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Attachment E 33 every priority could not be totally accommodated as part of the 2023 budget, they were used to 34 help frame important components of the budget proposal. 35 36 The impact of inflation is being felt across department budgets. The City is experiencing higher 37 operational costs due to price spikes in supplies such as fuel and facing higher costs (and longer 38 waiting periods) for the acquisition of replacement capital items, these inflationary costs have been 39 factored into the proposed City Budget and I have employed strategies when possible to mitigate 40 its effecton the property tax levy. Howeverit should be noted that factoring out new or expanded 41 programs, services, or personnel, this budget is experiencing a much higher cost to deliver the 42 existing programs and services than a typical budget year. 43 44 Ona related note is the upward pressure on employee wages. With Minnesota’s low 45 unemployment rate, recruiting and retaining employees continue to be extremely challenging for 46 both public and private employers. As a result, employers have had to raise wages in order to 47 attract applicants for open positions. This budget begins to address this fact with both seasonal 48 and regular employees. A cost of living adjustment (COLA) it typically given to employees each 49 year, typically ranging for 0 to 3%, to keep pace with inflation and remain competitive with other 50 employers. Our typical benchmarks for determining the amount of COLA for non-union 51 employees, are the Consumer Price Index (CPI) for Minneapolis/St. Paul and the Employment 52 Cost Index (ECI) for State and Local Government Workers. With inflation at a 40-year high, the 53 Minneapolis/St. Paul CPI in July 2022 was 8.2% higher than July 2021. The ECI for state and 54 local government workers wages only went up 3.2% compared to June 2021. The lower ECI rate 55 is probably reflective of the government’sannual budget process that does not allow the ability to 56 quickly adjust wage rates as private industry are able to do. With all that in mind, this budget is 57 proposing a COLA of 3% for non-union employees which will match what union employees will 58 be receiving as part of their collective bargaining agreements. 59 60 Finally a note about the City’s ongoing equity work. As this document primarily outlines large 61 cost drivers and new costs that are part of the proposed budget, there will not be much description 62 of the City’s equity work. However, our equity work continues to be a priority for the City. The 63 2022 budget included a new investment of $126,000 levy dollars to go toward our equity work. 64 The 2023 budget continues funding equity work at the amount of $135,000. For 2023, the 65 funding will go towards the following work: 66 67 Diversity, Equity, Inclusion (DEI) Training 68 for Staff and Leadership $50,000 69 Juneteenth Event Support$ 5,000 70 Translation Services$10,000 71 Software for Engagement Activities (e.g.Envisio) $30,000 72 Youth Equity and Engagement $10,000 73 Recruitment initiatives/other expenses $30,000 74 $135,000 75 76 It should be noted these are expenses for the City’s general equity work. In the future, it is planned 77 that additional costs for department specific equity work will be included within the department 78 budgets. 79