Loading...
HomeMy WebLinkAboutStaff Report 3.D 07/02/2012 Ar-ewida/Itevw#3 . 17 441/ 285a , DATE: July 2, 2012 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Pamala Stephens, Human Resources Manager" Z`" SUBJECT: Ratification of the Memorandum of Understanding executed_by the City and the Peace Officers' Association of Petaluma for Employees of Unit 6 (Police) RECOMMENDATION It is recommended that the City Council adopt the Resolution ratifying the Memorandum of Understanding (MOU) executed by the duly authorized representatives of the City and the Peace Officers' Association of Petaluma for Employees of Unit 6. BACKGROUND The Peace Officers' Association of Petaluma Unit 6 —MOU expired on June 30, 2010. The City met and conferred with union representatives and has reached agreement with the Association over the terms and conditions of employment for the contract period of July 1, 2010 through June 30, 2014. DISCUSSION The City and Unit 6 representatives have negotiated a second-tier retirement formula for newly hired safety and miscellaneous employees and a contract period through June 30, 2014. Second- tier safety employees will receive a retirement benefit that provides a-3% at 55 formula retirement plan, and a three-year final average compensation, instead of the current benefit of 3% at 50 formula retirement plan and one-year final average compensation. Second-tier miscellaneous employees will receive a retirement benefit that provides a 2% at 60 formula retirement plan and a three-year final average compensation, instead of the current benefit of 2% at 55 formula retirement plan and one-year final average compensation. Effective upon agreement,with the City's other Miscellaneous or Safety bargaining units, the City would amend its contract with Ca1PERS. The reduced retirement benefit becomes effective upon an,amendment to the Ca1PERS contract. City of Petaluma safety employees would continue to make an employee paid contribution of 9% towards their retirement, and miscellaneous employees will continue to make a 7% contribution. Agenda Revie I City Attorne} \ ^^ Finance Director City Manager I The City and Unit 6 representatives negotiated the elimination of Section 30 Retiree Medical Health Trust language as employees did not,approve membership-in,the Retiree Medical Expense and Health Trust. Sick leave payout upon,retirement was returned to 50% of accumulated unused sick, not to exceed 700 hours from a 25%-split between the Trust and a 25% payout. The total sick leave payout of-S0% has remained the same,just how the amount was split returned to payout only. The parties also negotiated calcification of how an employee will accrue seniority and service time during a leave of absence without pay. The term of the MOU goes to June 30, 2014. FINANCIAL IMPACTS There will be no immediatersavings to the City when the second-tier is implemented. Ultimately, it is expectedahat City costs will decrease in the long-term as mix of first tier employees decreases and new second tier employees increase. When the mix of all first and second tier employees reaches a 50-50% ratio, employer costs for all safety employees is estimated by CaIPERS to decrease by 1.55%. In current dollars a decrease of 1.55% would reduce the City's annual employer contribution for safety members by $182,490. For miscell'aneous employees with a 50-50% ratio in the first and second tiers, employer contributions 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 formiscellaneous members by $203,330. A total reduced City annual employer contribution.for safety and miscellaneous employees in the long-term is estimated to be$385,820. The Unit 6 (Police) - MOU includes a maintenance of benefit provision for health care that is calculated as follows: the cost of the monthly Ca1PERS,Health Premium for Kaiser—Bay Area/Sacramento less the City's.Public.Employees' Medical,and Hospital Care Act (PEMHCA) contribution times ninety-five'percent,(95%) for each employee and his or her family members (see chart below). For example; effective January 1,2011,the monthly premium at the Kaiser rate for single health benefit coverage is,$568 99. The additional benefit would be calculated at$568.99 less $108.00 times 95%=$437.94. The total benefit contributed by the City is$545.94. The employee pays the difference between the cost of his or her health plan premium and the City's total benefit contribution. Additional Benefit—Effective January 1,2010—Increase of 4.56%in Kaiser Rate 2010 City PEMHCA Maximum Additional Total Coverage Benefit.Contributed Benefit.Contributed Kaiser Rate Contribution bythe City by the City Single $532.56 $105.00 $406.18 $511.18 2:Party $1,065.12 $105.00 $912.11 $1,017.11 Family $1,384.66 $105.00 $1,215.68 $1,320:68 Additional Benefit—Effective January 1,2011 —Increase of 6.8%in Kaiser Rate 2011 City PEMHCA Maximum Additional Total Coverage Benefit Contributed Benefit Contributed Kaiser Rate Contribution by the City by the City Single $568.99 $108.00 $437.94 $545.94 2-Party $1,137:98. $108.00 $978.48 $1,086.48 Family $1;47937 $108.00 $1,302.80 $1,410.80 Additional Benefit—Effective January 1,2012—Increase of 7.3%in Kaiser Rate 2012 City PEMHCA Maximum Additional Total Coverage Kaiser Rate Contribution Benefit Contributed Benefit Contributed by the City by the City Single $610.44 $112.00 $473.52 $585.52 2-Party $1,220.88 $112.00 $1,053.44 $1,165.44 Family $1,587.14 $112.00 $1,401.38 $1,513.38 Additional Benefit—Effective January I,2013—Increase of 9.53%.in Kaiser Rate 2013 City Maximum Additional Total Coverage Kaiser Rate. Contribution Benefit Contributed Benefit Contributed by the City by the City Single $115.00 $525.95'_ $640.95 2-Party $115.00 $1,161.15 $1,276.15 Family $115.00 $1,542.27' $1,657.27 Additional Benefit—Effective January 1,2014—Rate increase unknown estimated to be 9% 2014 City Maximum Additional Total Coverage Benefit Contributed Benefit Contributed Kaiser Rate Contribution by the City by the City Applicable As!determ ined Monthly Kaiser PEMHCA Single Kaiser rate by CaIPERS rate less PEMHCA Contribution+ contribution Maximum Additional 2-Party times 95% Family The Unit 6 MOU is on a fiscal year basis from July 1 to Jun& 30. CaIPERS health plan rate increases are on a calendar year basis. 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 6 employees on a fiscal year basis, including the cash- in-lieu program is estimated to be as follows: FY 2009-2010 $ 909,250 FY 2010-2011 $ 977,851 FY 2011-2012 $ 977,583 FY 2012-2013 $ 1,054,355 FY 2013-20,14' $ 1,151,631 There were personnel changes in FY 2011-2012 that resulted in reduced health benefit costs for that year. Those included retirements, separations, and a displacement to another bargaining unit due to layoff. ATTACHMENTS 1. Resolution Ratifying the Memorandum of Understanding Executed by the Duly Authorized Representatives of the City and the Peace Officers' Association of Petaluma for Employees of Unit 6. 2. Attachment A— Summary of Changes to the Memorandum of Understanding between the City and the Peace Officers' Association for Eniployees of Unit 6 for Fiscal Year 2010— 2014. ® 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 6 MOU FY 2010—2014 Lf Resolution No. 2012-XXN.C.S. of the City of Petaluina; California RESOLUTION RATIFYING MEMORANDUM OF UNDERSTANDING EXECUTED BY THE DULY AUTHORIZED REPRESENTATIVES OF THE CITY AND THE PEACE OFFICERS' ASSOCIATION OF PETALUMA FOR EMPLOYEES OF UNIT 6 (POLICE) WHEREAS, the City, through its duly authorized representatives, and the Peace Officers' Association of Petaluma, 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.in Unit.6, 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 the Peace Officers' Association of Petaluma 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, City of Petaluma City Charter, 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 Unit 6 and does recommend that the City Council ratify said Memorandum of Understanding. 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 Memorandum of Understanding shall be effective July 1, 2010 through June 30, 2014. 3 A-11)SC -3=Ma3T 2 ATTACHMENT A Summary of Changes to the.Memorandum.of Understanding Between The City of Petaluma and the Peace Officers' Association Of Petaluma—Unit 6 A complete copy of the 2010 - 2014 Memorandum of Understanding for Unit 6 is on file in the City Clerk's office. I. Benefits 1. Second-tier Retirement in CaIPERS New MOU language that,provides for a different level of benefits (two-tiered retirement) for newly hired Safety— Police and Miscellaneous employees. Effective upon agreement with the City's other Miscellaneous or Safety bargaining units, the City shall amend its contract with Ca1PERS. The amended contract shall provide that Safety— Police employees hired after the effective date of the amendment shall receive the 3% at 55 formula retirement plan and the three-year final average compensation; instead of the current benefit of 3% at 50 formula retirement plan and one-year final average compensation. 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 reflects:the'201'1, 2012, 2013 and 2014 CaIPERS health insurance and PEMHCA rates and,therefore,the City's increased benefit contribution rate for 2011, 2012, 2013 and 2014. 3. PORAC Retiree Medical Trust—Eliminated Provision Elimination of Section 30— Retiree Medical Expense arid Health Trust; and replacement of Section 13.8 Sick Leave,Payout Upon Retirement to: In the event of retirement, an employee who as completed ten (10) years or more with the City of Petaluma shall receive fifty percent(50%)'of his or her accumulated but unused sick leave, not to exceed seven hundred (700) hours. The City and the Association agreed to a.provision the 2008-2010 MOU that provided a Retiree,Medical Health Trust. When the parties agreed to:the.provisions in.the MOU, they also agreed to.change'sick leave payout upon retirement in to;25%0 of accumulated unused sick leave, not to exceed 350 hours, from 50% of accumulated unused sick leave, not to exceed 700 hours. When the payout was reduced to 25%, the parties also agreed to remit the cash value of the other 25% of accumulated unused sick leave, not to exceed 350 hours to the Trust's Plan administrator. The Association had a delay in entering into an agreement with the PORAC Retiree Medical Trust: The City was not able to accomplish the payroll deduction for the employee contribution to the Trust due to software limitations. Then the Association advised the City that the employees did not. approve membership in the Retiree Medical Expense and Health Trust. Therefore, the POAP requested and the City agreed that Section 30 Retiree.Medical Expense and Health Trust be eliminated and sick leave payout upon retirement be returned to 50% of accumulated unused sick, not to exceed 700 hours. Cl� 4. Leave of Absence Without Pay Removed existing language of "or of the accrual- of seniority" that was unclear and clarified with new language that "Commencing,July 1,;2012, an employee will not accrue seniority or accrue service time for salary*range advancement during a leave of absence without pay. The City Manager may extend the probationary period by the length of the leave of absence without pay." II. Revised new language to reflect either change in policy, practice or law 1. Preamble 2. Term of agreement—July 1, 2010 through June 30, 2014 3. Ca1PERS - Updated reference to CaIPERS sections to reflect-Ca1PERS changes.