Council approves consultant to update compensation system; consultant warns of pay‑equity constraints

The Lake Elmo City Council voted to retain Flaherty & Hood for a targeted compensation update intended to maintain internal equity and check market competitiveness.

Jennifer (administration) outlined the city’s need to refresh its pay system and said the goal was an abbreviated study that preserves the existing classification structure while addressing known misalignments. Brandon Fitzsimmons of Flaherty & Hood presented the firm’s phased approach: review current class and compensation documents, update job analyses and job‑evaluation points required under Minnesota pay‑equity law, run a market survey of comparable cities, and recommend structural adjustments with implementation options.

Fitzsimmons emphasized legal and analytical constraints: "Minnesota’s pay equity law is very statistical based. There’s little discretion," he said, adding the study will first focus on internal equity points and then on market placement. He recommended identifying 7–15 comparable municipalities but said Lake Elmo’s rapid growth could justify as many as 15 comparables.

Council discussion focused on benchmarking methodology, the risk that individual employees or unions could lobby council over specific results, and affordability of any recommended raises. One council member noted benchmarking errors would undermine the report: "If it's off, the report is junk," the member said.

The motion to approve the Flaherty & Hood agreement carried by voice vote with no recorded opposition. Staff said the abbreviated update is intended to bridge to a more comprehensive study later and to provide recommendations that administration can cost‑test before implementation.