Solid Waste Management Agency Joint Powers Board — Thu, Sep 24, 2026 · VII.A Classification and Compensation Study: Presentation, Discussion, and Possible Action on Recommendations (Tracy Morris, Gallagher Benefit Services, Inc.).
MEMORANDUM To: SFSWMA Joint Powers Board Members From: Randall Kippenbrock, P.E., Executive Director RLK Date: September 14, 2026 Subject: Classification and Compensation Study: Presentation, Discussion, and Possible Action on Recommendations (Tracy Morris, Gallagher Benefit Services, Inc.) SUMMARY Tracy Morris of Gallagher Benefit Services (Gallagher) will present the Board with an overview of the attached PowerPoint presentation, including results and recommendations (Attachment 1). Based on comprehensive market data, Gallagher concluded that the Agency's compensation is about 6% above the median, indicating that employees' pay remains competitive. Gallagher noted that current ranges start below market levels and extend well above them. Low minimums complicate hiring, while high maximums mean employees take a long time to reach those upper limits. Gallagher recommends three actions to ensure pay is competitive, fair, and sustainable. 1. Adopt the proposed structure: a single pay structure with a $19.00 hourly floor and a consistent 22 percent midpoint progression between grades. This improves market competitiveness. 2. Implement the pay adjustments: Bring every employee to at least the minimum of their proposed range, then apply a time-in-position adjustment to correct compression. This improves internal equity. 3. Review the Plan every year: Grant increases according to market trends and available revenue, and review the pay structure annually. This keeps the plan competitive over time. Table 1 presents Gallagher’s proposed pay structure, with seven grades starting at $19.00 per hour and a consistent 22 percent progression between grades. The proposed pay ranges for union and non-union positions are provided in Attachments 2 and 3. Gallagher recommends two actions to transition employees to the new structure, implemented in sequence. The first action adjusts the range minimum, ensuring that each employee meets at least the minimum of their proposed pay range. This affects seven employees (six union positions, one non-union position) at a cost of $20,134 (0.65% of payroll). The second action is a time-in-position compression adjustment, calculated at 1.5 percent per year based on time in the employee’s current position. This affects five employees (four union positions, one non-union position) at a cost of $7,489 (0.24% of payroll). Table 1. Proposed Pay Structure. Pay Ranges Range Min Mid Max SWU04 17.69 21.67 25.65 SWU09 23.18 28.44 33.70 SWU10 28.28 34.70 41.12 SWU14 34.50 42.33 50.16 SWM17 39.76 51.64 63.52 SWM20 48.51 63.00 77.49 SWM28 59.18 76.86 94.54 ACTION REQUESTED The Agency recommends approving the proposed pay ranges for union and non-union positions, effective September 26, 2026. The Agency also recommends approving the two proposed actions, which would bring affected employees to at least the minimum of their proposed range (six union positions, one non-union position) at a cost of $20,134, and a time-in-position compression adjustment based on time in the employee’s current position (four union positions, one non-union position) at a cost of $7,489, for an estimated total of $27,623. Funding is available in 8100851.500110 (Landfill Operations General Salaries) and 8100852.500110 (BuRRT Operations General Salaries). The matter is before the Board for discussion and possible action regarding the recommendations outlined in Gallagher’s presentation. Attachments: 1) Gallagher’s PowerPoint Presentation – Classification & Compensation Study 2) Union Position Pay Ranges, Effective September 26, 2026 3) Non-Union Position Pay Ranges, Effective September 26, 2026 M:\Memo\Memo091426.1 ATTACHMENT 1 Gallagher’s PowerPoint Presentation – Classification & Compensation Study ©2026 ARTHUR J. GALLAGHER & CO. Classification & Compensation Study Santa Fe Solid Waste Management Agency ©2026 ARTHUR J. GALLAGHER & CO. 2 Engagement OverviewEngagement Overview Santa Fe Solid Waste Management Agency ꞏ Gallagher’s Public Sector, Community & Higher Education PracticeSanta Fe Solid Waste Management Agency ꞏ Gallagher’s Public Sector, Community & Higher Education Practice 01 Study Approach & Methodology01 Study Approach & Methodology What Gallagher did, the data sources used, and how the market comparison was built. What Gallagher did, the data sources used, and how the market comparison was built. 02 What We Found02 What We Found Classification and FLSA findings, employee pay against market, and the current pay structure. Classification and FLSA findings, employee pay against market, and the current pay structure. 03 Our Recommendations03 Our Recommendations The recommended pay structure, the pay actions that bring employees onto it, and how it is sustained. The recommended pay structure, the pay actions that bring employees onto it, and how it is sustained. 04 Implementation & Cost04 Implementation & Cost The cost to implement and the steps that follow.The cost to implement and the steps that follow. 4343 Employees in the studyEmployees in the study Every position includedEvery position included 2828 Unique job titlesUnique job titles 100% of roles priced in the market100% of roles priced in the market 77 Pay grades reviewedPay grades reviewed SWU and SWM seriesSWU and SWM series 0.89%0.89% Cost to implementCost to implement Of current annual payrollOf current annual payroll What we did and the data behind it Study Approach & Methodology ©2026 ARTHUR J. GALLAGHER & CO. 4 Study ApproachStudy Approach How the study was conductedHow the study was conducted The study followed three stages, each building on the last: understand the organization, price it to the market, then design and cost a structure that can be administered consistently. The study followed three stages, each building on the last: understand the organization, price it to the market, then design and cost a structure that can be administered consistently. Plan and collectPlan and collect Price the marketPrice the market Every benchmark job matched to published survey data on duties, not job titles, using an 80 percent duties- match standard. Every benchmark job matched to published survey data on duties, not job titles, using an 80 percent duties- match standard. Design and recommendDesign and recommend Current structure evaluated, a proposed structure designed, and the cost to implement modeled and reviewed with the project team. Current structure evaluated, a proposed structure designed, and the cost to implement modeled and reviewed with the project team. Objectives were confirmed with the SFSWMA project team, pay and position data collected for every employee, and job descriptions and organizational structure reviewed. Objectives were confirmed with the SFSWMA project team, pay and position data collected for every employee, and job descriptions and organizational structure reviewed. ©2026 ARTHUR J. GALLAGHER & CO. 5 Data Sources & MethodologyData Sources & Methodology Published survey data, quality-assured and adjusted to Santa FePublished survey data, quality-assured and adjusted to Santa Fe Market data was screened for outliers, trended forward to a common implementation date, and adjusted for the local cost of labor so comparisons reflect what Santa Fe employers actually pay. Market data was screened for outliers, trended forward to a common implementation date, and adjusted for the local cost of labor so comparisons reflect what Santa Fe employers actually pay. Data sources and job matchingData sources and job matching CompAnalyst and Economic Research Institute. Only jobs matching at least 80 percent of benchmark duties were used. Gallagher follows DOJ and FTC guidance on job matches before drawing statistical conclusions. CompAnalyst and Economic Research Institute. Only jobs matching at least 80 percent of benchmark duties were used. Gallagher follows DOJ and FTC guidance on job matches before drawing statistical conclusions. Quality assurance, aging and geographyQuality assurance, aging and geography Extreme values excluded; 25th, 50th and 75th percentiles calculated. Aged to January 1, 2027 — 4.0 percent salary trend and 2.0 percent structure trend. Normalized to the Santa Fe, New Mexico cost of labor. Extreme values excluded; 25th, 50th and 75th percentiles calculated. Aged to January 1, 2027 — 4.0 percent salary trend and 2.0 percent structure trend. Normalized to the Santa Fe, New Mexico cost of labor. Source: CompAnalyst; Economic Research Institute; WorldatWork Administrative, Support & Waste Management Services salary trend survey.Source: CompAnalyst; Economic Research Institute; WorldatWork Administrative, Support & Waste Management Services salary trend survey. Market & Economic Context 4% Projected median base salary increase for 2026 WorldatWork — Administrative, Support & Waste Management Services 2% Projected salary structure (range) adjustment WorldatWork — Administrative, Support & Waste Management Services $24.51 Living wage, single adult (≈ $50,980 / yr) MIT — Santa Fe, NM What this means • Market movement is steady. A ~4% pay increase with ~2% structure adjustment reflects moderate upward pressure in industry pay. • Living wage sets a floor. A single adult in the Santa Fe metro needs ≈ $24.51/hour to meet basic needs. • Competitiveness must be sustained. Periodic structure adjustments keep ranges aligned to a moving market between full studies. ©2026 ARTHUR J. GALLAGHER & CO. 6 Market and pay structure findings What We Found Market Assessment — All Market Data Employee pay vs. market median · 28 benchmark titles +19% vs. market 25th %ile +6% vs. market median (50th) -6% vs. market 75th %ile Against all market data, SFSWMA pay is above the median by ~6%, indicating actual pay that employees are earning is competitive with the market. 27 1 Benchmark titles vs. market median (n = 28) At market (85–115%) Below market (<85%) Above market (>115%) ©2026 ARTHUR J. GALLAGHER & CO. 8 ©2026 ARTHUR J. GALLAGHER & CO. 9 The Current Pay StructureThe Current Pay Structure Seven grades, but inconsistent from grade to gradeSeven grades, but inconsistent from grade to grade The current structure provides formal ranges, but the steps between grades are uneven and two different range designs are in use — which makes pay differences hard to explain and hard to administer. The current structure provides formal ranges, but the steps between grades are uneven and two different range designs are in use — which makes pay differences hard to explain and hard to administer. Seven gradesSeven grades Four SWU (union) grades and three SWM (non-union) grades span hourly and salaried positions, each defined by a minimum, midpoint and maximum. Four SWU (union) grades and three SWM (non-union) grades span hourly and salaried positions, each defined by a minimum, midpoint and maximum. Uneven progressionsUneven progressions Midpoint progression between adjacent grades ranges from 4.8 percent to 44.3 percent — some grades sit almost on top of one another while others jump sharply. Midpoint progression between adjacent grades ranges from 4.8 percent to 44.3 percent — some grades sit almost on top of one another while others jump sharply. Two range designsTwo range designs Range spreads of about 45 percent at SWU grades and 60 percent at SWM grades. Range spreads of about 45 percent at SWU grades and 60 percent at SWM grades. Source: SFSWMA current pay structure; Gallagher structure analysis, 2026.Source: SFSWMA current pay structure; Gallagher structure analysis, 2026. ©2026 ARTHUR J. GALLAGHER & CO. 10 Current Structure Compared to MarketCurrent Structure Compared to Market Averaged across all benchmark positionsAveraged across all benchmark positions The current ranges start below the market and top out well above it. Low minimums make hiring harder, while high maximums are costly and take a long time for employees to reach. The current ranges start below the market and top out well above it. Low minimums make hiring harder, while high maximums are costly and take a long time for employees to reach. –4%–4% Range minimumRange minimum vs. market 25th percentilevs. market 25th percentile +6%+6% Range midpointRange midpoint vs. market medianvs. market median +14%+14% Range maximumRange maximum vs. market 75th percentilevs. market 75th percentile The proposed pay structure and pay actions Our Recommendations ©2026 ARTHUR J. GALLAGHER & CO. 12 Our RecommendationsOur Recommendations Three actions to make pay competitive, fair and sustainableThree actions to make pay competitive, fair and sustainable Taken together, these three actions move SFSWMA to a pay structure that is competitive in the Santa Fe market, internally consistent between grades, and affordable to maintain year over year. Taken together, these three actions move SFSWMA to a pay structure that is competitive in the Santa Fe market, internally consistent between grades, and affordable to maintain year over year. 01 Adopt the proposed structure 01 Adopt the proposed structure A single pay structure with a $19.00 hourly floor and a consistent 22 percent midpoint progression between every grade. Improves market competitiveness. A single pay structure with a $19.00 hourly floor and a consistent 22 percent midpoint progression between every grade. Improves market competitiveness. 02 Implement the pay adjustments 02 Implement the pay adjustments Bring every employee to at least the minimum of their proposed range, then apply a time in position adjustment to correct compression. Improves internal equity. Bring every employee to at least the minimum of their proposed range, then apply a time in position adjustment to correct compression. Improves internal equity. 03 Review the plan every year 03 Review the plan every year Grant increases according to market trends and available revenue, and review the pay structure annually. Keeps the plan competitive over time. Grant increases according to market trends and available revenue, and review the pay structure annually. Keeps the plan competitive over time. ©2026 ARTHUR J. GALLAGHER & CO. 13 Proposed Pay StructureProposed Pay Structure Seven grades, a $19.00 floor and consistent 22 percent progressions from one grade to the next.Seven grades, a $19.00 floor and consistent 22 percent progressions from one grade to the next. Hourly rates. Midpoint progression is a consistent 22.0 percent between every grade; range spreads are 45 percent (SWU) and 60 percent (SWM). Source: Gallagher proposed pay structure, August 21, 2026. Hourly rates. Midpoint progression is a consistent 22.0 percent between every grade; range spreads are 45 percent (SWU) and 60 percent (SWM). Source: Gallagher proposed pay structure, August 21, 2026. Pay GradePay Grade Range MinimumRange Minimum Range MidpointRange Midpoint Range MaximumRange Maximum SWU 04SWU 04 $19.00$19.00 $23.31$23.31 $27.62$27.62 SWU 09SWU 09 $23.18$23.18 $28.44$28.44 $33.70$33.70 SWU 10SWU 10 $28.28$28.28 $34.70$34.70 $41.12$41.12 SWU 14SWU 14 $34.50$34.50 $42.33$42.33 $50.16$50.16 SWM 17SWM 17 $39.76$39.76 $51.64$51.64 $63.52$63.52 SWM 20SWM 20 $48.51$48.51 $63.00$63.00 $77.49$77.49 SWM 28SWM 28 $59.18$59.18 $76.86$76.86 $94.54$94.54 ©2026 ARTHUR J. GALLAGHER & CO. 14 Recommended Pay AdjustmentsRecommended Pay Adjustments Two pay actions bring employees onto the new structureTwo pay actions bring employees onto the new structure Adjustments are applied in sequence: pay is first brought to the range minimum, and the compression calculation is then run against the adjusted salary. Adjustments are applied in sequence: pay is first brought to the range minimum, and the compression calculation is then run against the adjusted salary. 01 Adjustment to the range minimum 01 Adjustment to the range minimum Every employee is brought to at least the minimum of their proposed pay range. 7 employees ꞏ $20,134 ꞏ 0.65% of payroll 6 union; 1 non-union Every employee is brought to at least the minimum of their proposed pay range. 7 employees ꞏ $20,134 ꞏ 0.65% of payroll 6 union; 1 non-union 02 Time in position compression adjustment 02 Time in position compression adjustment A 1.5 percent per year calculation, based on time in the employee's current position, corrects pay compression. 5 employees ꞏ $7,489 ꞏ 0.24% of payroll 4 union; 1 non-union A 1.5 percent per year calculation, based on time in the employee's current position, corrects pay compression. 5 employees ꞏ $7,489 ꞏ 0.24% of payroll 4 union; 1 non-union ©2026 ARTHUR J. GALLAGHER & CO. 15 How the Compression Adjustment WorksHow the Compression Adjustment Works Time in position — an internal equity correction, not a longevity rewardTime in position — an internal equity correction, not a longevity reward This is not a reward for loyalty or years of service. It corrects pay compression — where employees with years in a role earn nearly the same as employees newly hired into it, because starting salaries rise with the market while existing pay does not keep pace. This is not a reward for loyalty or years of service. It corrects pay compression — where employees with years in a role earn nearly the same as employees newly hired into it, because starting salaries rise with the market while existing pay does not keep pace. 01 Start at the minimum 01 Start at the minimum Every calculation begins at the minimum of the employee's proposed pay range. Every calculation begins at the minimum of the employee's proposed pay range. 02 Apply 1.5% per year 02 Apply 1.5% per year 1.5 percent is applied for each full year in the current position to build a compression benchmark. 1.5 percent is applied for each full year in the current position to build a compression benchmark. 03 Compare to actual pay 03 Compare to actual pay The employee's adjusted salary is compared with that benchmark. The employee's adjusted salary is compared with that benchmark. 04 Close the gap 04 Close the gap If pay is below the benchmark, it is raised to it. If pay is at or above it, no adjustment is made. If pay is below the benchmark, it is raised to it. If pay is at or above it, no adjustment is made. Time is measured in the current position, not total tenure with the organization. Two employees with the same time in position may receive different amounts, because the adjustment closes each individual gap rather than applying an across-the-board increase. Time is measured in the current position, not total tenure with the organization. Two employees with the same time in position may receive different amounts, because the adjustment closes each individual gap rather than applying an across-the-board increase. ©2026 ARTHUR J. GALLAGHER & CO. 16 Sustaining the PlanSustaining the Plan A market-based approach to annual pay planningA market-based approach to annual pay planning A pay structure holds its value only if it is maintained. These three practices keep the plan competitive without requiring another full study.A pay structure holds its value only if it is maintained. These three practices keep the plan competitive without requiring another full study. Fund increases from revenueFund increases from revenue Grant pay increases each year based on available revenue and prevailing market trends. Ties pay decisions to the market. Grant pay increases each year based on available revenue and prevailing market trends. Ties pay decisions to the market. Review the structure annuallyReview the structure annually Review the pay structure each year and adjust it as needed to hold a competitive position in the local market. Prevents the structure drifting out of date. Review the pay structure each year and adjust it as needed to hold a competitive position in the local market. Prevents the structure drifting out of date. Move ranges at half the increase Move ranges at half the increase Best practice is to move the salary structure by half of the pay increase granted annually. Lets employee pay progress faster than the range moves. Best practice is to move the salary structure by half of the pay increase granted annually. Lets employee pay progress faster than the range moves. ©2026 ARTHUR J. GALLAGHER & CO. 17 Cost to ImplementCost to Implement Estimated annual payroll impact of the recommendationEstimated annual payroll impact of the recommendation The full recommendation — bringing employees to range minimum and correcting time in position compression — adds less than one percent to annual payroll. The full recommendation — bringing employees to range minimum and correcting time in position compression — adds less than one percent to annual payroll. $3,095,174$3,095,174 Current annual payrollCurrent annual payroll 43 employees43 employees $3,122,797$3,122,797 Proposed annual payrollProposed annual payroll Fully implementedFully implemented $20,134$20,134 Adjustment to minimumAdjustment to minimum 7 employees7 employees $7,489$7,489 Compression adjustmentCompression adjustment 5 employees5 employees Costs are estimates based on staffing at the time of the study; any change in staffing will change the cost.Costs are estimates based on staffing at the time of the study; any change in staffing will change the cost. ©2026 ARTHUR J. GALLAGHER & CO. 18 Next StepsNext Steps A single recommendation, in three partsA single recommendation, in three parts Together these move SFSWMA to a structure that is competitive in the Santa Fe market, internally consistent, and affordable at less than one percent of payroll. Together these move SFSWMA to a structure that is competitive in the Santa Fe market, internally consistent, and affordable at less than one percent of payroll. Adopt the pay structureAdopt the pay structure Seven grades with a $19.00 hourly floor, consistent 22 percent progressions, and range spreads held at 45 and 60 percent. Seven grades with a $19.00 hourly floor, consistent 22 percent progressions, and range spreads held at 45 and 60 percent. Approve the pay adjustmentsApprove the pay adjustments $27,623 in total — 0.89 percent of current annual payroll — to bring employees to range minimum and correct compression. $27,623 in total — 0.89 percent of current annual payroll — to bring employees to range minimum and correct compression. Commit to annual reviewCommit to annual review Review the structure and the flagged classifications each year so the plan stays competitive and defensible. Review the structure and the flagged classifications each year so the plan stays competitive and defensible. ©2026 ARTHUR J. GALLAGHER & CO. 19 Q&A Thank you ©2026 ARTHUR J. GALLAGHER & CO. ATTACHMENT 2 Union Position Pay Ranges, Effective September 26, 2026 Classification (Position Title) Range Min Mid Max Laborer SWU04 19.00 23.31 27.62 Scalemaster SWU09 23.18 28.44 33.70 BuRRT Transfer Operator I SWU09 23.18 28.44 33.70 Equipment Mechanic I SWU09 23.18 28.44 33.70 Heavy Equipment Operator I SWU09 23.18 28.44 33.70 Maintenance Worker I SWU09 23.18 28.44 33.70 Scalemaster II SWU10 28.28 34.70 41.12 BuRRT HHW Handler SWU10 28.28 34.70 41.12 BuRRT Transfer Operator II SWU10 28.28 34.70 41.12 Equipment Mechanic II SWU10 28.28 34.70 41.12 Field Service Lube Tech SWU10 28.28 34.70 41.12 Heavy Equipment Operator II SWU10 28.28 34.70 41.12 BuRRT Transfer Operator III SWU14 34.50 42.33 50.16 Equipment Mechanic III SWU14 34.50 42.33 50.16 Heavy Equipment Operator III SWU14 34.50 42.33 50.16 Maintenance Worker III SWU14 34.50 42.33 50.16 Outreach Coordinator SWU14 34.50 42.33 50.16 Santa Fe Solid Waste Management Agency Bargaining Unit Position Pay Ranges Fiscal Year 2027 Effective September 26, 2026 Pay Ranges ATTACHMENT 3 Non-Union Position Pay Ranges, Effective September 26, 2026 Classification (Position Title) Range Min Mid Max Accountant I SWM17 39.76 51.64 63.52 Adminstrative Assistant/HR Officer SWM17 39.76 51.64 63.52 BuRRT Superintendent SWM17 39.76 51.64 63.52 Environmental Health, Safety & Training Administrator SWM17 39.76 51.64 63.52 Equipment Maintenance Supervisor SWM17 39.76 51.64 63.52 Landfill Superintendent SWM17 39.76 51.64 63.52 Scalehouse Supervisor SWM17 39.76 51.64 63.52 Accountant II SWM20 48.51 63.00 77.49 Executive Director SWM28 59.18 76.86 94.54 Santa Fe Solid Waste Management Agency Non-Union Positions Fiscal Year 2027 Effective September 26, 2026 Pay Ranges