10-30-2003 Council Work Session - Laserfiche WebLink

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TO: FROM: Mayor Peterson and Council Members Ron Moorse, City Administrator DATE:October 28,2003 SUBJECT: 2004 CompcnsatioB Adimttttf ats Compensation Adjustment Criteria An outline of the criteria on which pay and insurance adjustments are generally based is as follows: A.Pay Adjustment Criteria I. Cost of living increase a.U.S. Consumer Price Index: annualized increase from September, 2002 to September, 2003 is 2.3%. b.Minneapolis/St. Paul Consumer Price Index: annualized increase from the first half of 2002 to the first half of 2003 (July 2002 to July 2003) is 1.3%. The increase for the first six months of 2003 was .9%. This increase annualized over 12 months would be 1.8%. 2.Market comparison. a. Cities in the metro area are providing pay adjustments of 1.75% to 3.25%. Cafeteria Benefit Plan Contribution Adjustment The insurance premiums for 2003 will inc.’- rase by 13.6%. Although this increase is significantly larger than we had hoped, it is also significantly lower than the increases most other organizations are experiencing. The magnitude of the premium increase was reduced by increasing the office co pay from $15.00 to $30.(X). The monthly family coverage premium increases for the three Medica options are as follows: MedicaHigh: $117.96 Medica Elect: $ 108.21 MIC 1000: $149.77 The MIC 1000 plan is a high deductible plan that has had a 20% office visit co-pay. The premium increase for the MIC 1000 plan could not be reduced by the increased office visit co-pay, because the co-pay did not change in the MIC 1000 plan. Recommendation For 2004, it is recommended that the compensation adjustment be focused on pay rather than on the cafeteria benefit plan contribution, and that pay levels be increased by 3%. and the cafeteria benefit plan contribution remain at the 2003 level of $500.00 per month.I