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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 8 Tessia Melvin said that is a discussion Council can have when the time is right. She thought typically you aren't going to start someone at the top step. She said savings also come depending on when the position is hired. There will be some savings because that salary will only be paid out when the position is filled. It won't be for the entire year. Tessia Melvin outlined the recommendation for implementation be the 3% cost of living adjustment(COLA), cut the bottom three and add three to the top then move employees into the closest step that benefits the employee. If the adjustment is made to the scale and employees stay at the same step, which would be a bigger cost up front. The first option would give employees a bump of 4-6%, the second option would give a higher percentage. Mayor Grant asked staff if either option could be implemented. Finance Director Yang confirmed it could be implemented either way. Councilmember Holden asked if the cost of$155,000 included social security and Medicare. Finance Director Yang confirmed. Councilmember Holden said she thought earlier the amount for FICA and PERA was $26,000 and $6,000 for the insurance. Finance Director Yang explained that a portion of it allocated to the General Fund and another portion to the Enterprise Fund. Councilmember Holden asked for confirmation this only includes non-union staff. Finance Director Yang confirmed. Councilmember Holden asked for confirmation that the current union contract will expire in January. Public Works Director and City Engineer Swearingen confirmed. He said negotiations have begun. Councilmember Monson noted the City hasn't done an analysis like this in several years. She believes the impact on the levy may be too big. She would like to understand what the levy impact would be if we come to market and move to above market over the next three years. She recognizes we are digging ourselves out of a hole and trying to be above average for a pay philosophy. She thinks the cost is too high to take on at one time. She would like to see what the cost of being at market and the costs of exceeding the market at 5%vs. 8% as outlined in the current option. She wants to understand what the scale of a change like that would be. Would it mean $20,000 or$100,000 difference? Tessia Melvin said she doesn't want to guess what that number might be. She said the most important question that should be answered tonight is the implementation of this. Will employees be placed at the closest step,by dollar amount, to what they are currently making or will they remain at the same step and receive that increase. She anticipates going from 8% to market, the cost will go down by a couple percent.