March 17, 2026
TO: City Council
REQUESTED BY: Tom Prill, Deputy City Manager
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Professional Services Agreement - Gallagher Benefits Services RECOMMENDATION:
Staff recommends that the City Council approve the Professional Services Agreement with Gallagher Benefit Services, Inc. to conduct a comprehensive compensation study in an amount not to exceed $60,000 and authorize the City Manager to execute the agreement.
DISCUSSION:
In the recent labor negotiations with the Service Employees International Union Local 721 (SEIU), the City committed to conducting a comprehensive compensation study. To ensure equity across employee groups, this study will also encompass management and confidential classifications in the Management Association Memorandum of Understanding (MOU).
It is a City practice to conduct classification and compensation studies approximately every three years to ensure our compensation structures remain competitive, equitable, and fiscally responsible. The last study was done in-house in 2022. Since that time, the labor market has evolved, and the City has experienced organizational changes that warrant a thorough review of our current classifications and total compensation packages.
To select a qualified consultant, the City conducted an informal Request for Proposal (RFP) process. Staff reached out to five consulting firms with expertise in public sector compensation:
CPS HR Consulting, Gallagher Benefit Services, Inc., McGrath Human Resources Group, Segal, and MGT Impact Solutions. Each firm submitted proposals for review. After evaluating the proposals, Gallagher was selected based on their ability to survey all 56 job classifications at a cost of $52,800, which was competitive with other proposals and provided the most comprehensive scope of work for the City's needs.
Consulting Firm Proposed Cost Classifications
Gallagher Benefit Services, Inc. $52,800 56 (all classifications) MGT Impact Solutions, LLC $18,450 50
CPS HR Consulting $46,190* Up to 18 (approx. 60% of
total)
Consulting Firm Proposed Cost Classifications
Segal $80,000 40
McGrath Human Resources Group $13,000** 40
*CPS HR's total reflects the base compensation study ($42,640) plus the internal equity analysis ($3,550), which would be necessary for a complete study. **McGrath's base price is for the compensation study only; position analysis (+$5,600) and benefits analysis (+$5,500) were priced as optional add-ons.
While McGrath Human Resources Group and HGT Impact Solutions, LLC responded with the lowest cost proposals, staff’s initial discussions with both firms revealed a lack of California clients and knowledge about California’s specific employment landscape. Instead, staff opted to go with the lowest cost firm that responded fully to the RFP that had numerous California clients.
The goal of this study is to review the City's compensation structure against an appropriate set of comparator agencies to ensure San Jacinto remains competitive with the current market, enabling the City to recruit and retain qualified staff. Gallagher Benefit Services, Inc. will analyze external market data, evaluate internal equity across all classifications, and provide a final report with findings and recommendations. The study will include a review of salaries and benefits for approximately 70 employees and 56 job classifications.
This study fulfills a commitment made during negotiations with SEIU and in the resulting MOU, which was adopted after the FY 2025/2026 Budget was approved. This study also supports the City's ongoing efforts to maintain a stable and effective workforce.
While the proposed cost of the study is $52,800, additional services not known at this time (such as additional presentations) may be required, so staff is requesting appropriations of $60,000.
FISCAL IMPACT:
The fiscal impact for the comprehensive compensation study is estimated at $60,000, with additional services not known at this time. The study was not budgeted, so an appropriation from the General Fund is requested for the Human Resources department for account #010- 1210-412.34-05 (Contract Services).
ATTACHMENTS:
Professional Services Agreement - Gallagher
Proposal - Gallagher