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100906 CC WS Min CITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, OCTOBER 9, 2006 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 8:00 P.M. or Immediately Following the Regular Council meeting MINUTES 1. CONVENE CITY COUNCIL WORK SESSION Mayor Love called the meeting to order at 8:10 P.M. A. Roll Call Present: Mayor Love; Councilmembers Callies, Lizee, Turgeon and Wellens; Administrator Dawson; Finance Director Burton; and Director of Public Works Brown Absent: None. B. Review Agenda Without objection from Council, Mayor Love proceeded with the Agenda for the meeting. 2. EMPLOYEE HANDBOOK POLICIES A. Sick Leave / Severance Policy Administrator Dawson stated there were three items remaining to be resolved for placement in the new employee handbook: the sick leave/severance policy; the funeral leave policy; and the health insurance opt-out policy. If Council provided direction on those items tonight, approval of the new employee handbook could be considered as early as October 23,2006. Administrator Dawson explained the goal of changes to the sick leave/severance policy was to establish a cap to limit the City's financial liability on the balance of sick leave paid as severance at time of an employee's termination. At the September 25, 2006, work session, Council asked that the employee Benefits Committee review and provide comments on a plan that would: 1. Place a 960-hour cap for purposes of calculating severance. 2. Have a graduated scale for severance base on tenure with the City. 3. Have no cap on the number of hours that may accumulate in an employee's sick leave balance. Administrator Dawson then explained there were three employees that had more than 960 hours in their sick leave balance, and each had approximately 1600 hours on balance. Under the current plan one-third of the amount over 400 hours (1600 - 400 = 1200) would be paid out as severance. Administrator Dawson stated the Benefits Committee had met the week of October 2, 2006, to review the above proposed sick leave / severance plan. The Committee members believed that their "800-hour" proposal was fair for both the City and the employees. The Committee expressed high value on the proposed program that rewarded employees for responsible use of stick leave. CITY OF SHOREWOOD WORK SESSION MEETING October 9, 2006 Page 2 of5 Administrator Dawson stated from his perspective either of the two proposed plans were reasonable. Both plans place a cap on accumulated sick leave. The separate question was how to address the three employees with a sick leave balance greater than the recommended cap. Mayor Love stated he wanted to ensure those three employees would be made "whole" as they had counted on the severance benefit. After ensuing discussion, Administrator Dawson clarified that in the "800-hour" proposal, the buy-down of sick leave hours in excess of 800 hours would occur each year-end. Dawson also clarified the "800- hour" proposal did not contain a graduated scale based on tenure; any buy-down was dependent on a minimum tenure of five years. The Committee believed the "800-hour" proposal was easy to understand. Councilmember Turgeon stated she would prefer a graduated scale based on tenure. Administrator Dawson stated the League of Cities and the City Attorney both recommended an alternative that the three employees with sick leave hours in excess of the proposed cap should no longer accrue sick leave, and they would work down their sick leave hours as needed over time; at time of termination the employee would be paid the larger of the amount of severance based on the current benefit versus proposed benefit. In response to a question from Councilmember Turgeon, Administrator Dawson clarified the "800-hour" proposal had an 800-hour cap. He stated that proposal could be modified to reflect a 960-hour cap if Council so chose. Councilmember Callies stated she could support the "800-hour" proposal. Administrator Dawson stated there were a few alternatives that could be considered to compensate the three employees for accumulated sick leave in excess of the proposed cap. One was to buy-down the excess hours at varying percentage rates. Another would be to prohibit further accumulation of sick leave hours in excess of the cap. And third, at termination the employee would be compensated for their excess hours based on which ever is higher of the current severance benefit or the proposed benefit. Discussion ensued with regard to how those employees with accumulated sick leave hours in excess of a proposed cap should be addressed for those excess hours. Administrator Dawson stated the employees with more than 800 hours of accumulated sick leave were very loyal employees. They often came to work because of work obligations when they should have stayed home because they were ill. In response to a question from Mayor Love, Administrator Dawson stated the "voice" of the three employees was represented in the Committee's "800-hour" proposal. Administrator Dawson explained the "800-hour" proposal was in use by Eden Prairie, and was previously used by Hennepin County on a graduated scale. He stated the Committee thought the 50% approach was easy to understand. Councilmember Wellens stated a 33% approach was also easy to understand. He then stated he would prefer to leave the benefit as is. He also stated his employer did not compensate an employee for any outstanding sick leave balance at time of termination. CITY OF SHOREWOOD WORK SESSION MEETING October 9, 2006 Page 3 of5 Administrator Dawson stated the goal in making changes to the severance benefit was to find a way to limit the City's financial liability on the balance of sick leave paid as severance. Mayor Love stated if the severance benefit was to change he would support the "800-hour" proposal; but he could also support no change to the benefit. Councilmember Turgeon stated the 960-hour cap was relatively common amongst other local governments. Some would have no cap on accumulated hours, but would have a cap on the amount that would be paid as severance. Administrator Dawson commented that would be one method where employees could bank hours to use in the event of a major illness, yet it would limit the City's financial liability. Councilmember Turgeon stated there were a number of employees that were nearing the 800-hour sick leave level. (Administrator Dawson stated there were 2 - 3 employees.) Turgeon then stated one way to view a yearly buy-down of sick leave hours in excess of an 800-hour cap was to consider it a "bonus" for good attendance. She stated the important aspect of the severance benefit was to ensure there was a cap on the severance. Administrator Dawson concurred that was the critical component to the benefit. In response to a question from Mayor Love, Councilmember Turgeon explained her desire was not to have a cap on the accumulated sick leave hours, but to have a cap on the severance paid. Councilmember Turgeon stated she did not think accumulation of sick leave hours was a common practice in large corporations. In response to a question from Mayor Love, Administrator Dawson explained if an employee used two sick days per year they would accumulate 800 sick leave hours in ten years. Mayor Love stated Council again stated he would support the Committee's "800-hour" proposal. Councilmember Callies concurred, and she stated Council had asked the Committee to review various severance alternatives (which they did) and they still recommended the "800-hour" proposal. Mayor Love stated it was important the three employees with accumulated sick leave hours well In excess of 800 hours were treated fairly; he noted "fairly" was difficult to define. Discussion ensued with regard to the need for a graduated scale based on tenure. Councilmember Turgeon stated she was sensitive to the possible misinterpretation by the Committee that although it was asked for its perspective, its perspective was not considered. Councilmember Callies commented that Council had referred the benefit under consideration back to the Committee for review; therefore its recommendation should have considerable merit. Councilmember Turgeon clarified that Mayor Love and Councilmember Callies would support an 800- hour cap on accumulated sick leave hours; the severance would be 50% of the hours at termination with a minimum of five years of tenure; and there would be an annual buy-down of hours in excess of 800 at a 50% rate. In response to a question from Mayor Love, Administrator Dawson explained that would place a limit on the City's financial liability. Council member Lizee stated she could support the Committee's "800-hour" proposal. The Committee had reviewed other local governments' benefits. She commented the City was not a major corporation. CITY OF SHOREWOOD WORK SESSION MEETING October 9, 2006 Page 4 of5 Administrator Dawson stated there was still the outstanding item of how to address the three employees who had more than 800 hours of accumulated sick leave. In response to a question from Mayor Love, Administrator Dawson stated the Committee could support either of the options and it did consider the "voice" of the three affected employees. Mayor Love stated he wanted to ensure the three employees who had sick leave hours in excess of 800 hours would not be negatively affected, and there would be equity for employees who would reach that amount in the future. Discussion again ensued with regard to the severance benefit alternatives. Mayor Love stated he believed that Council had reached a consensus on what the future benefit should be. He had concern with how a shift in benefits would impact the three individuals; and it was important those individuals were not negatively impacted. Councilmember Turgeon stated the employees could prefer to have the security of accumulated sick leave hours to rely on in the event of a health catastrophe. Mayor Love questioned if Council could support asking Administrator Dawson to meet with the three individuals and ask for their input on what an equitable solution to the accumulated sick leave hours in excess of 800 hours would be, and then discuss it at a future Council work session. There was Council consensus. B. Funeral Leave Policy Administrator Dawson stated the proposed funeral policy was the same as the City's labor agreement with the AFSCME (public works). He explained some Councilmembers had expressed concern with granting one funeral leave day for friends of employees. He stated there was a preference to have consistency between non-organized labor and organized labor benefits. He then explained the current language to grant time off granted discretion of the City Administrator could address the concern. In response to a question from Councilmember Turgeon, Director Burton explained there was a pay category for funeral leave. Councilmember Wellens suggested the benefit granting one day of funeral leave for death or funerals of other relative or friend be eliminated. Administrator Dawson commented employees did not take many funeral leave days. There was Council consensus to leave the current funeral leave policy as is. C. Health Insurance Opt-Out Policy Administrator Dawson explained the City had been willing to pay $50/month to any employee who chose not to participate in the City's health insurance plan for many years. If an employee were to participate as a single member in the health-insurance program it would cost the City $250 per month based on the employee's age. The Committee recommended the amount for non-participants be increased to $IOO/month. Councilmember Lizee supported the increase to $1 OO/month. CITY OF SHOREWOOD WORK SESSION MEETING October 9, 2006 Page 5 of5 Councilmember Turgeon noted there was one employee that did not participate. She questioned if there would be others that would opt-out if the amount were increased. Director Burton clarified the employee would be required to prove they had other coverage. There was Council consensus to increase the opt-out amount to $1 OO/month. 3. VOLUNTEER LEAVE POLICY Administrator Dawson stated Council had requested research and alternatives to consider a "volunteer leave" program be done separately so as not to cause further delay in modifications to employee benefits and approval of the new employee handbook. He then stated little information was available to model a "volunteer leave" program around. He noted that the League of Minnesota Cities prohibited Cities from making financial contributions to certain types of organizations. Councilmember Turgeon stated her intent was to use accumulated sick leave hours for volunteer efforts. If that required a rewrite of the sick leave policy she did not support moving forward with that effort at this time. Councilmember Lizee stated she did not view the volunteer policy as one that would make use of accumulated sick leave. She did recommend encouraging employees to volunteer their time to private organizations, corporations, and school students. She then stated children were being educated on the benefits of volunteering. She also stated it was important for the City's employees to feel they could contribute to the City, the Lake Communities, and/or their own communities as a volunteer. Mayor Love suggested that Council move forward with the Benefits Handbook and in the future consider a volunteer leave policy. There was Council consensus on that recommendation. 4. OTHER None. 5. ADJOURN Turgeon moved, Wellens seconded, Adjourning the City Council Work Sessio 9,2006,9:05 P.M. Motion passed 5/0. eeting of October RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Woody Love, Mayor ATTEST: