The Lake Elmo City Council took steps on Jan. 17 to try to limit the high staff turnover it has seen in the past. Those steps included a drastic pay increase to the city administrator, as well as increases for three other city employees.
On Jan. 3, Councilmember Justin Bloyer had asked to have a discussion about the compensation for the city administrator position, noting that other cities in the area had current openings for administrators. City staff prepared a list of salaries for city administrators from neighboring and comparably-sized cities.
“This has nothing to do with our administrator, it has to do with the position itself,” Bloyer said. ” For the last two years … Lake Elmo has been a little contentious. Lake Elmo’s history, I think in the last 10 years we have gone through nine administrators. We have a difficult council to deal with.”
Bloyer called the increase “the Lake Elmo premium,” stating that the city has had many administrators in the past decade and that the increase could provide stability. Bloyer made a motion to increase the city administrator position salary to $135,000 annually, an increase of $22,500. He also moved to allow for two days per month where the city administrator could choose to work from home. Prior to the increase, City administrator Kristina Handt currently had an annual salary of $112,500.
Both Councilmember Julie Fliflet and Councilmember Jill Lundgren asked if Handt was applying for other positions and intended to leave Lake Elmo. However, the
council majority felt that discussion was about the salary for the position of city administrator and not the individual currently in the position, and Handt did not answer the question.
“To have this be the first thing we are doing, it’s just embarrassing. I am not in support of it,” Fliflet said. “I do not believe it is the right thing to do to react to a threat or an administrator applying to other positions to do this.”
“I cannot support giving our administrator a $22,500 raise,” Lundgren said.
The city council voted 3-2, with Fliflet and Lundgren dissenting, to increase the salary.
The council also increased salaries to three other employees after a report from David Drown Associates Human Resources, Inc. The firm was hired last year to review the job classifications and compensations of the employees. Consultant Tessia Melvin gave a presentation to the council.
“One thing in looking at Lake Elmo is the tenure,” Melvin said. “There are 23 employees; there are eight employees less than a year, 10 that are less than seven … three employees less than 12 years and one at 25 years. These employees are relatively new in their position here.”
The city of Lake Elmo has experienced much turnover and has some difficulty in recruiting qualified employees, Melvin said in her report. The intent of the study was to help the city retain employees and recruit highly trained and desirable employees.
“Turnover is to be expected, but excessive turnover has a serious impact on an organization’s overall effectiveness,” Melvin wrote in her report. “Organizations will experience some turnover, but when it becomes excessive the organization faces serious challenges. Other non-measurable components of turnover include, current employees covering the void left by departing employees, training new employees and slower progress on meeting organizational goals.”
The review indicated that the salary ranges for most of the city of Lake Elmo positions are above minimum salary ranges of comparable organizations, Melvin said. The study only looked at employee salary, and did not include benefits. Three job positions were below the market minimum: the finance director, the planning director and the fire chief. The council voted 3-2, with Fliflet and Lundgren dissenting, to give salary raises to the three employees with salaries that were under the market minimum. Fliflet said she did not vote for the increase because she wanted to compare the city’s benefits package to the comparable cities’ benefits. The change does not include a pay increase to include education, training or tenure.
“We went to the League of Minnesota Cities to talk about our insurance — basically what I would call the loss of our insurance — we said that this was one of the things that we would do,” said Mayor Mike Pearson. “There are some things we said we would do and we would appreciate it if they could reconsider the change.”
The change Pearson referred to was a deductible hike imposed by the city’s insurance carrier last year.
The most significant salary adjustment was for the fire chief; the market minimum hourly rate was found to be $39.32, whereas the Lake Elmo fire chief had received an hourly rate of $35.08. The cost to move all three positions to the market minimum is $18,158.
As part of the report, Melvin found that currently the city of Lake Elmo does not have a pay philosophy. Melvin told the council that a pay philosophy guides the design of a compensation system and answers questions regarding pay strategy.
When seeking employees, the city has filled positions and developed salaries and raises for employees without a specific plan on how training, experience or tenure influence salary. In looking at the market average for all positions, Melvin found that only 52 percent of the city’s employees were being paid above the market average of other comparably sized cities. The total cost to move all employees to market average is an additional $96,683, Melvin said. Melvin suggested using a pay philosophy so the city and staff can plan for salary increase or develop salaries for open positions that will be more consistent.
Melvin also suggested a few title changes to reflect the current job descriptions for some employees and the addition of a public works lead position.
Contact Alicia Lebens at [email protected]