More than a dozen municipal employees turned up at City Hall Monday night to hear the results of a year-long study of how Unalaska categorizes and pays its workers.

The work was done by Fox Lawson and Associates of Phoenix, Arizona and St. Paul, Minnesota. They sent consultant Lori Messer to Unalaska twice over the past year to research the kind of work that city employees are actually doing -- and what they're getting paid for it.

Messer returned to town Monday to explain the results in a two-hour presentation.

Fox Lawson’s overarching recommendation to the city is that it stop thinking of compensation in terms of cost of living, and start thinking about it in terms of paying people for their labor. Messer stressed that the study isn't meant to place a dollar value on the individuals who currently work for the city of Unalaska.

“This is about the value of work in the marketplace and how the city stacks up with the market in regards to that,” Messer said.

Messer said her research is based on the cost of labor -- a figure calculated by the independent Economic Research Institute, based solely on the supply and demand of labor in a given location. For this study, Messer used similar-sized cities in Alaska including Kenai and Kodiak, and Edmonds, Washington.

Unalaska’s pay is currently competitive with those towns, Messer said. But same classes of employee -- particularly Title III employees, who are not unionized -- are underpaid by comparison. They're currently making 17% less than the "midpoint" of the salary range in similar cities.

Several other positions were found to be ”lagging or leading” the common market salary, as Messer put it. But those jobs are unionized, and their pay can’t be adjusted outside of union negotiations.

But the focus wasn't on adjusting individual salaries. Fox Lawson drew up an brand new model for the city to use when organizing its jobs. Right now, Unalaska has 99 job descriptions for its 151 employees. Messer said the city should classify employees by how much responsibility they have and how difficult their job is -- narrowing it down to 34 ranked categories.

With the new rankings, the consultants suggested a new salary structure. The lowest-ranking job in the city would earn $29,565 at the low end before benefits were added in, and the top-ranking job would max out at $149,633 before benefits.

Fox Lawson also suggested some tweaks to the city’s benefit plan, like adding an employee-sponsored flexible spending account for health care expenses. And the company is encouraging the city to rely more heavily on one-time bonuses to award good performance instead of pay raises, to stay within the bounds of the pay structure.

City manager Chris Hladick told council that right now, his top priority is to increase the salaries of underpaid Title III employees.

There are several ways to do that: The city could choose to bring all Title III employees’ salary up to the low end of the range, which would cost an extra $10,000 a year. Another options is to move Title III salaries to the midpoint, which run an additional $233,000 each year.

Hladick said he isn’t sure what approach the city will take. But once that’s figured out, staff will get any extra information the city council wants before they start working through Fox Lawson's recommendations for categorizing jobs and assigning salary ranges. City staff may recommend an implementation plan, Hladick said.

“We’ll try to come back with something that’s reasonable and fair and hopefully reflective of the amount of time people have put in [working for the city],” Hladick said.

It’s been years since Unalaska significantly changed its pay or classification structure for municipal employees. But this isn’t the first time the city has tried to do that.

Unalaska previously commissioned a study in 2001 that council chose not to work with, Hladick says. The city performed an internal study around 2006 using Alaska Municipal League salary data, which Hladick said city staff used to adjust pay for Title III employees. 

The Fox Lawson study was commissioned in August 2012. It cost $65,000 to complete.