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Item No: 5 Meeting Date: March 7, 2011 Type of Business: Work Session City of Mounds View Staff Report To: Honorable Mayor and City Council From: James Ericson, City Administrator Item Title/Subject: Review Section 3 of the City’s Personnel Manual Introduction: At the December 13, 2010 City Council meeting, a suggestion was made to provide the Council with copies of personnel manual for review and discussion purposes, to ensure the policies continue to represent the goals of the City Council. Because the Personnel Manual is too large to effectively review and discuss in one meeting, Staff has been presenting the manual in logical sections. The first section, entitled “Workplace Issues”, was review at the January 3, 2011 Work Session. The second section, “Attendance and Leaves”, was reviewed at the February 7, 2011 Work Session. The third section of the Personnel Manual entitled “Compensation and Benefits” is now attached for the Council’s review. Discussion: The policies within Section 3 include the following: • Section 3.01: Compensation • Section 3.05: Flex Time Leave • Section 3.10: Holidays • Section 3.15: Insurance Benefits • Section 3.20: Miscellaneous Benefits • Section 3.25: Payroll, Overtime, Compensatory Time • Section 3.30: Retirement benefits • Section 3.35: Sick Leave • Section 3.40: Vacation • Section 3.45: Retirement Health Savings Plan • Section 3.47: Severance • Section 3.50: Uniform Allowance This section historically has generated significant discussion among Council Members, specifically in reference to Policy 3.01 (Compensation) and Policies 3.35 and 3.40 (Sick Leave and Vacation, respectively.) As the Council will recall, the policy on Compensation was most recently revised to exclude any reference to market rate adjustments or a specific benchmark for comparison purposes. While there may be a need at some point to conduct a market rate compensation study, the Council did not support an annual requirement to do so. The Council has also expressed some concern about large sick leave and vacation balances paid out for retiring or separating employees. It should be noted that previous labor agreements allowed for unlimited sick leave accruals which has led to several large severance payouts in recent years, but the number of employees that remain under the former policy permitting large sick leave balances and severance payments therefrom are now few.