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HomeMy WebLinkAboutStaff Report 4.B 09/19/2016DATE: September 19, 2016 Agenda Item #4.B TO: Honorable Mayor and Members of the City Council through City Manager FROM: Dianne Dinsmore, Human Resources Director SUBJECT: Resolution Ratifying The Memoranda Of Understanding Executed By The Duly Authorized Representatives Of The City Of Petaluma And The Petaluma Professional And Mid - Managers Association For Employees Of Unit 4 (Professional), Unit 9 (Mid- Managers), And Unit 11 (Confidential) RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Ratifying The Memoranda Of Understanding Executed By The Duly Authorized Representatives Of The City Of Petaluma And The Petaluma Professional And Mid - Managers Association For Employees Of Unit 4 (Professional), Unit 9 (Mid - Managers), And Unit 11 (Confidential). BACKGROUND The Petaluma Professional and Mid - Managers Association's (PPMMA) Memorandums of Understanding (MOUs) for Unit 4 (Professional), Unit 9 (Mid - Managers), and Unit 11 (Confidential) expired on June 30, 2016. The City has met and conferred with Association representatives and has reached a three year agreement with the Association over the terms and conditions of employment for the contract period of July 1, 2016 through June 30, 2019. The Tentative Agreement can be found at Attachment 1. DISCUSSION The City and the Association met over a period of three months. Prior to commencement of negotiations, the parties agreed to comparator agencies and jointly conducted a compensation survey as stipulated in the expired MOUs, which provided that "The parties agree that the completion of the study in no way obligates the City to a pre - determined level of pay. Rather the City and the Association agree that review of compensation and benefits packages of comparator agencies is a valuable exercise when developing salary and benefits recommendations for Petaluma employees." The study found the majority of professionals and mid - managers were more than 5% below the average of the comparator agencies, with a significant number more than 10% below. For a summary of the results of the compensation study, see Attachment A to the Tentative Agreement. The primary elements of the Agreement follow: Compensation The results of this study were given particular weight in the compensation agreement reached by the parties. No Cost of Living Adjustment was included in the Agreement. The shared goal of the parties was to focus on equity and move toward average, even if average was not attainable given the City's financial resources. The Agreement takes the first step toward this goal, granting equity adjustments of 7 %, 5 %, 3 %, or 1% depending on a classification's position with respect to the average of the surveyed agencies. Category (Range) % Increase 15% or > 7% 10% or > to 14.99% 5% 5% or > to 9.99% 3% 1% or > to 4.99% 1 % At or above average 0% In addition, the parties recognized living expenses are rising. Therefore, employees at or above the average of the comparators were granted a $3,162 one -time, non - PERSable signing bonus. Employees who received an equity adjustment were granted a $1,162 one -time, non - PERSable signing bonus. The parties agreed to a re- opener for the sole purpose of discussing whether a potential wage adjustment will take place in Years 2 and /or 3 of the Agreement. Retirement PPMMA also agreed to pay an additional 3% toward PERS retirement starting in Year 1 of the Agreement and an additional 1% in Year 3. Concurrent with employees increasing their contribution to PERS, the salary range of all PPMMA- represented classifications will be raised by 3% in Year 1 and 0.75% in Year 3. Health Benefits The City contribution for medical insurance remains the same as in the expired Agreement: Level City Contribution Employee Only $700.95 Employee + 1 $1,389.95 Employee + 2 or more $1,803.34 The parties agreed to a re- opener for the sole purpose of discussing whether a potential change in the City contribution will take place in calendar years 2018 and /or 2019 if the Kaiser premium increases more than 5% over the prior year. Dental and Vision The maximum lifetime benefit for orthodontia was increased from $1,000 to $2,000. The maximum benefit for flames was increased from $120 to $180 and lenses from $200 to $300. Holidays Most City employees not in 24/7 operations like Police and Fire work a regular schedule of ten hours a day, four days a week, or nine hours a day five days a week, with every other Friday off. Holiday pay was eight hours, meaning an employee was required to use two hours of leave for every holiday if s/he worked a 4/10 schedule. The Agreement provides that fixed holidays will now be paid based on the employee's regular work shift rather than a flat eight hours. I Cost Saving Agreements Medical Cash Back Currently employees receive half of the City contribution for medical and /or dental insurance at the level s /he is eligible if the employee waives his /her coverage under the City's health and /or dental benefits and provides written verification of health and /or dental benefits insurance coverage from another source. The parties agreed that medical cash back for all employees hired on or after October 1, 2016 shall be a flat amount of $400 and cash back for dental was discontinued. Administrative Leave Payout PPMMA agreed to reduce the number of hours of Administrative Leave mid - managers may cash out at the end of each fiscal year from 40 hours to 20 hours. FINANCIAL IMPACTS The estimated net cost of the Agreement is $62,575 in the General Fund (GF) and $108,800 non- General Fund (NGF) in Year 1, $37,233 GF and $74,579 NGF in Year 2, and $37,761 GF and $75,616 NGF in Year 3. Ongoing resources related to fee updates, along with one -time revenues received related to real property transfer taxes and mandated cost reimbursements have been identified to fund the recommended costs. The cost for the equity adjustments is estimated to be $39,750 annually in the GF and $78,000 NGF. The cost of the one -time non- PERSable signing bonuses is $25,850 GF and $35,150 NGF. The City is self - funded for dental and vision. Costs associated with improvements in the orthodontia and vision benefits are negligible. Savings from the reduction in Administrative Leave cash out is estimated to be $3,025 GF and $4,350 NGF. Savings from Medical Cash Back will occur as employees retire and new employees are hired. To give an idea of the scale of savings, consider that if all employees currently receiving Medical Cash Back were to receive the new benefit of a flat $400, the all funds savings would be approximately $32,000 per year. ATTACHMENTS 1. Tentative Agreement between the City of Petaluma and Petaluma Professional and Mid - Managers Association, Unit 4, 9 and 11 3. Resolution M Items listed below are large in volume and are not attached to this report, but may be viewed in the City Clerk's office. • Exhibit A, MOUs for Units 4, 9 and 11 for FY 2014 -2016 3 ATTACHMENT 1 PPMMA TENTATIVE AGREEMENT August 17, 2016 Item Tentative Agreement Term 3 year term, July 1, 2016 through June 30, 2019 Annual Actuarial Valuation The City will provide PPMMA with a copy of the annual actuarial valuation provided by Ca1PERS and other relevant correspondence from CalPERS directly relating to o the Ca1PERS contract covering members within ten (10) business days of receipt. Salaries Effective September 12 2016, those classifications currently filled, who receive an equity adjustment for FY 2016 -2017, shall receive a one -time non - PERSable signing bonus of $1,162.00, payable the first full pay period following approval by the City Council. Those classifications currently filled who did NOT receive an equity adjustment for FY 2016 -2017 shall receive a one -time non - PERSable signing bonus of $3,162.00, effective the first full pay period following approval by the City Council. Note: if authority is granted to City negotiators by Council on 9/12/16, signing bonuses shall be $3,162 and $1,162, respectively. This additional $162 per person is not a formal tentative agreement at this time (8/17/16). Effective September 12 2016 and concurrent with all members pang an additional three percent 3 %) towards PERS retirement, for a total contribution of ten percent (10 %) all unit members shall receive a 3% base wage increase. Effective the first full pay period in July 2018, and concurrent with all members paying an additional one percent (I%) towards PERS retirement for a total contribution of eleven percent (11%), all unit members shall receive a point seven -five percent 0.75 %) base wage increase. Note: if authority is granted to City negotiators by Council on 9/12/16, concurrent with the employee paying an additional one percent (1 %) of the employer's share of PERS, for a total employee contribution of eleven percent (11 %), employee shall receive a point seventy -five percent (0.75 %) base wage increase. This additional 0.75% employee base wage increase is not a formal tentative agreement at this time (8/17/16). Parties agree to re -open negotiations in April 2017 and April 2018 for the sole purpose of discussing whether a potential wage adjustment will take place for Fiscal Year 17/18 and /or Fiscal Year 18/19 (specifically for increase wage only). Wage increase can take the form of a COLA, equity adjustment based on a total compensation survey, or other financial payment. Holidays Fixed holidays currently provided for in the MOU will be based on the employee's regular work shift. For example, if an employee works a 4/10 schedule, s /he shall receive ten (10) hours of pay for the holiday. If an employee works a 9/80 schedule, s /he shall receive nine (9) hours of pay for the holidU, or eight (8) hours pay if the holiday falls on their regularly scheduled eight (8) hour workday as part of their 9/80 schedule. If an employee works a 5/8 schedule (five days /week, eight hours /day. s/he shall receive eight (8 ) hours of pay for the holiday. The same shall be true for any employee whose regular work week is fewer than forty (40) hours per week, except that no such employee shall receive more than eight (8) hours of pay for the holiday. Personal Leave (formerly Floating Holiday) During the fiscal year, the City will authorize one (1` "Floating 14 liday» eight (8) hours of Personal Leave per employee, which may be taken by the employee at a time selected by the employee, subject to operational requirements and approval as determined by the City. Employees hired between July 1 and December 31 will be eligible for a "Fleatin g I " Personal Leave during the course of the fiscal year. Personal Leave is limited to eight (8) hours and may not be carried over to the next fiscal year. Personal Leave After 20 Years of Service After completion of twenty years of service, an employee shall _(20) receive an additional eight (8) hours of Personal Leave per fiscal year, which may be taken by the employee at a time selected by the employee, subject to operational requirements and approval as determined by the City. The additional eight (8) hours of Personal Leave may not be carried over to the next fiscal .year. Administrative Leave Payout (exempt members only) Annual Payment for Unused Leave. Employees shall receive payment for up to twenty (20) -off (40) hours of unused administrative leave at the end of the fiscal year. Payment shall be at the employee's base pay rate as of June 30. Payment shall be made on the last pay period of the fiscal year. Health Benefits — Active Employees Employee Contribution. Employees shall contribute to his/her Ca1PERS Health Premium in the amounts less the City's PEMHCA contribution and less the additional benefit paid by the City. If the Kaiser premium increases more than five percent (5 %) over the 2017 rate, there shall be a re- opener in July 2017, but no later than October 2017, for the sole purpose of discussing whether a potential change in n City Additional Contribution will take place for Benefit Year beginning January anuary 1, 2018. If the Kaiser premium increases more than five percent (5 %) over the 2018 rate there shall be a re- opener in July 2018, but no later than October 2018 for the sole purpose of discussing whether a potential change in City Additional Contribution will take place for Benefit Year beginning January anuary 1, 2019. PEMHCA Contribution Chart Calendar Year City Monthly PEMHCA Contribution City Cash Retiree Benefit Total Benefit Amount 2015 $122.00 $18.00 $140.00 2016 $125.00 $15.00 $140.00 2017 v GaIPERS $128.00 $140.00 PE-A414 GA minus n oenfttibution $12.00 2018 Minimum PEMHCA Total benefit amount of $140.00 $140.00 contribution as set by minus the City monthly PEMHC Ca1PERS. contribution 2019 Minimum PEMHCA Total benefit amount of $140.00 $140.00 contribution as set by minus the City monUhly PEMHCJ Ca1PERS. contribution CalPERS System Effective September 12, 2016, all employees shall pay an additional three percent (3 %) towards PERS retirement. For Classic members, this three percent (3 %) is added to the current seven percent 7 %) employee contribution for a total employee contribution of ten percent (10 %). Employees subject to the PEPRA formula shall also pay an additional three percent (3 %) on top of their required employee contribution, which is currently 6.25% but is subject to change by PERS. Effective the first full pay period in July 2018, all employees shall pay an additional one percent 1 %) toward PERS retirement. For Classic members this one percent (1 %) added to the current ten percent (10 %) employee contribution for a total employee contribution of eleven percent (11 %). Employees subject to the PEPRA formula shall also paY an additional one percent (1 %) on top of their required employee contribution which is currently 6.25% but is subject to change by PERS. Note: if authority granted to City negotiators by City Council on 9/12/16, employees shall pay an additional one percent (1 %) of the employer's share of PERS, for a total employee contribution of eleven percent (11 %). This additional 1% employee contribution is not a formal tentative agreement at this time (8/17/16). The parties shall work collaboratively to Medite formal adoption of a contract amendment with CaIPERS to reflect this cost - sharing agreement under which the employee is pang a portion of the employer contribution to PERS. Optional Settlement 2W and 1959 Survivor Level 4 Actuarials from PERS necessary for evaluating PPMMA's proposal to add Optional Settlement 2W and 1959 Survivor Level 4 benefits were not complete at the time a Tentative Agreement was reached. The parties agree to discuss during the he April 2017 wage reopener whether these enhancements will be added to the options available to PPMMA members. Medical Cash Back For All Employees Hired On or After October 1, 2016: For all employees hired on or after October 1, 2016, the cash in -lieu amount for health benefits shall be $400.00 per month. Employees shall not be eligible for cash in -lieu for dental benefits. Upon declining medical insurance, the employee will be required to meet the terns and conditions regarding the he City's medical plan. If an employee decides to stop receiving the medical cash back and wishes to re- enroll into the City's medical plan, then s/he must meet the current terms and conditions of the City medical plan. The City cannot guarantee that once the employee leaves a particular medical plan, s/he may be able to re- enroll in his/her prior plan and under the same terms and conditions of his/her prior plan. Dental Insurance The City shall provide a dental plan for the tern of the Memorandum of Understanding and pay the total premium costs for the employee and eligible dependents. The maximum benefit amount is two thousand dollars ($2,000.00) per person per calendar year. Oi4hodonfi , eover -age be for dependent the shall provided ehildreft under- age of ninetem (19) $1,000 life4i you pef per-son). Orthodontic coverage shall be provided at 50% of the dentist's allowed fee (subject to a $2,000 lifetime maximum per person). Dependent children are eligible for dental and orthodontic coverage from birth to age 19, or to age 23 if enrolled as full -time students in an accredited school, college or university. Vision Insurance The City shall provide a vision plan for employees and eligible dependents. The cost shall be paid for by the City. Employees are eligible for eye exams every twelve (12) months with a twenty -five dollar ($25.00) deductible. Frames are available every twelve (12) months with a maximum benefit of one hundred tweni eighty dollars ($120.00) ($180.00) and lenses are available every twelve (12) months with a maximum benefit of two three hundred dollars ��. ) ($300.00). Retiree Health Savings Remove from MOU; this continues to be unfeasible into the foreseeable Account future. Layoff and Recall Should the City decide, for labor cost - control reasons, to permanently eliminate bargaining Unit work by permanently replacing existing bargaining Unit positions with contract or subcontract employees to do the same work under similar conditions of employment ( "Work Elimination "), the City grees to provide PPMMA leadership notice of potential layoffs no later than 30 days prior to the anticipated effective date. City will issue notices of layoff to the impacted employees no later than 21 days prior to the effective date of lames n„+i f . the employees elimina tion, in fourteen (1 4) .1.,<.�rto inVlemepAatien the of work order to allow the employees to meet and confer with respect to the effects of the proposed action upon the employees and to propose effective economical methods, if any, by which such work could continue to be provided by the City's own employees. The City will encourage contract firms to provide laid off employees' preference in hiring for contract work. Layoff — Employee Notification Employees to be laid off shall be given at least f tifte °r (14) twenty -one 21) calendar days' prior notice. Comparator Agencies Eliminate entire section; it talked about establishing the agencies; replace with: On November 2 2015, the City Council approved comparator agencies for most PPMMA classifications. Criteria used was based on population; proximity to Petaluma as a direct competitor; median household income and cost of housing; zip code analysis of City's pplication pool; agencies PPMMA employees left Petaluma for over the last 3 years; number of authorized positions in agencies; number of classifications matching _PPMMA classifications; services provided. Fairfield Napa Novato San Rafael Santa Rosa Vacaville Vallejo Walnut Creek Marin County Sonoma County On March 7 2016, the City Council approved comparator agencies for classifications in Airport, Transit, and Wastewater using the same basic criteria. Airport Transit Wastewater Ukiah Fairfield City of Santa Rosa Watsonville Vacaville Vacaville Marin County Marin Transit Sonoma County Water AgencX Napa County Sonoma County Transit Central Marin Sanitation District Solano County Vallejo Sanitation District Yuba County Compensation Study Following establishment of comparator agencies, the parties shall form ,l 11 d an an .onun�# .. and jointly ... ..+ . ..mY°nsat.„n study update the classification specifications of the classifications represented by PPMMA. Both parties agree to work jointly to update job descriptions, with the goal of completion and approval by the Council by June 30, 2017. City agrees to update the compensation survey by January 31,2019 ' using the same comparator agencies and the same criteria used in the July 1, 2016 survey. The compensation study will be completed prior to commencement of negotiations for a successor MOU to this Agreement. The parties agree that the completion of the study in no way obligates the City to a pre - determined level of pay. Rather the City and the Association agree that review of compensation and benefits packages of comparator agencies is a valuable exercise when developing salary and benefits recommendations for Petaluma employees. Attachment A summarizes the positions of PPMMA - represented classifications against the average of the comparator agencies. Equity adjustments, effective September 12, 2016, are as follows: • Classifications that are 15% or more below average shall receive a 7% equity adjustment • Classifications that are 10% to 14.99% below average shall receive a 5% equity adjustment. • Classifications that are 5% to 9.99% below average shall receive a 3% equity adjustment. • Classifications that are 1% to 4.99% below average shall receive a 1% equity adjustment. • Classifications that are 0% below average or above average shall receive no equity adjustment. Note: if authority is granted to City negotiators by Council on 9/12/16, classifications that are greater than 0% but less than 5% below average shall receive a 1% equity adjustment. This 1% adjustment is not a formal tentative agreement at this time (8/17/16). Flexibly Staffed Flexibly staffed classifications are those so defined by adopted class specifications. Advancement from one level of a flexibly staffed Classifications classification to the next level of a flexibly staffed classification (e.g., from Management Analyst I to Management Analyst II) may occur when a position is authorized at the higher level but filled at the lower level and there is a department need. At such time, upon the request of the Department Director and approval by the City Manager, incumbents may advance to the higher level upon attainment of the required training, education, and /or experience, who have demonstrated proficiency in member's area of assignment. The requirements for advancement within a flexibly staffed series are those established by the adopted job specification. Attachment A to Attached following signature page MOUs - Compensation Chart Exhibit A to MOUs — salary charts will be updated with new charts as follows after Council Salary Charts approval: • July 1— September 11, 2016 — existing salaries • September 12, 2016 through June 30, 2017 — pick up equity adjustments and 3% base wage increase • July 1, 2018 through June 30, 2019 — pick up additional 0.75% base wage increase Any compensation that may be awarded from re- openers would require charts to be updated as applicable. 10 Attachment A July 1, 2016 Compensation Survey Unit Classification Mastagni Survey: Category % Signing % below avg total (Range) Increase Bonus compensation 9 Airport Division Manager - 46.94% 15% or> 7% $ 1,162.00 9 IT Manager - 27.98% 15% or > 7% $ 1,162.00 9 Water Recycling Plant Ops Supv - 27.69% 15% or> 7% $ 1,162.00 9 Environmental Services Manager - 26.64% 15% or > 7% $ 1,162.00 9 Chief Building Official - 19.10% 15% or> 7% $ 1,162.00 4 Accountant Analyst - 14.04% 10% or> to 1499% 5% $ 1,162.00 4 Recreation Coordinator - 12.77% 10% or> to 14.99% 5% $ 1,162.00 4 Recreation Coordinator - 12.77% 10% or> to 14.99% 5% $ 1,162.00 4 Recreation Coordinator - 12.77% 10% or> to 14.99% 5% $ 1,162.00 9 Parks & Facilities Manager - 12.54% 10% or> to 14.99% 5% $ 1,162.00 4 Management Analyst II - 12.53% 10% or> to 14.99% 5% $ 1,162.00 9 Operations Manager - 12.46% 10% or> to 14.99% 5% $ 1,162.00 11 HR Analyst II vacant - 11.84% 0 10% or > to 14.99% 5% 0 0 4 Programmer Analyst - 9.69% 5% or> to 9.99% 3% $ 1,162.00 9 City Engineer -9.54% 5% or > to 9.99% 3% $ 1,162.00 9 Asst Operations Mgr - Utilities -9.50% 5% or > to 9.99% 3% $ 1,162.00 4 Asst Engineer vacant - 8.74% 5% or > to 9.99 %' ` 3% 0 9 Asst Operations Mgr -PW -7.38% 5% or> to 9.99% 3% $ 1,162.00 9 Housing Administrator - 7.37% 5% or> to 9.99% 3% $ 1,162.00 4 Accountant vacant - 7.31% 5% or > to 9.991/o 3% 0 11 Accountant - 7.31% 5% or> to 9.99% 3% $ 1,162.00 9 Senior Planner - 6.92% 5% or > to 9.99% 3% $ 1,162.00 9 Principal Financial Analyst - 5.79% 5% or > to 9.99% 3% $ 1,162.00 4 Associate Civil Engineer - 5.34% 5% or > to 9.99% 3% $ 1,162.00 4 Associate Civil Engineer -5.34% 5% or> to 9.99% 3% $ 1,162.00 9 Senior Civil Engineer - 4.65% 1% or > to 4.99% 1% $ 1,162.00 9 Senior Civil Engineer -4.65% 1 % or > to 4.99% 1% $ 1,162.00 9 Senior Civil Engineer - 4.65% 1% or > to 4.99% 1% $ 1,162.00 9 Commercial Services Mgr -3.18% 1 % or> to 4.99% 1 % $ 1,162.00 9 Transit Manager -2.28% 1 % or> to 4.99% 1 % $ 1,162.00 11 Exec. Asst to City Manager - 1.19% 1% or > to 4.99% 1% $ 1,162.00 9 Econ Development Mgr 0.49% above avg total comp 0 $ 3,162.00 9 GIS Manager 3.07% above avg total comp 0 $ 3,162.00 11 Legal Assistant 3.57% above avg total comp 0 $ 3,162.00 4 Senior Accountant 5.30% above avg total comp 0 $ 3,162.00 4 Enviro Services Analyst not studied - 0% 0 $ 3,162.00 4 Neighborhood Presv. Coord. not studied - 0% 0 $ 3,162.00 9 Enviro Services Supervisor not studied - 0% 0 $ 3,162.00 9 Recreation Supervisor vacant not studied - 0% 0 0 9 Deputy Dir. PW &U not studied - 0% 0 $ 3,162.00 4 Project Manager not studied - 0% 0 $ 3,162.00 4 Senior Lab Analyst vacant not studied - 0% 0 0 11 ATTACHMENT 2 RESOLUTION RATIFYING THE MEMORANDA OF UNDERSTANDING EXECUTED BY THE DULY AUTHORIZED REPRESENTATIVES OF THE CITY OF PETALUMA AND THE PETALUMA PROFESSIONAL AND MID - MANAGERS ASSOCIATION FOR EMPLOYEES OF UNIT 4 (PROFESSIONAL), UNIT 9 (MID - MANAGERS), AND UNIT 11 (CONFIDENTIAL) WHEREAS, the City of Petaluma, through its duly authorized representatives, and the Petaluma Professional and Mid - Managers Association ( PPMMA), 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 4, 9 and 11 in accordance with the Meyers- Milias -Brown Act and the City's Employer- Employee Relations, Rules and Regulations (Resolution No. 55412 N.C.S.); and WHEREAS, the duly authorized representatives of the City and the PPMMA have executed Memoranda of Understanding pursuant to Section 15, Resolution No. 5512 N.C.S. and recommend their 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 Memoranda of Understanding for Unit 4, 9 and 11 and does recommend that the City Council ratify said Memoranda of Understanding. NOW, THEREFORE, BE IT RESOLVED that the Memoranda of Understanding, being in the best interests of the City of Petaluma, is ratified and the terms and conditions of said Memoranda of Understanding, attached to and incorporated as Exhibit A, shall be effective July 1, 2016 through June 30, 2019. 12 IIC Memoranda of Understanding Unit 4 — Professional Unit 9 — Mid - Managers Unit 11— Confidential 13