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On split vote, Delano City Council approves cost-of-living increase
Jan. 2, 20112

By Ryan Gueningsman
Managing Editor

DELANO, MN – Following much discussion in a city council work session, the Delano City Council took action in its regular meeting Dec. 20, approving a cost-of-living increase of 3.5 percent for city staff.

With this approval, total wages will increase approximately $43,000 from 2011 levels, according to information prepared for the council by Finance Director Brian Bloch.

Council Member Dan Vick said perhaps the city could add an additional step to the city’s step program, rather than giving a blanket cost-of-living increase.

Vick said there tends to be discrepancies in the amounts of cost of living increases, with higher-paid employees potentially earning several thousand more dollars a year based on the percentage increase.

“I think it’s putting the city in a bad position,” Vick said. “Over time, it is going to come down to where the city can’t afford it.”

Vick made it clear he was not being critical of the city staff, but said, “when I ran (for city council), I said I’d hold the line until the economy turned around.”

Council Member Derek Schansberg had information showing that perhaps the economy has “turned around” and that this may be the new “norm.”

Vick said he still doesn’t feel the economy has shifted in Delano.

“I don’t feel we’re in a crisis in our city,” Council Member Betsy Stolfa said. “I simply don’t feel we’re in that now. This fits the economics, the realities of life in Delano.”

She added that what is going on across the nation doesn’t matter, stating “we’re here.”

Schansberg asked Vick if perhaps “management level” employees should be put into a separate category as far as cost-of-living wage increases. Vick said he wants the city to stay stable.

“I don’t think we’d stay stable if we keep it up,” he said.

Stolfa said people are getting paid more now than they did in 2001.

“Prices of everything go up,” she said.

Mayor Dale Graunke talked about corporate situations where employees may get more than a cost-of-living increase.

City Administrator Phil Kern said it would be timely for the city to do a market comparison, and said one hasn’t been done since 2004.

He said the League of Minnesota Cities has employee wage information that can be used for comparisons. Kern said city staff can select cities of comparable size and similar geography.

“We do have three or four positions far below average,” Kern added.

Stolfa said the results of such a survey may even show Delano should increase some of its wages.

“We’d have to be ready to accept the results for what they are,” she said.

Graunke said when Kern started, he didn’t make what he does now, but he’s gotten more experience, and said, “the longer someone is here, naturally, the more it goes up. There’s not a way it won’t go up and keep compounding.”

The council also discussed a savings realized this year from health insurance costs. The city provides a benefit for all full-time, permanent employees to use toward medical, dental, and related insurances, according to Bloch. That benefit amount was $10,400 per employee in 2011.

The major portion of this benefit relates to medical insurance that is provided to employees by HealthPartners, through the LOGIS group. In 2011, this group went out for bids for an insurance provider for 2012 through 2016. The contract was awarded to Blue Cross/Blue Shield and is 16.02 percent below the 2011 cost.

Because of this, the council approved a benefit amount of $8,900 per employee, which is a 14.42 percent decrease, or a savings of $31,349 from 2011 levels, Bloch said.

Vick asked for the cost-of-living increase to be added to the regular meeting agenda.

“I’m not going to support it,” he said, adding that he prefers a step philosophy, and discussed where an additional step would be added.

Bloch said there are presently about nine city employees who are at the final step.

Stolfa said it sounds “really complicated,” and said she was not sure what the net result would be for the employees. She said she would want to see a spreadsheet and see what the result is.

Vick said it would be less than a blanket cost-of-living increase. In Bloch’s prepared information, it noted the present Bureau of Labor and Statistics shows a 3.5 percent increase in the Consumer Price Index (CPI) in the latest information available.

Stolfa made a motion based on this information, to approve a 3.5 percent cost-of-living increase for city employees, which was reduced slightly from the originally-proposed 3.6 percent.

Vick asked if her motion also included step increases.

“Yes,” she replied. “We budgeted for it.”

Schansberg seconded the motion, and additional discussion took place.

“I think it’s something we should do in public,” Vick said, with the rest of the council agreeing to vote on the issue in the regular meeting.

Little discussion took place on the issue in the regular council meeting, with the council voting 3-1 in favor of the increase, with Vick opposing it. Graunke, Stolfa, and Schansberg voted in favor of it.

Council Member Holly Schrupp was absent.

The council also approved a 50-cent raise for on-scene and reporting firefighters. On-scene pay is for the members who respond to the incident, while reporting pay is for members who respond to the station for the call, but do not go to the scene.

Bloch said the city pays firefighters two times a year – in June and December. There has been no increase in this pay since 2008.

The increase brings the rate to $8.50 for on-scene, and $2 for reporting.

Schansberg abstained from voting on this issue.

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