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HAY Point Analysis and 2009 Pay Plan December 22, 2008 Page 3 Second, having a pay plan with established pay ranges is easier to administer because it is not dependent on conducting a market survey of all positions every year. Salaries of benchmark positions can be monitored annually to make sure that the City’s pay plan is consistent with its market position. On average, the City should expect to conduct a complete salary survey and job evaluation study every five years or so. Third, in establishing its pay plan, the City can consider its market position. The City can establish a policy to be equal to market, to lead market, or to lag market. On-going administration. The City should expect development of a pay plan based on grades to result in efficient administration of its compensation program, primarily because the City will not have to maintain separate pay scales for each position. Adopting such a pay plan will also result in consistent administration of the City’s compensation program, regardless of whether market data exists for a given position. Implementation Springsted recommends that the market and predicted wage increases be implemented over time rather than all at once. The 2009 budget has already been adopted and the full extent of the wage increases cannot be absorbed in one year without causing significant budgetary consequences. Add to that the uncertainties caused by the State’s budget crisis, the “phasing in” of the recommended increases over time is a fiscally conservative and sensible approach. Staff recommends preparation of a multi-year pay plan that would incorporate a maximum 3% wage increase in 2009 for those positions which, based on the attached wages table, would warrant a market or predicated pay increase. For positions that are observed to be paid in excess of the market or, absent reliable market data, in excess of the predicted wage, the Council may consider adopting a lower cost of living increase in subsequent years, however it would not be my recommendation to do so. In addition to the potential detriment to morale, it would be likely that other cities would eventually catch up with the Mounds View positions in the long term, negating the need for reduced COLA increases. Recommendation: Staff recommends approval of Resolution 7380, a resolution approving the results of the Springsted salary compensation study and authorizes the preparation of the 2009 pay plan effective January 1, 2009. Respectfully submitted, ________________________ James Ericson Clerk-Administrator