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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUST 12, 2024 3 Councilmember Holden asked if currently there is 3% gap between every single step. Tessia Melvin confirmed. Councilmember Holden stated if a cost of living increase was implemented for someone who was not at the max, there would be additional cost because they would also get an extra step. She wondered if that was included in the calculations. Tessia Melvin confirmed the total cost does include the 3% cost of living increase and implementation into the step cost. Councilmember Monson wondered if information was available regarding how many current positions would be maxed out in 2025, 2026 and 2027. Tessia Melvin replied ten, currently. She said they would get the adjustment but no additional step. There would be other movement as others max out but she would have to look up and didn't have the information available. Councilmember Holden thought in comparison to other cities, Arden Hills is at 100%. She wondered how often the study needs to be completed. Interim City Administrator Jagoe believed it was every three years. Tessia Melvin confirmed it is mandated by the state to complete pay equity every three years. She said it is recommended that you look at the market every three years, as well, because it changes. She confirmed Councilmember Holden's statement that Arden Hills is at the average and its fine to stay there if that is the pay philosophy of the City. Councilmember Rousseau asked staff where they see Arden Hills needing compensation increase. She wondered if it was to recruit new hires or if it was for retention of current staff. Interim City Administrator Jagoe stated she believed it is both. It would be a tool to bring new people in when a position is posted but is also equally important for retention of current employees. Councilmember Rousseau wondered if it could be maneuvered around to include a 2% increase for entry level staff and adding 3% on the maximum. She wondered how that might land. Interim City Administrator Jagoe stated the negotiation usually includes an offer at the entry level steps. These increases could serve as an attractant for new hires. For current employees who might be maxed out, adding one or two steps will know they have movement vs. adding one increase and now they're still at the max. Councilmember Fabel asked if the total cost figures included just year one. Tessia Melvin confirmed that it is for 2025 and just includes the wage adjustment. It does not include PERA or taxes. This includes the cost of living adjustment, moving into the option chosen and any predicted step movement for 2025. Councilmember Holden stated we are a small city and said we'll never be able to compete with the larger cities. She is not happy with the cost of living being 3%. She thinks it should be higher.