04/11/1984 Meeting (2) - Laserfiche WebLink

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e e e L. Services & Materials Mr. Wong reviewed the methodology and assumptions, stating that staff was assuming a five-percent inflation rate based on the FY85 budget. Mr. Gleason clarified that utilities were not included in this item. M. Salaries & Wages Mr. Wong stated that staff was assuming a five-percent cost-of-living adjust- ment. He said there was a declining factor for merit increases because staff believed that there would be a greater turnover in personnel as the economy improved. He did not perceive such turnover to be occurring at the present time. Mr. Holmer suggested that Fringe Benefits be discussed at this time due to its relationship with Salaries & Wages. N. Fringe Benefits Mr. Wong stated that the figures listed were a composite average of the four bargaining units. He reviewed the items included with these benefits, stating that the only variable over which the City had any control was medical insur- ance. Mr. Holmer, while he believed that the City should be fair with the employees, suggested that any personnel expenses should be limited to a rate equal to the inflation rate. He said the City should negotiate with the employees that the inflation rate should equal the total package of direct salary and fringe benefits increases. He added that the City would have to increase the rate in other areas to balance the salary and fringe benefits increases if it did not limit such increases. Ms. Wooten was concerned with setting any limitation, stating that the City Council did not have the auth- ority to negotiate with the employees. Mr. Holmer responded that the council could provide a framework for bargaining and that it should give some direc- tion to staff. Mr. Long stated that the City used to tie wages and salaries to the Consumer Price Index (CPI) but difficulties occurred when the CPI rose to 10 percent and above. He expected the five- to six-percent rate to be conservative. He added that health costs were not part of the CPI but were still an obligation of the City. Mr. Gleason stated that the wage settlement with the bargaining units included the fringe load but other costs would be included when the contract was finally signed. He said he was usually tied to the market line in the settlements. While he would like to achieve the suggested limitation, he did not believe it would be possible. In response to a question, Mr. Gleason said he could not assume that any settlement would be reached based on the inflation rate. He recognized that negotiations were based on the market but many factors were involved. Ms. Smith left the meeting at this time. The council continued its discussion of limiting salary increases. Ms. Schue said the City must expect to pay the fringe packet and believed that the projec- tions were based on actual costs. Mr. Holmer stated that he did not want to disturb the fringes but only wanted to place a cap on the total salary and MINUTES--Eugene City Council April 11, 1984 Page 6