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As shown in the table above, there is at least $623,000 of potential tax-supported budgetary impacts in 2015. Each of these impacts is briefly described below. Emplover PERA Contribution Increase The 2014 Legislature enacted mandatory employer and employee contribution increases in 2015 for all employees covered by the Public Employees Retirement Association (PERA). The City contribution rate for employees covered under the Police and Fire PERA Plan will increase from 153% of salary to 16.2%. The contribution for employees covered under the General PERA Plan will increase from 7.25% to 7.50%. The contribution rate for the Police and Fire Plan is higher due to the fact that employees covered under this plan do NOT receive employer-paid FICA (Social Security) of 62%. The total financial impact is $63,300, or which $52,000 lies within the tax-supported funds. Employee Cost-of-Living Adjustment (COLA� The City has a long-standing practice of maintaining external and internal pay equity amongst all employee groups including union and non-union employees. The Police Patrol, Police Sergeants, and Maintenance Operators unions have all agreed to a 2% COLA for 2015. The 2% COLA is consistent with pay adjustments provided by peer cities. As of this date, the Paid-on-Call Firefighters union has not settled on a pay plan. In the interest in keeping external and internal equity, it is recommended that all regular non-union employees also receive a 2% COLA. The cost for this adjustment in the tax-supported funds is approximately $196,000. Em�lovee Wa_�e Ste� Increases Under the Ciry's Compensation Plan(s), eligible employees that meet satisfactory performance standards are advanced to a higher step within their position pay grade. The higher step is in recognition of the added skills and institutional knowledge that the employee has obtained. It also reflects the increased value the employee creates for the City. This approach is coupled with the general practice of hiring less experienced employees at a lower pay step or introductory wage. About half of all full-time employees are still progressing through these wage steps. The total financial impact in the tax-supported funds is approximately $100,000 Ca�ital Re�lacements As previously recommended by the CIP Committee; the CIP Funding Plan calls for an $80,000 increase in the 2015 tax levy to strengthen the Ciry's Pathways program. It is suggested however, that the City Council consider a funding increase of only $55,000 far General Facilities instead. This is explained further in a separate Staff Memo. General Inflation The City is projecting a general inflationary impact of approximately 2% on all non-personnel related costs. This would include any capital purchases as well as supplies, materials, and contractual services needed for day-to-day operations. The estimated impact in the tax-supported funds is $105,000. Page 2 of 4