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102306 CC WS Min CITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, OCTOBER 23, 2006 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:30 P.M MINUTES 1. CONVENE CITY COUNCIL WORK SESSION Mayor Love called the meeting to order at 6:33 P.M. A. Roll Call Present: Mayor Love; Councilmembers Callies, Lizee, Turgeon, and Wellens; Administrator Dawson Absent: None B. Review Agenda Without objection from Council, Mayor Love proceeded with the Agenda for the meeting. 2. SEVERANCE POLICY Administrator Dawson stated at a Council work session on October 9, 2006, the majority of the Council had supported the inclusion of the "800-hour" sick leave / severance benefit policy in the revised Employee Handbook. At that same meeting Council had directed him to meet with the three employees who had in excess of 800 hours in the balance of their sick leave; that meeting occurred the week of October 9, 2006. Dawson explained the three employees were long-term, loyal employees; they had accrued sick leave due to good health, or their willingness to come to work when they were ill. Their high balances were not primarily motivated by the potential need to have high balances available for long-term illness or injury, or for the severance benefit. Dawson then explained the three employees had been agreeable to reducing their balances to 800 hours at the end of 2006 through a buy-down of their excess hours, rather than being able to maintain their high balances. The employees preferred the 50% conversion. He then explained a 50% conversion (proposed policy) would cost approximately $36,000, and a 33% conversion (current policy) would cost $24,000; and the City had adequate reserves to make the one-time payments to the three employees. Dawson noted a policy for addressing the three employees whose balances were in excess of 800 hours was a separate matter from the revised Employee Handbook, although Council had requested a policy for addressing the matter be developed. In response to a question from Councilmember Callies, Administrator Dawson explained under the current policy an employee would be paid one-third of the amount over 400 hours (e.g., 1600 - 400 = 1200) as severance at time of termination. CITY OF SHOREWOOD WORK SESSION MEETING October 23, 2006 Page 2 of3 In response to a question from Councilmember Wellens, Administrator Dawson clarified the buy-down of hours to 800 hours for these employees was a one-time effort. Councilmember Turgeon stated if the employees had actually taken their sick leave, the hours would have been paid at 100% of their then current rate of pay. She questioned ifit was possible to compensate the employees for the excess hours at a 100% rate of their sliding-average pay rate over their tenure. Administrator Dawson explained the current severance policy was calculated based on the current rate of pay. In response to a question from Councilmember Wellens, Administrator Dawson clarified that at time of termination an employee's vacation was paid out at their current rate of pay. He noted there was a cap on the amount of vacation that could be accrued. Mayor Love request this issue be broken into two components: 1) compensation for sick leave hours in excess of the proposed cap (which was the preference of the three affected employees); and 2) the conversion rate that would be used for that compensation - the employees preferred to be compensated at a 50% rate (based on the proposed sick leave/ severance balance policy) rather a the 33% rate (the current policy rate). Councilmember Callies stated Council had referred the "800-hour" policy back to the three employees for consideration of how they would prefer their excess hours to be addressed, and they stated they would prefer to be compensated for their excess hours. Therefore, she would support their request for compensation. She questioned if there was a need to compensate the employees at the proposed rate of 50% rather than the current rate of33%. Discussion ensued with regarding using the current policy conversion rate versus the proposed policy conversion rate. Councilmember Lizee stated the three employees had been hard working, loyal employees. They had not used much of their sick leave due to their commitment to performing their job responsibilities. She stated using the proposed conversion rate of 50% demonstrated the Council's and the City's commitment back to them. Councilmember Turgeon stated another option to consider was a 100% conversion rate as long as the severance policy was being changed and a sick leave cap imposed. Mayor Love stated although there had not been a vote at the previous Council meeting regarding the proposed 800-hour cap, he had thought there had been agreement on the proposed cap. He noted Councilmembers still had the prerogative to change their minds. He noted Council had requested comments from the three affected employees. Councilmember Wellens stated because Council had approved a two-phased plan to bring employees to their market-rate of pay (with the first phase effective July 1, 2006), the employees had from his perspective received a bonus. Therefore, he would prefer a compensation rate of 33%. Councilmember Lizee stated she did not classify increasing an employee's rate of pay to the market rate as a bonus. Council member Callies echoed Lizee's comments. Callies could see the logic in the 33% compensation rate, although the buy-down was not totally analogous to the severance benefit. Mayor Love stated his major concern had been to ensure the three employees were treated equitably, and he could support either the 33% rate or the 50% rate. CITY OF SHOREWOOD WORK SESSION MEETING October 23, 2006 Page 3 of3 Councilmember Turgeon again stated if the employees had taken their sick time they would have been paid at 100% of their then current rate of pay. Therefore, compensating them at 100% of their then current rate of pay would be considered equitable. She then stated a decision to buy down the excess hours should not occur until the proposed policy had been adopted. She stated in hindsight maybe the buy-down proposal and the severance-cap proposal should have been considered in reverse order. Mayor Love clarified the buy-down was contingent on the proposed policy being adopted. He also stated the intent of placing a cap on accrued sick leave was to limit the City's liability. Administrator Dawson stated he had mentioned to the three employees that he believed a 33% rate, based on the current rate, would be equitable. The three employees recommended the 50% rate, which is what he presented to Council. Mayor Love asked that this item be considered for formal action in the Council meeting that was to follow. 3. OTHER None. 4. ADJOURN Wellens moved, Turgeon seconded, Adjourning the City Council Wo Session Meeting of October 23,2006, at 6:50 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Woody Love, Mayor ATTEST: