Minnesota Pay Equity Act (PEA), Minn. <br />Stat. §§ 471.991-.999. The PEA requires that every Minnesota governmental unit establish <br />compensation for female-dominated classes that is not consistently below the compensation for male- <br />dominated classes of comparable value of work measured by the skill, effort, responsibility, and <br />working conditions normally required in the performance of the work. <br /> <br />To achieve these objectives, Minnesota governmental units need to establish job classification and <br />compensation systems, which establish job activities and responsibilities, job ratings (e.g. points), and <br />appropriate pay for each job in the governmental unit. <br /> <br />Job classification involves the systematic update of jobs to determine which activities and <br />responsibilities they include, the personal qualifications necessary for performance of the jobs, the <br />conditions under which the work is performed, and each job’s relative importance and worth to other <br />jobs internally (e.g., points) and externally. Compensation, which includes the wages and salary paid by <br />employers to employees in exchange for work, along with other total rewards, i.e., benefits, work-life <br />effectiveness, recognition, performance management, and talent development, are the primary indicators <br />of the value the governmental unit places on a job. A compensation system involves establishing how <br />the governmental unit manages compensating employees. <br /> <br />Flaherty & Hood, P.A.’s job classification and compensation update will review the city of Lake Elmo’s <br />job classification and compensation system, analyze internal and external information and make <br />recommendations to ensure the City of Lake Elmo’s classification and compensation system is: <br />• Understandable <br />• Flexible and updatable <br />• Cost-effective <br />• Internally equitable <br />• Legal and defensible <br />• Externally competitive <br />