More than a year after starting the process, the Lake Havasu City Council got its first look at some of the findings of the positional analysis study during its budget work session on May 21.
The highest profile aspect of the study compares city employees’ pay to their counterparts in other comparable cities across the state. But the study also includes producing new job descriptions and job titles, determining which employees should be hourly and which salary, and reviewing the evaluation process and pay philosophy for city staff.
“What the city is trying to accomplish is to attract and retain the best employees,” City Manager Jess Knudson said. “We are seeing turnover rates in two departments specifically within the city – that is in Public Works and the Police Department – but this is not a situation that is isolated to one or two departments. It is citywide, and it is important for us to attract the best and the brightest employees.”
Human Resources Director Shawn Marie Irula told the City Council that the study is still in progress, but the city has already received the salary data from the study. City staff has worked with consultant Baker Tilly to determine the estimated cost for salary increases would be $1.2 million per year. Administrative Services Director Jill Olsen estimated that the total cost of implementing the study would be about $1.8 to $2 million.
“When you pay more salary you are paying more for overtime, you are paying more for ASRS, worker’s comp, disability, everything that is based upon a salary dollar amount,” she said.
Not all city employees would see a raise as a result of the study, only those whose salaries were identified as being below market value.
Irula told the council that although the original plan called to implement the findings of the study on July 1, staff is now recommending that it be enacted on Jan. 1, 2021 to allow the city time to take stock of the financial toll the coronavirus has taken on its finances.
“While staff understands that this is not the ideal situation, we cannot ignore the fact that our revenues are expected to decrease in light of the covid pandemic,” Irula said. “The placement of the implementation on the Plan B list allows the city to reevaluate our revenues in the fall and better understand how our economy has been affected.”
She explained that with a Jan. 1 start date, the expected impact on the budget in the next fiscal year would be $600,000 – or half of the cost of a full year with the new pay scales. Of that, $200,000 would go to the police department, $120,000 to the fire department, and $118,000 for public works making up a majority of the total salary increases identified.
Delays in the process
Irula told the City Council that the positional analysis study was initially estimated to take about six months to complete, but said that estimate was a best-case scenario and that such studies often overshoot the estimated timeline.
She said one of the biggest delays in the study came in the data gathering phase as Baker Tilly distributed surveys to cities throughout Arizona identified as most comparable to Lake Havasu City. Irula said many of the cities requested an extension to the deadline to provide the data, and the study was not able to move forward until it had collected that data.
Now that the data has been collected and Baker Tilly has shared it, along with its recommendations with the city progress is being made. But Irula said it has been difficult to schedule times for all of the department heads to meet and discuss the aspects of the study still in progress such as the performance evaluation process.
“This process would go a whole lot quicker if I would just sit in a room by myself and make the decisions,” Knudson noted. “That is not the process that we want to unfold here. We are engaging with the department heads and the executive team – the brain trust of the organization – to make some determinations on what is best for the organization. It is a belabored process, but we want to make sure that what we do is important.”
Irula said there is still a significant amount of work left to do. Currently, she said staff is working with Baker Tilly on revamping the performance evaluation process. The city will also need to updates its software, systems, policies and procedures before it will be ready to implement citywide.
She said it is still too early to estimate an exact date to complete the project, but said if directed by City Council staff could have everything ready for implementation by the start of next fiscal year on July 1.
“There are some things that are still outstanding with our consultant that we are still working on, but as far as an administrative position, we are ready to implement, and can get ready as soon as the council is ready to move forward,” she said.
Several City Councilmembers expressed frustration at how long it has taken to complete the study, but Mayor Cal Sheehy and Knudson stressed the importance of producing a quality study that fits the city’s needs.
“One of the objectives was to do it right,” Sheehy said. “Some of the challenges that we are having now, and some of the compression issues that some of our team members have experienced is because we did quick fixes by department, by band, or by position to make some corrections. The whole intent here was to do a system wide approach so that we don’t have those issues going into the future. It is taking a long time, but I think the end result will be very positive. We just have to make sure that it is implemented in the correct way.”
Once the positional analysis study is completed, the results of the study will share the final report with City Council and present the information at a City Council meeting. In order to pay for implementation of the study, the City Council most include money in the budget. The proposed budget that the council is expected to vote on next month includes $600,000 based on Jan. 1 implementation.
Once the money is in the budget, it will be up to the city manager to implement the results.