Agenda Item Wording:
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Contract award for total compensation and comprehensive classification study - Authorize the City Manager to award the contract to conduct a total compensation and comprehensive classification study to Gallagher Benefit Services, Inc., in the amount of $391,600 and authorize the appropriation of $141,600 from the General Fund.
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Prepared by:
Shonna Oneal, Administrative Services Director, Shonna.Oneal@Visalia.gov, (559)713-4053
Amy Powell, Human Resources Manager, Amy.Powell@Visalia.gov, (559)713-4575
Department Recommendation:
Staff recommends that the City Council:
1. Authorize the City Manager to award the contract for RFP 23-24-58, Total Compensation and Classification Study to Gallager Benefit Services, Inc. in the amount of $391,600; and
2. Authorize an additional appropriation of $141,600 from the General Fund.
Summary:
City staff issued RFP 23-24-58 to hire a professional consulting firm to conduct a total compensation and comprehensive classification study. These studies will evaluate compensation to determine the City’s competitiveness in the marketplace and address changes in the organizational structure, reporting relationships, and staffing which may have affected the type, scope, level, and classification of work being performed by employees. Ultimately, the study will facilitate a plan to address classification issues and improve compensation, which will increase the City’s ability to retain a quality labor force.
Project timeline is anticipated to be conducted in two phases. The first phase “total compensation study” will begin March 2026 and be completed by January 2027. The second phase “classification study” is anticipated to begin in June 2027 and be completed by June 2029.
Background Discussion:
The City has historically reviewed, revised, and created job descriptions on an as-needed basis, typically in response to vacancies, operational needs, or changes in organizational structure. However, the City has not conducted a comprehensive classification and compensation study in several decades. Best practices in public sector human resources recommend conducting these studies approximately every ten years to ensure job classifications remain accurate, compensation structures are equitable, and the organization remains competitive in the labor market.
In recent years, competition for qualified employees has increased, particularly for specialized or hard-to-fill positions. Public agencies rely on comprehensive classification and total compensation studies to attract and retain talent, maintain internal equity, and ensure fiscal responsibility. This study will provide an objective, data-driven framework for classification decisions, salary adjustments, and organizational planning.
The study will evaluate both market compensation and internal classification structures. The market component will include a comparative analysis of up to nine (9) similar public agencies and approximately one hundred (100) benchmark classifications, reviewing total compensation including salary and benefits.
The internal classification review will examine roughly 198 classifications citywide, including position audits, preliminary allocations, and development of draft class descriptions to ensure that positions are accurately classified based on current duties and responsibilities. The study will also provide the framework moving forward to keep classification structure in place.
The consultant will also engage employees, management, and other stakeholders through structured advisory and stakeholder groups. This engagement ensures that recommendations reflect the City’s operational needs and organizational goals.
Bidding Process
The City issued request for proposals (RFP) 23-24-58 and received twelve (12) responses. Following is a list of the final rankings:
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No. |
Vendor |
Location |
|
1 |
Gallagher Benefit Services, Inc. |
Walnut Creek, CA |
|
2 |
Baker Tilly |
Frisco, TX |
|
3 |
Public Sector |
Los Angeles, CA |
|
4 |
MGT |
Tampa, FL |
|
5 |
Evergreen Solutions, LLC |
Tallahassee, FL |
|
6 |
JER HR Group |
New York City, NY |
|
7 |
Transformance Consulting |
Corona, CA |
|
8 |
CPS HR Consulting |
Sacramento, CA |
|
9 |
Bolton |
Cincinnati, OH |
|
10 |
Uncomplicate HR |
Fresno, CA |
|
11 |
Salary.com |
Waltham, MA |
|
12 |
The HR Innovator Group |
San Diego, CA |
A selection committee evaluated the proposals based on experience with public sector classification and compensation studies, technical approach, project team qualifications, and demonstrated understanding of municipal operations. Following the initial evaluation, the top four firms, Gallagher Benefit Services, Inc., Public Sector, MGT, and Baker Tilly, were invited to interviews with the selection committee.
After completing interviews and final evaluations, Gallagher Benefit Services, Inc. was ranked as the highest-qualified firm. City staff then opened the fee envelope for the selected consultant and began the negotiation process. If approved by City Council, Gallagher Benefit Services, Inc. will begin work immediately upon execution of the agreement.
Gallagher Benefit Services, Inc. was formerly known as Koff & Associates and consists of an experienced team of consultants that has been providing predominantly classification, compensation, and recruiting services to cities, counties, special districts, courts, educational institutions, and other public agencies for over 40 years. They have recently performed work with other nearby communities (City of Tracy) and have a local senior consultant in the Fresno area that will be available to attend in-person at a couple of the City Council meetings.
Fiscal Impact:
The contract with Gallagher Benefit Services, Inc. is in the amount of $391,600. Council previously approved Capital Improvement Project 0649 and allocated $250,000 toward this study. An additional appropriation of $141,600 from the General Fund is required to fully fund the project. Funding for this study will be included in the upcoming fiscal year budget, and total project costs will be managed within authorized appropriations. This investment is expected to provide a structured, equitable, and competitive compensation framework that supports employee retention and organizational efficiency.
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Budget Summary (CP0649): |
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Project Funding Source: |
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General fund (001) |
$250,000 |
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Total Project Funding |
$250,000 |
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Project Budget |
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Consultant Fee |
$391,600 |
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|
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Total Project Cost |
$391,600 |
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Remaining Budget (deficit) |
($141,600) |
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Appropriation of Funds |
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General Fund (001) |
$141,600 |
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Prior Council Action:
Approval of Capital Improvement Project 0649 - Classification and Compensation Study.
Other: N/A
Alternatives: None recommended. Should the consultant contract not be awarded, the City would be unable to complete the study internally with current staffing levels.
Recommended Motion (and Alternative Motions if expected):
I move to authorize the City Manager to award the contract to conduct a total compensation and comprehensive classification studies to Gallagher Benefit Services, Inc., in the amount of $391,600; authorize the additional appropriation of $141,600 from the General Fund.
Environmental Assessment Status: NEPA Environmental Assessment does not apply.
CEQA Review: Not applicable
Deadline for Action: N/A
Attachments:
1. Consultant Ownership Disclosure Form
2. Sample Consultant Contract
3. Consultant Proposal with Amendments