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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—AUGUST 12, 2024 5 Councilmember Monson stated the recommendation from Tessia Melvin is to do a market review every three years. Councilmember Monson clarified she believes the market review should be completed every three years as well. She believes increasing the cost of living adjustment is a budget issue. Between Options 1 and 2, there is a five thousand dollar difference and believes it would be worth the five thousand dollars to be that much more competitive in the market. Councilmember Holden reminded that figure is wages only. It doesn't include PERA, Social Security, or Medicare. It's more than six thousand. Councilmember Fabel stated if someone was maxed out now and we went with Option 1, they would continue to get raises for three years. With Option 2, after two years, they would be maxed out before getting to another adjustment. He believes Option 1 is the better choice so as long as this current writ remains in place employees will continue to see raises. Mayor Grant asked if Option 1 would put everyone 8% above the average. Tessia Melvin replied the pay grid is calibrated at 8% above average. Some employees will be slightly under and some will be slightly over. This is 8% average overall, not individually. Councilmember Holden asked if Option 1 is chosen and someone new comes in, would it be more likely to start them at entry level. Because starting someone at step 3 on the grid would be at step 5 now. Tessia Melvin stated most individuals aren't going to know the steps on the grid, they will know the wage that is posted. Negotiation is usually based off of where they are. Councilmember Holden said its public information. People know the grids. Councilmember Fabel wondered if there is a reason for nine steps. He asked if we increase the max by three steps, do we have to eliminate the three minimums. Tessia Melvin replied the average is eight to ten steps so having nine falls into line. Councilmember Monson thinks it's important to add the three steps and remove the bottom three because that raises the entry level wage which is more attractive for recruiting. Adding the three at the top end helps with retention. The minimums are already at 5% below market. Not eliminating the bottom three steps will stall that at 5% or more below. She thinks the adding and subtracting of steps is needed to stay competitive in the market. Councilmember Holden added that there used to be twelve steps but went to nine in an effort to give larger increases. Councilmember Fabel asked if there was data for total cost on year two and year three. Mayor Grant said Option 1 would cost $124,546 in 2025. Would the cost be $124,546 in 2026, as well?