Kennewick staff review Baker Tilly pay study; consultant recommends 105% market midpoint and raises to entry minimums

Baker Tilly presented a draft classification and compensation study to the Kennewick City Council on April 8, recommending a new pay structure aligned to 105% of market midpoints and a higher starting minimum for non‑represented positions.

The consultant said the study evaluated internal job value using a nine‑factor point system called SAFE (Systematic Analysis and Factor Evaluation) and benchmarked 110 positions against 11 public peers plus three published private‑sector surveys. The firm recommended a new 18‑grade pay plan (grades A–R) with 11 steps and a consistent 2.5 percent step increase, and proposed aligning pay midpoints to 105 percent of the market midpoint to maintain a “lead market” philosophy.

Sarah Towne, consulting manager with Baker Tilly, told the council the firm’s market assessment covered 110 benchmark positions and produced market values for 97.3 percent of those positions. “None of these scenarios will result in a pay decrease for any employee,” Towne said when describing implementation options.

Why it matters: the study would reframe how the city recruits and retains staff by adjusting minimums, midpoints and maximums across the workforce and by creating a more predictable step progression. Council and staff discussed budget impact, implementation approaches, and which employees would be moved onto the new pay ranges.

Key findings and structure Baker Tilly said the city currently uses a 16‑grade structure labeled A–P; the draft replaces that with 18 grades (A–R) and keeps 11 steps per grade. The firm recommended equal 28 percent range spreads (minimum to maximum) and a uniform 2.5 percent step differential to reduce uneven progression and compression. Towne said the firm’s geographic cost‑of‑labor adjustments showed Kennewick’s cost of labor about 8 percent above the U.S. average, and that the firm did not weight peer organizations over one another when calculating market midpoints.

Proposed minimums and midpoints Baker Tilly proposed raising the city’s general pay plan starting minimum (grade A, step 1) from $22.72 per hour (about $47,250 annually under the existing plan) to $26.26 per hour (about $54,622 annually) and reported a proposed midpoint for grade A of about $61,800. Towne said those entry increases were intended to make minimums more competitive while preserving room for advancement within each grade.

Benchmarks, matches and coverage The consultant reported 110 benchmark positions were included in the market survey, with an average of 6.4 quality matches per benchmark and one‑quarter of benchmarks having more than nine matches. Baker Tilly said it required at least three quality matches to compute a market value for a benchmark position; positions with fewer matches were not used to calculate a market midpoint but did receive internal job evaluation scores.

Implementation options and costs Baker Tilly presented three implementation scenarios and annualized cost estimates based on about 142 employees and vacant positions: - Option 1: Move only employees whose current salary falls below the new grade minimum to the nearest step without a decrease — estimated annual impact $261,155. - Option 2: Recalibrate employees into steps based on time in position (move to the step matching years in position, without reducing anyone’s pay) — estimated annual impact $332,322. - Option 3: Hold employees at the same numeric step in the new structure unless a decrease would result — estimated annual impact $904,168.

Towne and staff emphasized the firm’s implementation rule that no employee would receive a pay decrease from the change. The firm also prepared scenarios for one‑time implementation costs and annualized base‑pay impacts (not including benefits or pay differentials).

Council and staff discussion Council members asked for clarifications on peer selection, the role of unions and how cost‑of‑labor adjustments were applied. Towne replied that peer selection aimed to include organizations that “look like you, work like you” — similar population, services and employee counts — and that private‑sector data were included when positions compete with private employers. Council members raised concerns about escalation if neighboring jurisdictions repeatedly seek to “lead market” and asked how the city could sustain longer‑term adjustments.

Staff recommendations and next steps City staff said they would include a spring budget adjustment and noted a narrower first‑step implementation was under consideration. Finance staffing ran numbers for partial‑year implementation: staff reported raising the group of employees currently below the proposed minimum to market would cost about $121,443 on an annual basis and approximately $74,500 if effective July 1 (a partial‑year cost). During the meeting staff signaled preference for an approach that at minimum addresses the employees currently below the proposed minimum and allows further implementation planning; council asked staff for more granular budgeting information ahead of any formal adoption.

Quotes from the meeting “None of these scenarios will result in a pay decrease for any employee,” Sarah Towne, consulting manager, Baker Tilly. “We do not weight the data,” Towne said, describing the firm’s approach to peer comparisons.

What the council directed Council asked staff to prepare a spring budget adjustment and to return with implementation details; staff said they would present budget figures and options. No formal vote or ordinance was taken at the workshop.

Background and context The study used employee‑completed position analysis questionnaires and supervisor reviews to perform internal job evaluation, and paired those internal scores with external market benchmarks from 11 peer governments plus three published private surveys (CompAnalyst, Economic Research Institute and PayFactors). Baker Tilly described the SAFE job evaluation tool as a nine‑factor point system that measures the job (minimum qualifications and value of the position) rather than incumbent characteristics.

What’s next Staff will include a recommended spring budget adjustment to address employees below the proposed minimum and will return to council with implementation details, cost calculations and any ordinance or policy language needed to adopt the new classification and compensation plan.