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5.7. SR 06-12-2006 City of Elk River REQUEST FOR COUNCIL ACTION Agenda Section Meeting Date W orksession une 12, 2006 Item Description Personnel Related Policies Item Number 5.7. Prepared by Lori ohnson, Ci Administrator Reviewed by Introduction There are several personnel items on which I would like to update the Council including some that require Council input for future action. The items are discussed briefly below. Additional information will be presented at Monday's meeting. Discussion Pay Plan and Reclassification Study: Mr. Rod Kelsey is reviewing and adjusting a few positions based on additional information he requested before finalizing the reclassification of all positions. He has provided a very preliminary recommendation on the pay plan. Once the market benchmark data is reviewed, he will be prepared to present the study to the Council. Post Employment Insurance: A Post Employment Insurance Committee lead by Human Resource Representative Lauren Wipper was formed last year to research the possibility of offering a post employment insurance plan to employees. The plan would have been at no cost to the City as it would be funded entirely with employee contributions. Attached is a memo from Ms. Wipper explaining the Committee's recommendation to not offer a post employment insurance plan. Exempt Compensatory Time Policy: In 2003, the compensatory time policy for exempt employees was changed. In an effort to bring more accountability, clarity, and consistency to the policy, a new policy is being proposed. This policy requires that the time be tracked and clearly states how much may be used at a time. Exempt employees have reviewed the revised policy and recommend approval. Attached is the current policy marked-up with the proposed changes. Non-Exempt Compensatory Time Policy: The street and park maintenance departments have requested that the twelve-month year for the carry over of compensatory time change from a calendar year to November 1 to October 31. Currendy, the calendar year is used to determine the carry over of time to the next year. Changing from December 31 to October 31 would help eliminate employee requests to use compensatory time during the busy snowplow season. This provision would apply only to the street and park maintenance departments. Uniforms: There has been discussion with the street, wastewater, and park departments about changing the way uniforms are provided to employees in those departments. Currendy, there is no uniform policy except for police employees covered by a bargaining unit. Again, for consistency and accountability, a formal policy should be approved for all departments. Additional information on this item will be presented at the meeting. s: \ Council\Lori\2006 \Personnel Related.doc Personnel Policy Manual: Other changes need to be made to the Personnel Policy Manual; most are immaterial such as position title changes, incorporating existing policy from the pay plan into the Personnel Policy, and updating some sections to reference changes previously approved by the Council. A marked-up copy of the Policy will be distributed at the meeting at which time I will give an overview of the proposed changes. The Policy will be brought back to the Council at a future meeting for approval following Council input. Further, legal review of some sections is needed to ensure that the City Policy references recent law changes. Those sections will also be brought back at a future date. Financial Impact None Attachments . Memo from Lauren Wipper . Non- Exempt and Exempt Compensatory Time Policies Action Requested Discussion on above items. Council Action Motion by _ Second by _ Vote Follow Up s: \ Council\Lori\2006 \Personnel Related.doc MEMORANDUM TO: Mayor and City Council FROM: Lauren Wipper DATE: June 12, 2006 SUBJECT: Post Employment Insurance After months of study and consideration, the Post Employment Insurance Committee decided to forgo implementing a Post Employment Insurance Plan (PEIP) for the City's non-union employee group. The main motivator for this decision was our comparison ofPEIPs and 457 Deferred Compensation Plans. While employees will pay tax on the money they receive from their 457 account, as opposed to money from a PEIP which is tax free, the committee did not feel this was a strong enough motivator to require the mandatory participation and restricted use of a PEIP. Additional information is provided on the attached employee memo. While we were considering our options, one method the committee contemplated for contributing into a PEIP was the use of severance pay. In our research, we found that the City's severance pay policy falls behind comparable City's in the percent of hours paid out and the years of service required. I am wondering if you would like the committee to review this and bring information and some options to a future meeting. I would like to commend the committee members for their hard work and dedication to this project. What we anticipated to be a difficult task went way beyond in our need to learn about options and employees' desire, and our desire to do the best for the most employees. Everyone's input was truly appreciated and valued. PEIP Committee: Tina Allard, Cliff Anderson, Chris Clark, Ross Demant, Mike Donais, Joan Frick, Case Hayward, Doug Wellner, Lauren Wipper POST EMPLOYMENT INSURANCE UPDATE After many hours and considerable consideration, the Post Employment Insurance Committee has decided not to develop a Post Employment Insurance Plan (PEIP) at this time. This decision was based primarily on the following information comparing PEIP's with 457 Deferred Compensation plans: . PEIP's require mandatory participation by every employee of the designated group. Severance pay as well as regular deferrals throughout employment can be contributed to a 457 plan at the employee's discretion. The City offers two different options for investing in 457 plans. 457 plan contributions are pre-tax, the same as contributions to a PEIP. PEIP moneys can be used only for qualified medical expenses while 457 moneys can be used for anything you choose. Money in a PEIP account can only be used by the employee's spouse and tax dependents if the employee dies. If there is no spouse or dependent, the money is forfeited to the trust. 457 account balances go directly to the employee's designated beneficiary. . . . . . While you will pay tax on the money you receive from your 457 account, as opposed to money from a PEIP which is tax free, the committee did not feel this was a strong enough motivator to require mandatory participation and restricted use. On behalf of the committee, thank you all for your input during this process. We encourage everyone to carefully consider the potential cost of health care after employment and to prepare for this as you choose. If you would like more information on the 457 plans available to City employees, contact Lauren at extension 1024. . . . ., . ... . . 'I . . . . . .. . . . . . . . . . . . . . . . . ........,~....... . . .. ... ., . . .. . , '" '.r'" ., ., ,. .or.. '....... ....... . . . . . . . . . , . . . . . . >:-:.:-:.:.:-:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . :::::::~::::: .........':..... . ';' !'.'. .. . . . . .. . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . Emergency call out hours, as determined by the department head, and weekend rotation hours will be compensated as overtime hours and will be paid at time and one half. Overtime compensation will be paid for overtime hours, unless the employee and department head mutually agree in advance of performance of the work that the overtime will be banked as compensatory time in lieu of receipt of overtime compensation. Employees may request and use compensatory time off in the same manner as other leave requests. Non-exempt employees who have requested the use of accrued compensatory time will be permitted to use the compensatory time within a reasonable period after making the request, if the use of the compensatory time does not unduly disrupt the operations of the City. All compensatory time must be marked as such on official timesheets, both when it is earned and when it is taken. Overtime hours not specified as compensatory time will be paid with overtime compensation. The Finance Department maintains compensatory time records. An employee whose activities include public safety, emergency response or seasonal work may accumulate up to 480 hours of unused compensatory time in a "bank." All other employees may accumulate up to 240 hours of unused compensatory time in a "bank." In any event, no employee may carry over more than forty (40) hours of compensatory time in a bank from one calendar year to the next. Street and Park Maintenance Department employees will track coml'ensatory time based on a November 1 to October 31 year. No more than 40 hours may be carried from October 31 to November 1 of the next year. Any non-exempt employee who has accumulated more hours of compensatory time than he or she is permitted to bank will be paid overtime compensation for all overtime hours of work in excess of the amount permitted to be banked. Upon termination of employment, non-exempt employees will be paid for all accrued but unused compensatory time. Overtime pay for holidays is paid based on the provisions found in the HOLIDAYS section of this manual. TIME OFF FOR EXEMPT EMPLOYEES Exempt employees are exempt from the overtime requirements of the Fair Labor Standards Act and are expected to work whatever hours are necessary in order to meet the performance expectations outlined by their supervisors, the City Administrator. an~tl1euqty__G()un(:iJ.___/ f Deleted: i;-----m Generally. to meet these expectations. an exempt employee is .,oftenJe~uire~ _ fIll(U:xp.ect.ed__~o___ _ _ _ - - { Deleted: Exempt employees are work in excess of forty (40) hours per week. Exempt employees do not receive extra pay for the hours worked over 40 in one work week. For reasons of accountability. exempt employees track all hours worked. including the hours worked in excess of 40 hours per week. For those additional hours worked. no more than eight hours of this banked time may be used in a one week period. No more than 40 hours of accrued banked time may be carried over beyond December 31 of each year. Under no circumstance will accrued banked time will be paid to exempt employees. mmml J 5