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Personnel committee hears that reworking Franklin’s pay plan would cost hundreds of thousands; leaders cite levy and budget limits
Summary
Franklin City staff told the Personnel Committee that rewriting the city’s compensation plan to match market pay would require hundreds of thousands of dollars and that levy limits and a personnel‑heavy budget constrain the city’s options.
Franklin City’s Personnel Committee spent substantial time reviewing the city’s classification and compensation framework and heard from staff that closing the gap with market pay would require finding significant money in the operating budget.
Kelly Hirsch, director of administration, reviewed the history of the city’s compensation approach: a GovHR study from February 2015 established the current class-and-comp framework and the city asked GovHR for a refresh in fall 2023. Hirsch said the plan’s use of the “60 fifth percentile” (referred to in meeting discussion as the 65% or 60th‑percentile benchmark) has left many employees well below comparable market pay because merit and progression mechanisms were never fully implemented. "That 60 fifth percentile... has that demoralizing effect on people," Hirsch said.
Staff described the arithmetic: the original plan assumed employees would reach the market percentile within a shorter period, but internal calculations show it may take many years (staff offered a worked example that could take 16 years under prior assumptions). The committee was told an initial implementation of a step plan that raises currently eligible employees toward market ranges would cost about $450,000 in the first year; full adjustments discussed during the meeting were described as roughly in the range of $500,000 to $1,000,000 depending on the chosen approach.
Committee members and staff repeatedly noted the city’s fiscal constraints. Staff said personnel costs are roughly 76–80% of operating budgets and the city has limited levy room: new revenue options are constrained by statutory levy limits and prior referendums that voters did not support. "I mean, the reality is we don't have $450,000 sitting around to make this work," Hirsch said, adding that the committee should consider incremental or targeted changes that do not require new revenue.
Staff proposed alternatives for discussion: (1) a step plan that would move employees through defined steps (an eight‑step plan was presented for committee review) with options to shorten the timeline, (2) targeted regrading of a few job families (for example, retitling and aligning some administrative assistants), and (3) limited, communicable one‑time adjustments to show progress while the committee and council consider larger funding options. Staff said a transparent multi‑year schedule could help morale even if funds are phased in.
Committee members asked for more data on where employees sit within salary ranges; staff agreed to supply a breakdown showing how many employees fall into each percentage of their assigned pay range. The committee set the matter for ongoing review and asked staff to return with modeling on step durations (for example, five‑year and eight‑year variants) and the budget impacts of each.
Ending
No formal change to the compensation policy was adopted. The committee directed staff to develop a phased plan and provide detailed spreadsheets and cost estimates for the next meeting so aldermen can consider tradeoffs within the city’s constrained operating budget.
