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AGENDA BILL Agenda Item No. 5{0) Date: June 19, 2012 To: El Cerrito City Council From: Sukari Beshears, Employee Services Manager Subject: Adoption of Modifications to Memorandums of Understanding for the El Cerrito Police Employees Association and the United Professional Firefighters Association, Local 1230; and Resolution for Management Employees ACTION REQUESTED Adopt three separate resolutions approving the following actions: 1. Adopt a resolution approving a side letter to the Memorandum of Understanding between the City and the El Cerrito Police Employees Association to modify language on salaries; 2. Adopt a resolution approving a side letter to the Memorandum of Understanding between the City and the United Professional Firefighters Association, Local 1230 to modify language on salaries; and 3. Adopt a resolution approving a modification to pension plan benefits and reimbursement for Management Employees BACKGROUND/ANALYSIS As discussed at the FY 2012-13 Budget study sessions, the El Cerrito Police Employees Association and the United Professional Firefighters Association, Local 1230 agreed to meet and discuss possible concessions with City management in light of the current economic climate, dissolution of the Redevelopment Agency and the negative impacts on the City's budget. Each group willingly participated and very positive discussions took place related to the potential contribution each group could make relative to the short- and long-term budgetary challenges facing the City. Management Employees are not represented and are currently governed by Resolutions 2006-52 and 2008-79 adopted by the City Council in 2006 and 2008, respectively. However, the Management Employees group wanted to contribute to closing the gap in the City's budget deficit for FY 2012-13 in a way that also deals with the long-term impacts of increased pension costs. El Cerrito Police Employees Association (ECPEA) and United Professional Firefighter"s Association, Local 1230 The City's management team and representatives of ECPEA and Local 1230 began meeting in May 2012 to discuss the shortage the City is facing in revenues and the continued increase in the benefit cost for employees, with a specific emphasis on ---PAGE BREAK--- Agenda Item No. 5{0) pension obligations and their impacts on the City's budget. Both groups wanted to participate in discussions about the City's finances and ultimately agreed to bring to their membership the City's request to forego their contractual cost of living adjustment (COLA). Both groups took the request back to their respective members who voted to forgo the upcoming 2.1 percent COLA salary adjustments scheduled for July 2012. As a result, ECPEA and Local 1230 have agreed to enter into side letter agreements (Attachment 1 Exhibit A, and Attachment 2 Exhibit A) with the City specifying that there shall be no increase to the base salary in July 2012. Management Employees The Management Employees group consists of all non-Public Safety management employees and includes technical staff such as and project managers. Although the Management Employees are unrepresented and the City Council could impose changes, the group felt it was important to come forward with a proposal that would not only help with the proposed budget shortfall for next fiscal year but would have a much greater long-term impact. This would be achieved by having the employees pick up a larger share of their pension costs. The pension plan benefits and reimbursement are costs shared by the City and the employees. Currently, an employee's contribution to CalPERS is 1% of salary while the City contributes 7% of the required 8% of the total cost, also known as the Employer Paid Member Contribution (EPMC). The overall additional pension costs (employer costs) to the City are much greater (approximately 20% of salary). The Management Employees have offered to increase their share of the member contribution from 1% to 4% which results in savings of approximately $93,000 Citywide. Future updates to the Management Resolution will be brought back to the City Council at a later date and financial changes for FY 2013-14 will be considered as part of next year's budget cycle. FINANCIAL CONSIDERATIONS The concessions by the El Cerrito Police Employees Association and United Professional Firefighters Association, Local 1230 will save the City approximately $250,000 and Management Employees will save the City approximately $93,000 Citywide ($64,000 General Fund). The combined contributions will save the General Fund approximately $314,000 for FY 2012-13. Page2 ---PAGE BREAK--- Agenda Item No. 5(0) ~ott Hanin, City Manager Attachments: 1. Resolution adopting a side letter to the existing MOU for the El Cerrito Police Employees Association 2. Resolution adopting a side letter to the existing MOU for the United Professional Firefighters Association, Local1230 3. Resolution amending Resolution 2006-52 for Management Employees Page 3 ---PAGE BREAK--- RESOLUTION 2012-XX Agenda Item No. 5(D) Attachment 1 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO MODIFYING THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF EL CERRITO AND THEEL CERRITO POLICE EMPLOYEES' ASSOCIATION AND ADOPTING A SIDE LETTER TO MODIFY THE LANGUAGE ON SALARIES WHEREAS, the Meyers-Milias-Brown Act allows employee units within the City to represent themselves on matters concerning salaries, hours and working conditions; and WHEREAS, the Employer-Employee Relations Ordinance of the City of El Cerrito provides the methods and procedures for meeting and conferring in good faith; and WHEREAS, the El Cerrito Police Employees' Association is recognized as the majority bargaining unit for police officers, corporals, sergeants and all non-sworn police employees; and WHEREAS, representatives of the City of El Cerrito and the El Cerrito Police Employees' Association have met and conferred in good faith; and WHEREAS, the City of El Cerrito and El Cerrito Police Employees' Association representatives have agreed to a side letter modifying the language of the current Memorandum of Understanding, to forgo the salary increase scheduled for July 2012. NOW THEREFORE, BE IT RESOLVED, that the City Council of the City ofEl Cerrito does hereby adopt the side letter, attached hereto as Exhibit A, between the City of El Cerrito and the El Cerrito Police Employees' Association, and there shall be no increase to the base salary for represented classifications in July 2012. I CERTIFY that at a regular meeting on June 19, 2012, the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City ofEl Cerrito on June XX, 2012. Cheryl Morse, City Clerk APPROVED: William C. Jones III, Mayor ---PAGE BREAK--- SIDE LETTER AGREEMENT BETWEEN THE CITY OF EL CERRITO AND Agenda Item No. S(D) Attachment 1, Exhibit A THEEL CERRITO POLICE EMPLOYEES' ASSOCIATION June 19, 2012 Representatives for the City of El Cerrito and representatives for the El Cerrito Police Employees' Association have agreed to the following modifications of the Memorandum of Understanding between the City of El Cerrito and the El Cerrito Police Employees Association which expires on June 30, 2011 and was extended to June 30, 2017 by a Side Letter between the parties dated July 8, 2010. • Section 13.1 Base Salaries o Salary Increase for Police Officer/Corporal • Effective the first full pay period in July 2012, there shall be no increase to the base salary for represented classifications. • Effective July 2013 - Survey • Effective the first full pay period in July 2014, the base salary for represented classifications shall be increased by the April 2013 to April2014 San Francisco Bay Area Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent • Effective July 2015 - Survey • Effective the first full pay period in July 2016, the base salary for represented classifications shall be increased by the April 2015 to April 2016 San Francisco Bay Area Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent o Salary Increase for Police Sergeant • Effective the first full pay period in July 2012, there shall be no increase to the base salary for represented classifications. • Effective July 2013- Survey • Effective the first full pay period in July 2014, the base salary for represented classifications shall be increased by the April 2013 to April2014 San Francisco Bay Area Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent • Effective July 2015 - Survey ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 1, Exhibit A • Effective the first full pay period in July 2016, the base salary for represented classifications shall be increased by the April 2015 to April 2016 San Francisco Bay Area Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent o Salary Increase for Non-Sworn Classifications • Effective the first full pay period in July 2012, there shall be no increase to the base salary for represented classifications. • Effective July 2013- Survey • Effective the first full pay period in July 2014, the base salary for represented classifications shall be increased by the April 2013 to April 2014 San Francisco Bay Area Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent • Effective July 2015 - Survey • Effective the first full pay period in July 2016, the base salary for represented classifications shall be increased by the April 2015 to April 2016 San Francisco Bay Area Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent For the City ofEl Cerrito For the El Cerrito Police Employees' Association Date: Date: ---PAGE BREAK--- RESOLUTION 2012-XX Agenda Item No. 5(D) Attachment 2 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO MODIFYING THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF EL CERRITO AND THE UNITED PROFESSIONAL FIREFIGHTERS LOCAL 1230 AND ADOPTING A SIDE LETTER TO MODIFY THE LANGUAGE ON SALARIES WHEREAS, the Meyers-Milias-Brown Act allows employee units within the City to represent themselves on matters concerning salaries, hours and working conditions; and WHEREAS, the Employer-Employee Relations Ordinance of the City of El Cerrito provides the methods and procedures for meeting and conferring in good faith; and WHEREAS, the United Professional Firefighters Local1230 is recognized as the majority bargaining unit for firefighters, fire engineers and fire captains; and WHEREAS, representatives of the City of El Cerrito and the United Professional Firefighters Local1230, have met and conferred in good faith; and WHEREAS, the City of El Cerrito and the United Professional Firefighters Local 1230 representatives have agreed to a side letter modifying the language of the current Memorandum of Understanding, to forgo the salary increase scheduled for July 2012. NOW THEREFORE, BE IT RESOLVED, by the City Council of the City ofEl Cerrito that it does hereby adopt the side letter, attached hereto as Exhibit A, between the City ofEl Cerrito and the United Professional Firefighters Local1230, and there shall be no increase to the base salary for represented classifications in July 2012. I CERTIFY that at a regular meeting on June 19, 2012, the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City ofEl Cerrito on June XX, 2012. Cheryl Morse, City Clerk APPROVED: William C. Jones, Mayor ---PAGE BREAK--- SIDE LETTER AGREEMENT BETWEEN THE CITY OF EL CERRITO AND Agenda Item No. 5(D) Attachment 2, Exhibit A UNITED PROFESSIONAL FIREFIGHTERS LOCAL 1230 REGARDING MODIFYING LANGUAGE ON SALARIES June 4, 2012 Representatives for the City of El Cerrito and representatives for the United Professional Firefighters of Contra Costa County, Local 1230 have agreed to the following modifications of the Memorandum of Understanding between the City of El Cerrito and United Professional Firefighters of Contra Costa County Local 1230 which expires on June 30, 2016 and was extended to June 30, 2017 by a Side Letter between the parties dated June 10, 2010. • Section 13.1 Base Salaries o Effective the first full pay period in July 2012, there shall be no increase to the base salary for represented classifications. o Effective July 2013 the base salary for represented classifications shall be increased to achieve the median level based upon the survey conducted by the City. (The survey conducted by the City shall not include the City's contribution to the employee's Retiree Health Savings Account.) o Effective the first full pay period in July 2014, the base salary for represented classifications shall be increased by the April 2013 to April 2014 San Francisco BayArea Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent o Effective July 2015 the base salary for represented classifications shall be increased to achieve the median level based upon the survey conducted by the City. (The survey conducted by the City shall not include the City's contribution to the employee's Retiree Health Savings Account.) o Effective the first full pay period in July 2016, the base salary for represented classifications shall be increased by the April 2015 to April 2016 San Francisco Bay Area Consumer Price Index for All Urban Wage Earners. The minimum increase shall be at least two percent the maximum increase shall be no more than four percent ---PAGE BREAK--- For the City ofEl Cerrito Date: For Loca11230 Date: Agenda Item No. 5(D) Attachment 2, Exhibit A ---PAGE BREAK--- RESOLUTION 2012-XX Agenda Item No. S(D) Attachment 3 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO AMENDING SECTION 2.2 OF RESOLUTION 2006-52, SPECIFYING SALARIES, BENEFITS AND CONDITIONS OF EMPLOYMENT FOR NON-PUBLIC SAFETY MANAGEMENT EMPLOYEES. WHEREAS, the City Council adopted Resolution 2006-52, which specifies the compensation and working conditions for management employees effective July 1, 2006; and WHEREAS, the City Council approved implementation of the 2.7%@ Age 55 retirement formula with the Public Employees Retirement System (PERS) plan with the employees contributing one percent (1 of the member contribution and the City contributing seven percent of the total eight percent member contribution; and WHEREAS, in response to budgetary constraints currently faci:t?-g the City, the management employees have agreed that the City's contribution to the PERS plan through the employer paid member contribution (EPMC) will decrease from seven percent to four percent and WHEREAS, the management employees have also agreed that they will increase the employee-paidcontribution to the PERS plan will increase from one percent (1 to four percent NOW THEREFORE, BE IT RESOLVED, that the City Council of the City ofEl Cerrito does hereby amend Resolution 2006-52 as further amended by Resolution 2008- 79 by modifying Section 2.2 to read as follows, with additions in underline and deletions in strikethrough text: 2.2 Pension Plan Benefits and Reimbursement Employees are members of the 2.7% at Age 55 Public Employees Retirement System (PERS) plan, which has an seven eight percent employee contribution, the PERS single highest year option and service credit for unused sick leave option. This 2.7% at Age 55 fonnula is integrated with Social Security. The City provides what is commonly known as EPMC or Employer Paid Member Contribution, i.e., the The City pays the etnployee contribution of to PERS and, further, the City contributes four percent 1% percent of the required 1% member contribution. The employee pays four percent (4o/o) of the 1nen1ber contribution. Etiective July 2, 2006, the City will amend its agreen1ent vlith the Public Employees Retirement System (PERS) for the local tniscellaneous n1e1nbers fro the 2.7~~ @55 retiretnent fonnula integrated Vv'ith Social Security. ---PAGE BREAK--- Agenda Item No. 5(D) Attachment 3 Effective upon in1plementation of the 2.7%, @55 retiren1ent formula, the En1ployee shall pay the one percent increase required in the "1nember contribution." I CERTIFY that at a regular meeting on June 19, 2012, the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City ofEl Cerrito on June XX, 2012. Cheryl Morse, City Clerk APPROVED: William C. Jones, Mayor