2025-12-22 City Council Agenda
Richfield City Council Agenda
December 22, 2025 -- 6:00 PM
Richfield Municipal Center
Council Chambers
6700 Portland Avenue South
1. Call to Order
2. Pledge of Allegiance
3. Approval of the Agenda
4. Approval of Minutes
5. Open Forum
Participants can share their comments in person, by voicemail, or email, and may also request to
participate virtually. For more information on submitting comments, refer to the Council Agenda and
Minutes page on richfieldmn.gov/citycouncil
6. Proclamations and Presentations
7. Consent Calendar
8. Consideration of Items, if Any Removed From Consent Calendar
9. Public Hearings
10. Proposed Ordinances
11. Resolutions
a. Labor Agreement with International Union of Operating Engineers (IUOE) Local 49 for
2026-2027.
b. Modifying the Health Care Savings Plan (HCSP) for Law Enforcement Labor Services
(LELS) Local #123 Police Patrol.
12. Other Business
13. City Manager’s Report
14. Council Discussion
15. Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the
City Clerk at 612-861-9739.
Includes Materials - Materials relating to these agenda items can be found in the Council Chambers Agenda Packet book located by
the entrance. The complete Council Agenda Packet is available electronically on the City of Richfield website.
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City Council Meeting 12/22/2025
Agenda Section: Resolutions
Agenda Item: 11.a.
Report Prepared By:
Courtney DesCamps, Senior Analyst
Department Director:
Sack Thongvanh, Assistant City Manager
Item for Consideration:
Labor Agreement with International Union of Operating Engineers (IUOE) Local 49
for 2026-2027.
EXECUTIVE SUMMARY
A two-year labor agreement has been reached with the Labor and Trades bargaining
unit. The contracts would take effect January 1, 2026, and remain in effect through
December 31, 2027. The agreement provides a cost-of-living adjustment, targeted
market adjustment, and updates to wages, clothing and boot allowances, and licensure
and certification pay to support recruitment, retention, and internal pay equity.
Primary changes include:
• 2026: 3% COLA + 1% market adjustment
• 2027: 3% COLA + 1% market adjustment
• Clothing Allowance: Increase from $700 to $725/year in 2026
• Clothing Allowance: Increase from $725 to $750/year in 2027
• Safety Boot Allowance: Increase from $200 to $225/year in 2026
• Licensure/Certification Pay: 3% COLA to licensure/certification pay in 2026
• Licensure/Certification Pay: 3% COLA to licensure/certification pay in 2027
Additionally, union members will receive the same insurance benefits, including the new
Minnesota Paid Leave program, as all employees.
RECOMMENDED ACTION
By Motion: Adopt resolution approving the provisions of the 2026-2027 labor
agreement with International Union of Operating Engineers (IUOE) Local 49, and
authorize the City Manager to execute the agreement.
HISTORICAL CONTEXT
EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
The agreement supports internal equity by ensuring Labor and Trades employees
receive consistent cost-of-living and market adjustments in line with other City
bargaining units. The agreed-upon terms also promote external equity by keeping
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wages competitive with peer cities, supporting recruitment and retention within a critical
service area.
POLICIES (RESOLUTIONS, ORDINANCES, REGULATIONS, STATUTES, ETC.)
The agreements conform to applicable City policies, state labor laws, and bargaining
obligations under PELRA. No deviations from standard contract format or past practice
are proposed.
CRITICAL TIMING ISSUES
Approval on December 22, 2025, allows accounting staff to update payroll and benefit
tables in time for the January 1, 2026, effective date so that employees receive accurate
pay without delay.
FINANCIAL IMPACT
Based on the City’s budget impact analysis, the total cost increase associated with the
negotiated 2026 wage adjustments, market adjustments, allowances, specialty pay, and
shift differentials is approximately $125,921.35 for 2026 and $130,827.70 for 2027.
These increases reflect the 3% COLA, 1% market adjustment, updated clothing and
safety boot allowances, and revised licensure and certification pays.
The Public Works budgets assumed a 3% wage increase; however, the finalized
collective bargaining agreement includes a 4% increase, along with additional specialty
pay. The resulting funding gap, approximately $30,000, will be addressed in the 2026
revised budget through offsetting reductions within Public Works divisions, including
Garage, Parks, Streets, Utilities and Water Plant, and/or Recreation.
The resulting 2026–2027 wage structure remains comparable to peer cities and
supports ongoing recruitment and retention.
LEGAL CONSIDERATIONS
The agreement has been ratified by the bargaining unit membership. Approval finalizes
the negotiated agreement. If the terms are not approved, the City may need to return to
bargaining and/or proceed to mediation, which may delay implementation and impact
workforce operations.
ALTERNATIVE RECOMMENDATION(S)
• Do not approve the agreement and prepare for further negotiations or mediation.
• Defer the item to a future meeting.
ATTACHMENTS
1. Resolution Approving Labor Agreement with IUOE
Page 3 of 12
RESOLUTION NO.
RESOLUTION APPROVING LABOR AGREEMENT BETWEEN THE CITY
OF RICHFIELD AND INTERNATIONAL UNION OF OPERATING
ENGINEERS, LOCAL 49 (LABOR AND TRADES)
BARGAINING UNIT FOR YEARS 2026-2027
WHEREAS, the City Manager and representatives of International Union of
Operating Engineers, Local 49 have negotiated terms and conditions of employment
for the 2026–2027 contract period; and
WHEREAS, the union has engaged in good-faith bargaining with the City; and
WHEREAS, State statute requires that contracts between the City and the
exclusive bargaining representatives of employees be approved by Council resolution.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Richfield
hereby approves the 2026–2027 Labor Agreement between the City of Richfield and
International Union of Operating Engineers, Local 49, to be implemented effective January
1, 2026, and authorizes the City Manager to execute said agreement on behalf of the City.
Adopted by the City Council of the City of Richfield, Minnesota, this 22nd day of
December 2025.
Mary Supple Mayor
ATTEST:
Michelle Friedrich City Clerk
Page 4 of 12
City Council Meeting 12/22/2025
Agenda Section: Resolutions
Agenda Item: 11.b.
Report Prepared By:
Sack Thongvanh, Assistant City Manager
Department Director:
Sack Thongvanh, Assistant City Manager
Item for Consideration:
Modifying the Health Care Savings Plan (HCSP) for Law Enforcement Labor
Services (LELS) Local #123 Police Patrol.
EXECUTIVE SUMMARY
In 2001, the Minnesota Legislature granted the Minnesota State Retirement System
(MSRS) the authority to offer a post-employment Health Care Savings Plan (HCSP) to
eligible employees of the State of Minnesota and other governmental subdivisions. The
HCSP is an employer-sponsored program that allows employees to set aside funds to
pay for medical expenses and/or health insurance premiums after separation from
employment. Employees may select from various investment options offered through
the State Board of Investment. Contributions to the HCSP are tax-free, earnings
accumulate tax-free, and distributions used for eligible medical expenses remain tax-
free.
Law Enforcement Labor Services, Local #123 Police Patrol bargaining unit employee
group has requested modifications to its plan. Under state statute, modifications to
HCSP's cannot be made more often than once every two years. The last modification to
the Police Patrol HCSP was on October 1, 2004.
The critical changes for this modification include, but not limited to:
1. Enrollment in the program will occur on the first day instead of the waiting period
after 5 years of consecutive employment with the City.
2. Changing fixed dollar amount contribution to a percentage.
3. Severance Contribution - No longer shall be paid as cash. All accumulated but
unused Personal Leave, Vacation Leave, Holiday Leave, and Compensatory
Time hours shall be paid to the employee's account in the Police Patrol HCSP.
RECOMMENDED ACTION
By Motion: Adopt a resolution modifying a Health Care Savings Plan for eligible
LELS Local #123 — Police Patrol bargaining unit employees.
HISTORICAL CONTEXT
• Legal authority to establish a Health Care Savings Plan (HCSP) is provided
under Minn. Stat. § 352.98 and applicable Internal Revenue Service rulings. The
establishment of each plan, including its contribution formulas, must be
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negotiated when it involves a collective bargaining unit or incorporated into a
personnel policy for non-union employees. Once a plan is established or
modified, it must be filed with the Minnesota State Retirement System (MSRS) to
implement the new or revised plan.
• Participation in the HCSP is mandatory for all employees within the designated
bargaining unit or employee group once the plan is adopted for that group. In
addition, the contribution amounts for or by each employee within a specific
group must be uniform; however, contribution levels may differ between
employee groups.
• Under state statute, HCSP plan modifications may not occur more frequently
than once every two years.
EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
This change was requested by LELS Local #123 Police Patrol and our ability to be
flexible with a benefit need will assist in retention as part of our strategic plan.
POLICIES (RESOLUTIONS, ORDINANCES, REGULATIONS, STATUTES, ETC.)
• The City of Richfield has offered this benefit to employee groups that are
interested in such a mandatory plan.
• Approval of the resolution by the City Council will provide the City authority to
proceed with this modified program for the LELS Local #123 Police Patrol
bargaining unit employees. Plan modifications can be made every two years.
CRITICAL TIMING ISSUES
The request is to implement the modifications effective January 1, 2026, to run
concurrently with the new two-year union contract with Officers. After City approval, this
plan must be submitted to MSRS for filing and implementation.
FINANCIAL IMPACT
There is no cost to the City since the City makes no contribution. The plan provides a
great tax savings for the participating employees and provides a tax mechanism to fund
post-employment medical costs.
LEGAL CONSIDERATIONS
The plan modifications has been sent to the State for review and has received informal
approval.
ALTERNATIVE RECOMMENDATION(S)
The City Council may choose not to approve this plan modification. If that occurs, the
current plan would remain in effect. However, declining the modification would run
counter to the expressed wishes of the majority of employees within this bargaining unit.
ATTACHMENTS
1. 2025-12-22 Resolution XXXXX
2. Richfield - Proposed HCSP MOU_11-26-25_Redline
Page 6 of 12
3. Richfield - Proposed HCSP MOU_11-26-25_Clean Version
Page 7 of 12
City of Richfield December 22, 2025
County of Hennepin
State of Minnesota
RESOLUTION NO. XXXXX
1 of 1
Motion by:
Seconded by:
RESOLUTION MODIFYING POST EMPLOYEMENT HEALTH CARE SAVINGS PLAN (HCSP)
FOR LAW ENFORCEMENT LABOR SERVICES (LELS) LOCAL #123 POLICE PATROL
WHEREAS, Laws of Minnesota 2001, Chapter 352.98, authorizes the Minnesota State
Retirement System (MSRS) to offer a Post Employment Care Savings (Plan) Program to state
employees, as well as, other governmental subdivisions; and
WHEREAS, the Internal Revenue Service Code provided for such Plans; and
WHEREAS, the City of Richfield currently offers such a Plan to eligible City employees as a
tax-free method for employees to set aside money to cover the increasing cost of health insurance and
medical costs after termination of public employment; and
WHEREAS, modification to the provisions of the established Plan for Patrol Officers have been
agreed to by the Police Patrol employee group, LELS Local #123.
NOW, THREFORE, BE IT RESOLVED that the City of Richfield hereby authorizes the City
Manager to modify the Health Care Savings Plan for LELS Local #123 – Police Patrol group of
employees in the City of Richfield.
Adopted by the City Council of the City of Richfield, Minnesota this 22nd day of December, 2025.
VOTING AYE VOTING NAY
Supple, Mary Supple, Mary
Burk, Walter Burk, Walter
Christensen, Sharon Christensen, Sharon
Coleman-Woods, Rori Coleman-Woods, Rori
Hayford Oleary, Sean Hayford Oleary, Sean
Mary B. Supple, Mayor
ATTEST:
Michelle Friedrich, City Clerk
Page 8 of 12
Plan Purpose The City of Richfield and the Police Patrol/Detective (LELS Local
#123) bargaining unit are interested in establishing a means for eligible
employees to participate in a mandatory program to help defray some of
the costs of post employment health related expenses, including health
insurance premiums using pre-tax dollars. Participation in the Post
Employment Health Care Savings Plan, administered by the Minnesota
State Retirement System (MSRS), is intended to provide an opportunity
to accomplish that goal.
Post Employment
Health Care
Savings Plan
Eligibility to
Participate
A Post Employment Health Care Savings Plan (HCSP) is an
Employer-sponsored program that allows eligible employees to:
1) defer payment of a portion of unused vacation and personal leave as a
severance payment at the time of termination to pay for eligible
health insurance premiums and/or health expenses after separation
from City service, and
2) defer a portion of an Employees’ bi-weekly salary for deposit into
their HCSP for the payment of qualified healthcare related expenses
after separation from City service.
Employees will be able to choose among several different investment
options provided by the Minnesota State Board of Investment. Under the
Plan, amounts contributed into the HCSP are tax-free and not subject to
FICA contributions. Assets in the HCSP will accumulate tax-free and
since payouts are used for qualifying medical expenses, they will also
remain tax-free.
Participation in the Police Patrol/Detective HCSP is mandatory for all
employees that meet the following requirements:
1. The Employee must be a member of the Richfield Police
Patrol/Detective Bargaining Unit at the time of termination of
employment, and
2. The Employee must have been employed by the City of Richfield for
at least 5 consecutive years.
Police Patrol/Detective
Post Employment Health Care Savings Plan
Memorandum of Agreement
Between
The City of Richfield & LELS Local 123
Effective Date: October 1, 2004 January 1, 2026
Page 9 of 12
Contribution
Formula
Mandatory participation in the Police Patrol/Detective HCSP shall be in
accordance with, and limited to the following formulas for contributions:
I. Bi-weekly Contribution
1. An eligible Employee with more than 5 but less than 10 years of service must
contribute $15 2% per pay period to the Employee’s account in the Police
Patrol/Detective HCSP. Such contributions shall not exceed $15 per pay period.
2. An eligible Employee with more than 10 but less than 15 years of service must
contribute $20 3 % per pay period to the Employee’s account in the Police
Patrol/Detective HCSP. Such contributions shall not exceed $20 per pay period.
3. An eligible Employee with more than 15 years and more but less than 20
years of service must contribute $25 4% per pay period to the Employee’s
account in the Police Patrol/Detective HCSP. Such contributions shall not
exceed $25 per pay period.
4. An eligible Employee with more than 20 years of service must contribute $30 2%
per pay period to the Employee’s account in the Police Patrol/Detective HCSP.
Such contributions shall not exceed $30 per pay period.
II. Severance Contribution
1. Severance based on all accumulated but unused Personal Leave, Vacation
Leave, Holiday Leave and Compensatory Time hours shall be paid based on
years of employment to the Employee’s account in the to the employee’s
account in the Police Patrol/Detective HCSP.
a. Employees with less than 15 years of employment shall be paid as cash.
b. Employees with 15 years or more of employment shall be paid as credit to the
Employee’s account in the Police Patrol/Detective HCSP.
2. All severance payments based upon Personal, Vacation and Holiday Leaves are
calculated as described above, by multiplying the number of hours by the
applicable rate of pay upon termination.
HCSP
Administration
Contributions authorized under this Plan shall continue until such time as this
memorandum is amended or repealed by the City of Richfield and LELS-Local 123.
The HCSP is authorized under the Internal Revenue Code and is
administered by the Minnesota State Retirement System.
FOR THE CITY OF RICHFIELD: For LELS #123 – POLICE PATROL/DETECTIVES:
City Manager Union representative
Administrative Services Director Union representative
Page 10 of 12
Plan Purpose The City of Richfield and the Police Patrol (LELS Local #123)
bargaining unit are interested in establishing a means for eligible
employees to participate in a mandatory program to help defray some of
the costs of post-employment health related expenses, including health
insurance premiums using pre-tax dollars. Participation in the Post
Employment Health Care Savings Plan, administered by the Minnesota
State Retirement System (MSRS), is intended to provide an opportunity
to accomplish that goal.
Post Employment
Health Care
Savings Plan
Eligibility to
Participate
A Post Employment Health Care Savings Plan (HCSP) is an
Employer-sponsored program that allows eligible employees to:
1) defer payment of a portion of unused vacation and personal leave as a
severance payment at the time of termination to pay for eligible
health insurance premiums and/or health expenses after separation
from City service, and
2) defer a portion of an Employees’ bi-weekly salary for deposit into
their HCSP for the payment of qualified healthcare related expenses
after separation from City service.
Employees will be able to choose among several different investment
options provided by the Minnesota State Board of Investment. Under the
Plan, amounts contributed into the HCSP are tax-free and not subject to
FICA contributions. Assets in the HCSP will accumulate tax-free and
since payouts are used for qualifying medical expenses, they will also
remain tax-free.
Participation in the Police Patrol HCSP is mandatory for all employees that
meet the following requirement:
The Employee must be a member of the Richfield Police Patrol
Bargaining Unit at the time of termination of employment.
Police Patrol
Post Employment Health Care Savings Plan
Memorandum of Agreement
Between
The City of Richfield & LELS Local 123
Effective Date: January 1, 2026
Page 11 of 12
Contribution
Formula
Mandatory participation in the Police Patrol HCSP shall be in accordance with,
and limited to the following formulas for contributions:
I. Bi-weekly Contribution
1. An eligible Employee with less than 10 years of service must contribute 2%
per pay period to the Employee’s account in the Police Patrol HCSP.
2. An eligible Employee with more than 10 but less than 15 years of service must
contribute 3 % per pay period to the Employee’s account in the Police Patrol
HCSP.
3. An eligible Employee with 15 and more years of service must contribute 4%
per pay period to the Employee’s account in the Police Patrol HCSP.
II. Severance Contribution
1. Severance based on all accumulated but unused Personal Leave, Vacation
Leave, Holiday Leave and Compensatory Time hours shall be paid to the
employee’s account in the Police Patrol HCSP.
2. All severance payments based upon Personal, Vacation and Holiday Leaves are
calculated as described above by multiplying the number of hours by the
applicable rate of pay upon termination.
HCSP
Administration
Contributions authorized under this Plan shall continue until such time as this
memorandum is amended or repealed by the City of Richfield and LELS-Local 123.
The HCSP is authorized under the Internal Revenue Code and is
administered by the Minnesota State Retirement System.
FOR THE CITY OF RICHFIELD: For LELS #123 – POLICE PATROL:
City Manager Union representative
Administrative Services Director Union representative
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