The City of Estherville and Local 79 UFCW exchanged initial proposals Tuesday as negotiations began for the 2013-14 Public Works Agreement.
Dale Bradley presented the initial proposal for the public works employees, asking for a 3.25 percent increase in the hourly rate of pay for each employee.
City officials countered with 1 percent increase in the hourly rate of play.
City officials also presented minor change in the contract language eliminating the eight-hour day maximum for a day employees are at training.
Last year, the two sides agreed to a 3 percent increase.
Following Tuesday's initial exchange, the two sides immediately went into closed sessions.