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4. COMMITTEE BUSINESS 4.01: Discussion Regarding 2014 Non -union Wages and City Health Insurance Contributions Human Resources Manager Lasher reviewed the staff report, noting the City has 68 employees, of which 65 are benefit eligible. Of those 68, 24 are non -union and 44 are union. The purpose of this case is to discuss non -union employee's wages and health insurance benefits for 2014 and to consider a comparison related to the City's unionized employees. It was noted 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. She advised that staff has data from about 18% of the reporting metro area cities indicating an average, non- union wage increase of 2.08% for 2014. Human Resources Manager Lasher reviewed terms of the 2014 settled contracts (wages and health insurance) (AFSCME, LELS-Patrol, and LELS- Sergeants). She presented three options for the Committee's consideration and further discussion: Option #1: Retain the previously budgeted 2.5% increase in order to have flexibility based on the results of further analysis and receipt of additional pending data and to offer the same health insurance benefit to the non -union group as the unionized groups. Option #2: Option #1 plus direct staff to perform a League of Minnesota Cities wage study for each non -union position in order to gather position specific market data and then use the remaining .5% to increase the position(s) that are too low. Option #3: Based on discussion. Human Resources Manager Lasher stated staff recommends Option #1, noting this will allow flexibility and time to learn what the Consumer Price Index and market are doing. She noted that in 2012, Department Heads received a 1% increase and all other staff members received a 2% increase, causing an even greater disparity within the compensation structure and market. It was noted the preliminary 2014 budget has accounted for a 2.5% non -union COLA and health insurance increases. The difference between a 2% increase and a 2.5% increase is about $6,000 per year. She stated there may be an issue coming forward relating to comparable market wages. Councilmember Backous asked if a League of Minnesota Cities study is done each year and if it has been done for 2014. Human Resources Manager Lasher stated it is done yearly and already completed for 2013. Councilmember Backous asked how the City rated and stated his preference to consider what the market bears and compete for talent in that way. Human Resources Manager Lasher stated the unionized groups are where they need to be. She stated she has analyzed two-thirds of the non -union positions and found the City is at market or below, but none are over market rate. Personnel Committee / October 15, 2013 Page 2 of 9