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112607 CC WS MinCITY OF SHOREWOOD CITY COUNCIL WORK SESSION NOVEMBER 26, 2007 MINUTES 1. CONVENE CITY COUNCIL WORK SESSION 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:00 P.M. Mayor Lizee called the meeting to order at 6:00 P.M. A. Roll Call Present. Mayor Lizee; Councihnembers Callies, Turgeon, Wellens, and Woodnlff; Administrator Dawson; Finance Director Burton; Planning Director Nielsen; Director of Public Works Brown; and Engineer Landini Absent: None B. Review Agenda Woodruff moved, Turgeon seconded, Approving the Agenda as presented. Motion passed 5/0. 2. COMPENSATION ADJUSTMENTS Administrator Dawson stated Council had requested information regarding the employee economic salary adjustments being considered for the 2008 budget. He stated in the information provided there was a significant amount of background information about the City's compensation plan. He explained during the budgeting process the adjustments were proposed based upon an understanding of inflation, what the neighboring cities were considering, and what the budget would be able to support. He stated he had also provided a couple of Consumer Price Index (CPI) indices from the U.S. Bureau of Labor Statistics - a CPI-U (All Urban Consumers) and CPI-W (Urban Wage Earners and Clerical Workers). He explained the City had more typically used the CPI-U because of the City's Joint Powers Agreements were tied to that and a figure existed for the Minneapolis/Saint Paul in the CPI-U. He also explained the 2008 proposed budget reflected an economic adjustment of 2 percent on January I and again on July 1 (which amounted to an overall increase in outlay of 3.04 percent). The budget also reflected $20,000 for a performance adjustment pool. In recent discussions some Councihnembers wanted to decide what indicator(s) should be used as a guide for the economic adjustment. Councilmember Callies stated the discussion was prompted by Councilmember Woodruff's suggestion that the economic adjustment should be the same as the Social Security adjustment, which was 2.3 percent. Councilmember Woodruff stated the CPI-U for the Minneapolis/St. Paul area for the first half of 2007 reflected a 2.83 percent increase over the first half of 2006. He stated the Social Security adjustment was derived from the CPI-W; it removed the effect of fuel and food in the inflation factor. Councilmember Callies questioned if it was assumed that people on Social Security used less fuel. Woodruff stated it may also be to take out the highly volatile effects of the energy situation. Woodruff explained that part of his reason for suggesting the 2.3 percent (the Social Security adjustment) was there were probably soiree residents in the City whose only income was Social Security. He stated he could support an economic adjustment equal to the CPI-U index; he thought a 3 percent economic adjustment would be too high. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 26, 2007 Page 2 of 8 Callies questioned why 3 percent was too high; she suggested the economic adjustment remain at the 3 percent budgeted based on the CPI-U and the proposed economic adjustments of the neighboring cities. Councilmember Woodruff suggested that Council pick one metric to use for the economic adjustment, Councilmember Wellens stated it was more relevant to use the Minneapolis/St, Paul index. Councilmember Callies questioned if it was more appropriate to wait for the CPI-U index for the entire calendar year to be determined. Administrator Dawson stated that figure would not be available until March or April of 2008. Mayor Lizee stated it was important the City's pay scale be competitive with neighboring cities. Councilmember Turgeon stated it was also important to factor in the population size of the cities when comparing cities' compensation. Councilmember Turgeon questioned if it was more beneficial to give the economic adjustment annually or bi-annually, although she was not advocating one over the other, Administrator Dawson stated employees looked forward to a second adjustment. Turgeon stated employees could get their entire increase up front. Director Burton stated over the course of a year the City's would be financially indifferent. Dawson stated the outlay would be the same. Councilmember Turgeon stated she wanted insurance benefits to remain consistent with economic adjustments. Councilmember Woodruff suggested the economic adjustment be made once at the beginning of the year after perfornance appraisals were done and retroactive to the first of the year if need be. He stated the financial outlay for the City would be basically the same in one year if the economic adjustment were administered annually or semi-annually. But, the employee's base salary would be 4.04 percent higher at the end of 2008 then it was at the end of 2007 if the adjustment were administered semi-annually; and he was not in support of that. Councilmember Callies stated the purpose of the adjustment was in effect a "cost of living" adjustment; therefore, why did performance appraisals have to be done before it was administered. Councilmember Woodruff stated it was easier to administer economic adjustments and performance-pay adjustments at the same time. Administrator Dawson stated the performance appraisals were scheduled to be done by year-end. Mayor Lizee stated she understood Council to agree that the economic adjustment and performance-pay adjustment would be done once on January 1 and the economic adjustment would be 3 percent. Councilmember Wellens stated he would prefer to use the CPI-U index. Administrator Dawson stated the issue was whether the Council wanted to use one specific metric or also to use other factors when determining the economic adjustment the way it had in the past. In response to a question from Councilmember Woodruff, Administrator Dawson explained the sLlrvey data on budget planning salary adjustments for neighboring cities was gathered in August of 2007; he would not know what the cities' actual increases would be until the budgets were finalized. Councilmember Wellens stated he preferred the Minneapolis/St. Paul CPI-U be used as the guide for the economic adjustment which would be administered the first of the year. Councilmember Woodruff stated he was advocating the CPI-U index of 2.83 percent. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 26, 2007 Page 3 of 8 Councilmember Callies stated she thought the economic adjustment should be 3 percent like the neighboring cities. Councilmember Woodruff stated he would agree to an annual 3 percent economic adjustment; but, he wanted Administrator Dawson to find out what the other cities decided to do (although that didn't have to be done before the adjustment was administered). Director Burton stated Council always adopted a resolution that documented the salary chart and the City's insurance contribution. With regard to the performance-pay adjustment, Councilmember Woodruff stated he did not think it was appropriate to give an employee whose salary was under market wage aperformance-pay increase if their performance rating was below acceptable performance. Councilmember Turgeon stated she would like the performance-pay adjustment table and the performance table in the sample performance assessment form to be made consistent. Councilmember Woodruff stated he would like the performance-pay increase chart to be modified such that any employee with a performance rating less than 3 would not receive aperformance-pay adjustment. Councilmember Callies questioned if there could be circumstances where an employee needed improvement, yet it was appropriate to give them a perfornance-pay adjustment. Woodruff stated, for example, giving someone with a 2.75 ranking (out of 9) a 4 percent pay range adjustment if they were below market wage was not appropriate and it sent the wrong message to the employee. Anyone with a performance rating less than 3 should be zero. Administrator Dawson stated the reason for an adjustment was the expectation was to reach market wage within five years. He stated there were no employees with a rating less than 3. 3. HEALTH INSURANCE DISCUSSION Administrator Dawson stated the 2008 proposed budget reflected a City contribution of $730 per employee per month for insurance benefits; the largest portion of that was for health insurance. He then stated Council had requested it review some of the insurance options that had been presented to the City to see if the insurance contribution could be kept close to the amount contributed for the last three years (which was $680). The City had received quotes from HealthPartners (which the City had used for coverage in 2006 and 2007). He explained the City exited the LOGIS group (a consortium of cities) in June 2002 when it was determined it could get better rates as a small group; it went with Medica (2003- 2005) for small group coverage. He stated the City's experience modification rate changed for 2008 because of very heavy usage in 2007; the rate had been 0.75 in 2006 and 2007 (which was the best it could be) and it changed to 0.86 for 2008. Dawson then explained for 2007 the City offered a $15 co-pay, 100% coverage plan and a health savings account (HSA) plan with a $1,500 deductible and 100% coverage, both through HealthPartners. HealthPartners only allowed the City to choose two plans. The Benefit Committee met and reconunended that one of the plans for 2008 should be ahigh-deductible HSA plan. The Committee spent a great deal of time considering what other plan would be a suitable replacement for the HealthPartners 1.5-100 plan currently in place. Although the out-of-pocket cost for employees would be more for the 15-100 plan, the employees indicated they preferred to keep the existing plan. Director Burton highlighted a memorandum on 2008 Employee Health Insurance dated November 26, 2007, which she and Administrator Dawson had prepared and distributed to Council for discussion purposes. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 26, 2007 Page 4 of 8 In response to a question from Councilmember Woodruff, Director Burton stated the City did not go out for bid for 2008 insurance coverage because Staff thought it beneficial to stay with one provider for three years; if an organization went out for bid annually the organization developed a reputation and insurance coverage was priced accordingly. The City did go out for bids for 2006. She stated that the City's insurance broker stated because of the City's heavy usage in 2007, the rate for 2008 was as good as it would be from HealthPartners. Director Burton explained the monthly City contribution amount was based on an average family medical premium (for health insurance, dental insurance, short-term disability, long-term disability, and life insurance) multiplied by 67%. The average family amount could vary based on family composition, size, participant age, and medical plan. This method of calculation was adopted by the Council sometime in the mid-1990's. This percentage formula ensured both the City and the employees shared in the rising costs of health-care coverage. She stated life insurance was one-times the employee's salary and it was a very small portion of the cost of the coverage. She commented that the City fully paid for single-coverage employees. Burton then explained the renewal rates received for 2008 had increased approximately 17% for the HP 15-100 plan, and 8% for the HSA 1500-100 plan. If the 2008 plans were renewed exactly as they were in 2007, the calculated maximum monthly City contribution would be $756 per month, per employee. The 2008 budgeted amount for employee insurance was $730 per month, per employee. She explained that part of the reason for the increase in rates for 2008 was the premiums paid to the insurer ($145,387) compared to the expenditures paid on the City's behalf ($233,974), or a ratio of expenses to premium of 160.93%. In other words, HealthPartners paid out more money than it took in. Burton went on to explain amongst the plans reviewed, the Benefit Corrnnittee considered a) increasing the deductible to $20 with 100% coverage; and b) increasing the deductible to $25 with 80/20% co- insurance hospital in-patient coverage, capped at $2,000 per person. The estimated City's monthly contributions for those plans would be a) $751 and b) $727. After consideration, the employees indicated they preferred to keep the existing plan (HP 15-100), even if it meant they would have to pay more out of pocket. There had been interest in changing the HSA plan from a $1,500 deductible to a $2,200 deductible HSA plan. Burton stated if all employees were to participate in the HSA 2200-100 plan (the high deductible plan), the estimated City contribution would be $546 per month. Even though this plan would save money for the City, it would be a hardship for several employees with families and children who do a lot of doctor visits. Burton noted that the South Lake Minnetonka Police Department paid 100% of single employee medical coverage and also paid them a monthly supplement of $65 per month. It paid $760 per month for family coverage plus the $65 supplement. Councilmember Woodruff stated he understood and could support the increase in the City's contribution to $756 per month for 2008. He stated based on his insurance costs for his wife and him the amount seemed reasonable. He requested the City go out for bids for 2009 and the process be started earlier in the year. Director Burton explained that coverage rates were not available until November 1. Director Burton stated the City must let HealthPartners know by December 15, 2007, which two plans it would like for 2008. There was consensus to raise the City's monthly insurance contribution per employee to $756. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 26, 2007 Page 5 of 8 Mayor Lizee recessed the work session to a City Council regular meeting at 6:55 P.M. Mayor Lizee reconvened the work session at 9:18 P.M. 4. ROAD RECONSTRUCTION DISCUSSION Engineer Landini stated after the Amlee Road, Manitou Lane, and Glen Road Road Reconstruction Project was terminated, Staff thought it was an appropriate time to discuss standards and procedures for future street reconstruction projects. He then stated he had researched the 2006 Fire Codes, City Ordinance No. 401, the City's Comprehensive Plan, and the City's current street standards with regard to road widths. Staff had provided Council with document listing some of the codes that were currently in place as well as some ideas on how to streamline the process for future road reconstruction projects. Mayor Lizee stated the document was well done, She stated Staff and Council had learned it would be very beneficial to have more public involvement in the design phase of a road reconstruction project. Councilmember Wellens suggested Staff prepare a glossary of terms and definitions used when describing road widths and road standards; that would help Council to have a better and common understanding of a project. He stated he understood the document to say if City watermain was being installed as part of a project then the road width would have to be much wider. He also stated the Wedgewood Drive, Mallard Lane, and Teal Circle road widths would not meet current State Fire Codes. Engineer Landini explained that the only requirement for watermain was the watermain pipe had to be ten feet away from other pipes (such as sewer pipe). Wellens clarified the City's Ordinance 401 stated when a fire hydrant was located on a fire apparatus access road, the minimum road with shall be 26 feet. Director Brown explained the road did not have to be wider because of City watermain; there could be bump-out for a fire hydrant and the entire road would not have to be that width. Brown stated he agreed that the Wedgewood Drive, Mallard Lane, and Teal Circle road widths would not meet the current State Fire Codes, Brown then stated Staff also had to interpret the various terms in the different codes. Councilmember Wellens suggested the City should ask for the required easements during the survey phase of a project. Councilmember Callies stated the Staff suggestions in the document relating to process were very good. She thought people expected a list of the "Top 30 Frequently Asked Questions". She understood Staff to be asking Council for its perspective on how involved the public should be. She did not think it was appropriate for the public to tell the City what it wanted with regard to the entire design of the road; there were certain things where public input could be taken and other things that were dictated by standards and Council and Staff. Councilmember Turgeon suggested different road design templates be developed for different types of roads (e.g. a dead-end road, a collector street, the purpose of the road, etc.), She questioned if the new State Fire Codes were applicable to new developments and not necessarily for existing roads in neighborhoods that were completely developed. Director Brown stated the City did have a set of plans which identified what the standards were for local roads. He commented it was prudent for Staff and Council to be in agreement on the standards before taking public input on the road design; the public should not be able to have a say in what standards should be adhered to. He stated that people should be able to expect the City would construct to its own standards. He commented that Staff had met with the EFD Fire Chief and the Chief stated the City may choose not to adopt some of the State Fire Codes, but it was irrelevant because the State had adopted the Codes. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 26, 2007 Page 6 of S Councilmember Turgeon stated she could not imagine a conm7unity such as Greenwood which had very narrow roads having to reconstruct a road in compliance with State Fire Codes. Director Brown commented that was why roads like that were not reconstructed; they were repaired. Councilmember Turgeon questioned if the State and City road standards would be complied with for a street such as Star Circle in an older neighborhood. Director Brown stated from a technical perspective the road would be designed to have a 24-foot-wide driving surface to comply with the standards. He then stated Council could decide not to adhere to that standard. Turgeon stated Star Circle was adead-end street and there were approximately 12 houses on that street; she questioned how a 24-foot-wide driving surface plus curb and gutter could be justified for that type of stl-eet. Brown stated a 24-foot-wide driving surface was, from an engineering perspective, frequently considered the "bare" minimum. Turgeon stated there was a development in Lake Elmo with roads that were 18-feet wide, 20-feet wide or 25-feet wide. Brown questioned if the roads were public or private. Turgeon did not know. She then stated she thought there were other designs the City should consider. Director Nielsen stated a road should not be less than 20-feet wide in order to comply with the State Fire Code. Councilmember Callies stated she thought there maybe different standards for private roads than public roads. Councilmember Woodruff stated he would also like to have Staff prepare a glossary of tei7ns. He then stated he had not been aware that fire apparatus access roads 20 - 26 feet wide had to be posted on both sides as a fire lane per City Ordinance 401; he stated the City was delinquent in adhering to that. He stated roads in a new development should adhere to State and City regulations. He commented that the City had almost all of the roads it was going to have and many of them were substandard from a width perspective. He stated there would be public uproar if the City was going to reconstruct an existing 18- foot wide road to 32-feet wide. He suggested standards be developed for road reconstruction of differing width roads. Councilmember Wellens stated maybe the City should not have a template; maybe each road construction project should be considered uniquely. Councilmember Callies stated in the past Staff prepared a design report on a road reconstruction project and then Council discussed the standards used in the design. Director Brown stated for the Shady Island Bridge reconstruction project, the engineer's recommended a design for the bridge in compliance with State and City codes. Council acknowledged that design, but decided not to comply with the codes. Mayor Lizee stated Staff and Council could agree to disagree. Each project could be considered based on the characteristics of the project. Councilmember Callies stated there should be a requirement that a road should not be reconstructed unless City watermain was installed (unless watermain already existed). Also, there should be a requirement that a project would not be done if the City could not obtain the necessary easements. Administrator Dawson stated the City had a policy to do a watermain installation feasibility study with any road reconstruction project. Councilmember Turgeon stated she agreed there were some things that were nonnegotiable as part of a road reconstruction project. Director Brown stated Staff and Council should agree before hand what items were nonnegotiable. He then stated some level of preliminary design had to be done before a project could be effectively evaluated. With regard to easements, the City's roadway fund could not fund compensation for easements; not compensating for easements was a non-traditional approach. Councilmember Callies stated it was prudent for the City to be prepared to compensate for easements if CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 26, 2007 Page 7 of 8 absolutely necessary. Mayor Lizee stated the City had to able to convey to residents what easements were necessary, what the City's and residents' rights were, and how the easements would be obtained. Director Brown stated Staff would further develop the road reconstruction process. 5. CITY ENGINEER POSITION Administrator Dawson explained that in July 2007 Staff recommended that James Landini be appointed to the position of City Engineer; Mr. Landini had completed asix-month probationary period at that time. Council decided to extend the probationary period another six months at that time. Since that time, Mr. Landini continued to perforn~ at or above expectations. Staff had prepared a report which had been distributed to Council listing many of Mr. Landini's accomplishments during his tenure with the City (both part of and outside the scope of his job description). Dawson stated his office was located next to Mr. Landini and therefore he had the opportunity to over hear and observe many of the things Mr. Landini had done. Mr. Landini had exhibited the skills and characteristics he would expect of any member of the Staff. Dawson noted that the addition of a staff city engineer had been cost-effective when compared to the 0.8-time contract city engineer arrangement in 2006 (a savings of $15,000 - $20,000), while at the same time realizing at least 25 percent more productive time as well. Dawson then stated Staff again recommended the regular appointment of Mr. Landini to the position of City Engineer. Director Brown stated there had been a lot of thought put into the report describing Mr. Landini's accomplishments. He explained that during Mr. Landini's 6-month performance review there were a few areas recommended for improvement; but, there were very few of them and they were very minor. Overall, Mr. Landini had well exceeded the expectations of the city engineer job description. Mr. Landini was a good fit with the Staf£ Mr. Landini had demonstrated his ability to handle difficult and challenging situations (e.g., and Amlee Road, Manitou Lane, and Glen Road Road Reconstruction Project). The staff city engineer position was a cost savings for the City when compared to the 2006 city engineer consulting arrangement. Brown stated he could not speak highly enough about Mr. Landini. Councilmember Callies stated she had been disturbed about the process in July 2007 when Council denied the recommendation for the regular appointment of Mr. Landini to the position of City Engineer. She questioned if it was possible to separate the consideration of Mr. Landini's performance from whether or not the City should have a staff city engineer. Councilmember Turgeon stated what was missing in July 2007 was information about what Mr. Landini had accomplished. The decision to have afull-time staff city engineer had already been decided, although she had presented that argument at that meeting. It appeared, based on his performance, that Mr. Landini was the correct person for the position. Councilmember Wellens stated the document describing Mr. Landini's accomplishments was very persuasive and he would support the regular appointment of Mr. Landini to the position of City Engineer. Councilmember Woodruff stated had similar information on Mr. Landini's performance been provided in July 2007, he may have taken different action on the recommendation at that time. He then stated he was convinced that Mr. Landini's performance was acceptable. He went on to state the report provided had answered the questions he had in July 2007. He suggested Council and Staff have a discussion in general about the organization of the engineering department at a future date. Mayor Lizee stated she thought Mr. Landini had done an exceptional job. Mr. Landini worked well with Staff. She extended her gratitude to Mr. Landini for all that he had done. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 26, 2007 Page 8 of 8 There was consensus that the regular appointment of Mr. Landini to the position of City Engineer would be approved at the December 10, 2007, Council meeting. 6. ADJOURN Wellens moved, Turgeon seconded, Adjourning the City Council Work Session Meeting of November 26, at 9:56 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder ~~~ Christine Lizee, Mayor ATTEST: ~~~ ~ a~~ Craig ~ ~ swa on~~ Ci Administrator/Clerk