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MEMORANDUM OF UNDERSTANDING #4 This is a Memorandum of Understanding concerning the 2008-2012 collective- bargaining agreement between the City of Missoula, Montana (“Missoula”) and Local 271 of the International Association of Firefighters (“Local 271"). This agreement has been reached through the process of collective bargaining and is based on the following recitations: Whereas, Missoula and Local 271 are parties to a collective-bargaining agreement effective from July 1, 2008 to June 30, 2012 which agreement was reached through the process of collective-bargaining; Whereas, the 2008-2012 collective bargaining agreement provides for salary increases effective July 1, 2010; Whereas, due to the downturn in the economy of Missoula and Montana, Missoula’s Mayor requested that Local 271 agree to forego the salary increases scheduled to go into effect on July 1, 2010; and, Whereas, after negotiations between the parties, Local 271 and Missoula have agreed to amend the 2008-2012 contract by providing for a base salary freeze for one year beginning July 1, 2010, by lengthening the term of the 2008-2012 contract by three additional years and providing for salary increases in the additional years, by providing for clothing allowances in the additional years, and by providing for an IRC § 125 Plan. Therefore, the parties agree as follows: 1) The following is added as a new section to Appendix B of the 2008-2012 contract: Section 3: The City agrees to allow employees to participate in an I.R.C. 125 plan whereby employees can contribute toward their health benefit plan on a pre-tax basis. Effective July 1, 2012 two hundred eighty five dollars ($285) of the City’s per- employee health benefit plan contribution will be added to the employees’ gross pay and effective July 1, 2013 an additional two hundred eighty five dollars ($285) for a total of five hundred seventy dollars ($570) of the City’s per-employee health benefit plan contribution will be added to the employees’ gross pay. This portion of the employee’s gross pay is hereafter referred to as the “Contribution.” As part of this collective bargaining agreement, employees are required to participate in the City’s health benefit plan on either a pre-tax or post-tax basis. If an employee elects to participate on a pre-tax basis, the employee shall authorize a payroll deduction from the employee's gross pay equal to the Contribution amount. This deduction from the employee's gross pay will in turn be paid into the employee health benefit fund. ---PAGE BREAK--- If an employee elects to participate on a post-tax basis, the Contribution amount shall be taxable income to the employee and the employee shall authorize the payment of the Contribution amount, after its deemed receipt, into the employee health benefit fund. Including the Contribution amount in the employee's gross pay serves the purpose of augmenting the employees’ eventual retirement benefit. Both parties acknowledge that employee pension contribution and employer pension, workers’ compensation, and unemployment contributions will be required on this additional gross income. The parties further agree that the Contribution amount be excluded from the determination of the employee’s “regular rate” of compensation as that phrase is defined under 29 U.S.C. § 207(e)(4). In the event that any subsequent law, court, arbitrator, or other lawful authority determines that the inclusion of the Contribution amount in the employee's gross pay should be included in overtime compensation calculations, then the parties agree that there will be a corresponding adjustment to the affected rate of pay to carry out the intent of this provision. The intent of such adjustment will be to result in the least net financial effect on both the bargaining unit and the employer. 2) The first sentence of the second paragraph of Section 1 of Appendix B of the 2008-2012 contract is amended to provide follows: From July 1, 2008 through June 30, 2015, the Union agrees to accept increases in employee contributions and/or health plan design changes to those in effect as of July 1, 2008 up to a maximum of $75 per month, provided these increases/plan changes are approved by the City Council and in effect for all other City employees. 3) Appendix A of the 2008-2012 contract is amended to provide for the following Classification Schedule of base pay rates effective July 1, 2010 through June 30, 2015. Classification 7/1/10 7/1/11 7/1/12 7/1/13 7/1/14 Firefighter Trainee (6 months - 1 year) 3240 3370 3505 3645 3791 Confirmed Firefighter (1 year - 3 years) 3699 3847 4001 4161 4327 3-Year Firefighter (3 years - 5 years) 3793 3945 4103 4267 4438 Firefighter 1st Class (5 years - 10 years) 4025 4186 4353 4527 4708 ---PAGE BREAK--- Senior FireFighter (10 years to 15 years) 4213 4382 4557 4739 4929 15-Year Firefighter (15 years or more) 4484 4663 4850 5044 5246 Captain Inspector/Rot. Inspector Assistant Mechanic 4892 5088 5292 5504 5724 Battalion Chief Assistant Fire Marshall 5323 5536 5757 5987 6226 Master Mechanic EMS Coordinator Fire Marshall Training Officer 5546 5768 5999 6239 6489 Exception: If an employee retires from the Missoula Fire Department on or before December 31, 2011, the employee’s base, certification and overtime rates shall be recalculated per the original firefighter classification schedule in Appendix A of the 2008-2012 Agreement. Upon retirement, the member shall receive a lump sum retroactive payment for the difference between what the employee was paid under this amended schedule and what he or she would have otherwise been paid under the original schedule subject to all required taxes and withholdings. Retroactive pay, excluding any payment for the employee’s adjusted overtime rate, shall be reported to MPERA as regular compensation for the effective pay periods to be included in the employee’s pension calculations. 4) Article XXVI, Section 1 of the 2008-2012 contract is amended to provide that the agreement (including all of its appendices and memorandums of understanding) shall extend through June 30, 2015; 5) Article XII, Section 1 is amended to provide for a clothing allowance of five hundred fifty-eight dollars ($558.00) for FY 2013, five hundred seventy-five dollars ($575.00) for FY 2014, and five hundred ninety-two dollars ($592.00) for FY 2015. IN WITNESS WHEREOF, the parties hereto have set their hands and seals this ___day of April, 2010 For the City: For the Union John Engen, Mayor Jeff Kroll, President Bruce Bender, Chief Administrative Officer Chad Nicholson, Negotiating Team