HomeMy WebLinkAboutStaff Report 5.B 07/06/2009CITY OF PETALUMA, CALIFORNIA
AGENDA BILL
Agenda Title: Discussion and Possible Adoption of Resolution Amending
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. l
(Confidential),'Unit.2 (Maintenance), and Unit 3 (Clerical/Technical).
AN
'Meeting. Date:
July 6, 2009
Meeting Time: 7:00 PM
Categorv: ❑ Presentation ❑ Appointments ❑ Consent ❑ Public Hearing ❑ Unfinished Business M New Business
Department: Director: Contact Person: Phone Number:
City Manager John C. Brown Pamala_ Robbins 778-4343
Total Cost of Proposal or Proiect: (See Financial Impact) 'Name 6f'Fund- Affects the General Fund and
Various Salary Accounts
Amount Budgeted: Account Number: Salary and Benefit Accounts
Current, Fund Balance: N/A
Recommendation: It is recommended that the City Council take the following action: It is recommended
that the City Council .adopt the Resolution amending the existing Memorandum of Understanding between the
City and Units 1, 2 and 3 and approve a one-year extension of the :current MOUS.
1. ❑ First readirig'of Ordinance approved unanimously, or with unanimous vote to allow posting prior to. second reading
2. ❑ First reading of Ordinance approved without unanimous vote: Ordinance'has been published/posted prior to second
reading; see Attachment
3. ❑ Other action requiring special notice: Notice has been given, see Attachment_
Summary Statement:
The City of Petaluma continues to face financial shortfalls and imI e,.nding layoffs. In response to the current
financial and economic condition of'the City, representatives of AFS;CME have .offered and agree to defer the
2% salary adjustment effective June 29, 2009 and the 2% salary adjustment effective December 28, 2009 and to
discuss the extension of those deferred salary adjustments next year in April 2010.
The City and AFSCME have also agreed to extend the current 3 --year MOUs by one year through June 30, 2011
and for the City to pay the yet unknown Ca1PERS health premium amount for calendar year 2011 as detailed in the
Side letter of Agreement dated June 25, 2000. It is estimated that health premium increase for 2011 could range
between 5% to 10%.
Attachments to Agenda Packet Item:
1. Resolution Amending the 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. Exhibit A- Side Letter of Agreement executed June 25; 2009. to the Memorandum of. Understanding
between 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).
Reviewed by Finance Director:
/:�U
Date: 001', %.
RevA Date Last Revised:
�64ht, I
Reviewed by City Attorney:
File:
Approve b_v—City Manager:
Date: �15d d <�
CITY OF PETALUMA, CALIFORNIA
JULY 6, 2009
AGENDA REPORT
FOR
Discussion and Possible Adoption of Resolution Amending 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).
I. RECOMMENDATION:
Adopt the Resolution amending, the existing Memorandum of Understanding between the City and
Units I; 2 and 3 and approve a one-year extension of the current MOUs.
2. DISCUSSION:
The City and AFSCME have been in discussions these past several months endeavoring to find ways
collaboratively and thoughtfully to address1he City -,s financial situation and its impact upon City
employees and members of AFSCME. Out of those discussions the City and AFSCME have agreed
to defer scheduled salary adjustments, extend the MOUS by one year, and for the City to pay any
increase in the 2011 Ca1PERS health plan premium rate as specified in the Side Letter of Agreement.
Further, the City agreed to give consideration to AFSCME?s request to apply associated savings to
the, extension of lay-off dates to- some portion of affected -AFSCME represented employees, or
restoration of some portion of AFSCME represented employees.
3. •FINAN.CIAL IMPACTS?
Units I, 2'and 3 have 3 -year Memorandum of Understandings in place effective July 1, 2007 to
June 30, 2010. The MOUS provide for the following salary'adjustments:
July 2, 2007
4%
June 30, 2008
2%
December 29, 2008
2%
June 29, 2009
2%
December 28, 2009
2%
TbAr;+x, of PetahKm51 rnnt'in�iec to fare _fi_nancial shortfalls and impending layoffs. In response to.the
.... ". ��
current financial and economic condition of the City,, representatives of AFSCME have offered and
agree to defer the 2% salary adjustment effective June 29, 2009 and the 2% salary adjustment
effective December 28, 2009.
The cost of the 2% salary adjustment effective June 29, 2009 and the 2% salary adjustment effective
December 28, 2009 is estimated to. be $233,244. General fund savings is estimated to be $105,298
and savings to other funds to be $127,947.
The MOUs provide' active employees with a monthly amount towards the cost of the monthly CalPERS
Health Premium. That monthly amount for calendar year 2.009 is for Single $487.94; 2 -Party $970.82;
and Fainily'$1,260.55. For calendar year 2010 the monthly amount is Single $511.18; 2 -party $1,017.11;
oil
and Family $1,320.68. Ca1PERS health premium amounts are on a calendar year basis while MOUs are
on a July 1 to June 30t' basis.
The Side of Letter of Agreement provides for the extension of the MOUs an additional year (July 1, 2010
to June 30, 2011) and for the City to pay the yet unknown.CalPERS health premium amount for calendar
year 2011 as detailed in the Side letter. It is estimated that health premium amount for 2011 could range
between 5% to 10%. In 2010 the health, premium amounts increased by 4.8%. In prior years that increase,
has been closer to 10%. A 5% to 10% increase in health- premium amounts in 2011 would result in a
$54,145 to $108,290 cost increase to the City for Units 1, 2, and 3.
The City Manager intends to immediately apply a portion of the savings to restore the Information
Technology Specialist II position, and will also extend the lay-off date of AFSCME maintenance
employees. As of the writing of, this agenda bill, the City 'is working out the details to create a limited
term assignments in the Water Department to replace water meters, into which two of these AFSCME
maintenance can be placed. An existing position, for which AFSCME-represented maintenance
employees may be eligible, is also open in the Water Department. The extended lay-off date allows
the City to put details in place to provide for the possible placement of as many as three of the four
affected maintenance positions in the limited term and regular' positions in the Water Department.
Resolution No. 2009AX• N.C.S.
of the City of Petaluma, California
RESOLUTION AMENDING 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 (CL'ERICAL/,TECHNICAL)
WHEREAS, a Memorandum of Understanding:(MOU) for American Federation of
State, County, and' Municipal Employees, Local 675, Units `l., 2, and 3 was approved by the
Council of the City of Petaluma on..November 19; 2007, pursuant to Resolution 2007-197; and
WHEREAS, the City, through its duly authorized -representatives, and the American
Federation of State, County, and Municipal Employees (AFS.CME), Local 675, through its duly
authorized representatives, have met and conferred in good faith; and
WHEREAS, the City and,AFSOME, Local .675,; have executed a Side Letter of
Agreement executed June 25, 2009 on the extension of the current Unit 1, 2, and 3 MOUS; and
WHEREAS, the City Manager has reviewed and ;concurs with said Side Letter of
Agreement for Units 1, 2, and 3 and does recommend that the City Council amend the MOUs
and extend the MOUS by one year. through June 30, 201 l;.arid
NOW, THEREFORE, BE IT RESOLVED that the•. Memorandum of Understanding for
the AFSCME, Local 675, Units 1, 2, and 3 is, hereby amended.and extended by one year through
June 30, 2011.
BE IT FURTHER RESOLVED, that all Unit 1, 2, and 3 side letters of agreement and
the MOUs remain in effect as originally agreed and/or. adopted.
Lj
Side Letter of Agreement
Between the:
City of Petaluma 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)
One -Year Extension of the Current Units 1, 2 and 3 Memorandum of Understandings
and
Deferral of the 2% Salary Adjustment effective,.June 29, 2009 and the
2% Salary Adjustment,effective December 28, 2009
Representatives of the City of Petaluma and AFSCME; Local 675 Unit 1 (Confidential), Unit 2 (Maintenance), and
Unit 3 (Clerical/Technical) have met and conferred in good faith and have reached agreement on this Side Letter
of Agreement.
The City of Petaluma and AFSCME Units 1, '2; and, 3 have 3 -year 'Memorandum of Understandings in place
.effective July 1, 2007 to June 30, 2010. The MOUs provide for the following salary adjustments:
July 2, 2007 4%
June 30, 2008 2%
December 29; 2008 2%
June 29, 2009 2%
December 28, 2009 2%
The City of Petaluma continues to face financial shortfalls and impending layoffs. In response to the current
financial and economic condition of the City, representatives of AFSCME have offered and agree to defer the 2%
salary adjustment effective June 29, 2009 and the 2% salary adjustment effective December 28, 2009.
The parties therefore agree that the 2% June 29, 2009 salary adjustment and the 2% December 28, 2009 salary
adjustment is hereby deferred. The parties agree to meet and confer no later than April 2010 to discuss the
extension of the deferred salary adjustments
In exchange for the deferred salary adjustments the City of Petaluma agrees to extend the current 3 -year
Memorandum of Understandings in place effective July 1, 2007 to June 30, 2010 by one-year to June 30, 2011.
The City agrees to give consideration to:AFSCME's request to apply associated savings to the extension of lay-off
dates to some..portion of affected AFSCME represented employees, or restoration of some portion of AFSCME
represented positions.
The parties hereby agree that the current MOUs between the City and AFSCME Units 1, 2, and 3 shall be
extended for one'year and effective through June 30, 2011.
The parties hereby further agree as follows:
For Unit 1 - Confidential and Unit 3 — Clerical/Technical
1. The parties agree to replace existing MOU sections 27 and 28 with the following revised sections 27 and 28
effective January 1, 2010:
SECTION 27 — HEALTH BENEFITS — ACTIVE EMPLOYEES
27.1 Active Emplovees — PEMHCA Contribution
The City currently provides health benefits through the California Public Employees' Retirement
System (CaIPERS) Health Benefits Program under the Public Employees' Medical and Hospital Care
Act (PEMHCA). The City's employer contribution for each employee shall be the minimum required
by PEMHCA. The City pays this contribution, directly to CaIPERS.
Page 1 of 1
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27.2 Active Emplovees - Additional Benefit
Effective January 1, 2010 and January 1, 2011 the City shall provide active employees with an
additional monthly benefitas identified in the chart below and explained as follows: the cost of the
monthly CaIPERS Health Premium for Kaiser — Bay Area/Sacramento less the City's PEMHCA
contribution times ninety-five (95%) for each employee and his or her family members. For example,
effective January 1, 2010, the monthly premium at the Kaiser rate for single health benefit coverage is,
$532.56. The additional benefit would be calculated as $ 532.56 less $ 105.00 times 95% = $406.18.
27.3 Additional Benefit — Effective January 1, 2010
Coverage
2010
City PEMHCA
Maximum Additional Benefit
Level
Kaiser Rate
Contribution
Contributed by the City
Single
$532.56
$105.00
$406.18
2 -Party
$1;065:12
$1,05.00
$912.11
Family
$1,384.66
$105.00.
$1,215.68
27.4 Additional Benefit— Effective January 1, 2011
Coverage
2010
City PEMHCA
Maximum Additional Benefit
Level
Kaiser Rate
Contribution
Contributed by the City
Single, 2 -Party,
Applicable
As determined
Monthly Kaiser rate less
or Family
Kaiser Rate
By
PEMHCA contribution times
CaIPERS
95%
27.5 Emnlovee Contribution
Employees shall contribute to his/her CaIPERS Health Premium in the amounts less the City's
PEMHCA contribution and less the additional benefit dollar paid by the City.
SECTION 28 — HEALTH BENEFITS — RETIRED EMPLOYEES
28.1 Retired Emplovees — CaIPERS and the PEMHCA
The City currently provides health benefits through the California Public Employees' Retirement
System (CaIPERS) Health Benefits Program under the Public Employees' Medical and Hospital Care
,Act (PEMHCA). In order'for a retired employee to be eligible to receive health benefits through
CaIPERS upon retiremerit, a retiree must meet the following definition of "annuitant" under CaIPERS
law:
(A) Employee must be a member of CaIPERS; and
(B) Employee must retire within 120 days of separation from employment with the City of
Petaluma and receive a monthly retirement allowance from CaIPERS.
28.2 "Unequal Contribution"' Method for Health Care Premium Pavments for Retirees
The City uses the "unequal contribution" method for health care premium payments for annuitants
(retirees), as permitted under Government Code. section 22892. Under this method, the City is
required annually to increase the total monthly annuitant health care contribution to equal an amount
not less than the number of years the City has .been in the PEMHCA program multiplied by five
percent (5%) of the current monthly employer contribution for active employees until the time the
City's Contribution for annuitants equals the City's PEMHCA contribution paid for active employees.
By way of explanation, forcalendar year 2010, the formula for determining the City's PEMHCA for
retirees is as follows:
16 years in the PEMHCA program x 5% = 80% x $105 (minimum employer contribution for active
employees for 2010) = $84.00.
Page 2 of 7
V
The City pays this contribution directly to CaIPERS. The'retiree is required to contribute to the cost of
the health benefit coverage. The retiree's monthly, contribution shall be the cost of the monthly health
benefit premium less the amount of the City's contribution.
28.3 CaIPERS Annuitant — PEMHCA-Health Benefits,
In accordance with the PEMHCA provisions, if an employee is a CaIPERS annuitant as defined in
Section 28.1 and receives health benefits under the PEMHCA, the employee is eligible to receive
the City's PEMHCA contribution amount specified in Section 28.5 below, regardless of the
number of years of service with the City of Petaluma.
28.4 Less Than 20 Years of Service— Not Receiving PEMHCA Health. Benefits
A retired employee with less than twenty (20) years of service with the City of Petaluma who is
not enrolled in the CaIPERS health benefit program does not receive any retiree benefit from the
City.
28.5 Less.Than 20 Years of Service — Receiving PEMHCA Health Benefits
A retired employee with less than twenty (20). years of service with the City of Petaluma who is a
CaIPERS annuitant as defined, in Section 28.1 and enrolled'in the CaIPERS health benefit program is
eligible to receive the City's PEMHCA contribution amount according to the following schedule:
Calendar Year
City's Monthly PEMHCA
contribution
2008
$70:00
2009
$75.75.
201'0
$84:00.
2011
$85,._00
2012
$90..00
2013
$95.00
2014
$1'00.00
28.6 20 Years or More of Service — Not Receivinq PEMHCA Health Benefits
A retired employee with twenty (20) or more years of service_ with the City of Petaluma who is not
enrolled in the CaIPERS health benefits program shall !receive direct payments in the amount of
one -hundred -forty dollars ($140) each month, effective 'the first month following 'the expiration of
health benefit coverage.
28.7 20 Years or More of Service —'Receivinq PEMHCA Health Benefits
A retired employee with twenty (20) years or more .of service with the City of. Petaluma. who is a
CaIPERS annuitant as defined in Section 28.1 and enrolled in the CaIPERS health _benefit
program shall receive a benefit payment of one -hundred -forty dollars ($140) permonth as specified
in this section.
The City.s cash retiree benefit is sent directly to the retiree.
Page 3 of 7
1
The following chart indicates the amount of the City's PEMHCA contribution and the amount of Cash
payment to the retiree in the coming years.
Calendar
City Monthly PEMHCA
I City Monthly Cash
I Total Benefit Amount
Year
contribution
Retiree Benefit
Contributed by the City
2008
$ 70.00
$ 70.00
$ 140.00
2009
$ 75.75
$ 64:25
$ 140.00
2010
$ 84.00
$ 56.00
$ 140.00
2011
$ 85.00
$ 55.00
$ 140.00
2012
$ 90:00
$ 50.00
$ _140.00
2013
$ 95.00
$ 45.00
$ 140.00
2014
$ 100.00
$ 40.00
$ 140.00
It is the responsibility of the retiree to notify the City in writing if he/she is no longer participating in the
CaIPERS health benefit program. Following receipt of1he written notice, the City will commence direct
payment of the one-hundred=forty dollars ($140) at the beginning of the following month.
For Unit 2 — Maintenance
The parties agree to replace existing MOU sections 28 and 29 with the following revised
sections 27 and 28 effective January 1, 2010:
SECTION 28 — HEALTH BENEFITS — ACTIVE EMPLOYEES
28.1 Active Employees — PEMHCA Contribution
The City currently provides health benefits through the California Public Employees' Retirement
System (CaIPERS) Health Benefits Program under the Public Employees' Medical and Hospital Care
Act (PEMHCA). The City's employer contribution for each employee shall be the minimum required
by PEMHCA. The City pays this contribution directly to CaIPERS.
28.2 Active Employees - Additional Benefit
Effective January 1, 2010 and January 1, 2011 the City shall provide active employees with an
additional monthly benefit as identified in the chart below and explained as follows: the cost of the
monthly CaIPERS Health Premium for Kaiser — Bay' Area/Sacramento less the City's PEMHCA
contribution times ninety-five (95%) for each employee and his or her family members. For example,
effective January 1, 2010, the monthly premium at the Kaiser rate for single health benefit coverage is
$532.56. The additional benefit would be calculated'as $ 532.56 less $ 105.00 times 95% = $406.18.
28.3 Additional Benefit — Effective January 1, 2010
Coverage
2009
City PEMHCA
Maximum Additional Benefit
Level
Kaiser Rate
Contribution
Contributed by the City
Single
$532.56
$105.00
$406.18
2 -Party
$1,065.12
$105:00
$912.11
Family
$1,384.66
$105.00
$1,215.68
2R.4 AHHitinnal Renefit — Fffertive January 1, 2011
Coverage
2010
City PEMHCA
Maximum Additional Benefit
Level
Kaiser Rate
I Contribution
Contributed by the City
Single, ,
A licable•er
As determined
Monthly Kaiser rate less
mity
or Family
Kaiser Rate
IBy
PEMHCA contribution times
CaIPERS
95%
Page 4 of 7
28.5 Employee Contribution
Employees shall contribute to his/her CaIPERS Health Premium in the amounts less the City's
PEMHCA contribution and less the additional benefit dollar paid by the City.
SECTION 29 — HEALTH BENEFITS — RETIRED EMPLOYEES
29.1 Retired Emplovees — CaIPERS and the PEMHCA
The City currently provides health benefits through the California Public Employees' Retirement
System (CaIPERS) Health Benefits Program under the Public Employees' Medical and Hospital Care
Act (PEMHCA). In order for a retired employee to be eligible to receive health benefits' through
CaIPERS upon retirement, a retiree must meet the following definition of "annuitant' under CaIPERS
law:
(A) Employee must be a member of CaIPERS; and
(B) Employee must retire within 120 days -of separation from employment with the City of
Petaluma and receive a monthly retirement allowance from CaIPERS.
29.2. "Unequal Contribution" Method for Health Care Premium Pavments.for Retirees
The City uses the "unequal contribution" method forhealth care premium payments for annuitants
(retirees), as permitted under Government Code section 22892. Under this method, the City is
required annually to increase the total monthly annuitant healthcare contribution to equal an amount
not less than the .number of years the City has been in the PEMHCA program multiplied by five
percent (5%) of the current monthly employer contribution for active employees until the time the
City's Contribution for.annuitants equals the City's•PEMHCA.cohtribution paid for active employees.
By way of explanation, for calendar year 2010, the formula for determining the City's PEMHCA for
retirees is,as follows:
16 years in the PEMHCA program x 5% = 80% x $105 (minimum employer contribution for active
employees for 2010) _ $84.00.
The City pays this contribution directly to CaIPERS. The retiree is required to contribute to the cost of
the,health benefit coverage. The retiree's monthly contribution shall be the cost of the monthly health
benefit premium less the amount of the City's contribution.
29.3 CaIPERS Annuitant— PEMHCA'Health Benefits
In accordance with the PEMHCA provisions, if an employee is a CaIPERS annuitant,as:defined �in
Section 29.1 and receives ,health benefits under the PEMHCA, the employee is eligible to receive
the City's PEMHCA contribution amount specified in Section 29.5 below, regardless of the
number of years of service with the City of Petaluma.
29.4 Less Than 20 Years of Service — Not Receiving PEMHCA Health Benefits
A retired employee with less than twenty (20) years of service with the, City of Petaluma who is
not enrolled in the CaIPERS health benefit program does not receive any retiree benefit from the
City.
Page 5 of 7
29.5 Less Than 20 Years of Service — Receiving PEMHCA Health Benefits
A retired employee with :less than twenty (20) years of service with the City of Petaluma who
is a CalPERS annuitant as defined in Section 28.1 and enrolled in the CalPERS health
benefit program is eligible to receive the City's PEMHCA contribution amount according to
the following schedule:
Calendar Year
I City's Monthly PEMHCA
City Monthly Cash
contribution
2008
$70.00
2009
°$75.75
2010
$84.00
2011
$85.00
2012
$90'.00
201'3
I $95.00
2014
$100.00
29.6 20 Years or More_ of .Service — Not Receivina PEMHCA Health Benefits
A retired employee With twenty (20) or more years of service with the City of Petaluma
who is not enrolled in the CalPERS health benefits program shall receive direct
payments in the amount sof one -hundred -forty dollars ,($140) each month, effective the first
month following the expiration of health benefit coverage.
29.7 20 Years or More of Service — Receivina PEMHCA Health Benefits
A retired employee with twenty (20) years" or more of service with the City of Petaluma
who is a CalPERS annuitant as defined in Section 29.1 and enrolled in the CalPERS
health benefit program ;shall receive a benefit payment of one -hundred -forty dollars ($140)
per month as specified in this section.
The City's cash retiree,benefit is sent directly to the retiree.
The following chart indicates the amount of the City's PEMHCA contribution and the
amount of Cash payment to the retiree in the coming years.
Calendar
City Monthly PEMHCA
City Monthly Cash
Total Benefit
Year
contribution
Retiree Benefit
Amount
2008
$70,00 _
$70,00
$ '140.00
2009
$ 7575
$64.25
$ 140.00
201'0
$ 84.00
$ 56.00
$ 140.00
2011
$ 85.00
$ 55.00
$ 140:00
2012
$ 90.00
$ 50.00
$ 140.00
201'3
$ 95.00
$ 45.00 '
$ 140:00
2014
$ 100.00
$ 40.00
$ 140.00
It is the responsibility of the retiree to notify the City in writing if he/she is no longer
participating in the. CaIPERS health benefit program. Following receipt of the written notice,
the City will commence direct payment of the one -hundred -forty dollars ($140) at the
beginning of the following month.
Page 6 of 7
to
FROM FAX NO. :5105330890 Jun. 26 2009 11:58AM P7
This 91do Letter of Agreement is executed the 25th day of Jutta 2000, by the employer-eMployee relations
raprilgantatives whose signsture appears belcyw for ftlt respective OtgatlftatlOns-
AMERICAN FEDERATION OF. STATE, COUNTY; AND MI)NICIPAL EMPLOYEES
C/o
Lenny ,Basins A AFSCME' oat"
DO -Ug t3iiacciidtiME Cate
CITY'OFYFTAf4lMA
M;aa 7ge r
pemele, Robbing, Hurjg'nka urces Manager
Date,
o. & —j '
Date
Pace 7 Of I
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