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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — SEPTEMBER 9, 2024 10 into next year's increase. Either way, the cost is perpetual into future years. She said all discussions have been as of January 1. She thinks people have the expectation that they are going to get what the grid says at the first of the year. No matter what changes, people will be disappointed. Mayor Grant does not think factoring in a staff vacancy as a means of cost savings is appropriate. That should not be a part of the planning process. He said moving employees to the closest step to their current wage is how he would like to see it implemented. He would not characterize this as climbing out of a hole. He said they try to true this up every three years. He wondered how far behind you can really get in three years. He stated it is up to Council if they want to implement later than January 1. Interim City Administrator Jagoe pointed to the bench handout that councilmembers received at the beginning of the meeting. She had Finance Director Yang use Option 1 and the $155,000 based on her understanding of the council direction to look at employees doing the market analysis. That analysis showed which positions should be reclassified and then having those employees retain their tenure and moving them into the scale. She wanted to be clear; that was what Council is seeing with the $155,000. Councilmember Rousseau would like to see the difference if implementation was moved to July. 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.