Agenda - Council - 12/10/2013 - Laserfiche WebLink

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CC Work Session Meeting Date: 11/26/2013 Information 2.2. Title: Discussion Regarding 2014 Non -union Wages and Non -union City Health Insurance Contributions Purpose/Background: The purpose of this case is to discuss non -union employee' wages and non -union health insurance contributions for 2014 — and to consider the comparison related to the City's unionized employees. This work -session case is a follow-up to to one that occurred at the July 23, 2013, work -session, "Overview of 2014 Budget Process; as well as the Personnel Committee on October 15, 2013, "Discussion Regarding 2014 Non -union Wages and City Health Insurance Contributions." As background information, the City employs 68 employees, of which 65 employees are benefit eligible. Of the 65 benefit eligible employees, 24 are non -union and 44 are union. Again, this case is specific to the City's 24 non -union employees and the 2014 budget; however, it is important to note that since the union contracts have been settled through 2014 the decisions made regarding the non -union group will have an impact on the City's internal equity and compensation structure. Note: The July 23, 2013, work -session minutes and October 15, 2013, Personnel Committee minutes are are attached; as well as a summary of the City's wages, health insurance and other related documents. Note: The position identified in the attached charts as Community Development Director is currently referred to as the Development Services Manager and the City Planner is currently referred to as the Associate Planner/Environmental Coordinator; both positions are slated for reclassification. The position of Assistant to the City Administrator was not listed in the charts due to a lack of comparable data. Health Insurance Historically, the City has always offered the same health insurance contributions to all employee groups, union and non -union alike. Staff highly suggests continuing that practice in an effort to maintain internal equity, minimize the complexity of the budget, keep the payroll process streamlined, and to mirror other city's business practices. As background regarding the City's 2014 premium increases, the premiums were expected to be capped at 10% and the 2014 union contracts were negotiated based on that percentage. However, staff was aware that there was a chance the increase would be slightly higher due to healthcare reform fees and the unions were given (and have requested) to have a re -opener to negotiate for the added fees, which came in at 3.3% or 13.3% all together. Staff recommends the City Council consider authorizing the sharing of the premium increases with non -union employees as per one of the attached spreadsheets, limited to the Single, Employee + Spouse, and Employee + Children plans. These spreadsheet options represent the amounts previously negotiated with the unions, or, an option to include a portion of the remaining 3.3 percent that was added to the premiums due to healthcare reform fees. Staff recommends holding the City's contribution on the Family plan at the level that was previously negotiated with the unions in order to reduce costs and work toward more equitable contributions amongst the tiers. Staff recommends option C. Option C falls within the 2014 preliminary budget while 1) maintaining 100% coverage by the City on the least expensive single premium (consistent past with practice and recommended by the City's benefits broker), and 2) offers $130.00 toward the single VEBA contribution (but not $155 as was the case last year).