Eloy City Council Work Session on Employee Compensation Study - March 18, 2024
Eloy City Council Work Session on Employee Compensation Study - March 18, 2024
This work session of the Eloy City Council, held on Monday, March 18, 2024, at 5:00 p.m., focused on the findings and recommendations of the City of Eloy Employee Compensation and Classification Study conducted by HR Know Consulting. The council reviewed proposed salary adjustments to address market competitiveness, compression, and retention, followed by a presentation on funding options from city staff. Council members discussed affordability, long-term sustainability, and heard public testimony from employees. The session concluded with direction to staff to prepare a budget incorporating a 100% market adjustment and a 4% cost-of-living increase (COLA) for the next fiscal year, and to explore the feasibility of early implementation.
Discussion Items
- Presentation by Igor Shagolov (HR Know Consulting): Igor presented the study methodology, including market analysis using comparable agencies (Casa Grande, Coolidge, Oracle Valley, Florence, Marana, and Pinal County). He explained that the city’s current pay structure had a 55% bandwidth, which was wider than the market norm for technical jobs, causing recruitment difficulties. He recommended a 4% general increase (based on an Employment Cost Index of 4.5%) and market adjustments to bring employees to target positions based on years of experience in their current role. For police, a linear progression over 15 years was recommended; for other employees, a logarithmic regression was used. The total cost for 100% market adjustment was estimated at $125,000 for general staff and $159,000 for police, plus the 4% COLA. An 80% market adjustment option was also presented.
- Council Discussion: Council members raised concerns about the comparability of larger cities (e.g., Casa Grande, Pinal County) and the city’s ability to afford the increases long-term. City staff clarified that the relevant labor market includes agencies where the city loses employees, not just those of similar size. Mayor Powell and Councilmember Garcia disclosed that their spouses are city employees (no conflict of interest, as the study is objective). Councilmember Curtis questioned the trade-off between time-in-service and performance pay; Councilmember Sutton noted that the study aimed to address compression first, with a performance-based system to be developed later. Councilmember Turangle expressed concern about state revenue uncertainties (e.g., Santana Corporation incorporation, food tax repeal). Councilmember Snyder advocated for a business-like approach of increasing revenue or cutting costs, but Councilmember Garcia and Councilmember Turangle strongly supported the 100% market adjustment to retain employees.
- Presentation by Brian (City Finance): Brian outlined four funding options: (1) standard revenue sources (general fund, highway user revenue, enterprise funds) – total ~$1M, but would require cuts to services; (2) reallocating the 2% food-for-home-consumption tax (currently $444k/year, with a $1.4M balance) – would need ordinance amendment and would free up $600k for roads; (3) moving vehicle lease payments from the general fund to the CIP – freeing $200k/year; (4) paying off a general excise bond (City Hall or Police Station) using reserves – saving $386k/year in interest but reducing the uncommitted fund balance. Staff recommended a mix of options and noted that the city’s current revenue projections (sales tax growth, conservative budgeting) could support the increases. They presented three funding scenarios: Scenario 1 (4% COLA + 100% market) cost $759k including benefits; Scenario 2 (4% COLA + 80% market) cost $689k; Scenario 3 (hybrid) cost $627k.
Public Comments & Testimony
- Sergeant Jeremy Sandmans (Eloy Police Department, 10 years): Stated that he loves working for Eloy but is considering leaving because the city is no longer competitive. He is in the process with DPS for a $20,000 raise. He said that if the market adjustment is implemented, it would make him reconsider his plans. He asked for an earlier implementation to stop the loss of officers.
- Another employee (name not given): Echoed the need for action, noting that recruitment and retention costs will increase if changes are not made. They urged the council to implement the adjustments soon.
Key Outcomes
- Council Direction: The council expressed consensus to move forward with the 100% market adjustment and a 4% COLA for the 2024-2025 fiscal year (starting July 1, 2024). Staff was directed to build the budget accordingly.
- Early Implementation: Council asked staff to explore the feasibility of implementing a portion of the market adjustment before July 1, 2024, to stem the loss of officers. Staff will analyze the budget and provide a memo to the council within one to two weeks, with possible follow-up meetings.
- Next Steps: Staff will prepare a detailed budget incorporating the 100% market adjustment and 4% COLA, and will provide a memo on the possibility of early implementation. A formal vote will occur during the budget adoption process.
Meeting Transcript
Mayor have 530. Good evening. Welcome to tonight's work session. It is Monday, March 18th, 2024. Time's approximately 530. I call this meeting to order. Mayor, can I get a roll call, please? Councilmember Seton. Here. Councilmember Juanato Rodriguez. Here. Vice Mayor Curtis? Here. Mayor Powell? Here. Councilmember Snyder. Here. Councilmember Garcia? Present. Councilmember Tarangle. Thank you. Here. Oh sorry, thank you. We can all stand for the Pledge of Allegiance, Michelle. And to the public for which it stands one nation under God's role, whether it's justice or all. Thank you. We're gonna go to any unscheduled public appearances. I assume not at this point. So they're only here for the one topic that we're gonna discuss, so if anybody would like to talk at that time, we'll give them an opportunity. David. Thank you, Mayor, members of council. Um tonight we have Igor, and I'm gonna butcher your last name so I apologize. Shagov. Shagolov. Um here he's uh from HR Consulting now, and he presented and prepared all of our study findings over the past well almost a year now. We've been working diligently at this about this time last year. Uh one of the major uh things that we extrapolated from the study is we originally did it as a whole list of all employees, and then about halfway through the year we you know, I'd been approached by the police department at that time regarding some salary disparity between neighboring communities. So we re-examined that and as a result we decided it was best to pull that data out. So tonight you'll see not what's generally not typical of a common class study. You usually have all the employees of all positions in one. In this one we have the employees and then we segregated the PD as well. So we can kind of take a comparative look at all city employees versus just the police department and what actions might need to be taken to help with the police. So Igor will present his findings for you first, and then uh once we go through that answer questions and comments, then we'll roll into the city portion of the presentation, which is funding, how we're gonna be able to afford some of the recommendations that are being presented here and thank you. Uh but the I'd like to start with um introducing my company and uh explaining who we are and what we do. Uh we are independent consulting firm. Uh we provide uh compensation classification services for uh all uh uh private and uh non prof non profit and of course government uh agencies and organizations for now for uh about twenty years. I'm gonna skip this uh marketing pitch. Uh just wanted to tell you that uh we dedicated to your organization and we will follow up on any calibration, uh any follow-up uh uh calculations and uh we'll do good service to you. Those are just uh recent projects and cities uh government agencies that we worked for. Developed similar projects in classification compensation.
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