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Table 1 illustrates the constant pressure for wages to move up to keep pace with <br /> "inflation" or the desire to provide a similar standard of living for employees over time. <br /> Cities, along with the federal and state government, often look at cost-of-living <br /> adjustments (COLA) when setting salaries. One measure is the consumer price index <br /> (CPI), published by the Bureau of Labor Statistics, U.S. Department of Labor. The CPI <br /> is a measure of the average change over time in the prices paid by consumers for <br /> goods and services. Currently, the City adopts the annual resolution for compensation <br /> adjustment consisting of an across-the-board COLA increase. The past COLA <br /> increases have been loosely based on the change in the CPI with additional <br /> consideration given to what other cities are doing and the condition of the budget/tax <br /> levy. <br /> The columns in Table 1 point out that Orono has two different employee groups for <br /> compensation purposes. One of the groups is represented by labor unions and their <br /> compensation is negotiated as part of a collective bargaining agreement and hence <br /> cannot completely be set into a formal pay structure. The other group is non-union <br /> employees which are compensated according the City Council's annual compensation <br /> resolution. Attachment A provides the current policy from the employee handbook. <br /> I've also attached the current 2013 position groupings and pay ranges in Attachment <br /> B. <br /> Options: <br /> As you may know, the City is considered a "service" organization that provides its <br /> residents with police protection, snow plowing, engineering, water and sewer utilities <br /> and more. As a "people —driven" or service organization, the major expenditure <br /> category in the General Fund budget is Personnel Services (wages and benefits) <br /> accounting for 65% of the 2013 budget. Because employee compensation plays such a <br /> large role in the City's finances, I've listed three changes to consider which may help <br /> achieve the Council's strategic directive of containing personnel costs: <br /> 1. Consider a lump-sum only payment instead of COLA increases (similar to <br /> Hennepin County). <br /> Here is the language from a recent Hennepin County union contract for your <br /> consideration: <br /> • "Employees who have 18 or more years of continuous service with the Employer <br /> as of January 1 of the current year shall receive a supplemental cash payment of <br /> $150 paid over a payroll year at a rate of$5.77 per payroll period." <br /> This is essentially longevity pay (but in a lump sum) which we don't currently <br /> offer for non-union employees but longevity is provided to union employees. <br /> 2 <br />