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City Council Minutes 11-28-1988 SpecialMINUTES SPECIAL MEETING OF THE CITY COUNCIL Monday, November 28, 1988 - 6:30 p.m. Members Present: Arve A. Grimsmo, Bill Fair, Fran Fair, Warren Smith, Dan Blonigen Members Absent: None 1. 2. Call to Order. The meeting was called to order at 6:30 p.m. Consideration of Establishing a Pool for 1989 Salaries and Wages for Non -Union Personnel. City Administrator Wolfsteller outlined potential methods by which Council could establish salaries for 1989. Wolfsteller reviewed the topic as follows: "For the past four or five years, Council has met in a special session to create a pool of money based on a percentage of the current year's total payroll for non-union personnel. That pool of money has then been available for the Administrator to use in negotiating and setting salary proposals for the upcoming year with the staff. Previously, the Administrator's salary has been excluded from the initial pool and considered separately by the Council. As a reference and guideline for the Council, predictions and/or forecast of the upcoming year's inflation has been used in establishing a cost of living adjustment percentage. In addition, an additional percentage usually has been allowed as part of the pool that could be used as an additional adjustment for performance/merit increases. The purpose of a performance/merit increase is to reward or recognize employees that exceed or provide exceptional work habits. Straight salary adjustments that do no more than match the inflation expected in the upcoming year do nothing for an employee in improving his buying power or living conditions but merely keep him equal to where he was at the beginning of the year". Wolfsteller noted that the recent Kiplinger Letters published in Washington have estimated the 1989 CPI should run around 5 to 5-1/2 percent. The Kiplinger Letter also estimates that the average pay raise for non-union personnel is expected to average approximately 5 percent. Assuming the Council continues the practice of using next year's forecasted inflation factor as a guideline in establishing the amount of the adjustment that should be granted. Wolfsteller also stated that "based on discussions at last year's salary meeting, I believe most Council members are favorable to the idea of performance/merit seniority increases in addition to across the board inflation adjustments. Some of the concerns of the Council last year centered on what standards or guidelines have been used by the administration in determining who qualifies for a performance or merit increase. A few years back, employee evaluations were performed on an annual basis by the Administrator and Department Heads for all employees; Special Council Minutes - 11/28/88 and I propose that this again be instituted and used as a guideline for making merit/performance adjustments in the future. Although this has not been accomplished for 1988, my goal is to have performance evaluations completed in the near future using this format so that each employee has an idea of the areas that need improvement during the year. Then when the performance evaluations are completed near the end of 1989, they can be used as the guideline for any merit or performance increases allowed in the following year (1990)." Plans for development of an employee evaluation system received favorable support from Council. The concept of using the evaluation system as a tool in establishing merit pay increases received support as well; however, no pre -established percent increase was established to be used for merit increases for 1989 or beyond. Council directed staff to begin implementation of the evaluation system for use in conjunction with 1990 salary negotiations. Further discussion of pay increases for 1989 was tabled pending further research into health insurance options for city employees. It was the general consensus of Council to incorporate recent increases in insurance into the discussion of salary increases. This item to be discussed at a special meeting scheduled for 6:30 p.m., December 12, 1988. Respectfully Submitted, Jeff O'Neill Assistant Administrator -2-