Here is the transcribed townhall meeting with speaker names assigned based on the context provided. [00:00] **Elizabeth Kautz (Mayor):** Okay, good evening everyone. Um, I will now call our budget work session to order and um the clerk will show that it's 7:26 uh p.m. And as usual, members of the public are always uh welcome and welcome to our guests who are here uh in person tonight. But um members of our community can um watch the meeting on at Burnsvillemn.gov/meings or [snorts] watch us on Comcast channel 16 or 859. And the public can also participate through Zoom by joining us at zoom.us/join and more information is available on our meetings web page and in the council agenda packet. So we have one item on our budget work session this evening and that is our organizational analysis and Mike Tracy our HR director is presenting. The floor is yours Mike. [snorts] [00:58] **Mike Tracy (HR Director):** Yes, good evening mayor and council. Um we are here to talk about the organizational analysis. So this is the kickoff to the 2027 budget um uh budget process. So just as a little bit of a background about the organizational analysis um so the original OA or organizational analysis was adopted back in 2023. Um it was designed to be a four-year plan to catch us up to 2022 uh staffing levels by adding 56 FTE over those four years um across various departments. That work as we sit here now in 2026 is largely complete. We've added 58.4 FTE across the organization with the majority of those or an emphasis of those in police and fire. So as I move to this slide, you'll see that the the the plan has shifted from when it was four years ago. Um so in 2023 when the original organizational analysis was proposed, that first column there which says planned FTE is kind of what we originally had anticipated with the OA. Um, in terms of positions that we'd be adding to those departments, the middle column, which is the implemented FTE, is as of today, 2026, the actual positions that were added to those departments over the course of these four years. And then that last column is the investment in those positions or in those personnel um in 2026. [clears throat] So, you'll see um you know, with the 58.4 4 FTE. Um it was a slight increase from the 56 and that's because we had the police access study as well as the standards of cover that came out since the original OA um was presented. Um, and as you'll see, to kind of fund some of those additional police and fire positions that were identified as needs, um, we shifted some positions from, uh, from other non-public safety positions to help, uh, ease the burden, um, to, uh, implement those those police and fire positions. So, we've learned— [03:40] **Elizabeth Kautz (Mayor):** I think it'll be good for you to let the community know that we're fully um the police and fire are in full compliance now with all of the positions that they need. [03:51] **Mike Tracy (HR Director):** Yeah, the police department is fully staffed. Fire department is obviously with the safer grants that were added in 2026. They're hard at work right now trying to fill that um [clears throat] with the spring academy close close approaching, but yeah, very exciting and great news that we have. [04:10] **Elizabeth Kautz (Mayor):** It's the first time that since 1996, I think, with the first uh police master plan and we got the Clinton cops to jump start. But it's been a challenge getting police to be fully um staffed. [04:22] **Mike Tracy (HR Director):** Absolutely. I think it's it's not a lot of agencies can say that um these days. Uh so it's a credit to a lot of things. I think as we talk about through the organizational analysis, our compensation plans working, our emphasis on well-being, the culture that the the police department and the fire department have built um are all contributing to having uh not only fully staffed but great professionals out there who are doing great work for the community. [04:47] **Elizabeth Kautz (Mayor):** And Chief BJ, this is the first time that you're fully staffed too, right? [04:52] **B.J. Jungmann (Fire Chief):** Madame Mayor, members of the council, we're working on it right now. We have a few open positions with uh [clears throat] retirements— [05:00] **Elizabeth Kautz (Mayor):** —but you're funded for it is what I'm saying. [05:02] **B.J. Jungmann (Fire Chief):** Oh, I'm sorry. Yeah, we're I mean, we're we're funded. Yes. I mean— [05:06] **Elizabeth Kautz (Mayor):** —yeah, because I know that you're still what, three down? [05:08] **B.J. Jungmann (Fire Chief):** Yeah, Madame Mayor. I mean, we're essentially three down and then we are planning on adding those safer firefighters in the spring academy. So— [05:16] **Elizabeth Kautz (Mayor):** —yeah. [05:17] **B.J. Jungmann (Fire Chief):** I would say it's a bit of a moving target. [laughter] [05:20] **Elizabeth Kautz (Mayor):** Okay. Yeah, Greg, did you have something to add? [05:24] **Gregg Lindberg (City Manager):** Mayor, members of the council, I would just add to [clears throat] excuse me uh to the chief's comments that uh the fire standard of cover uh includes an additional I believe 13 positions that currently are not contemplated for funding outside of those nine additional safer funded positions. Uh it's our intention after this presentation during the 2027 budget process to come back and to talk about um those positions. And um as as we get through the presentation here tonight, you'll see how we plan to address those types of of needs moving forward using the organizational analysis to inform department requests that ultimately come before the council um in the form of a recommended or a proposed budget for your consideration, redirection um and ultimately your your adoption. [06:21] **Elizabeth Kautz (Mayor):** Okay, thank you. [06:22] **Mike Tracy (HR Director):** Y so there there's been some lessons that we've learned over these four years regarding the organizational analysis. First and foremost, it's a snapshot in time as I talked about back in 2023. Um we had a plan and then four years later that's shifted as community needs um have have changed um and organizational needs have changed and so just important for us to keep that in mind. And then effective staffing staffing decisions require organizational and data driven approach. We do a lot of operational studies to help inform these staffing needs um that turn into budget requests and and and future priority discussions. And then uh you know staffing decisions must be future focused and flexible. Um and you'll see this as we present this new plan uh to council tonight that it looks a little bit different than the previous organizational analysis did as we try to incorporate kind of that flexible um path forward. So we've done some current enhancements uh you know service demand and community expectations drive our staffing needs. Those operational studies are very important for us to inform um staffing request and and those priority discussions. Um and then the organizational analysis um directly is going to inform department budget presentations, department budget requests as as city manager Lindberg said uh just a few minutes ago and then through the budget process identifying those organizational priorities through the proposed budget. future enhancements that we're looking at for future organizational analysis is as um conducting a city-wide services study um to identify service levels and roles throughout the organization. Um continue to complete those organizational or operational assessments um and update um ones that have been completed that are uh that are due for updating and then incorporate market conditions into staffing need evaluations. The original organizational analysis compared us to market cities in terms of FTEES by department and and overall reintroducing that into future organizational analysis so we can compare ourselves to to other market cities. So as a reminder the organizational analysis consists of three elements service staffing and compensation. So first focusing on service it's an inventory of how we serve the community. Um we conduct a detailed service uh service inventory to align the work of departments with our uh with the council strategic priorities. So um you'll see with you today and in our council packet um uh for the public. We connect our jobs um and the service that we provide to those council uh strategic priorities. We updated it this year um to reflect changes in staffing and operations. This right here is just a quick at a glance for the uh for the service inventory. So you'll see um it's broken down by department, the number of services that are provided by those departments, um how many of them are mandated um either by state or federal um statutes or regulations. And then that third column is FTE. So the the staff resources that those departments have to do the work. The next component is staffing. So we focus we have a high emphasis in organizational effectiveness. So um we want to use our existing resources, the staff resources that we have um as effectively as we possibly can. So again those operational studies are important but also we examine the current use of resources. So if a position becomes vacant, we don't just necessarily go in and refill that position with the same uh with with the same job description or the same in even in the same department as it always has been just because we have that position. We really do an evaluation of um are there other needs in the organization that are priorities that we could use that resource maybe more effectively. Um and then you know we use the we use the organizational effectiveness and those conversations to inform uh those priority discussions through this budget process. So a little bit of framework when it comes to staffing. So u needs is the staffing required to meet current service demands. Requests are going to be department um directors department leaders who are formally asking for staffing or requesting staffing resources through the budget process. and then those priority discussions leadership team um proposing to the city council for consideration regarding uh what positions to fund for 2027. So far we've completed four operational studies, communications, standards of cover, IT, and police. And then this is the new staffing matrix. Um, looks a little bit different, like I said, from the previous organizational analysis. It doesn't have years where we're prescribing certain positions and certain departments getting resources in out years. What we're really doing is just showing existing staffing um resources by department and then those needs that have been identified through those operational studies um that will be part of those budget presentations, department presentations and priority discussions over the course of the next year as we look for 2027 and then compensation. So this is our strategy to attract, motivate and retain people. Um so we look at compensation on a uh two-year cycle in terms of of how we manage our compensation plan. So internal alignment in even years. We review position descriptions, make sure that they're up to date. We run them through our uh position evaluation system. That work for 2026 has already started. Um a number of departments have already gotten the kickoff email from our HR team. Um so that work is is continuing um into 2026 and then in odd years we conduct a market competitive study to ensure that we're aligned with our compensation strategy. And so in 2025 we completed that study um using a consulted DDA HR. The goal was to make sure that our pay is competitive and aligned with the strategy that council has set forward. um respond to any labor market changes or challenges that might be approaching um and then support recruitment and service delivery goals, make sure that we um uh can retain the great professionals that we have. And as a reminder, our strategy is to be in the top 75th percentile of our target market cities. So the results of the study um were positive. They were we you know we have a strong compensation plan. um we are well aligned with our um with our strategy. Um as you see here, 78% of our jobs are highly aligned or aligned with our strategy. There's about 22% of the jobs that are potentially misaligned or misaligned. Um and in general best practice, 70 to 80% is considered good. um you know, 90% would be bestin-class. Um I don't know of an organization that would be 100%. I don't think we should ever expect to be at 100%. um just because the market fluctuates a lot and also the important thing to notice too is not every organization is the same structures are different they might have similar job titles doesn't necessarily mean they have similar job responsibilities and each community and organization is different so there will be some fluctuation— [14:14] **Elizabeth Kautz (Mayor):** —on the 22% of the potentially misaligned you've identified those— [14:18] **Mike Tracy (HR Director):** —yes yep— [14:19] **Elizabeth Kautz (Mayor):** —and so you know what the strategy is to get them into alignment. [14:22] **Mike Tracy (HR Director):** Yep. So, we have basically there's two ways to address those those positions that are considered misaligned or potentially misaligned. You can either make an adjustment um or you can monitor them, hold them um and continue to monitor market conditions and other internal factors. So, with those 24 positions that were considered potentially misaligned or misaligned, we've made adjustments on eight of those positions. Um and then there's 16 that we're holding or monitoring moving forward. And there's various reasons why we're choosing to monitor those versus making changes. It could be in some cases that we're potentially looking at that department structure. Um, and we don't necessarily want to touch a job while we continue to evaluate what that position or that department could look like. Um, there's other positions that we know. Um, there's not necessarily strong comparables. Um, so a good example on this is you'll see GIS manager is one that is showing is misaligned. there's not a lot of cities around us that have a GIS um function um or if they do it's one individual who's responsible for that and we have a manager with um with a staff person underneath it. So uh we're unique in that regard. So there are some cases where we we've decided we're going to monitor and hold and uh and and continue to see how market conditions respond. [15:47] **Elizabeth Kautz (Mayor):** And I think in fleet studies, didn't um wasn't there something about uh uh the fleet personnel that there was you're going to monitor [clears throat] how many fleet [snorts] personnel were going to be there— [16:03] **Mike Tracy (HR Director):** —or adjust that? [16:05] **Gregg Lindberg (City Manager):** Mayor, I don't recall anything regarding fleet personnel being on the monitoring list. Um we have um— [16:11] **Elizabeth Kautz (Mayor):** —I don't know if there's any in public works, madam. [16:13] **Gregg Lindberg (City Manager):** That madame mayor, members of the council, it's correct. Uh Mike's correct. Uh there was some contemplation in one of the recommendations of the fleet study around [clears throat] fleet maintenance staffing. Uh that maintenance—the—there's—there's nothing in the market study results that are reflective of uh of needs uh from a compensation perspective as I understand it. to Mike's point. We do one of our operational studies that's planned for uh the upcoming year or so uh is an operational study at the public works [clears throat] department. Uh we then would adjust future year's organizational analysis u based on what we see as that snapshot in time need informed by that study from a staffing perspective for the fleet function. [17:03] **Elizabeth Kautz (Mayor):** Okay, that makes sense. Okay. Because I remember reading about that uh in the in the report in the fleet study report— [17:11] **Mike Tracy (HR Director):** —and all I have left is just next steps unless there's more questions. Um but ob like I said this is the kickoff to the budget uh process. March 25th, we had the financial management plan. And then um this summer, we'll be doing department budget presentations, which will be diving more into these um positional needs as those departments have ident—the ones that the departments have identified um as we go through budget priority discussions. [17:41] **Elizabeth Kautz (Mayor):** Okay, members of the council, any uh questions, any um comments? Um and and this is a great kickoff because we're a service organization. So where are all of our costs are are in service and uh that's personnel and of course water is the only product we have but that's that's an enterprise that's separate from this [snorts] and so that's nice job. I was saying to uh Greg earlier this is a huge um improvement from the [cough] last one. It's very thorough a lot more than so I was trying to find the 23. Uh I was talking to Bethany about it because this one is very comprehensive as I went through the background in the um on the agenda and uh this is so much more thorough about who has the responsibility, what are the essential functions of each position and um and then the impact in terms of uh in service to our community and um so nicely done. It's a lot of work. [18:51] **Mike Tracy (HR Director):** Thank you. It takes the whole team obviously like it it is definitely a team effort to put this together. So thank you. [18:57] **Dan Kealey (Council Member):** But it's mad mayor when I from a distance I thought this was the budget and I'm thinking we haven't started it yet. How did we get so big so quick? [laughter] And then [clears throat] I saw service inventory. I'm like, "Wow." I just have one question on what's the shelf life of of this document and obviously a lot went into it, but [clears throat] how long can it be used before you have to redo it, do you think? Or is it a living document that you'll just evolv? [19:27] **Mike Tracy (HR Director):** Council Member Keely, it's definitely a living document. Like we do update it obviously from a council perspective and to the public. We update it annually as part of the organizational analysis. Um obviously positions change and services change which is why we do these these updates. It does take us some time to do the updates. Um so uh part of it is a very intentional process as we start typically in summer to go through and make those changes and make sure that we're um we have the most up-to-date information in there. So um it's for the—I mean some departments had very little updating to do. Others had a lot more just depending on operational changes that they might have had or or staffing turned over or changes. So, it it depends from department to department. [20:15] **Dan Kealey (Council Member):** Prior to embarking on this, was this Madame Mayor or any employees, but I think you've been around longer than anybody here. Um, has this ever been done? [20:25] **Elizabeth Kautz (Mayor):** We did it in 22, but before that we never did a complete uh or analysis like this. This is— [20:31] **Dan Kealey (Council Member):** —was it 22 and then we adopted it in 23. [20:33] **Jennifer Rhode (Deputy City Manager/CFO):** Mayor and council. So the first organizational analysis we did in May of 2022 to inform this 2023 budget. And then the service inventory we actually added um as part of I think the very next iteration of it. But we've evolved the service inventory to include what you see today which is mapping kind of our specific services and the impact of those services to jobs and the responsibilities um directly. That's evolved and kind of improved over time. The first uh service inventory we had as part of the organalis was just simply the impacts and kind of— [21:13] **Elizabeth Kautz (Mayor):** —so it was a lot thinner. [21:14] **Jennifer Rhode (Deputy City Manager/CFO):** Yeah. [21:15] **Elizabeth Kautz (Mayor):** Yeah. I was going to say I don't remember anything this [laughter] but to your point [clears throat] it was 22 when we did this. That's the first time that we've ever done a deep dive into the organization and really understand uh all of the because one of the things like in parks I always want to understand how the seasonal health is also uh adjusted in that but it's not in the 349 correct the seasonal help is separate so I I I think people need to understand that the 349 is the full-time time. [21:56] **Mike Tracy (HR Director):** Yes. And the whole pay structure composition plan is all FD equals— [22:01] **Elizabeth Kautz (Mayor):** —and now and this is the first time that you see all of the the U grades well the steps I notice we don't have anybody in grade three four and five is it or one two and three sorry and it's start—or three sorry—one and two—grade three is where we have our starting staff level—yeah and I I think I don't think that in the past we saw uh as comprehensive as you have here with all of the grades and the steps. [22:34] **Jennifer Rhode (Deputy City Manager/CFO):** Mayor Council, I do—in last year's or analysis we did have—we did include the day—the there was a um compensation internal compensation work last year those as [snorts] Mike shared they alternate and so last year we did have um include that same table with the titles under each upgrade. Um but yes, prior to that, mayor, you're correct. [23:01] **Gregg Lindberg (City Manager):** Madame Mayor, members of the council, one of the improvements that we made in 2024 uh around um looking at the compensation leg of the three parts of the organizational analysis uh was to implement a two-year cycle uh where one year we look at the uh the internal alignment of the organization. That means we look at all of the the systems that we use to put value or relative worth to jobs. Um, so that means all of our managers are are updating job descriptions and we're uh HR team is going through our job evaluation process which is just the words that we use to talk about uh determining what value jobs have and then that's how jobs are categorized or slotted into those grades that you see in the organizational analysis. And then and then in the uh in the other year which uh was last year 2025 uh uh the the focus goes then to external competitiveness looking at the market uh to determine with those 14 market cities or in the case of the fire department in our comparable market [clears throat] cities um uh how our compensation is working and that's where obviously tonight Mike was talking about uh those those positions and alignment in in how we look at how we look at making decisions. both operationally and then strategically considerations for you in the future when it comes to that information. So that's been very helpful. We're we're now through our first two-year cycle. I think we're finding that it's working pretty well. Uh I will say that I know of no other city uh that is is on such a regular schedule. Um uh so I'm very proud of our team and the amount of effort that goes into making sure uh that there is effectiveness and and good thinking. At the end of the day we're talking about 75 plus% of of the city's operating budget. The vast majority of taxpayer resources are people. Uh so that's important work and uh something that I'm uh very proud of the team for taking as seriously as we do. [25:11] **Elizabeth Kautz (Mayor):** Yeah. And very well done because you know just looking at the way it's also laid out it has a job title so you know and then what is the responsibility uh the essential function and then you know the focus of service and then it goes on and [clears throat] how it affects the organizational culture. So, it's laid out in like a summary of that particular job. And [clears throat] if you want to look at, okay, how much are we paying this person who's doing all of this? And what grade are they? And and so these three things all go together, correct? [25:52] **Mike Tracy (HR Director):** Yeah. Pretty talented group of folks on the cover. It's really [laughter] missing police chief Schwarz. We'll photoshop her in there after [laughter] that to the list. [26:06] **Gregg Lindberg (City Manager):** In the passenger seat. [26:08] **Elizabeth Kautz (Mayor):** Really nicely done to Greg and the team. As I said to uh Bethany and Greg when I after I um read through this, I said, "This is really a big improvement from last time." And I'm trying to find my hard copy of the 22. And I don't think we gave you a hard copy. That's why I got to do the paper for stuff like this. So anyway, nicely done. I really like—so this is again will be things that I will hang on to for a long time like the others like the four studies that we have. It's always good to go back and take a look at what we did and and because those studies inform the budget as we move forward. Thank you so much. really well done. [snorts] Any other comments? So, um without any other comments, that was the only item on our um agenda for tonight. And then um we have the in March we dive into the financial management plan and then we start taking a look at all of the uh departments and and their individual budgets and functions which is this is the foundation. So when you come back you better bring your big book so [laughter] it's like a Bible. Yeah. Okay. Thank you so much. Well, if there's no other comments uh or questions about this, we stand adjourned by acclamation. And thank you very much everybody. Nicely done.