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HomeMy WebLinkAbout20 - Amendment to MOU and Supplemental MOU - NBPMA, NBFMA and Fire Fighters Association• June 23, 1997 Agenda Item No. 20 CITY OF NEWPORT BEACH. _ ADMINISTRATIVE SERVICES DEPARTMEN }� Resource Management Division JUN 2 3M June 23, 1997 C — D 0490 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY FROM: Dennis Danner, Administrative Services Director 4. 41 SUBJECT: AMENDMENT TO MEMORANDUM OF UNDERSTANDING AND SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING - NEWPORT BEACH POLICE MANAGEMENT ASSOCIATION, FIRE MANAGEMENT ASSOCIATION AND FIRE FIGHTERS ASSOCIATION DISCUSSION: The Total Compensation Formula that presently exists in the Memorandums of Understanding with the Newport Beach Police Management, Fire Management, and Firefighters Associations is made up of Salaries, Employer Retirement Contribution, Employee Retirement Contribution, and Health Insurance benefits. The City's Employer Retirement Contribution is scheduled to increase approximately 3.2% on July 1, 1997. Under the existing Total Compensation Formula for these associations, this increase would necessitate a decrease in employee's salaries since total compensation is not scheduled to change on July I". This process follows past practice whereby salaries would increase or decrease in inverse proportion to the increase or decrease to the Employer's Retirement Contribution rate. We have been negotiating with these associations for over 6 weeks to seek a solution to this dilemma of reducing salaries. The following is a summary of the outcome of these negotiations: 1. The agreements that are scheduled to expire on December 31, 1997 have been extended to December 31, 1998. 2. A 2% salary increase has been approved for the period January 1, 1998 to December 31, 1998. 3. The Total Compensation Formula has been revised to remove the Employer Retirement Contribution from the formula, thus creating a Modified Total Compensation Formula. This Modified Total Compensation Formula will be in existence only until December 31, 1998. 4. Based upon the Modified Total Compensation Formula, the City will pay any increase in the Employer Retirement Contribution on July 1, 1997. 0 i 5. Commencing in October of 1998, and October 1999, and 2000, the City and Associations will meet and confer on all matters within the scope of representation with the intent to reach an agreement on an MOU to be effective the first pay period the following January. 6. In negotiating adjustments to compensation, the City and Associations shall consider information regarding salaries and benefits paid by other Law Enforcement Agencies in Orange County, increases or decreases in the Consumer Price Index or similar indexes during the period since the last adjustment in compensation, internal relationships, increases in salary, compensation or benefits offered or provided to other City recognized employee associations, matters fundamental to prudent fiscal policy and fiscal decisions such as current and projected revenue, the level of reserves, unfunded contingent obligations and potential liability claims, and any other information either the City or Associations considers relevant to the issue. T Effective the first pay period in July, 1998, 1999, 2000, and 2001, the City shall, if necessary, adjust total compensation, using the expired Modified Total Compensation Formula, to the average of the 5 highest paid benchmark positions in Orange County. This is a "fail-safe" arrangement to make sure that association members do not fall below the compensation level they would have achieved had the Modified Total Compensation Formula not expired on December 31, 1998. After 2001, there will be no reference to a compensation formula in the Memorandums of Understanding with these Associations. The total cost of these adjustments are estimated at $650,000, and are factored into the City's i estimated General Fund fiend balance for the 1997-98 fiscal year. The Associations are currently voting on this proposal, and if approved by the City Council and the Associations, will become effective for the first pay period of July, 1997. RECOMMENDATION: That the City Council approve the attached Amendments to Memorandums of Understanding and Supplemental Memorandums of Understanding for the Newport Beach Police Management Employees, Fire Management Employees, and Firefighters Associations, to be effective on July 1, 1997. C:\WINWORDIDENN[SWP\STAFFREP.DOC 06/17/97 7:12 AM 0 0 is AMENDMENT TO MEMORANDUM OF UNDERSTANDING This Amendment to the current Memorandum of Understanding between the City of Newport Beach (City) and the Newport Beach Police Management Association (NBPMA) is dated for purposes of identification and is based on the following: RECITALS A. City and NBPMA are Parties to a Memorandum of Understanding that currently expires on December 311, 1997 (Current MOU); B. Subsequent to execution of the Current MOU, City received notice from PERS that, effective July 1, 1997, the rate of employer retirement contributions would substantially increase with the amount of the increase contingent on the funding horizon chosen by the City (2000, 2011 or 2016); C. According to the Current MOU and long-standing practice, the compensation paid to NBPMA members is negotiated and established on the basis of "Total Compensation" which consists of three (3) factors: salary, employer and employee retirement contributions, and City employee health plan contributions; D. According to a long-standing pattern/practice and consistent with the concept of negotiating compensation of the basis of Total Compensation, City has increased the salaries of NBPMA members when PERS has decreased the employer retirement contribution rate and decreased salaries when PERS has increased the employer retirement contribution rate; E. NBPMA members would experience substantial reductions in salary if, on July 1, 1997, City followed the established past pattem/practice in response to increases in PERS' employer contribution rates; F. City and NBPMA intend, through this Amendment to: 1. Extend the term of the Current MOU for a period of one (1) year; 2. Modify or eliminate certain provisions of the Current MOU and eliminate the past pattern/practice of reducing the salary of NBPMA members in response to increases in the PERS' employer contribution rate; 1 9 0 3. Eliminate provisions in the Current MOU, and the long- . standing pattem/practice, which mandate consideration of certain criteria in negotiating increases in Total Compensation, subject to execution of a Supplemental MOU (SMOU - copy attached as Exhibit "C'J which commits City to maintain a certain level of Modified Total Compensation during the term of the SMOU; NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: SECTION A. Amendments to Current MOU follows; Paragraph "2" of the Preamble is amended to read as "NBPMA representatives and City representatives have reached a tentative Agreement as to wages, hours and other terms and conditions of employment for the period from January 1, 1996 to December 31, 1998 and this tentative Agreement has been embodied in this MOU." Section 1B1 is amended to read as follows: 11 1. Except as specifically provided otherwise, any ordinance, resolution or action of the City Council necessary to implement this MOU shall be considered effective as of January 1, 1996. This MOU shall be effective as of January 1, 1996 and shall remain in full force and effect until December 31, 1998. The provisions of this MOU shall remain in effect subsequent to the date of expiration in the event the parties are meeting and conferring on a successor MOU as provided in the SMOU." 3. The provisions of Section 2A of the Current MOU are deleted in their entirety. This deletion confirms and implements the intent of the Parties that, subject to the provisions of the SMOU, the "Compensation Policy" is of no force or effect as of the effective date of this Amendment. This deletion also confirms and implements the intent and understanding of the Parties to eliminate, subject to provisions of the SMOU, the long-standing pattern/practice which mandates the use of Total Compensation as the basis for, and the consideration .of specific criteria in, negotiating salaries and benefits. 2 0 0 4. Section 2B1 (a) is amended to read as follows: • A. Direct Wa-ge Payments 1. Pay for Time Worked "(a) Salary Adjustments: The Parties have agreed on internal relationships among the various classifications represented by NBPMA, as well as the relationship between each step in those classifications and the Benchmark Position. The term Benchmark Position shall mean the top step non -specialty police officer of any municipal police department in Orange County and top step Patrol Deputy for the County of Orange without consideration of special pay or benefit categories or designations such as Master Officer or Senior Officer which are based on a combination of experience, training or education. These internal relationships have been computed in terms of numbers which, when multiplied by the Criteria Salary (the salary that must be paid to the Benchmark Position in Newport Beach to achieve the appropriate level of Total Compensation or Modified Total Compensation and not the salary actually paid to the Benchmark Position in Newport Beach which is beyond the control of the Parties) represent the salary to be paid to the classifications represented by NBPMA. The multipliers for each step of each classification represented by NBPMA are shown on the Matrix attached as Exhibit `B". The matrix shall be effective on January 1, 1996. The salaries of classifications represented by NBPMA shall be subject to the following mandatory adjustments calculated and implemented in accordance with the foregoing: (i) Effective the first pay period of January, 1997, the Total Compensation for all classifications represented by NBPMA shall be increased by fifty percent (50%) of the difference, as of July 1, 1996, between the Total Compensation of the Benchmark Position in City and the average Total Compensation of the five (5) Benchmark Positions with the highest Total Compensation. The ranking and average Total Compensation of the five (5) Benchmark Positions with the highest Total Compensation of the Benchmark Position as of July 1, 1996 shall be calculated on the basis of the survey conducted by the Orange County Division of the League of California Cities (League Survey) as verified and/or augmented by telephonic or written communication by the City and/or NBPMA, the results of which shall be made 0 available to the other Party. The term Total Compensation 3 0 0 shall mean a combination of salary, retirement benefits (including contributions required to be paid to PERS by an • employer and the contributions required to be paid by an employee even if paid by the City) and health insurance contributions. For purposes of determining Total Compensation, the salary and retirement benefits shall be calculated using the amount paid to, or on behalf of, the Benchmark Position and health insurance contributions shall be calculated based on the maximum contribution made by the employer on behalf of an employee with two or more dependents who is enrolled in the health plan having the largest number of employee participants. (ii) Effective the first pay period in July, 1997, the Total Compensation for all classifications represented by NBPMA shall be increased by the remaining fifty percent (50%) of the difference, as of July 1, 1996, between the Total Compensation paid to the Benchmark Position in City and the average Total Compensation paid to the five (5) Benchmark Positions with the highest Total Compensation. (iii) Effective the first pay period in January, 1998, City shall increase salaries for all classifications represented by NBPMA by two percent (2%). NBPMA shall be entitled to reopen negotiations solely on the issue of appropriate salary adjustments as of the first pay period iri January, 1998, in the event the Consumer Price Index (Los Angeles/Long Beach, all urban consumers) for the twelve month period ending October 1, 1997, exceeds five percent (5%). B. PERS Rate Increases (i) Effective July 1, 1996, City shall assume the payment of the full employer retirement contribution increase for safety employees (1.76%) without any corresponding reduction in the salary or Total Compensation of any NBPMA member. (ii) Effective July 1, 1997, City shall assume the payment of the full employer retirement contribution increase for safety . employees (approximately 3.2%) without any corresponding reduction in the salary or Total Compensation of any NBPMA member 0 K 5. Section 2132(e) is added to read as follows: (e) NBPMA members shall receive two hours of Flex Leave in addition to their normal Flex Leave accrual for each quarter (January through March, April through June, July through September and October through December) during the period from May 1, 1995 through June 30, 1997 in which he/she is assigned to work any 3/12 shift. Effective July 1, 1997, NBPMA members shall receive two hours of Holiday Pay in addition to their normal Holiday Pay for each quarter in which he/she is assigned to work any 3/12 shift. 6. Section 2132(f) is added to read as follows: (f) NBPMA members who were employed by City on February 1', 1996 shall receive Flex Leave equal to one and one-half times the hours worked during their normal daily work shift as scheduled in the month of February, 1996. This grant of Flex Leave to NBPMA members does not create, and is not evidence of, any pattern or practice of granting Flex Leave or other consideration for working assigned shifts during any future leap year. NBPMA agrees that City has the right, in the future, to respond to the need to staff February 29"' without granting any additional Flex Leave by, among other options, reducing manpower on certain shifts, modifying assignments/ schedules, or scheduling an additional day off. SECTION 2. Contingency The SMOU constitutes the primary consideration for NBPMA's Agreement to eliminate provisions of the Current MOU (Section 2A) and the long-standing pattern/practice which mandate consideration of certain criteria in negotiating adjustments to Total Compensation. The SMOU ensures that the Modified Total Compensation paid to NBPMA members will remain at least equal to the average Modified Total Compensation of the five (5) Benchmark Positions with the highest Modified Total Compensation. Accordingly, this Amendment shall not be effective until the SMOU is fully executed by authorized representatives of the Parties. Signatures 0 5 9 0 SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING 0 This Supplemental Memorandum of Understanding (SMOU) between the City of Newport Beach (City) and the Newport Beach Police Management Association (NBPMA) is dated the _ day of 1997 for purposes of identification and is based on the following: A. City and NBPMA have entered into an agreement to amend provisions of the Current MOU (Amendment - copy attached) B. The SMOU and the Amendment collectively achieve the objectives of the Parties as indicated in the Amendment Recitals and implement the agreement of the Parties with respect to matters beyond the term of the Amendment. C. The SMOU is intended to establish general guidelines for meeting and conferring regarding matters within the scope of representation while providing for periodic and mandatory adjustments necessary Ah ensure that Modified Total Compensation for NBPMA members is, OW specified dates during the term, at least equal to the average of the Modified Total Compensation paid to the five (5) Benchmark Positions with the highest Modified Total Compensation. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS 1. Definitions For purposes of this SMOU, the terms Total Compensation, Benchmark Position, League Survey and Criteria Salary shall be defined/ calculated as specked in the Amendment. 2. Term/Effective Date. The term of this SMOU shall commence on July 1, 1998 and expire on July 1, 2001. This SMOU shall be effective: (a) when signed by authorized representatives of the Parties; and (b) upon execution of the Amendment by authorized representatives of the Parties. 3. General Criteria for Negotiations. The Parties shall, commencing in October of 1998, and October in 1999 and 2000 if required due to the expiration of an MOU approved subsequent to the Amendment, meet and confer on all matters within the scope of representation with the intent to reach agreement on an MOU to be effective the first pay period the following January. In negotiating adjustments to compensation, the Parties shall, during the term of this SMOU, consider information regarding salaries and benefits paid by other Law Enforcement Agencies in Orange County, increases or decreases in the Consumer Price Index or similar indexes during the period since the last adjustment in compensation, internal relationships, increases in salary, compensation or benefits offered or provided to other City recognized employee associations, matters fundamental to prudent fiscal policy and fiscal decisions such as current and projected revenue, the level of reserves, unfunded contingent obligations and potential liability claims, and any other information either Party considers relevant to the issue. 4. SuDolemental Adiustments. Effective the first pay period in July, 1998,1999, 2000, and 2001, the City shall, if necessary, adjust Modified Total Compensation (Total Compensation less employer retirement contributions but including employer "pickup" or payment of employee retirement contributions) paid to NBPMA members to a level at least equal to the average Modified Total Compensation paid to the five (5) Benchmark Positions with the highest Modified Total Compensation. The comparison of Modified Total Compensation shall be based on the League Survey published in the preceding January, subject to verification of accuracy by the City and/or NBPMA with the results of verification to be shared by the Parties. 5. Adjustment Procedures Once the appropriate adjustment in Modified Total Compensation has been agreed to (subsequent to meet and confer) or calculated (in the case of adjustments in the first pay period in July that may be necessary to comply with Section 4), City shall calculate the corresponding increase in the Criteria Salary for the Benchmark Position in Newport Beach necessary to achieve the appropriate level of Modified Total Compensation and adjust salaries for all classifications represented by NBPMA in accordance with the multipliers in the Matrix. 0 0 11 AMENDMENT TO MEMORANDUM OF UNDERSTANDING This Amendment to the current Memorandum of Understanding between the City of Newport Beach (City) and the Newport Beach Fire Management Association (NBFMA) is dated this _ of 1997, for purposes of identification and is based on the following: RECITALS A. City and NBFMA are parties to a Memorandum of Understanding that currently expires on December 31St, 1997 (Current MOU); B. Subsequent to execution of the Current MOU, the City received notice from PERS that, effective July 1, 1997, the rate of employer retirement contributions would substantially increase with the amount of the increase contingent on the funding horizon chosen by the City (2000, 2011 or 2016 C. According to the Current MOU and long-standing pattem/practice, the compensation paid to NBFMA members is negotiated and established on the basis of "Total Compensation" which consists of three factors: salary, employer and employee retirement contributions, and City employee health plan contributions; D. According to a long-standing pattern/practice and consistent with the concept of negotiating compensation of the basis of Total Compensation, the City has increased the salaries of NBFMA members when PERS has decreased the employer retirement contribution rate and decreased salaries when PERS has increased the employer retirement contribution rate; E. NBFMA members would experience substantial reductions in salary if, on July 1, 1997, the City followed the established past pattern/practice in response to increases in PERS employer contribution rates; F. City and NBFMA intend, through this Amendment to: Extend the term of the Current MOU for a period of one year; E 0 6 2. Eliminate any provisions in the Current MOU that pertain to, and the past pattern/practice of, reducing the salary of NBFMA members in response to increases in the PERS employer contribution rate; 3. Eliminate provisions in the Current MOU that relate to, incorporate by reference or describe any compensation policy, and the long-standing pattern/practice which involves consideration of certain criteria in negotiating increases in Total Compensation, subject to execution of a Supplemental MOU (SMOU - copy attached as Exhibit "C") which commits the City to maintain a certain level of Modified Total Compensation during the term of the SMOU; NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: SECTION A. AMENDMENTS TO CURRENT MOU Paragraph "2" of the introductory paragraphs is amended to read as follows; "NBFMA representatives and City representatives have reached a tentative agreement as to wages, hours and other terms and conditions of employment for the period from January 1, 1996 to December 31, 1998 and this tentative agreement has been embodied in this MOU." 2. Paragraph "3" of the introductory paragraphs is amended to read as follows: " The City acknowledges and appreciates the cooperation of NBFMA during the meet and confer process leading to the adoption of the 1996-98 MOU. 3. Section 1131 is amended to read as follows: " 1. Except as specifically provided otherwise, any ordinance, resolution or action of the City Council necessary to implement this MOU shall be considered effective as of January 1, 1996. This MOU shall be effective as of January 1, 1996 and shall remain in full force and effect until December 31, 1998. The provisions of this MOU shall remain in effect subsequent to the date of expiration in the event the parties are meeting • and conferring on a successor MOU as provided in the SMOU." 6 • 4. The provisions of Section 2A of the Current MOU are modified to read as follows: A. Pay for Time Worked 1._ Salary/Total Compensation Adiustments (a) The Parties have agreed on salary differentials among the various classifications represented by NBFMA, as well as the relationship between each step in those classifications and the Benchmark Position. These salary differentials and the salary schedule (as of January 1, 1996) for all classifications as represented by NBFMA are reflected in the Matrix attached as Exhibit A. Subject to the provisions of Subsection (b), the adjustments to Total Compensation required by this MOU shall achieve and maintain the following salary differentials reflected in the Matrix: (b) Effective January 1, 1996, the salary for the bottom step Fire Battalion Chief shall be five percent (5%) greater than the salary for the top step Fire Captain. Concurrent with change in overtime compensation provided in Section 4 (Overtime), the salary of the bottom step Fire Battalion Chief shall be six and three-quarters percent (6.75%) higher than the top step Fire Captain. (c) For purposes of this MOU, the term Benchmark Position shall mean the top step firefighter of any municipal fire department in Orange County without adjustment for any specific combination of experience, training or education. The Benchmark Position in Newport Beach is top step Firefighter. The term Total Compensation shall mean a combination of salary, retirement benefits (including contributions required to be paid to PERS by an employer and the contributions required to be paid by an employee even if paid by the City) and health insurance contributions. For purposes of determining Total Compensation, the salary and retirement benefits shall be calculated using the amount paid to, or on behalf of, the Benchmark Position and health insurance contributions shall be calculated based on the maximum contribution made by the employer on behalf of an employee with two or more dependents is enrolled in the health plan having the largest number 0V employee participants. The ranking and average Total Compensation of the five (5) Benchmark Positions with the highest Total Compensation of the Benchmark Position as any speck date shall be calculated on the basis the information in the survey conducted by the Orange County Division of the League of California Cities (League Survey) current as of the date specked for comparison as verified and/or augmented by telephonic or written communication by the City and/or NBFMA, the results of which shall be made available to the other Party. The average Total Compensation paid to the five (5) Benchmark Positions with the highest Total Compensation shall be determined solely on the basis of the factors specified in this MOU and without regard to weighting, the number of officers or employees in any municipal fire department or any other similar factor. The term Criteria Salary shall mean the salary that must be paid to the Benchmark Position in Newport Beach to achieve the appropriate level of Total Compensation and not the salary actually paid to the Benchmark Position in Newport Beach which is beyond the control of the Parties. (d) Effective October 1, 1996, the City shall adjust the salaries for all classifications represented by NBFMA to reflect the Criteria Salary of the Benchmark Position in Newport Beach that would correspond to an increase in Total Compensation paid to the Benchmark position in Newport Beach equal to fifty percent (50%) of the difference, based on the League Survey of July, 1995, between the average Total Compensation paid to the five (5) Benchmark Positions with the highest Total Compensation and the Benchmark Position in Newport Beach (e) Effective March 1, 1997, the salaries for all classifications represented by NBFMA shall be adjusted to reflect a Criteria Salary for the Benchmark Position in Newport Beach that corresponds to a level of Total Compensation which is, based on the League Survey published in July, 1996, equal to the average Total Compensation paid to the five (5) Benchmark Positions with the highest Total Compensation. (f) Effective the first pay period in January, 1998, the City shall increase salaries for all classifications represented by NBFMA by 2%. NBFMA shall be entitled to reopen negotiations solely on the issue of appropriate salary adjustments as of the first pay period in January, 1998, in the event the Consumer Price Index (Los Angeles/Long Beach, all urban consumers) for the twelve month period ending October 1, 1997, exceeds five percent (5%). (g) Effective July 1, 1996, the City shall assume the payment of the full employer retirement contribution increase for safety employees (1.76%) without any corresponding reduction in the salary or Total Compensation of any NBFMA member. (h) Effective July 1, 1997, the City shall assume the payment of the full employer retirement contribution increase for safety employees (approximately 3.2%) without any corresponding reduction in the salary or Total Compensation of any NBFMA member SECTION 2. CONTINGENCY 0 The SMOU constitutes the consideration for NBFMA's agreement to modify and/or eliminate provisions of the Current MOU (Section 2A) and a long-standing pattern/practice which mandate consideration of certain criteria in negotiating adjustments to Total Compensation or link compensation of NBFMA members to the compensation paid to other City employees. The SMOU ensures that the Modified Total Compensation paid to NBFMA members will, during the term of the SMOU, correspond to a level of Total Compensation of the Benchmark Position in Newport Beach that is at least equal to the average Modified Total Compensation of the five (5) Benchmark Positions with the highest Modified Total Compensation. Accordingly, this Amendment shall not be effective until the SMOU is fully executed by authorized representatives of the Parties. Signatures I'1►Ii'- L 0 SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING This Supplemental Memorandum of Understanding (SMOU) between the City of Newport Beach (City) and the Newport Beach Fire Management Association (NBFMA) is dated the _ day of , 1997 for purposes of identification and is based on the following: A. City and NBFMA have entered into an agreement to amend provisions of the Current MOU (Amendment - copy attached) B. This SMOU and the Amendment collectively achieve the objectives of the Parties as indicated in the Amendment Recitals and implement the agreement of the Parties with respect to matters beyond the term of the Amendment. C. This SMOU is intended to establish general guidelines for meeting and conferring regarding matters within the scope of representation while providing for periodic and mandatory adjustments necessary to ensure that Modified Total Compensation for NBFMA members, on specified dates during the term of this'SMOU, corresponds to a level of Total Compensation paid to Benchmark Position in Newport Beach that is at least equal to the average of the Modified Total Compensation paid to the five (5) Benchmark Positions with the highest Modified Total Compensation. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS 1. Definitions For purposes of this SMOU, the terms Total Compensation, Benchmark Position, Matrix and League Survey shall be defined/ calculated as specified in the Amendment. 2. Term/Effective Date. • The term of this SMOU shall commence on July 1, 1998 and expire on July 1, 2001. This SMOU shall be effective: (a) when signed by -6 authorized representatives of the Parties; and (b) upon execution of the Amendment by authorized representatives of the Parties. 0 3. General Criteria for Negotiations. The Parties shall, commencing in October of 1998, and October in 1999 and 2000 if required due to the expiration of an MOU approved subsequent to the Amendment, meet and confer on all matters within the scope of representation with the intent to reach agreement on an MOU to be effective the first pay period the following January. In negotiating adjustments to compensation, the Parties shall, during the term of this SMOU, consider information regarding salaries and benefits paid to equivalent positions by other municipal fire departments in Orange County, increases or decreases in the Consumer Price Index or similar indexes during the period since the last adjustment in compensation, internal relationships, increases in salary, compensation or benefits offered or provided to other City recognized employee associations, matters fundamental to prudent fiscal policy and fiscal decisions such as current and projected revenue, the level of reserves, unfunded contingent obligations and potential liability claims, and any other information either Party considers relevant to the issue. 4. Supplemental Adjustments. n U Effective the first pay period in July, 1998;1999, 2000, and 2001, the City shall, if necessary, adjust Modified Total Compensation (Total Compensation less employer retirement contributions but including employer "pickup" or payment of employee retirement contributions) paid to NBFMA members to correspond to a level of Modified Total Compensation paid to the Benchmark Position in Newport Beach which is at least equal to the average Modified Total Compensation paid to the five (5) Benchmark Positions with the highest Modified Total Compensation. The comparison of Modified Total Compensation shall be based on the League Survey published in the preceding January, subject to verification of accuracy by the City and/or NBFMA with the results of verification to be shared by the Parties. 5. Adjustment Procedures Once the appropriate adjustment in Modified Total Compensation of the Benchmark Position has been agreed to (subsequent to meet and confer) or calculated (in the case of adjustments in the first pay period in July that may be necessary to comply with Section 4), City shall adjust the Modified Total Compensation of all classifications represented by 9 0 NBFMA in accordance with the Matrix while maintaining the salary differentials specified in the Amendment. SMOUF1 L] i 0 0 n �J 9 AMENDMENT TO MEMORANDUM OF UNDERSTANDING This Amendment to the current Memorandum of Understanding between the City of Newport Beach (City) and the Newport Beach Firefighters Association (NBFA) is dated this _ of , 1997, for purposes of identification and is based on the following: RECITALS A. City and NBFA are parties to a Memorandum of Understanding that currently expires on December 31', 1997 (Current MOU); B. Subsequent to execution of the Current MOU, the City received notice from PERS that, effective July 1, 1997, the rate of employer retirement contributions would substantially increase with the amount of the increase contingent on the funding horizon chosen by the City (2000, 2011 or 20166 C. According to the Current MOU and long-standing pattern/practice, the compensation paid to NBFA members is negotiated and established on the basis of "Total Compensation" which consists of three factors: salary, employer and employee retirement contributions, and City employee health plan contributions; D. According to a long-standing pattern/practice and consistent with the concept of negotiating compensation of the basis of Total Compensation, the City has increased the salaries of NBFA members when PERS has decreased the employer retirement contribution rate and decreased salaries when PERS has increased the employer retirement contribution rate; E. NBFA members would experience substantial reductions in salary if, on July 1, 1997, the City followed the established past pattern/practice in response to increases in PERS employer contribution rates; F. City and NBFA intend, through this Amendment to: 1. Extend the term of the Current MOU for a period of one year; 0 4V f C 2. Modify or eliminate certain provisions of the Current MOU and eliminate the past pattern/practice of reducing the salary of NBFA members in response to increases in the PERS employer contribution rate; 3. Eliminate provisions in the Current MOU, and the long-standing pattern/practice, which mandate consideration of certain criteria in negotiating increases in Total Compensation, subject to execution of a Supplemental MOU (SMOU - copy attached as Exhibit "C") which commits the City to maintain a certain level of Modified Total Compensation during the term of the SMOU; NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: SECTION A. AMENDMENTS TO CURRENT MOU Paragraph "2" of the introductory paragraphs is amended to read as follows; "NBFA representatives and City representatives have reached a tentative agreement as to wages, hours and other terms and conditions of employment for the period from January 1, 1996 to December 31, 1998 and this tentative agreement has been embodied in this MOU." Paragraph "3" of the introductory paragralihs is amended to read as follows: " The City acknowledges and appreciates the cooperation of NBFA during the meet and confer process leading to the adoption of the 1996-98 MOU. 3. Section 1131 is amended to read as follows: " 1. Except as specifically provided otherwise, any ordinance, resolution or action of the City Council necessary to implement this MOU shall be considered effective as of January 1, 1996. This MOU shall be effective as of January 1, 1996 and shall remain in full force and effect until December 31, 1998. The provisions of this MOU shall remain in effect subsequent to the date of expiration in the event the parties are meeting and conferring on a successor MOU as provided in the SMOU." I0 IA 9 4. The provisions of Section 2A of the Current MOU are deleted in their entirety. This deletion confirms and implements the intent of the Parti that, except to the extent embodied in the SMOU, the "Compensation Policy" is of no force or effect as of the effective date of this Amendment. This deletion also confirms and implements the intent and understanding of the Parties to eliminate, except to the extent embodied in the SMOU, the long-standing pattem/practice which mandates the use of Total Compensation as the basis for, and the consideration of specific criteria in, negotiating salaries and benefits. 5. Section 2B1 is amended to read as follows: A. Direct Wage Payments 1. Internal relationships. The Parties have agreed on salary differentials (Internal Relationships) among the various classifications represented by NBFA, as well as the relationship between each step in those classifications and the Benchmark Position. The term Benchmark Position shall mean the top step firefighter of any municipal fire department in Orange County without adjustment for any speck combination experience, training or education. These internal relationships have been computed in terms of percentages which, when multiplied by the salary paid to the Benchmark Position in Newport Beach, represent the salary to be paid to the classifications represented by NBFA. The term Total Compensation shall mean a combination of salary, retirement benefits (including contributions required to be paid to PERS by an employer and the contributions required to be paid by an employee even if paid by the City) and health insurance contributions. For purposes of determining Total Compensation, the salary and retirement benefits shall be calculated using the amount paid to, or on behalf of, the Benchmark Position and health insurance contributions shall be calculated based on the maximum contribution made by the employer on behalf of an employee with two or more dependents who is enrolled in the health plan having the largest number of employee participants. The percentages for NBFA classifications are as follows: Classification Percents Engineer 112.50% Paramedic 122.25% Fire Specialist 125.00% Line Captain 132.00% Staff Captain/Deputy Fire Marshal 139.50% The adjustments to Total Compensation required by Section 2A2 shall maintain these internal relationships. 6 Section 2B2 shall be amended to become 2A2 and to read as follows: 2. Total Compensation Adjustments/PERS Commitments City shall adjust the Total Compensation of NBFA Members and assume increases in the PERS employer retirement contribution rate as follows: (a) Effective the first pay period of October, 1996, the Total Compensation for the Benchmark Position in Newport Beach shall be increased by fifty percent (50%) of the difference, as of July 1, 1996, between the Total Compensation of the Benchmark Position in Newport Beach and the average Total Compensation of the five (5) Benchmark Positions with the highest Total Compensation. The ranking and average Total Compensation of the five (5) Benchmark Positions with the highest Total Compensation of the Benchmark Position as of July 1, 1996 shall be calculated on the basis the information in the survey conducted by the Orange County Division of the League of California Cities (League Survey) as verified and/or augmented by telephonic or written communication by the City and/or NBFA, the results of which shall be made available to the other Party. The Total Compensation of all other classifications represented by NBFA shall be adjusted as of the same pay period in accordance with the procedures specified in Subsection 2 A 1. (b) Effective the first pay period in July, 1997, the Total Compensation paid to the Benchmark Position in Newport Beach shall be adjusted to equal the average Total Compensation paid to the five (5) Benchmark Positions with the highest Total Compensation as determined by the League Survey for July 1996. The Total Compensation for �► i all other classifications represented by NBFA shall be adjusted as of the same pay period and in accordance wii the procedures specified in Subsection 2 A 1. (c) Effective the first pay period in January, 1998, the City shall increase salaries for all classifications represented by NBFA by two percent (20!0). NBFA shall be entitled to reopen negotiations solely on the issue of appropriate salary adjustments as of the first pay period in January, 1998, in the event the Consumer Price Index (Los Angeles/Long Beach, all urban consumers) for the twelve month period ending October 1, 1997, exceeds five percent (5%). (d) Effective October 1, 1996, the City shall assume the payment of the full employer retirement contribution increase for safety employees (1.76%) without any corresponding reduction in the salary or Total Compensation of any NBFA member. (e) Effective July 1, 1997, the City shall assume the payment of the full employer retirement contribution increase for safety employees (approximately 3.2%) without any corresponding reduction in the salary or Total Compensat* of any NBFA member SECTION 2. CONTINGENCY The SMOU constitutes partial consideration for NBFA's agreement to eliminate provisions of the Current MOU (Section 2A) and a long- standing patternipractice which mandate consideration of certain criteria in negotiating adjustments to Total Compensation. The SMOU ensures that the Modified Total Compensation paid to NBFA members will remain at least equal to the average Modified Total Compensation of the five (5) Benchmark Positions (excluding the Benchmark Position in Newport Beach) with the highest Modified Total Compensation. Accordingly, this Amendment shall not be effective until the SMOU is fully executed by authorized representatives of the Parties. signatures t I 0 0 ! SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING This Supplemental Memorandum of Understanding (SMOU) between the City of Newport Beach (City) and the Newport Beach Firefighters Association (NBFA) is dated the _ day of , 1997 for purposes of identification and is based on the following: A. City and NBFA have entered into an agreement to amend provisions of the Current MOU (Amendment - copy attached] B. This SMOU and the Amendment collectively achieve the objectives of the Parties as indicated in the Amendment Recitals and implement the agreement of the Parties with respect to matters beyond the term of the Amendment. C. This SMOU is intended to establish general guidelines for meeting and conferring regarding matters within the scope of representation while providing for periodic and mandatory adjustments necessary to ensure that Modified Total Compensation for NBFA members, on specified dates during the term of this SMOU, corresponds to a level of Total Compensation paid to the Berichmark Position in Newport Beach that is at least equal to the average of the Modified Total Compensation paid to the five (5) Benchmark Positions with the highest Modified Total Compensation. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS 1. Definitions For purposes of this SMOU, the terms Total Compensation, Benchmark Position, Matrix and League Survey shall be defined/ calculated as specified in the Amendment. 2. Term/Effective Date The term of this SMOU shall commence on July 1, 1998 and expire on July 1, 2001. This SMOU shall be effective: (a) when signed by ME authorized representatives of the Parties; and (b) upon execution of the Amendment by authorized representatives of the Parties. 0 3. General Criteria for Negotiations. The Parties shall, commencing in October of 1998, and October in 1999 and 2000 if required due to the expiration of an MOU approved subsequent to the Amendment, meet and confer on all matters within the scope of representation with the intent to reach agreement on an MOU to be effective the first pay period the following January. In negotiating adjustments to compensation, the Parties shall, during the term of this SMOU, consider information regarding salaries and benefits paid by other municipal fire departments in Orange County, increases or decreases in the Consumer Price Index or similar indexes during the period since the last adjustment in compensation, internal relationships, increases in salary, compensation or benefits offered or provided to other City recognized employee associations, matters fundamental to prudent fiscal policy and fiscal decisions such as current and projected revenue, the level of reserves, unfunded contingent obligations and potential liability claims, and any other information either Party considers relevant to the issue. 4. Supplemental Adjustments. W Effective the first pay period in July, 1998;1999, 2000, and 2001, the City shall, if necessary, adjust Modified Total Compensation (Total Compensation less employer retirement contributions but including employer "pickup" or payment of employee retirement contributions) paid to NBFA members to correspond to a level of Modified Total Compensation paid to the Benchmark Position in Newport Beach which is at least equal to the average Modified Total Compensation paid to the five (5) Benchmark Positions with the highest Modified Total Compensation. The comparison of Modified Total Compensation shall be based on the League Survey published in the preceding January, subject to verification of accuracy by the City and/or NBFA with the results of verification to be shared by the Parties. 5. Adjustment Procedures Once the appropriate adjustment in Modified Total Compensation of the Benchmark Position has been agreed to (subsequent to meet and confer) or calculated (in the case of adjustments in the first pay period in July that may be necessary to comply with Section 4), City shall adjust the Modified Total Compensation of all classifications represented by 0 0 NBFA in accordance with the Matrix while maintaining the salary differentials specified in the Amendment. SMOUFI