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ARDEN HILLS CITY COUNCIL WORK SESSION—MAY 21, 2007 8 <br /> Finance Director Iverson indicated equipment replacement funding should be addressed. • <br /> She reported no reserve fund is set up for equipment replacement. <br /> Discussion ensued. <br /> Consensus was reached to establish a reserve fund for equipment replacement with <br /> parameters and policies to be developed. <br /> Finance Director Iverson reported staff sees a need to establish a reserve fund for park <br /> capital improvement. She commented the fund would be a funding source for items <br /> included in the CIP. <br /> Discussion ensued. <br /> Consensus was reached to meet with the Parks, Trails, and Recreation Committee before <br /> a decision is made. <br /> Finance Director Iverson reported on salaries and benefits. She stated that last year, the <br /> Council authorized a 2.75 percent increase for steps and COLA increases. She explained <br /> this was also the rate increase agreed to by the labor union for 2006 and 2007. She stated <br /> the labor agreement expires December 31, 2007 and a new agreement must be negotiated. <br /> She commented that for several years, Council budgeted a 3 percent increase for COLA. • <br /> She explained staff sent out a survey to gather information on what other cities used over <br /> the last three years. The report showed that the average pay increase for cities surveyed <br /> was 3 percent in 2007, 2.9 percent in 2006, and 2.85 percent in 2005. She explained the <br /> current compensation study would show the market rates; however, future COLA <br /> increases would determine if the City stays current with the market or falls behind. <br /> Discussion ensued. <br /> Consensus was reached that staff make an assumption, report what was done to Council <br /> and then as the budget process is discussed, Council could weigh in on the decision. <br /> Assistant City Administrator Johnson discussed employee benefits. He stated there is a <br /> loophole in the contract with the co-op whereby the City could search for the best <br /> insurance. He stated he should know the rates by late July or early August. He explained <br /> there is a three-month window of opportunity; however, once out of the co-op, the City <br /> could not go back in. <br /> City Administrator Wolfe explained this would impact about 13 staff members and <br /> cautioned everyone on leaving a consortium. <br /> Discussion ensued. <br /> • <br />