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hit the midpoint of the market. With little variation, initial steps of a given pay grade start out at 77% of the top pay of that grade. When staff is allowed to move through their steps they are moving up through a system that has staff starting 77% below the midpoint of the market. When Colas are withheld as well as steps, the entire system starts to fall out of competitive ness with the market. The Springsted study conducted last year illustrated this point. Prior to non-union staff receiving their COLAs and steps the average non- union pay was 9 % below the midpoint of the market. Anything below 5% is considered uncompetitive. Attached is COLA and Step spreadsheet that illustrates various COLA and step scenarios. Springsted Study- In 2012, the City of New Brighton contracted with Springsted to conduct a compensation review of the City's 45 non-union and union positions. The Springsted study indicated that the salaries for non-union positions in the City of New Brighton were less competitive with the market than the City's union positions. The minimum salaries for non-union staff members were typically 9.77%below the market, midpoint salaries were 8.93%below the market and maximum salaries were 8.42%below the market average. In April 2012, the City Council approved 2% COLA and step increases for non-union staff. The approved COLA and step increases brought the City's overall compensation average to roughly 7% below market for non-union personnel. In comparison, the City's six union positions were typically very competitive with the market (within 5% above or below the average). The minimum wages were on average 5.42% above the market, midpoint wages were 2.13% above the market average and maximum wages were typically at the market rate average. Insurance Coverage for Permanent Part-Time Employees I asked Assistant to the City Manager Johnson to compose a memo that would provide answers to some of the questions regarding extending insurance to permanent part-time employees. Please see the attached memo. While it is very difficult to identify real costs, we tried to provide at least a scope of financial impact for the Council to consider. Conclusion These are the areas that Council asked for more information. Direction needs to be provided so that a preliminary levy can be created for Council consideration at the September 11, 2012 meeting. Thank you for your consideration. C:\Documents and Settings\kbruno\Local Settings\Temporary Internet Files\OLK9D\2013 Budget September 4 2012 doc