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HomeMy WebLinkAbout04 - MOU with PT Employees Assoc. NB%? 7 jr-!L_fflj�g�l TO: CITY OF � n.0 l 11 l!i rj ' COUNCIL STAFF REPORT Agenda Item No. 4 January 28, 2014 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 -644 -3002, _dkiff(cDnewportbeachea.gov Human Resources Department Terri L. Cassidy, Deputy City Manager /Human Resources Director 949 -644 -3303, tcassidy(a)newoortbeachca.gov PREPARED BY: Terri L. Cassidy, Deputy City Manager /HR Director Maggie. Williams - Dalgart, Senior Human Resources Analyst APPROVED: L(.: 4 A, V TITLE: Resolution No. 2014 : Adopting a Memorandum of Understanding with the Part Time Employees Association of Newport Beach, ABSTRACT`. On September 3, 2013, following a certified election, the Part Time Employees Association of Newport Beach (PTEANB) was formally recognized by the City as the exclusive representative for certain part -time employees. PTEANB was formed to replace the United Public Employees of California, Local. 777 (UPEC), which had disclaimed interest in the Part Time Unit in 2012. In October 2013, City and PTEANB representatives began meeting and conferring to discuss the terms of an initial memorandum of understanding between the parties, and on January 14, 2014, the parties reached agreement. The proposed Memorandum of Understanding represents agreements reached on wages, benefits, and other terms and conditions of employment for employees represented by the PTEANB for the period September 3, 2013 through June 30, 2015. City Council's adoption of the MOU is the last step in the meet and confer process, completing the agreement. RECOMMENDATION: 2014 -3 Approve Resolution No. adopting a Memorandum of Understanding between the City of Newport Beach and the Part Time Employees Association of Newport Beach. FUNDING REQUIREMENTS: See financial information in the body of the discussion. Approval of Resolution Adopting a Memorandum of Understanding with the Part Time Employees Association of Newport Beach January 28, 2014 Page 2 DISCUSSION: In 2012, the United Public Employees of California (UPEC), which had been representing part-time employees since January 2000, disclaimed interest in the Unit (effectively abandoning the group). Following a certified election, eligible part-time employees voted to replace UPEC with the newly formed Part Time Employees Association of Newport Beach ( PTEANB), to represent approximately 60 employees in various classifications throughout the City, the majority of which are assigned to Recreation, Library and Police. Of the 60 employees in the unit, 25 have worked for the City for ten years or more. The part-time employees serve an important function and provide excellent service to the Newport Beach community. The benefits for part-time staff are limited to a cafeteria allowance for medical (or an "opt -out" cash equivalent) at the rate of $3.75 per hour worked; enrollment in the California Public Employees Retirement Systems (PERS), with employees contributing 8% toward the benefit; and a Flex Leave benefit of .04 hour for every hour worked (the average benefit is 46 hours of Flex Leave per year). With the exception of certain classifications in the Police Department, that received a slight parity adjustment in September 2012, part-time employees last received a cost -of- living adjustment in January 2012 (3 %). The City's negotiating team and PTEANB representatives met on October 30, November 5, November 25, December 9, 2013, and January 14, 2014, to discuss the terms of an initial Memorandum of Understanding between the City and newly elected bargaining unit. Topics included salary adjustments, increased cafeteria benefits, and new assignment pays. Consistent with City Council's stated goal to reach a "50/50" shared responsibility for retirement costs, the parties also discussed the need for increased employee contributions toward the PERS benefit to help offset the growing obligation of public employee pensions. On January 14, 2014 City and PTEANB representatives reached agreement on the terms of an initial MOU, which would include the following: • Twenty -two month contract, from September 3, 2013 (date of PTEANB recognition) through June 30, 2015. • 1.45% cost -of- living adjustments in January 2014, January 2015, and June 2015. • Additional contributions to the PERS benefit, for a total employee pick -up of 12.35 %. By the end of the contract (June 2015), PTEANB employees will be contributing nearly 44% of retirement costs. This is consistent with the other three full -time Miscellaneous bargaining units (City Employees Association, Professional and Technical Employees Association, the Employees League) and the Key & Management group. 4 Approval of Resolution Adopting a Memorandum of Understanding with the Part Time Employees Association of Newport Beach January 28, 2014 Page 3 • Effective January 1, 2014, an increase in the cafeteria benefit by fifty cents (50¢) per hour, from $3.75 to $4.25, and another increase January 1, 2015, of twenty - five cents (25¢) per hour, to a total of $4.50 per hour, to offset anticipated increases in medical premiums. Effective January 2014, the maximum cafeteria benefit for current employees who "opt -out' of medical will be capped at $3.75 per hour, and upon adoption of the MOU the "opt -out' benefit for new hires will be eliminated. • A new benefit, if qualified for: 1) Bilingual Pay, at seventy -five cents (75¢) per hour for employees certified as bilingual; 2) Matron Pay equal to one hour of regular pay for Police Department employees assigned Matron duties; and 3) Night Shift Differential of $1.50 /hour for Police Department employees required to work shifts between 6 PM and 6 AM. These are similar to full time employees who perform the same functions. • An increase in the Flex Leave accrual cap from 80 hours to 100, and elimination of cashing out hours accrued beyond the maximum. On January 16, 2014, the PTEANB membership ratified the agreement by majority vote. The Memorandum of Understanding does not become effective, per Government Code §3505.1, until the governing body, i.e., City Council, takes action to adopt it. If the City Council approves adoption of the MOU with the PTEANB, Human Resources and Finance Department staff will work to implement the terms as soon as practicable. Fiscal Impact: The additional contribution employees will make toward the PERS retirement benefit will offset the increased costs associated with the COLA adjustments (total salary adjustment equal 4.35% and the corresponding employee contribution toward PERS is 4.35 %). The remaining cost for the increases to the cafeteria benefit, new assignment pays, and other benefit adjustment is estimated to be $48,700 for the twenty -two month term of the contract. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQX) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. 3 Approval of Resolution Adopting a Memorandum of Understanding with the Part Time Employees Association of Newport Beach January 28, 2014 Page 4 NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). by: Terri L. Cassidy Deputy City Manager /HR Attachment A: Resolution Adopting a Memorandum of Understanding with the Part Time Employees Association of Newport Beach Attachment A RESOLUTION NO. 2014 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE PART TIME EMPLOYEES ASSOCIATION OF NEWPORT BEACH WHEREAS, the City Council of the City of Newport Beach previously adopted Resolution No. 2001 -50, the "Employer- Employee Relations Resolution," to promote improved relations and communication between the City of Newport Beach and its employee associations; and WHEREAS, the Part Time Employees Association of Newport Beach was duly elected and recognized by the City of Newport Beach as the exclusive representative for certain part-time classifications on September 3, 2013; and WHEREAS, representatives from the City of Newport Beach and representatives from the Part Time Employees Association of Newport Beach have met and conferred in good faith over wages, benefits, and other conditions of employment for employees represented by PTEANB and agreed to the terms of an initial Memorandum of Understanding; and WHEREAS, the City Council of the City of Newport Beach desires to establish an initial Memorandum of Understanding with the Part Time Employees Association of Newport Beach. NOW, THEREFORE, the City Council of the City of Newport Beach does RESOLVE as follows: Section 1. Wages, hours, fringe benefits and other terms and conditions of employment of employees represented by Part Time Employees Association of Newport Beach shall be provided in accordance with the provisions of the attached Memorandum of Understanding (Exhibit A). Section 2. The term of the Memorandum of Understanding shall be for approximately twenty -two months, commencing retroactively to September 3, 2013 and will remain in full force and effect through June 30, 2015. Adopted this day of 2014. I'M ATTEST: City Clerk Mayor of the City of Newport Beach MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE PART TIME EMPLOYEES ASSOCIATION OF NEWPORT BEACH This MEMORANDUM OF UNDERSTANDING (hereinafter referred to as "MOU ") is entered into with reference to the following: PREAMBLE 1. The Part Time Employees Association of Newport Beach ( "PTEANB" or "Association "), a recognized employee organization, and the City of Newport Beach ( "City "), a municipal corporation and charter city, have been meeting and conferring, in good faith, with respect to wages, hours, fringe benefits and other terms and conditions of employment. 2. PTEANB representatives and City representatives have reached an agreement as to wages, hours and other terms and conditions of employment as provided in this Memorandum of Understanding (MOU) for the period from September 3, 2013 through June 30, 2015. 3. This MOU, upon approval by PTEANB and the Newport Beach City Council, represents the total and complete understanding and agreement between the parties regarding all matters within the scope of representation. Except as limited herein, the City retains all management rights as set forth in the Meyers - Milias -Brown Act and Resolution No. 2001 -50, SECTION 1. — General Provisions A. Recognition In accordance with the provisions of the Charter of the City of Newport Beach, the Meyers - Milias -Brown Act of the State of California and the provisions of the Employer- Employee Relations Resolution No. 2001 -50, the City acknowledges that PTEANB is the majority representative for the purpose of meeting and conferring regarding wages, hours and other terms and conditions of employment for part-time employees in those classifications specified in Exhibit "A" and meeting the following recognition requirements. 1. Recognition will continue for all employees recognized as of date of adoption of this MOU; thereafter, employees will become eligible for recognition after working a cumulative total of 1,000 hours in any fiscal year. 2. Once eligible for recognition, employees remain covered under the MOU regardless of the number of hours subsequently worked. 1 ;y 3. Employees meeting the criteria for the contract year commencing September 3, 2013 are listed in Exhibit A. B. Duration of Memorandum 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 September 3, 2013. This MOU shall remain in full force and effect until June 30, 2015, and the terms and conditions of this MOU shall continue after the date of expiration of this MOU in the event the parties have not yet agreed upon a successor MOU. The terms and conditions of this MOU shall prevail over conflicting provisions of the Newport Beach City Charter, the ordinances, resolutions and policies of the City of Newport Beach, and federal and state statutes, rules and regulations which either specifically provide that agreements such as this prevail, confer rights which may be waived by any collective bargaining agreement, or are, pursuant to decisional or statutory law, superseded by the provisions of an agreement similar to this MOU. C. Employee Data and Access Upon request, each July the City shall provide PTEANB a regular list of all unit members including name, department, and job title. D. Conclusiveness This MOU contains all of the covenants, stipulations, and provisions agreed upon by the parties. Therefore, for the life of this MOU, neither party shall be compelled to meet and confer concerning any issue contained herein. E. Modifications Any agreement, alteration, understanding, variation, or waiver or modification of any of the terms or provisions of this MOU shall not be binding upon the parties unless contained in a written document executed by authorized representatives of the parties. F. Subcontracting As provided in the Employer - Employee Relations Resolution No. 2001 -50, the City shall determine the manner in which City services are to be provided, including whether the City should provide services directly or contract out work, including work that is currently being performed by Association members. In the event the City introduces a plan to outsource services to achieve greater 2 M efficiency and /or cost savings, and upon request by the Association, the City shall meet and confer with Association representatives to discuss the impact of the City's decision to contract out work, prior to contracting out such services. The City shall retain sole authority to decide whether or not to contract out work, including work that is currently being performed by Association members. This provision shall not limit the City's authority to enter into such an agreement for any City services. G. Savings Should any part of this MOU be rendered or declared illegal or invalid by legislation, decree of court of competent jurisdiction or other established governmental administrative tribunal, such invalidation shall not affect the remaining portions of this MOU. SECTION 2. — Compensation A. Pay for Time Worked 1. SalaryAdlustments Effective the pay period including January 1, 2014, employee base salaries will be increased by 1.45 %. Effective the pay period including January 1, 2015, employee base salaries will be increased by 1.45 %. Effective the pay period including June 30, 2015, employee base salaries will be increased by 1.45 %. Notwithstanding the above adjustments, the top step pay rate of Police Reserve Officer shall be, at a minimum, equal to Step 1 of Police Officer. 2. Compensation for Overtime - Normal Overtime Normal overtime is defined as any scheduled hours worked in excess of the basic work week. For the purposes of this section, the basic work week is 40 hours, or as determined by the Department Director and approved by the City Manager which occurs between a fixed and regularly recurring period of 168 hours - 7 consecutive 24 hour periods - beginning at 0001 on Saturday and ending at midnight the following Friday. Definition of Hours Worked - Hours worked are defined as hours which employees are required to be performing their regular duties or other duties assigned by the City. 191 s Normal overtime for all non - exempt employees shall be paid at one -and- one -half (1 -1/2) times the regular rate of pay, as provided under City policy and in compliance with applicable State and Federal laws or regulations. 3. Assignment Pay (New) Night Shift Differential: Unit members assigned to the Police Department who are scheduled to work shall be eligible for night shift differential.of $1.50 per hour, payable for each regularly scheduled hour worked between 6:00 p.m. and 6:00 a.m. Additional time worked beyond 6:00 p.m. as an extension of an assigned day shift shall not qualify an employee for night shift differential. The differential pay is paid only for hours actually worked. Matron Pay: Female Police Department employees assigned matron duties shall receive one (1) hour straight time pay for each shift matron duties are performed. The employee must work a minimum shift of eight (8) hours to be eligible. Bilingual Pay: Employees certified as bilingual (Spanish) shall be eligible to receive seventy -five cents ($0.75) per hour in bilingual pay. The certification process will confirm the employee is fluent at the appropriate conversational level in speaking Spanish. Employees certified shall receive bilingual pay the first full pay period following certification. Additional languages may be considered upon Department Director determination of the benefit to the City and upon approval by the Human Resources Director. SECTION 3. — Fringe Benefits A. Cafeteria Plan The City has implemented an IRS qualified Cafeteria Plan. Employees shall have the option of allocating Cafeteria Plan contributions towards the City's existing medical insurance as program rules allow. Employees shall be allowed to change coverages in accordance with plan rules and during regular open enrollment periods. For employees enrolled in medical plans, the cafeteria amount is inclusive of the PERS designated minimum medical insurance contribution. Unused Cafeteria Plan funds shall be payable to the employee as taxable cash back. Effective September 3, 2013, the City shall contribute $3.75 per hour worked, to a maximum of 64 hours per pay period. Employees not enrolling in medical coverage must provide proof of other group coverage in order to receive the cafeteria benefit. rd 9 Effective the pay period including January 1, 2014, the City's contribution toward the cafeteria benefit will increase by fifty cents ($0.50) per hour worked, to $4.25 per hour, up to 64 hours per pay period. The maximum cafeteria allowance provided to employees who execute an "opt -out" agreement will remain at $3.75 per hour, effective January 2014. For employees hired after adoption of this MOU, and who do not enroll in a medical plan, there will be no cafeteria benefit. Effective the pay period including January 1, 2015, for employees enrolled in a City medical plan, the City's contribution toward the cafeteria benefit will increase by twenty -five cents ($0.25) per hour worked, to $4.50 per hour, to a maximum of 64 hours per pay period. The City and Association acknowledge that the City's contribution to the cafeteria benefit meets the intent of the "affordability' requirements under the Affordable Care Act (ACA) for qualified employees. The City will continue to assess the cafeteria benefit to confirm ongoing compliance with the ACA. In the event the City deems the benefit level may not meet the affordability threshold, the City and PTEANB will meet to discuss compliance options. B. Pay for Leave The City implemented a Flex Leave program in which employees receive pay for leave credits for each hour worked at the rate of .04 hours for each hour worked. Credits will be placed in an individual Flex Leave bank for each employee and will be subject to being paid out upon bi- weekly request, only to the extent that an employee has earned such credits. The maximum accrual of pay for leave hours will be one hundred (100) hours. Once an employee reaches the maximum accrual rate, Flex Leave will stop accruing until the employee's balance falls below 100 hours. C. Jury Duty PTEANB employees legally required to serve as a juror, and who provide appropriate documentation, shall be eligible for leave with pay for jury service occurring only during the employee's regularly scheduled shift, and as provided in the City of Newport Beach Employee Policy Manual. D. Retirement Benefit 1. PERS Retirement The City contracts with the California Public Employees Retirement System (PERS) to provide retirement benefits for its Miscellaneous employees. Pursuant to prior agreements and state mandated reform, the City has implemented first, second and third tier retirement benefits: on 1111 Tier 1: For employees hired by the City on or before November 23, 2012, the retirement formula shall be the 2.5% 55 calculated on the basis of the single highest year. Tier 2: For employees first hired by the City between November 24 and December 31, 2012, or hired on or after January 1, 2013 and are current members of the retirement system, as defined in Public Employees Pension Reform Act, the retirement formula shall be 2%((660 calculated on the average 36 highest months' salary. Tier 3: For employees first eligible for the PERS benefit, on or after January 1, 2013, and who do not meet the Tier 2 criteria, the retirement formula shall be 2%(a)62 calculated on the average 36 highest months' salary. 2. Employee Contributions Effective September 3, 2013, PTEANB employees will continue to pay the statutory normal member contribution. Employee retirement contributions referenced below that are in addition to the normal PERS Member Contribution will be made on a pre -tax basis through payroll deduction, to the extent allowable by the government tax code. It is recognized that these payments will not be reported to PERS as contributions toward either the member or employer rate and fall outside the scope of "cost - sharing," as provided under GC Section 20516(f). Tier 1 Employees: Effective the pay period including June 30, 2014, Tier 1 employees shall contribute 8% toward the normal Member Contribution plus an additional 1.45% of pay toward retirement costs pursuant to Government Code Section 20516(f), for a total of 9.45 %. Effective the pay period including January 1, 2015, Tier 1 employees shall contribute an additional 1.45% of pay toward retirement costs for a total of 10.90 %. Effective the pay period including June 30, 2015, Tier 1 employees shall contribute an additional 1.45% of pay toward retirement costs, for a total employee contribution of 12.35°/x. Tier 2 Employees: Effective the pay period including June 30, 2014, Tier 2 employees shall contribute 7% toward the normal Member Contribution plus an additional 2.45% of pay toward retirement costs pursuant to Government Code Section 20516(f), for a total of 9.45 %. Effective the pay period including January 1, 2015, Tier 2 employees shall contribute an additional 1.45% of pay toward retirement costs for a total of 10.90 %; and effective the pay period including June 30, 2015, Tier 2 employees shall contribute an additional 1.45% of pay toward retirement costs, for a total employee contribution of 12.35 %. A 11 Tier 3 Employees: The minimum statutory employee contribution for employees in Tier 3 is subject to the provisions of the Public Employees Pension Reform Act of 2012 (PEPRA) and equals 50% of the "total normal cost." For FY13 -14, the employee rate is 6.25% and is subject to change based on annual PERS actuarial valuations. Effective the pay period including June 30, 2014, Tier 3 employees shall contribute 6.25% toward the member contribution plus an additional 3.20% of pay toward retirement costs pursuant to Government Code Section 20516(f), for a total of 9.45 %. Effective the pay period including January 1, 2015, Tier 3 employees shall contribute an additional 1.45% of pay toward retirement costs for a total of 10.90 %; and effective the pay period including June 30, 2015, Tier 3 employees shall contribute an additional 1.45% of pay toward retirement costs, for a total employee contribution of 12.35 %. The City contracts with PERS for the 4th Level 1959 Survivors Insurance Benefit, $500 Lump Sum Death. Benefit, Sick Leave Credit, Military Service Credit, 2% Cost of Living Adjustment and the pre- retirement option settlement 2 death benefit (Section 21548). 3. PARS Retirement PTEANB employees not enrolled in the PERS retirement system will participate in the Public Agency Retirement Services (PARS) program. The City will make a matching 3.75% contribution to PARS on behalf of the employees. Employees in the classifications Police Cadet and Police Reserve Officer are excluded from membership in PERS, as provided in the contract between the City of Newport Beach and the Board of Administration of the Public Employees' Retirement System. E. Other Benefits Not Provided No other fringe benefits are provided to employees in the Part Time Unit. SECTION 4. - Miscellaneous. A. Direct Deposit All employees shall participate in the payroll direct deposit system. B. Citywide Classification and Compensation Study 7 IN Concurrent with the adoption of this MOU, the City is undergoing a comprehensive study of its classification and compensation structure. The City agrees to meet with the Association during this study to discuss preliminary findings or recommendations. The parties agree that during the term of this MOU the City may implement the findings and recommendations of this study regarding the compensation and classification of employees. Prior to adopting or implementing final recommendations, the City will meet and confer with the Association to discuss the possible impact on its members and for the purpose of discussing pay of part-time positions in full -time classifications. Executed this day of ATTEST: A 2014: PART TIME EMPLOYEES ASSOCIATION OF NEWPORT BEACH 0 0 Amy Mayfield, President Katherine Mielke, Vice President Cherall Weiss, Secretary/Treasurer CITY OF NEWPORT BEACH M Leilani Brown, City Clerk APPROVED AS TO FORM: A ro Harp, City Attor ey Rush N. Hill, II, Mayor `-1 13