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STAFF REPORT  <br />TO: Mayor Fischer and Members of City Council <br />FROM: Sam Magureanu, Finance Director <br />REVIEWED BY: Chris Heineman, City Administrator <br />DATE: September 27, 2023 <br />RE: Preventive Health and Employee Recognition Policy <br />ACTION REQUESTED: <br />Approve Proposed Policy Implementing and Allowing Expenditures for Preventive Health and <br />Employee Recognition Programs as presented <br />BACKGROUND: <br />During the 2022 City Financial Audit, the City’s contracted auditors (CLA) noted that the City <br />policy for the Employee and Volunteer Recognition Program and Other Public Purpose does not <br />meet Minnesota legal compliance guidelines. Specifically, CLA referenced an opinion from the <br />Attorney General that requires public entities to refrain from paying for holiday parties and other <br />employee social events. Public purpose guidance also does not allow for the purchase of flowers <br />for employees. City staff conducted research and reached out to the League of Minnesota Cities <br />and revised the attached policy based on those recommendations. <br />City staff removed the language related to holiday parties and flowers, and updated the policy to <br />ensure that it complies with Minnesota guidelines for public purpose expense and the authority <br />granted to Cities and Counties under Minn. Stat. § 15.46, 43A.17, 412.111. The revised policy is <br />also in alignment with the League of Minnesota Cities Human Resources Reference Manual <br />(HRRM) Chapter 5: Benefits, Sec. IV Sub. Sec. B which provides further guidance on how to <br />develop and adopt such policy. <br />The City Council is asked to determine if these types of employee benefits and expenditures <br />promote a public purpose and serve the best interests of the citizens of their community. <br />MAJOR REVISIONS TO EXISTING POLICY: <br />Apart from modifying specific language that does not meet legal compliance guidelines (e.g. <br />Holiday Party, Flowers), City staff also made changes to the overall structure and flow of the <br />policy by reorganizing the policy into the following topical sections: <br />Background <br />Policy <br />Program Objectives <br />Purpose and Intent <br />Service Anniversary Awards