Council adopts modified ‘bring to minimum +1’ pay plan: 30 steps at 1.5% progression

The City of Fair Oaks Ranch on Aug. 7 approved a resolution adopting the implementation method and pay-plan structure recommended by staff and the city’s consultant, Evergreen Solutions.

Joanna Merrill, director of human resources and communications, summarized staff’s recommendation: a modified bring-to-minimum plus one placement method to place current employees fairly into new market-based ranges, and a step-based pay system of 30 steps with 1.5% progression between steps.

“Any employee who’s currently below their range minimum will be brought to that minimum range, and then all employees will be moved forward by one step,” Merrill said. The approach, staff said, is intended to reduce wage compression, provide a transparent progression path and remain fiscally manageable.

Rob Williams, the consultant now leading the engagement for Evergreen Solutions, reviewed options and recommended the 30-step, 1.5% progression plan as a balance of cost, equity and market competitiveness. Williams told council the recommended implementation for bring-to-minimum plus one step is materially less costly than other options such as hybrid-parity or preserving exact comp ratios.

Staff presented estimated costs for implementation: the recommended bring-to-minimum plus one-step approach was presented as an estimated $2.19 million base salary cost, equivalent in the consultant’s presentation to about 4% of payroll. Staff said those costs can be managed through identified budget savings, vacancies and other efficiencies and noted that the plan is intended to be the first phase of a multi-year compensation strategy.

Council members asked about maintaining competitiveness over time, how ranges would be updated and whether periodic updates or a CPI-based update should be adopted; Evergreen recommended a multiyear approach and suggested a three-year rolling average for inflation adjustments as a policy tool. The council adopted the recommended option and directed staff to implement the pay-plan placement and structure as presented.

Motion to adopt the resolution passed on a recorded voice vote; staff will return with implementation details and next steps including placement of employees into the new pay ranges and budget adjustments as required.