STAFF REPORT
Meeting Date:
May 12, 2026
CONSENT
10 SUBJECT: RECEIVE AND FILE THE CLASSIFICATION AND COMPENSATION STUDY
PREPARED BY BAKER TILLY
RECOMMENDATION: It is recommended that the City Council:
1. Receive and file the Classification and Compensation Study prepared by Baker Tilly, US, LLP; and
2. Find that the recommended action is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378, as it does not constitute a project.
SUMMARY OF THE MATTER
.This report transmits the final Classification and Compensation Study prepared by Baker Tilly US, LLP (Attachment 1) for City Council receipt and filing. The study provides a comprehensive evaluation of the City’s classification structure, compensation framework, and market competitiveness.
At this time, no action is requested of the City Council. The report is being provided for informational purposes and to support ongoing discussions regarding potential future implementation.
There is no immediate fiscal impact associated with receiving and filing this report. Any potential changes to compensation, classifications, or related policies must be reviewed and addressed through the meet-andconfer process with the City’s bargaining units, to the extent such changes impact any respective represented employees, and will be brought forward to the City Council at a future date for consideration.
DISCUSSION
Background
The City retained Baker Tilly US, LLP to conduct a comprehensive Classification and Compensation Study to evaluate internal equity, external market competitiveness, and the overall structure of the City’s compensation system. On January 13, 2026, the City Council received a Study Session presentation on the preliminary findings and recommendations of the Classification and Compensation Study prepared by Baker Tilly (Attachment 2). That presentation provided an overview of the study’s methodology, key findings, and potential recommendations. No formal action was taken at that time, consistent with the purpose of a study session. The final report summarizes the consultant’s methodology, findings, and recommendations, including position evaluation, market benchmarking, and proposed pay plan design.
Purpose of Agenda Item
The purpose of this agenda item is to formally transmit the final report to the City Council and to ensure transparency in the completion of the study. This item is limited to the receipt and filing of the report. No policy direction, approval, or implementation actions are being requested at this time.
Next Steps
While the study provides recommendations from the consultant related to classification structure, compensation ranges, and pay plan design, any changes affecting represented employee compensation or
RECEIVE AND FILE THE CLASSIFICATION AND COMPENSATION STUDY PREPARED BY
BAKER TILLY
May 12, 2026
terms and conditions of employment must be negotiated with the City’s recognized bargaining units, as required by law.
Staff will continue discussions with the City Council and employee associations regarding the findings of the study. Any proposed implementation strategies, including fiscal impacts and policy considerations, will be brought back to the City Council as part of future agenda items and the budget development process.
FINANCIAL ANALYSIS
There is no fiscal impact associated with receiving and filing this report. The consulting services agreement with Baker Tilly for preparation of the study was previously approved and funded.
Any future fiscal impacts resulting from potential implementation of the study’s recommendations, including adjustments to compensation or classification structures, will be evaluated and presented to the City Council through future staff reports, the meet-and-confer process, and the annual budget process.
ALIGNMENT WITH CITY COUNCIL GOALS AND PRIORITIES
This item supports the City Council’s goal of City Fiscal Sustainability by providing data and analysis necessary to inform long-term compensation planning, workforce management, and organizational effectiveness.
ENVIRONMENTAL ANALYSIS
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378 because it does not constitute a “project.” The receipt and filing of an informational administrative report does not result in a direct or reasonably foreseeable physical change in the environment.
ATTACHMENTS
1. Final Classification and Compensation Study - Baker Tilly US, LLP (Pgs. 3-54)
2. January 13 Study Session and Staff Report and Study Session Slide Deck https://lagunabeachcity.primegov.com/Portal/Meeting?meetingTemplateId=623 Link to Study Session YouTube Video https://www.youtube.com/watch?v=TbDoIwKzEbM Submitted By:
. Approved: .David A Kiff
Gavin Curran, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Gavin Curran, Assistant City Manager Michelle Bannigan, Director of Administrative Services