HomeMy WebLinkAboutStaff Report 1.A 12/6/2012 lge:v a/ Item/#1 . 1
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DATE: December 6, 2012
TO: Honorable Mayor and Members of the City Council through the City Manager
FROM: Pamala Stephens, Human Resources Manager
SUBJECT: Ratification of the.Memorandums of Understanding executed by the City and the
American.Federation,of State, County,-and Municipal Employees, Local 675, for
Employees of Unit I (Confidential), Unit 2-(Maintenance) and
Unit 3 (Clerical/Technical).
RECOMMENDATION
It is recommended that the City Council adopt the Resolution ratifying the Memorandums of
Understanding (MOU) executed by the duly authorized representatives.of the City and the
American Federation of State, County, and Municipal Employees (AFSCME), Local 675, for
employees of Unit 1 (Confidential), Unit 2 (Maintenance),_and Unit 3 (Clerical/Technical).
BACKGROUND
The AFSCME Unit 1 (Confidential), Unit 2 (Maintenance), and Unit 3 (Clerical/Technical),
MOUs'expired on December'31, 2011. The City met and conferred with union representatives
and has reached'agreement with-the union over the terms and conditions of employnient for the
contract period of January 1,,2012 through December31, 2015.
DISCUSSION
The significant changes to the MOUs are the second-tier retirement formula for newly hired
employees and the limit that is placed on health cost increases.,in 2013, 2014 and 2015. Second-
tier employees will receive:a;retirement benefit that provides a 2% at.60'formula retirement;pl'an
and a,three-year final;:average compensation, instead of the current'benefit-of 2% at 55 formula
retirement plan andone-year final average compensation.
Effective with the adoption-of the Resolution,ratifyin g the MOUs for Unit 1, 2 and 3,- the City
may immediately proceed to amend its contract with CaIPERS. The reduced retirement benefit
becomes effective upon,an,-amendment-tothe CaIPERS contract. City of Petaluma miscellaneous
employees will continue to make a 7% contribution.
Agenda.Revie - S
City Attorne Finance Director City Ma
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The MOUs allow for increases in. the :City's health plan.contribution for calendar years 2012,
2013, 2014 and 2015. The MOUs provide that the City contrihute a monthly benefit that
includes an increase of rip to 9% effective January.l in 2013, 20 14 and'.2015, and that employees
pay any portion of an increase exceeding 9%.
The City's contribution for FY 2011/12 and FY 2012/13 has been budgeted. Health premiums
for the Kaiser Plan increased by 7.3% effective January 1, 2012' and the City continued to
provide employees with a monthly benefit that included that increase. The 2013 Kaiser Plan rate
will increase by 9.53%, thus the. employee 'share for health benefits will increase by .53%
effective January 1, 2013.
The Kaiser Plan rate for 2044. and'2015,is unknown and the MOUs provide for a monthly benefit
that depends upon the actual percentage increase in the Kaiser-Bay-Area/Sacramento premium.
The City's contribution for 2014 and 2015 shall be uplto a 9%,increase-over the prior year or the
actual 2014 and 2015 CaIPERS health premium for Kaiser-Bay-Area/Sacramento for current
employees and their covered family members, whichever is less. Any increase in excess of 9%
will be The responsibility of the employee.
Further, the parties have agreed to re-open negotiations in April 2014 and April 2015 for the sole
purpose of discussing whether a'poteptial salary adjustment,(either'an increase or reduction) may
take place effective July I, 2014 and/or July 1, 2015'. It is the only item that is subject to a
reopener.
The'MOU for Unit 2 incorporates language from a Side letter of.Agreement executed on April
16, 2008 that outlines'terms and conditions of standby for employees in the position of Water
Recycling Plant Operator III and Water Recycling Plant Lead Operator. In 2008 those positions
were new and pad of the newly hired staff at the Ellis Creek Recycling,Facility.
The MOU for Unit 3 incorporates language from a Side letter. of Agreement executed on April
22, 2008 that requires uniforms for employees in the position of P,,olice Records Assistant,I and II
and provides them with a uniform:allowance. At that time, the Police Department standardized a
uniform policy for all civilian personnel.
FINANCIAL.IMPACTS
There are no changes to salary.
There will be no immediate savings to the City when the second-tier is implemented.
Ultimately, it is expected that City costs will decrease as the mix of first-tier employees
increase.decreases and new second-tier employees increase. When the mix of all first and second tier
employees reaches a 50-50% ratio, employer costs are estimated by Ca1PERS to decrease by
1.7%. In current dollars a decrease of 1.7% would reduce the City's annual employer
contribution for miscellaneous employees by $203,330.
Health premiums for the Kaiser Plan increased by 7.3% effective January 1, 2012 and the City
continued to provide employees with a monthly benefit that included that increase. The Kaiser
Plan will increase by 9.53% effective January f, 2013. The MOUs provide that the City
contribute a monthly benefit that includes an increase,of 9%, thus the employee share for health
benefits will increase by .53%.
Health benefit costs for 2012 and 2013 are illustrated below. Note that the employee pays the
difference between the Kaiser Rate and the total benefit contributed by the City.
Additional Benefit Effective January 1, 2012: Increase of 7.3% in Kaiser Rate
1012l iaker =City PEMHCA ' Maximum Additional Total Benefit
;Coverage; Rate Contribution BenefitContribut_ed I Contributed,byr,the
by,the City, City
Single $610.44 $112 $473.52 $585.52
2 - Party $1,220.88 $112 1$1,053.44 $1,165.44
Family $1,587.14 $112 ;$1,40138 $1,513.38
Additional Benefit Effective January 1, 2013:._Increase cif 9i53%=in Kaiser Rate
2013 Kaiser° 1Vlaximum Additional Total Benefit
- City PEMHCAi?;'
:Coverages Rate`(9 /° Contribution 1 , "Benefit,Contribufed Contributed by`tfie
Increase) bythe City, City, _
Single $665.38 $115 $522.86 $637.86
2 - Party $1,330.76 $115 $1,154.97 $1,269.97
Family $1,729.98 $115 $1,534.23 $1,649.23
The City's contribution to health benefits in 2014 and 2015 shall be an amount up to a nine
percent (9%) increase of the;prior year Health Plan Rate contribution, less the City's PEMHCA
contribution, times ninety-five percent(95%); or an amount equal to the actual CaIPERS Health
Premium for Kaiser-Bay-Area/Sacramento, less the-City's PEMHCA-contribution, times ninety-
five percent (95%), whichever is less. The 2014 and 2015 premium for Kaiser-Bay-
Area/Sacramento and required PEMHCA contribution is unknown at this time. The amount of
the City's future contribution shall remain at the levels established effective January 1, 2015,
until changed through the meet and confer process and/or as allowed by the MMBA.
The City provides a cash-in-lieu program for:employees who do not enroll in the health plan.
That program provides eligible employees with a benefit amount of half or fifty percent of the
benefit that-the City would otherwise contribute towards the health plan. The total cost of health
benefits for Unit 1, 2 and 3 employees on a calendar year basis, including the cash-in-lieu
program is estimated to be as follows:
Cal. Yr. Unit 1 Unit 2 Unit 3 Total
2011 $116,134 $738,703 $407,192: 181,262,029
2012 $105,551 $765;073 $400,004 ,$1,270,628
2013 $115;021 $811,251 $432,054 ;$1,358,326
2014 $1 25342 $884,046 $470,813 ;$1,480,201
2015 $136,591 $963,384 $513,056 ;$1,613,031
The MOU for Unit.2 now incorporates language that provides, standby pay for employees
working at the Ellis Creek Recycling Facility. The Facility',operates twenty-four hours per day
seven days per week. The City has the option to staff the Facility in person or to have a
computer monitoring system with an assigned operator that responds to alarms and or data from
the computer system. The City staffs the Facility with on-site personnel.seven days per week, ten
and one-half hours per day. The other thirteen and one-half hours are monitored by an operator
assigned to standby. Thus, standby assignments are a necessary part of staffing at the Facility
and currently cost about$38,600 per year.
The MOU for Unit 3 now incorporates language that provides a uniform allowance for Police
Records Assistant employees. The allowance'provides a one-time+lump sum payment upon hire
in the amount of four hundred dollars ($400) to purchase uniforms. Thereafter, employees are
provided with ten dollars ($10) per pay period to maintain their uniforms. The City incurred a
Cost of about one thousand two hundred dollars ($1,200) whetiithe Side.Letter was implemented'
in 2008. Present on-going total costs are about six hundred dollars($600.00) per year.
ATTACHMENTS
1. Resolution Ratifying Memorandum,of Understanding Executed by the Duly Authorized
Representatives of the City, and the American Federation of State, County, and Municipal
Employees, Local 675, for Employees of Unit 1 (Confidential), Unit 2 (Maintenance),
and Unit 3 (Clerical/Technical).
2. Summary of Changes to the Memorandum of Understanding for employees in Unit 1
(Confidential), Unit 2(Maintenance) and Unit 3 (Clerical/Technical) for Calendar Years
2012 —2015.
Items listed below are large in volume and are not attached to this report, but may be viewed in the
City Clerk'''s office.
Unit 1, 2 and 3 MOUs 2012—2015
ATTACHMENT 1
RESOLUTION RATIFYING MEMORANDUM OF UNDERSTANDING
EXECUTED BY THE DULY AUTHORIZED REPRESENTATIVES
OF THE CITY AND THE AMERICAN FEDERATION OF
STATE, COUNTY, AND MUNICIPAL EMPLOYEES,
LOCAL 675, FOR EMPLOYEES OF
UNIT I (CONFIDENTIAL), UNIT 2 (MAINTENANCE),
AND UNIT 3 (CLERICAL/TECHNICAL)
WHEREAS, the City, through its duly..authorized representatives, and the American
Federation of State, County, and Municipal Employees (AFSCME), Local 675, through its duly
authorized representatives, have concluded their mutual obligation to meet and confer in good
faith with respect to terms and conditions of employment for the employees of Units 1, 2, and 3
in accordance with the Meyers-Milias-Brown Act and the City's Employer-Employee Relations,
Rules, and Regulations.(Resolution No. 5512 N.C.S.); and
WHEREAS, the duly authorized representatives of the City and AFSCME, Local 675;
have executed a Memorandum of Understanding pursuant to Section 15, Resolution No. 5512
N,C.S. and recommend its approval by the City Council; and
WHEREAS, the City Manager, pursuant to Section 28, of the Charter of the City of
Petaluma, and as the City's Municipal Employees' Relations Officer(Resolution No. 5375
N.C.S.) is required and empowered to make a recommendation to the City Council on matters!
related to employees' compensation; and
WHEREAS,the City Manager has reviewed and concurs with said Memorandum of
Understanding for Units 1, 2,and 3 and does recommend that the City Council ratify said
Memorandum of Understanding; and
NOW, THEREFORE, BE IT RESOLVED that the Memorandum of Understanding,
being in the,best interests of the City, is ratified and the terms and conditions of said
Memorandumof Understanding(as attached) shall be effective January. 1, 201'2,"through
December 31, 2015.
ATTACHMENT 2
Summary of Changes to the 2012— 2015 Memorandum of Understanding
for Unit 1 (Confidential), Unit 2 (Maintenance), and Unit 3 (Clericar/Technical)
A complete copy of the 2012 — 2015 Memorandum of Understanding for Unit 1, 2 and 3
is on file in the City Clerk's office.
I. Benefits
1. Second-tier Retirementin CaIPERS
New MOU language that provides for a different level of benefits (two-tiered retirement)
for newly hired Miscellaneous employees. Effective upon agreement with the City's
other Miscellaneous bargaining units, the City shall amend:its contract with CaIP-ERS.
The amended contract shall provide that Miscellaneous employees,hired after the
effective date of the amendment shall receive the 2% at 60 formula retirement plan and
the three-year final average compensation; instead of the current benefit of 2% at 55
formula retirement plan and one-year final average compensation.
2. Health Benefits — Active Employees and Retired Employees
Revised language that reflects the City's increased contribution amount towards health
insurance and the increased PEMHCA rates for 20W, 2011, 2012, 2013 and 2014.
II. Other Changes to the MOU
1. Re-opener
The parties agree to re-open negotiations in April 2014 and April 2015 for the sole
purpose of discussing whether a potential salary adjustment(either an increase or
reduction) may take place effective July 1, 2014 and/or July 1, 2015. The only item that
is subject to this re-opener is a potential salary adjustment for July 1, 2014 and/or July 1,
2015.
2. Standby Assignment and Pay - For the Unit 2 MOU only
Incorporated language from a Side letter of Agreement executed on April 16, 2008 that
outlines terms and conditions of standby for employees in the position of Water
Recycling Plant Operator III and Water Recycling Plant Lead Operator.
3. Uniform Requirement & Allowance— Police Records Assistant I &II— Unit 3 MOU
only
Incorporated language from a Side letter of Agreement executed;on April 22, 2008 that
requires uniforms for employees in the position of Police Records Assistant I and II and
provides them with a uniform allowance.
I11. Revised new language to reflect either change in policy, practice, and law or updated
language.
1. Term of MOU— January 1, 2012 through December 31, 2015.
2. CaIPERS - Updated reference to CaIPERS sections to reflect Ca1PERS changes.
3. Life Insurance
Deletion of language that provided a change inithe life insurance amount effective date of
February 1, 2008. The increased amount is in effect.
4. Premium Pay— DMV Test Examiner—Unit 2 MOU only
Elimination of obsolete MOU language that provided premium pay when performing
duties that involved work on the City of Petaluma's Department of Motor Vehicle
(DMV) Employer Test program. The State of California changed the certification
process and employees no longer possess the certificate and perform those.duties.
4. Layoff—Corrected section numbers.
5. Updated.Salary Table
The Salary Table was updated to reflect current salaries that were increased by 4.04%
effective July 1, 2011 and"approved changes lit position classifications for the period
July 1, 2010 to present.
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