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HomeMy WebLinkAboutStaff Report 3.E 07/02/2012 Agent:LaiIte i/#3 .E L F P` ( a/Ui Y\ .p,- 185$ DATE: July 2, 2012 TO: Honorable Mayor and Members of the City Council through�City -Manager FROM: Pamala Stephens, Human Resources Manager Y �t2 ✓✓� SUBJECT: Ratification of the Memorandum of Understanding executed by the City and the Petaluma Public.Safety Mid-Management Association for Employees of Unit 10 RECOMMENDATION It is recommended that the City Council adopt the Resolutiorpratifying the Memorandum of Understanding (MOU) executed,by the duly authorized representatives of the City and the Petaluma Public Safety Mid-Management Association Unit 10. BACKGROUND The Petaluma Public Safety Mid-Management Association's Unit 10— MOU expired on June 30, 2009. 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, 2009 through June 30, 2014. DISCUSSION The City and Unit 10 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 athree-year final average compensation, instead of the current benefit of 2% at 55 formula retirement plan and one-year final average compensation. Effective upon agreementwith the City's other Miscellaneous or Safety bargaining units, the City would amend,its.contract with-CaIPERS. The reduced retirement benefit becomes effective upon an amendment to the CaIPERS contract. City of Petaluma safety employees would continue to make an employee paid contribution of9%towards their retirement, and miscellaneous employees will continue to make a:7% contribution. Agenda Re ci e City Attorney Finance Director City Manager The parties also negotiated new MOU language that provides for Fire employees to be paid at the discretion of the Fire Chief for non-regular hours worked oma Strike Team outside of the Petaluma fire:service'area,.where a written agreement exists that provides for cost reimbursement. The compensation rate for work on a Strike Team is one and one-half times the base hourly rate (ho additional pays such as management pay,longevity, etc.) of Step lof the 56- hour Battalion Chief salary range. The term of the MOU goes to June 30, 2014. Also note, the City Manager agreed to execute a Side Letter of Agreement upon the City Council's ratification of the MOU. The Side Letter provides overtime to a Battalion Chief who fills in for a 56-hour Battalion Chief through June 30, 2014. The Fire Department has three 56- hour Battalion Chief positions. In the past when the Fire Department needed to fill a 56-hour Battalion Chief position on a temporary basis, the Department-was able to assign a qualified Fire Captain from a group of five Fire Captains. Due to retirements and recent promotions, the number of qualified Fire Captains is:.now at two. Two employees is not a sufficient number to meet the Battalion Chief fill in staffing need. Further, it appears that it will be eighteen months or longer before a current Fire Captain is qualified to fill an assignment as a Battalion Chief. To be eligible to fill an assignment as a Battalion Chief, an employee must successfully complete the Acting Battalion Chief training program. Therefore, in order to staff a 56-hour Battalion Chief position on a temporary fill in basis the City Manager and the Association agreed: 1. The Fire Department shall continue the existing practice of first offering a temporary fill in Battalion Chief assignment to,a:qualified Fire Captain that is eligible to fill an assignment as Battalion Chief. If the qualified.Fire Captains are not available or decline the temporary assignment, the Fire Chief may fill the assignment with a Battalion Chief. 2. When assigned to fill in or cover a Battalion Chief shift on a temporary basis, a Battalion Chief shall be compensated at the rate of one and one-half times the base hourly rate (no additional pays such as management pay, longevity, etc:) of Step lof the 56-hour Battalion Chief salary range. FINANCIAL IMPACTS There will be no immediate savings to the City when the second-tier is implemented. Ultimately, it is expected that City costs will decrease in the long-term as the 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 miscellaneous 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 for miscellaneous members by $203,330. A total reduced City annual employer contribution for safety and miscellaneous employees in the long-term isestimated to be $385,820. The Unit 10- 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, 2010,the monthly premium at the Kaiser rate fot.single health benefit coverage is $532.56. The additional benefit would be calculated at$532.56.1esSS105.00 times 95% =$406.18. The total benefit contributed by the City is $511.18. The employee pays the difference between the cost of his or her health plan premium and the City's PEMHCA contribution and additional benefit amount. Additional Benefit-Effective January 1,2009-Increase of 7.99% City PEMHCA Maximum Additional Total Coverage 2009 Kaiser Rate Benefit Contributed Benefit Contributed•Contribution by the City by the•City Single $508.30 $101.00 $386.94 $487.94 2-Party $1,016.60 $101.00 $869.82 $970.82 Family $1,321.74 $101.00 $1,159.55 $1,260.55 r Additional Benefit-Effective January I,2010-Increase of 4.56%in Kaiser Rate 2010 City PEMHCA Maximum Additional Total Coverage Kaiser Rate Contribution Benefit Contributed Benefit Contributed by the 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 $1,479.37 $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 Benefit Contributed Benefit Contributed Kaiser Rate. Contribution 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 PEMHCA 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 PEMHCA Maximum Additional Total Coverage Benefit Contributed Benefit Contributed Kaiser Rate Contribution by the City by the City Applicable As determined Monthly.Kaiser PEMHCA Single Kaiser rate by CaIPERS rate less PEMHCA Contribution+ contribution Maximum Additional 2-Part y times.95% Family The Unit 10 MOU is on a fiscal year basis from July 1 to June 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 10 employees on a fiscal year basis, including the cash- in-lieu program is estimated to be as follows: FY 2009-2010 $ 132,267 FY 2010-2011 $ 149,479 FY 2011-2012 $ 183,687 FY 2012-2013 $ 200,514 FY 2013-2014 $ 219,021 Under-the terms of the proposed Side Letter, when assigned to fill in or cover a Battalion Chief shift, a Battalion Chief will work additional hours above their normal schedule. A Battalion Chief will be compensated for those additional hours worked at the rate of one and one-half the base hourly rate of Step 1 of the 56-hour Battalion Chief salary range. The current hourly rate of Step 1 is.$37.73 and the one and one-half rate is $56.59. It is expected the assignment and payment of overtime to a Battalion Chief in these circumstances will not result in any additional costs to the City. That is because the current overtime rate paid to a Fire Captain for the assignment is $57.25. Agreed upon MOU language provides that Fire employees may be compensated at the discretion of the Fire Chief at the rate of one and one-half times the base hourly rate of Step l of the 56-hour Battalion Chief salary range for non-regular hours worked on a Strike Team outside of the Petaluma fire::service area, where a written agreement exists that provides for cost reimbursement: As noted above, the current overtime rate for Step 1 of the 56-hour Battalion Chief salary range is,$56.59. Costs for overtime in these circumstances are to be covered by reimbursement from another agency. ATTACHMENTS 1. Resolution Ratifying the Memorandum of Understanding Executed by the Duly Authorized Representatives of the City and the Public Safety Mid-Management Association for Employees of Unit 10. 2. Attachment A— Summary of Changes to the Memorandum of Understanding between the City and the Petaluma Public Safety Mid-Management Association for Employees of Unit 10 for Fiscal Year 2009 — 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 10 MOU FY 2009—2014 S Resolution No. 2012-XX N.C.S. of the City of Petaluma, California RESOLUTION RATIFYING MEMORANDUM OF UNDERSTANDING EXECUTED BY THE DULY AUTHORIZED REPRESENTATIVES OF THE CITY AND THE PUBLIC SAFETY MID-MANAGEMENT ASSOCIATION FOR EMPLOYEES OF UNIT 10 WHEREAS, the City, through its duly authorized representatives, and the Public Safety Mid-Management Association, 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 10, 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 Public Safety Mid- Management Association have executed.a Memorandum of Understanding pursuant to Section 15, Resolution No. 5512 N.C.S'. and recommend its approvaLby 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 10 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, 2009 through June 30, 2014. ATTACHMENT A Summary of Changes to the Memorandum of Understanding Between The City of Petaluma and the Petaluma Public Safety Mid-Management Association—Unit 10 A complete copy of the 2009 - 2014 Memorandum of Understanding for Unit 10 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 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 Safety—Fire employees hired after the effective date of the amendment shall receive the 3%at 55 formula retirement plan, no Post Retirement Survival Allowance— 50% as provided by Sections 21624/26/28, and the three-year final average compensation; instead of the current benefit of 3% at 50 formula retirement plan, Post Retirement Survival Allowance-50% as provided by Sections 21624/26/28, 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 2010, 2011, 2012, 2013 and 2014 CaIPERS health insurance and PEMHCA rates and therefore, the City's increased benefit contribution rate for 2010, 2011,2012, 2013 and 2014. 3. Strike Team.Compensation - Fire New MOU language that provides that "Fire employees may be compensated at the discretion of the Fire Chief at the rate of one and one-half times the base hourly rate (no additional pays such as management pay, longevity, etc.) of Step lof the 56-hour Battalion Chief salary range for non-regular hours worked on a Strike Team outside of the Petaluma fire service area, where a written agreement exists that provides for cost reimbursement." II. Revised new language to reflect either change in policy, practice or law 1. Preamble 2. Term of agreement—July 1, 2009 through June 30, 2014 3. CaIPERS - Updated reference to CaIPERS sections to reflect Ca1PERS changes.