Adopt Resolution #21-356 Authorizing the City's 2022 Non-Union City Health and Dental Insurance Contributions and Wage  Adjustments

The purpose of this case is for City Council consideration of non-union employee City health and dental insurance contributions and wage adjustments.  To-date, all settled union contracts have received the same wage and benefit adjustments as are being proposed for non-union employees.  Wage adjustments for the cost of living (COLA) are at 3%.  In addition, certain positions are listed below to receive a market rate adjustment.

Health Insurance
The City continues to be a member of LOGIS (Local Government Information Systems) which is a consortium of Minnesota local government units.  This consortium has many benefits including coverage by the group’s health plan.  LOGIS went out for bid and received a 3% rate reduction on health insurance premiums for 2022 and future rate caps.  Employees may choose a health plan that best meets their needs by selecting one of four tiers and choosing between two networks; or they may choose to waive the City’s health insurance.

If approved, the City's total monthly contribution to health insurance will be as follows:

• Employee only (single) City contribution, not to exceed $877.50; and
• Employee and Children City contribution is $1053.30; and
• Employee and Spouse City contribution is $1106.10; and
• Family City contribution is $1369.50; and

In addition to the premium contributions listed above, the city will contribute the following to the H.R.A./V.E.B.A. or H.S.A., as follows:

• Single plans with a $4000 deductible receive $194.00 per month toward the H.R.A./V.E.B.A. or H.S.A.
• Other single plans receive $130.00 per month toward the H.R.A./V.E.B.A. or H.S.A.
• All employee + children and employee + spouse plans will receive $160.00 per month toward the H.R.A./V.E.B.A. or H.S.A.
• All family plans will receive $192.00 per month toward the H.R.A./V.E.B.A. or H.S.A. 

Or

The City will pay $370 per month in 2022 in lieu of health insurance benefits for employees who waive such coverage. Employees receiving the waiving benefit prior to 2013 will continue to be grandfathered in to the waiving benefit.  Other employees to the program are subject to the following terms: Employee must agree to the terms of the waiving benefit as described within the City’s policy and signs the acknowledgement form.

Life Insurance
If approved, the City will continue to purchase $20,000 of basic life and AD&D insurance for full-time regular employees working 30 hours per week and employees participating in the PERA's phased retirement program.  The cost of basic life insurance is $3.40 per month per employee.

Single Dental Insurance
If approved, the City's monthly contribution to single dental insurance will be $33.45 per month.  The City will not offer credit in lieu of coverage for dental insurance.

Wages

• Cost-of-living Adjustment (COLA):  If approved, the City's COLA will be 3.00%, effective January 1, 2022.  Annual cost of living adjustments are carefully researched, budgeted for, and are necessary for recruitment and retention of employees. 
• Market Rate Adjustments:  From time to time, specific position wage scales may require adjustments and may be amended by the City Council.  In making such adjustments, the City considers the following factors: maintenance of equitable relationship between classes, based on their relative duties and responsibilities; comparable wages in similarly sized cities; current recruitment and retention experience and comparable worth for all positions within the organization.
  • All non-union position wages were reviewed relative to the current market and the recommended adjustments were discussed with the City Council at a previous work session.  The following positions are recommended for a wage scale adjustment:  City Administrator, Finance Director, Police Chief, Fire Chief, City Engineer, PW Superintendent, Admin Services Director, IT Manager, Building Official, City Planner, Building Maintenance Supervisor, Deputy City Clerk, PW Parks Supervisor, PW Utilities Supervisor, PW Streets Supervisor.  The total budget impact to adjust the above listed wages scales in 2022 is $32,290 and has been included in the 2022 budget.

Non-union COLA Wage History
2021 2.75%
2020 3%
2019 2.75%
2018 2.5%, 1-1-18 through 06-30-18 plus .5% beginning 07-01-18
2014 through 2017 2%
2013 1%
2012 2% for all employee groups, with the exception of Department Heads at 1%
2010 & 2011 Zero %
2003 to 2009 3%

The funding required for this action is included in the 2022 budget. 

Staff recommends adopting resolution #21-356 to move forward with the City non-union insurance contributions, COLA and market rate adjustments, effective January 1, 2022. 

Motion to adopt resolution #21-356, contingent upon approval of the 2022 general fund budget including these actions, as follows:

1) Authorize the following non-union monthly City health insurance contributions, effective January 1, 2022: Employee only (single) City contribution, not to exceed $877.50; Employee and Children City contribution $1053.30; Employee and Spouse City contribution $1106.10; and Family City contribution $1369.50; and the following  H.R.A./V.E.B.A. or H.S.A. contributions: Single plans with a $4000 deductible receive $194.00, other single plans receive $130.00 per month; all employee + children and employee + spouse plans will receive $160.00 per month and all family plans will receive $192.00 per month; or the Employer will pay $370 per month in lieu of health insurance benefits for employees who waive such coverage; and 
2) Authorize the non-union dental contribution, effective January 1, 2022, of $33.45 per month; and
3) Authorize increasing the non-union wage scale by three percent (3.00), effective January 1, 2022; and 
4) Authorize market rate adjustments the following positions, effective January 1, 2022:  City Administrator, Finance Director, Police Chief, Fire Chief, City Engineer, PW Superintendent, Admin Services Director, IT Manager, Building Official, City Planner, Building Maintenance Supervisor, Deputy City Clerk, PW Parks Supervisor, PW Utilities Supervisor, PW Streets Supervisor.