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Request for Council Action continued <br />P«ge2 <br />November 7.2001 <br />Year 2002 Non-Union Compensation Adjustroenls <br />The year 2000 budget included a $25.00 per month insurance contribution increase. After the budget <br />and levy were adopted, the City received the 2000 health insurance rates. These rates reflected an <br />increase of S120 per month in the premium for the high option family coverage. Although other plan <br />changes were made that provided additional lower cost options, a significant number of employees <br />were not abie to take advantage of these options. For these employees, the $25.00 per month <br />increase covered only a small portion of the premium increase. <br />Because the 2001 health insurance rates increased by approximately 12%, the City was not able to <br />increase its insurance contribution sufficiently to catch up for the large rate increase in 2000. <br />The percentage increase in health insurance rates tor 2002 was originally projected to be in the mid­ <br />teens. Based on this projection, the amount budgeted for health insurance was increased by 122%. <br />The 2002 budget reflects a 12.2% increase in the City’s contribution toward health insurance. The <br />insurance contribution is proposed to increase from $410.00 per month to $460.00 per month. The <br />2002 Police Officer contract reflects the same increase. <br />In late October, the Cit>' received information that the insurance rate increase wll be substantially <br />lower than initially projected. The insurance rates have increased 8.4%. An 8.4% increase in the <br />City’s insurance contribution would raise the City’s contribution from $410.00 per month to $445.00 <br />per month. The additional $15.00 per month provided by the proposed $460.00 per month <br />contribution enables the City to catch up with recent years’ higher premium increases. <br />COUNCIL action REQUESTED: <br />Motion to adopt the attached resolution approving pay plan adjustments for non-union employees <br />for 2002. which reflects a 3.75% adjustment to pay schedules and an increase in the City's insurance <br />contribution to $460.00 per month.