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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 10 Tessia Melvin said the way this was costed out was that on January 1, everyone receives the COLA and then moves into the grid. Depending on how Council decides to implement it, everyone either moves to the step that is closest to their current pay or receives the new rate at their current step. Then, everyone would step up on anniversary dates. She admitted we are kicking the can down the road either way. With the labor market as it is, it will be favorable to have a pay grid that is competitive. The implementation can move. Councilmember Monson gave a hypothetical example and stated the employee wouldn't lose money but would appear that they lost tenure. Interim City Administrator Jagoe confirmed. She said Option 1 was calculated by taking an equal percentage for every employee for an increase. If someone was at Step 5 they might be Step 2 on the new scale. There were employees who went up steps because the way it was calculated, every employee to average 6%. For some employees the closest step to their current wage wasn't 6% so those employees stepped higher. If positions were reclassified to meet market, their step went down. There are variables in play that gets everyone to the average. Tessia Melvin stated direction from the former City Administrator was that everyone should get something. She states that Option 2 is equitable because it leaves everyone at their step. The employees that will get more than the 6%will be the positions that are reclassified. They will keep their step and they're getting a new grade. Those employees are moving horizontally and vertically on the grid. Councilmember Monson thinks the example that uses $125,000 could create a tenure issue if an employee is bumped lower. She wants to understand, in the second option that uses $155,000, how an employee stays at the same step. Interim City Administrator Jagoe clarified that, in the $155,000 option, an employee who is at Step 5 would move to Step 2. You retain that tenure step but it's still a drop of three. Councilmember Holden said no one is losing any money. The only thing happening is shifting the grid to allow three more steps. Mayor Grant clarified that employees will not receive a step increase on January 1 but rather on their anniversary. Tessia Melvin confirmed. The step increase will happen at the employee's anniversary. Councilmember Holden thought from the initial discussions, one of the reasons January 1 was selected was because it made it much easier to implement. Now you will have people on two different grids throughout the year. That was the reason Council chose January 1 to change the grid system. Mayor Grant said Council needs to land somewhere. Tessia Melvin summarized that she isn't hearing a decision has been made. She hears that the cost needs to come down from $155,000. She can come back with some options. She asked for direction on what should be changed so she can come back with more options.