Adopt Resolution #14-12-258 approving the 2015 Non-union Cost of Living Adjustments (COLA) and Non-union Health Insurance Contributions.

The purpose of this case is to ask the City Council to authorize the non-union employee cost of living adjustments (COLA) and non-union health insurance contributions for the City's 28 non-union employees in 2015.   This request is based on the discussions at the November 25, 2014, work-session; it was the consensus of the City Council to move ahead with a 2% COLA and City health insurance contributions, as presented.    Both the COLA and health insurance contributions fall within the 2015 budget.   It should be noted, due to prior commitments, Councilmember Backus and Councilmember Tossey were not able to attend the November 25^th meeting.

Wages
Staff  has accounted for a 2% non-union cost of living adjustment (COLA) in the 2015 budget.  Staff has reviewed the most recent COLA data and found that cities are coming in at an average COLA of 2%. Staff recommends a 2% COLA be authorized for the non-union employee group in order to maintain a completive compensation package and proactively retain the city's talent. The 2% COLA is the same amount offered to the other groups. 

Background Information -- COLA/Wage Adjustment History
2014 Wages
•           Non-Union 2% 01-01-14
•           AFSCME 2% COLA 01-01-14 & 07-01-14 1% market adjustment
•           LELS Patrol and Sergeants 2% COLA 01-01-14 & 2% market adjustment 07-01-14
2013 1% COLA for all groups
2012 2% for all employee groups, with the exception of Department Heads at 1%
2011 Zero % for all employee groups
2010 Zero % for all employee groups
2003 to 2009 3% each year for all employee groups
 
Health Insurance
The City is members with 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; currently administered by BCBS. The City is benefiting by five years of rate caps; 2015 will mark the 4^th year with rates capped at a maximum increase of 10.6%; which was the increase the City received for 2015.

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.  Note: The following 2015 health insurance contributions are the same contributions proposed for all other employee groups; which has proven to be an effective way to maintain internal equity, minimize the complexity of the budget, keep the payroll process streamlined, and to mirror other city's business practices.
 
Employee Only.............................$871.74
Employee + Spouse......................$1142.00
Employee + Children.................... $1226.00
Family..........................................$1358.00
Credit in Lieu of Coverage.............. $345.00

*The City's 2015 VEBA contribution includes the $4.30 monthly claims fee. 
**Employees that elect to waive health insurance must agree to providing proof of other coverage;  as well as agree to come back on the City's health plan if the City requires them to do so.   
***All of the above listed amounts are equal to the amounts offered to all three bargaining units. 

Amount of Increase over 2014
Single Premium  increased by $71.74 
Employee + Spouse increased by $50.00
Employee + Children increased by $50.00 
Family not increased over 2014 amounts
Waiver/Credit in lieu of Coverage increased by $50.00
 
Staff recommends the above listed City contributions, which are within the 2015 budget.   This contributions approach works to:  1) maintain 100% coverage by the City on the least expensive single premium (consistent past with practice and recommended by the City's benefits broker), 2) limit the City’s costs on the two middle tiers, and 3) holds the City's contribution on the Family plan at the 2014 amount, reducing the City’s costs and working toward more equitable contributions amongst the tiers,4) allows employees the flexibility to waive coverage if waiving is the best option for their individual circumstances.  

The City will continue to purchase $20,000 of basic life insurance for full-time regular employees working 30 hours per week or more. 

 

Staff recommends moving forward with a two percent (2%) COLA and city health insurance contributions as listed. 

The funding required for the non-union COLA and health insurance contributions is included in the 2015 budget.

To adopt resolution #14-12-258 authorizing the 2015 non-union city health insurance contributions and to increase the non-union wage scale by two percent (2%).

Motion to adopt resolution #14-12-258 to approve the 2015 non-union city health insurance contributions and to increase the non-union wage scale by two percent (2%).