6.5. SR 02-11-2008 - Laserfiche WebLink

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Item # 6.5. ver MEMORANDUM TO: Mayor and City Council FROM: Lori Johnson, City Administrator DATE: February 11, 2008 SUBJECT: Consider Benefits for Department Heads This item is a follow up to the Council's request to research the possibility of providing additional benefits to upper level management. Some Councilmembers expressed concern ui retaining existing key upper level management employees and wanted to provide additional benefits as an incentive to retain those employees. There axe obviously many factors that play in to an applicant's decision to accept employment with the City and with an employee's decision to stay or leave. Pay and benefits are a big part of that, although not always the overriding factor in an employee's decision. Outside of reorganization losses from several years ago, the City's retention level has been very high and the losses that have occurred have been because of career advancement that was not available at the City or other factors such as relocation. While I fully agree that it is important to retain key upper management employees and that offering some additional benefits may provide some incentive to keep them here, I am, however, concerned about retaining our outstanding key employees at all levels. I don't want an incentive fox one group to become the opposite for another group. Maybe that is why I have found in researching this topic and from past experience that most cities choose to use an egalitarian system where all employees receive the same benefits. The few cities who do offer more to upper management offer a small car allowance or additional vacation time that maybe cashed in at the end of the year if not used (this essentially becomes extra pay). If the Council wants to just adjust benefits fox upper management, the options in addition to those above axe open for discussion, but are somewhat limited to healthcare related contributions. One Councilxnembex suggested that the City pay more of the insurance premium and another option is to contribute to a health savings account. Additionally, another option and one way to offer an incentive to keep highly valuable employees throughout all levels would be to look at the city's severance pay polity. This is a benefit in which the city lags far behind other cities and Elk River Municipal Utilities. Making a change in the severance would benefit employees who stay longer so not only