TO:
Honorable Mayor and Members of the City Council
FROM:
David N. Carmany, City Manager
SUBJECT:Title
Memoranda of Understanding with the Manhattan Beach Police Officers' Association, California Teamsters Local 911, and the Manhattan Beach Firefighters' Association.
APPROVE, ADOPT RESOLUTION NO. 13-0017
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council approve the successor Memoranda of Understanding (MOUs) between the City and the Manhattan Beach Police Officers' Association, California Teamsters Local 911, and the Manhattan Beach Firefighters' Association, each with the term of January 1, 2013 through December 31, 2015.
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FISCAL IMPLICATIONS:
The Memoranda of Understanding are for a three-year period commencing on January 1, 2013, and expiring on December 31, 2015. The financial portions of the MOUs take effect prospectively on the payroll period beginning on March 9, 2013, for the Manhattan Beach Police Officers' Association and California Teamsters Local 911, and March 23, 2013, for the Manhattan Beach Firefighters' Association. The estimated fiscal impact of the MOU over its three-year term is:
FY2012-2013 (6 mos.): $59,149
FY2013-2014: $237,217
FY2014-2015: $462,415
FY2015-2016 (6 mos.): $258,451
3-Yr Total: $1,017,231 or 1.30%
A detailed breakdown for each MOU by fiscal year is provided on Attachment 1.
These costs include the net value of all salary, overtime, pension, medical and any other provisions agreed to through the collective bargaining process, which are included in the MOUs presented for approval.
By way of further detail, the major costs in the MOUs are listed by category as follows:
Salaries & Wages: $5,771,261
Pension: ($4,441,437)
Healthcare: ($305,843)
Other: ($6,750)
3-Yr Total: $1,017,231 or 1.30%
A detailed breakdown for each MOU by category is provided on Attachment 1.
The MOUs will have a minimal effect on the fiscal year 2012-2013 budget ($59,149). If the MOUs are approved, the necessary budget adjustments will be performed (no appropriations are necessary). The costing of the MOUs will be factored into the Fiscal Year 2013-2014 budget and the five-year forecast will also be adjusted prior to the upcoming budget discussions.
BACKGROUND:
The City and its Police Officer and Firefighter associations (the Manhattan Beach Police Officers' Association and the Manhattan Beach Firefighters' Association) as well as the employee union that represents most of the non-sworn classifications in the City (California Teamsters Local 911), have been engaged in labor negotiations over the last several months. Those labor negotiations have resulted in the parties reaching agreement for a successor memorandum of understanding (MOU) for a term that will extend until December 31, 2015. Each of the bargaining units' membership have ratified the terms of their respective MOU. City Council approval is necessary in order to implement the contract.
DISCUSSION:
The City Council directed its negotiators to reach an agreement that addressed pension reform, the rising cost of health insurance and several other operational issues while also being sensitive to the City's financial condition and the continued uncertainty of our national and local economy. The City Council also indicated its desire to maintain the standard of living for the employees who provide service to the community. The result was that the City was able to negotiate successfully a MOU that met the City Council's desired goals and objectives.
Each of the MOUs address pension reform as the employees will now pay their entire member contribution (9% for Police and Fire and 7% for Teamsters) to the Public Employees' Retirement System. For the Police Officers' and Firefighters' Associations, they will pay an additional 3% towards their retirement (totaling 12% each for both groups) starting during their MOUs. In addition, while the MOUs were being negotiated, the Public Employee Pension Reform Act of 2013 was enacted in California. The Act mandates lower pension formulas than the City current provides (2.7% @ 57 for Police and Fire and 2% @ 62 for Teamsters) for new members hired by the City after the effective date of the new MOUs. Passage of the Act enabled the City to accomplish a second tier retirement formula with lower pension costs without having to negotiate (which had been initially proposed by the City at the negotiations table) with its associations and union.
The employees are provided with corresponding salary increases to address the impact on their compensation of their pension contributions (e.g., 7% or 9% salary increases to offset 7% or 9% pension contributions) as well as a salary increase of 2.5% one time during MOUs.
The City was also able to address the rising health costs by having the Association and union members agree to pay 5% of the cost of their health insurance. The City has always maintained a maximum amount it would pay a percentage (5% for Police and Fire and 3% for Teamsters) of the cost of their health insurance. The City has always maintained a maximum amount it would pay for such benefits, but now each of the employees will be responsible for out of pocket cost associated with whatever benefits (based on the maximum) they choose. For the Fire Association, health insurance through the MOU has historically been provided through a negotiated flat dollar amount. The new MOU with the Fire Association ties the contribution to one of the CalPERS Medical plans (just like in the Police MOU) and provides for five percent (5%) contribution from the members.
The parties agreed to numerous other modifications to their MOUs to address operational needs as well as economic issues to control future cost increases. However, the substantive terms of each MOU are as follows:
Manhattan Beach Police Officers' Association
1. Term of Agreement:
January 1, 2013 to December 31, 2015.
2. Salary/Pension Contribution:
Current employees will pay 9% towards pensions beginning 3/9/2013. Current employees will pay additional 3% pension cost sharing beginning 1/1/2015 per Government Code Section 201516(f). Employees receive a 9% salary increase on 3/9/2013, a 2.5% increase on 1/1/2014, and a 3% increase on 1/15/2015.
3. Retirement:
The formula for new members (as defined in the Pension Reform Act) is 2.7%@57, and based on the average compensation of the last three years (as opposed to the single highest year). New members pay the higher of 9% or half the normal cost from 1/1/2013 through 12/31/2014, and pay the higher of 12% or half the normal cost starting 1/1/2015. If any contribution is above half the normal cost, it will be a deduction per Government Code Section 201516(f).
4. Survey:
Maintains the language in the MOU on a salary survey, but the parties agree that there is no obligation to do a survey (other than the survey being done pursuant to the classification and compensation study) during the term of the MOU. In addition, with regard to the survey being performed under the classification and compensation study, there will be a contract re-opener once the study is completed and presented to the Police Officers' Association. Per the terms of the re-opener, there must be a mutual agreement on both the classification and compensation parts of the study.
5. Work Schedule:
A 3/12.5 + 10 work schedule for patrol with one-year trial period. Under this schedule, officers work three shifts of 12.5 hours (totaling 150 hours in a 28-day cycle) and one 10-hour shift during that period, for a total of 160 hours in a 28-day (4-week) cycle. This replaces the current 4/10 schedule in which an officer works four shifts of 10 hours each per week.
6. Compensatory Time Off:
Increased from 65 to 80 hours. This is an alternative to paid overtime.
7. Driving Instructor Pay:
$180 per month. This is an additional flat dollar premium pay to recognize the efforts of the eight officers who have departmental responsibility training other officers.
9. Health Insurance:
City to provide health insurance up to the cost of the PORAC Plan with Police Officers' Association members paying 5% towards health insurance plans chosen effective 4/1/2013. The City will pay for members' health insurance (for the health insurance plan chosen through the cafeteria) up to a maximum of the rate established for the PORAC plan for employees whether they choose single, employee + 1 or employee + 2. If the plan chosen is less costly than the rates of the PORAC plan, they will still pay 5% of the premium for the plan chosen. Thus, all members, regardless of what plan is chosen will pay 5% of the premium unless the plan chosen is more costly than the PORAC rate. In that case, the employee will pay the difference between the PORAC premium rate and the more expensive plan as well as 5% of the PORAC premium rate for the coverage chosen, i.e., single, employee + 1 or employee + 2. Employees will not receive any cash back from the cafeteria for the difference between the PORAC premium rate and the rate for the plan chosen if less costly than the PORAC rate. Any employee opting-out of health insurance will receive 95% of the single PORAC rate that may be deposited in a flexible spending account.
10. Flat Rate Specialty Pay:
The parties agree to flat rate the Crime Scene Investigator (CSI) pay at $250 per month effective 1/1/13 in lieu of the current 3%.
11. Holidays and Vacation:
Modify holiday article providing that employees may cash out unused holidays, by reducing the amount of holiday hours that may be cashed out from 110 to 30. At the end of the year, any additional unused holiday hours will be added to the employee's vacation accrual. Employees can cash out up to 80 hours of vacation in the last payroll each year.
12. Sick Leave and Family Medical Leave:
Sick leave will now run concurrently with the Federal and State laws requiring family medical leave (FMLA/CFRA/PDL).
13. Computer Loan Program:
Although not part of the original MOU, the parties agreed to eliminate the computer loan program.
14. Drug-Testing:
Parties agree to modify drug-testing language to make it clear that regardless of whether an employee changes the class of their driver license, he/she must be drug tested at least once every five years.
California Teamsters Local 911
1. Term of Agreement:
January 1, 2013 to December 31, 2015.
2. Salary/Pension Contribution:
Current employees will pay 7% towards pensions beginning 3/9/2013. Employees receive a 9.5% salary increase on 3/9/2013.
3. Retirement:
The formula for new members (as defined in the Pension Reform Act) is 2%@62, and based on the average compensation of the last three years (as opposed to the single highest year). New members pay the higher of 7% or half the normal cost.
4. Survey:
There will be a contract re-opener once the classification and compensation study is completed and presented to the Teamsters. Per the terms of the re-opener, there must be a mutual agreement on both the classification and compensation parts of the study.
5. Work Schedule:
Within 90 days of MOU approval, employees at City Hall will work a 9/80 work schedule with City Hall remaining open every day between Monday and Friday. As an alternative, maintenance employees who work in the Public Works Yard may be assigned a 4/10 work schedule. This will be a one-year trial period to evaluate the effectiveness of these work schedules.
6. Health Insurance:
City to provide health insurance up to the cost of the Kaiser HMO Plan with Teamsters members paying 3% towards health insurance plans chosen effective 4/1/2013. The City will pay for members' health insurance (for the health insurance plan chosen through the cafeteria) up to a maximum of the rate established for the Kaiser HMO plan for employees whether they choose single, employee + 1 or employee + 2. If the plan chosen is less costly than the rates of the Kaiser HMO plan, they will still pay 3% of the premium for the plan chosen. Thus, all members, regardless of what plan is chosen will pay 3% of the premium unless the plan chosen is more costly than the Kaiser HMO rate. In that case, the employee will pay the difference between the Kaiser HMO premium rate and the more expensive plan as well as 3% of the Kaiser HMO premium rate for the coverage chosen, i.e., single, employee + 1 or employee + 2. Employees will not receive any cash back from the cafeteria for the difference between the Kaiser HMO premium rate and the rate for the plan chosen if less costly than the Kaiser HMO rate. Any employee opting-out of health insurance will receive 97% of the single Kaiser HMO rate that may be deposited in a flexible spending account.
7. Shift Differential:
For employees who work graveyard and swing shifts, their shift differential is increased by $0.25 per hour.
8. Tool Allowance:
Increase from $400 to $700 annually for the Equipment Mechanic.
9. Boot Allowance:
Modification to manner and amount of compensation for new work boots and resoles for employees who wear safety boots for their jobs as defined.
10. Standby Pay:
Information Services Network Administrators are eligible for this pay of $250 per week and will be required to be available.
11. Sick Leave and Family Medical Leave:
Sick leave will now run concurrently with the Federal and State laws requiring family medical leave (FMLA/CFRA/PDL).
12. Computer Loan Program:
Although not part of the original MOU, the parties agreed to eliminate the computer loan program.
Manhattan Beach Firefighters' Association
1. Term of Agreement:
January 1, 2013 to December 31, 2015.
2. Salary/Pension Contribution:
Current employees will pay 9% towards pensions beginning 3/23/2013. Current employees will pay additional 3% pension cost sharing beginning 1/1/2014 per Government Code Section 201516(f). Employees receive a 9% salary increase on 3/23/2013, a 3% increase on 1/1/2014, and a 2.5% increase on 1/15/2015.
3. Retirement:
The formula for new members (as defined in the Pension Reform Act) is 2.7%@57, and based on the average compensation of the last three years (as opposed to the single highest year). New members pay the higher of 9% or half the normal cost from 1/1/2013 through 12/31/2014, and pay the higher of 12% or half the normal cost starting 1/1/2015. If any contribution is above half the normal cost, it will be a deduction per Government Code Section 201516(f).
4. Survey:
There will be a contract re-opener once the classification and compensation study is completed and presented to the Firefighters' Association. Per the terms of the re-opener, there must be a mutual agreement on both the classification and compensation parts of the study.
5. Overtime:
Effective July 1, 2013, the overtime rate for the Fire Marshal and Fire Inspector, when working a suppression shift, will be reduced from the 40 hour rate to the 56 hour rate.
6. Training:
Modification to compensation for employees who are in training, where employees shall be paid for their regular shift on days of the week which overlap the days which they would otherwise be on duty and shall be paid for their hours in training (at time and one half) while in training. This is a trial program, which the Fire Chief will evaluate.
7. Health Insurance:
City to provide health insurance up to the cost of the PORAC Plan with Firefighters' Association members paying 5% towards health insurance plans chosen effective 1/1/2014. The City will pay for members' health insurance (for the health insurance plan chosen through the cafeteria) up to a maximum of the rate established for the PORAC plan for employees whether they choose single, employee + 1 or employee + 2. If the plan chosen is less costly than the rates of the PORAC plan, they will still pay 5% of the premium for the plan chosen. Thus, all members, regardless of what plan is chosen will pay 5% of the premium unless the plan chosen is more costly than the PORAC rate. In that case, the employee will pay the difference between the PORAC premium rate and the more expensive plan as well as 5% of the PORAC premium rate for the coverage chosen, i.e., single, employee + 1 or employee + 2. Employees will not receive any cash back from the cafeteria for the difference between the PORAC premium rate and the rate for the plan chosen if less costly than the PORAC rate. Any employee opting-out of health insurance will receive 95% of the single PORAC rate that may be deposited in a flexible spending account.
8. Discipline:
The parties added provisions to comply with the Firefighters' Procedural Bill of Rights Act on disciplinary appeals.
9. Sick Leave and Family Medical Leave:
Sick leave will now run concurrently with the Federal and State laws requiring family medical leave (FMLA/CFRA/PDL).
10 Computer Loan Program:
Although not part of the original MOU, the parties agreed to eliminate the computer loan program.
CONCLUSION:
The MOUs presented for City Council approval reflect many months of collaborative negotiating by the City and each bargaining unit. Each agreement provides the City's valued employees with fair wages and compensation while also maintaining the City's fiscal responsibility. The City Council's major objectives of pension reform and medical costs have been addressed and provide the groundwork to control future costs in these important areas of employee compensation. We would like to thank the Manhattan Beach Police Officers' Association, California Teamsters Local 911, and the Manhattan Beach Firefighters' Association, for their efforts and cooperation in reaching these agreements. This achievement reflects the City's excellent relations with its employees, and the spirit of cooperation that exists.
Staff recommends that the City Council approve the successor Memoranda of Understanding (MOUs) between the City and the Manhattan Beach Police Officers' Association, California Teamsters Local 911, and the Manhattan Beach Firefighters' Association, each with the term of January 1, 2013, through December 31, 2015, and adopt Resolution No. 13-0017.
Attachments:
1. Fiscal Implications Breakdown by Fiscal Year and Category
2. Manhattan Beach Police Officers' Association Memorandum of Understanding
3. California Teamsters Local 911 Memorandum of Understanding
4. Manhattan Beach Firefighters' Association Memorandum of Understanding
5. Resolution No. 13-0017