Minutes - Council Work Session - 11/26/2013

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Councilmember Riley stated the capital improvement items are not being paid from the General Fund and money is being borrowed from the Equipment Revolving Fund to make those purchases. He supported budgeting for those purchases rather than borrowing. Finance Director Lund stated if that borrowing continues, the Equipment Revolving Fund will be depleted by 2017. She explained that in the past, equipment certificates were used but at this point, those items cannot be added unless other items are cut. She stated the telephone system has been pushed off for years and is now needed. City Administrator Ulrich stated that type of thing shows up as "red flagged" when considering a five -year budget. Mayor Strommen suggested the Finance Committee take on the issue of funding capital improvement items and make a recommendation. The consensus of the Council was to continue discussion of the 2014 Budget to the December 10, 2013 Work Session. 2.02: Discussion Regarding 2014 Non -Union Wages and Non -Union City Health Insurance Contributions Human Resources Manager Lasher reviewed the staff report, past consideration of non -union wages, and comparison of the City's 24 non -union employees' wages and health insurance to that of related unionized employees. With regard to health insurance, Human Resources Manager Lasher reviewed a spreadsheet containing premium increases with non -union employees. She stated staff recommends the Council consider authorizing the sharing of the premium increases with non -union employees as per one of the options, limited to the Single, Employee plus Spouse, and Employee plus Children plans. Staff also recommends Option C, which falls within the 2014 preliminary budget while maintaining 100% coverage by the City on the least expensive single premium (consistent with past practice and recommended by the City's benefits broker); and, offers $130 toward the single VEBA contribution (but not $155 as the case last year). With regard to wages, Human Resources Manager Lasher stated staff originally accounted for a 2.5% non -union Cost -of- Living Adjustment (COLA) in the preliminary 2014 budget. Due to the need to drive down the 2014 preliminary budget, the percentage was reduced to 2 %. She explained that staff reviewed the most recent COLA data and found most cities are coming in at an average COLA of 2% so staff recommends a 2% COLA be authorized for the non -union employee group. Human Resources Manager Lasher presented a non -union market study of similarly sized metro cities that had been completed on every non -union position. In response to the comment made at the October 15, 2013 Personnel Committee meeting that the non -union group is the highest paid employees in the City, she noted most non -union positions are not eligible for overtime compensation, work a number of extra hours including night meetings, require an advanced education, are already below the market when comparing 2013 data, and the wage scale shows a narrowing margin considering that LELS will be getting 2% COLA plus a 2% market adjustment in 2014 and AFSCME will be getting 2% COLA plus 1% market adjustment in 2014. City Council Work Session / November 26, 2013 Page 5 of 9