07-26-06 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL, JULY 26, 2006 to the City, those costs should be offset by the City's FICA savings. The Administrator noted that there is some risk to the City should an employee leave during the plan year prior Co adequate withholdings from wages for dollars spent. However, there is risk to the employee as well in that dollars allocated must be spending during the plan year or they revert to the City. The next amendment is the addition of a section on the Post Employment Health Care Savings Plan to reflect previous Council approval implementing this plan through ICMA-RC. The Post Employment Health Care Savings Plan allows employees to designate pre-tax wages for future health care costs post employment. It also allows for some employer contribution to the Plan on behalf of employees. Again, there are tax benefits to the City resulting from FICA savings. The next amendment modifies the Personnel Policy to provide for the continuation of insurance benefits to the end of the month in which the employment terminates. The Administrator noted that in reviewing this issue with the League of Minnesota Cities, this reflects common practice among cities and resolves some issues relative to continuation of insurance benefits and collection of the cost of insurance from a terminating employee. He noted that insurance benefits do not commence from employees until the first day of their first full month of employment. The Administrator reviewed the next amendment addresses performance issues relative to the use of sick leave. It was noted, however, that at any time there is an apparent abuse of sick leave, the supervisor can take the appropriate management steps. The Administrator also recommended the deletion of the paragraph recognizing no sick leave usage in a year given the severance pay benefit proposal. The next amendment provides that an unpaid leave of absence to offset prospective vacation pay to an employee's Post Employment Health Care Savings Account would have to be approved by the City Administrator and would continue to accrue vacation and sick leave benefits. The next amendment modifies the Travel Allowance section making it self-updating as it refers to IRS per-diem rate for the continental United States (CONUS). The City Administrator reviewed the proposal to implement a severance pay benefit based on unused sick leave. He noted that there has been previous Council discussion of this issue in the past. He also pointed out that this is a common benefit offered by other cities, and Little Canada is one of the few cities that does not provide this benefit. The Administrator 11