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HomeMy WebLinkAbout07 - NB Firefighters Association Supplemental MOUTO FROM: CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 7 April 13, 2010 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL Dave Kiff, City Manager 949 - 644 -3000, dkiffta)newportbeachca.gov Terri L. Cassidy J.D., Human Resources Director 949 - 644 -3303, tcassidv(anewportbeachca.gov SUBJECT: Approval of Resolution Adopting a Supplemental Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association extending the term to December 31, 2011; and Adoption of Resolution Implementing a CaIPERS Time -In- Grade Exception ISSUE: Should the City Council adopt a resolution approving the terms of a Supplemental Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association extending the contract term from December 31, 2010 to December 31, 2011; and should the City Council adopt a resolution approving a California Public Employees' Retirement System (CaIPERS) Time -in -Grade Exception for Employer Paid Member Contributions (EPMC), which is provided for in the MOU? RECOMMENDATION: The following actions are recommended: 1. Approve the resolution adopting the Supplemental Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association (Attachment A); and 2. Approve the resolution adopting the CaIPERS Employer Paid Member Contribution Time -in -Grade Exception (Attachment B). DISCUSSION: Background: On December 15, 2009, at the request of the City, the Newport Beach Firefighters Association, through their negotiations team of Chad Ponegalek, President, Brian NBFA Supplemental MOU April 13, 2010 Page 2 McDonough, Vice - President, Jeff Boyles, Representative at Large and Rich Thomas, Professional Labor Relations Representative began meeting with the City's negotiators Terri Cassidy, Human Resources Director and Bill Avery, Professional Labor Relations Representative to discuss the status of the City's budget and the salary adjustment that was due to be implemented on December 19, 2009 for the NBFA members. At the time, the NBFA was going to begin the 3`d year of a 3 year collective bargaining agreement (January 1, 2008 through December 31, 2010.) In recognition of the fiscal challenges facing the City, the NBFA expressed willingness to meet and discuss ways to partially offset increased costs in CalPERS retirement, in exchange for an extension in time to their Memorandum of Understanding (MOU) and other trial operational considerations (48/96 work schedule). Four additional meetings of good faith negotiations occurred through the months of December 2009 and in January and February 2010. The City Council was kept apprised of progress in Closed Session meetings in accordance with Brown Act Section 54957.6 that authorizes their conferring with the City's negotiators. The professional tenor of the discussions between the City and the Association representatives was appreciated by the City Council. On February 23, 2010, the City and the NBFA reached a Tentative Agreement which includes the following terms: • Extend the Current MOU by 12 months to December 31, 2011; • Implement the 3.5% wage increase previously negotiated, effective December 19, 2009; • Current safety unit employees (NBFA) to contribute 3.5% toward retirement through a pre -tax payroll deduction, effective December 19, 2009; • New safety hires to pay 5.5% of the 9% Employer Paid Member Contribution for the first five years of employment (called a "Time -in -Grade Exception "; required resolution included with agenda report); • A trial period of the "48/96" work schedule to be implemented no later than August 15, 2010, with terms being determined in a Side Letter Agreement. Either the City or the Association may cancel the schedule at any time, including during the initial 90 day trial; • All other terms of the original MOU shall remain unchanged. The membership of the NBFA ratified the above Tentative Agreement by a majority vote of 94% in favor. The agreement does not become effective, per Government Code Section 3505.1, until the governing body, i.e., City Council takes action to adopt it. NBFA Supplemental MOU April 13, 2010 Page 3 Pursuant to Government Code Section 20636(e) (1), and specifically authorized in Title 2, California Code of Regulations Section 569, the City Council may elect a Time -in- Grade Exception for the City's Employer Paid Member Contribution (EPMC). The Exception permits the City to provide varying levels of contributions toward EPMC for newly hired employees, with a five year maximum. CalPERS has reviewed and approved the attached resolution proposing the Time -in -Grade Exception. If the Council approves these items, staff will strive to implement the MOU terms as quickly as possible, and working with Interim Fire Chief Parker and Fire Department staff, will define the terms of the Pilot "48/96" work schedule to ensure continued excellent service to the community. Public Notice: Public notice was fulfilled with the posting of the agenda and report for this item. Funding Availability: The 3.5% increase, which includes increases to base pay, overtime, and special pays, was originally estimated to cost approximately $243,600 for FY 2009 -10. The recovery of 3.5% via pre -tax payroll deduction (to base pay only) was not contemplated when the original cost estimates were prepared and will save the City approximately $157,460. Alternatives: The alternative would have been to implement the wage increase, without any contribution by the employees and no extension of the Memorandum of Understanding. In that case, the contract would expire on December 31, 2010. Submitted by: r 0 Da Kiff City Manager Terri L. Cassidy Human Resources Director Attachments: Resolution Adopting a Supplemental Memorandum of Understanding (Attachment A) Resolution Adopting EPMC Time -in -Grade Exception (Attachment B) ATTACHMENT A RESOLUTION NO. 2010 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTIONG A SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH FIREFIGHTERS ASSOCIATION 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 employees; and WHEREAS, the City of Newport Beach previously entered into a Memorandum of Understanding with the Newport Beach Firefighters Association for the period of January 1, 2008, through December 31, 2010; and WHEREAS, representatives from the City of Newport Beach and the Newport Beach Firefighters Association have met and conferred in good faith and agreed to modify the current Memorandum of Understanding; and WHEREAS, the City Council of the City of Newport Beach desires to modify the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association by adopting the Supplemental Memorandum of Understanding: NOW, THEREFORE, the City Council of the City of Newport Beach does RESOLVE as follows: Section 1. The term of the Supplemental Memorandum of Understanding shall be for 12 months, extending the current Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association to December 31, 2011. Section 2. Additional changes to wages and benefits shall be modified pursuant to the provisions of the Supplemental Memorandum of Understanding (attached). Section 3. All other terms of the current Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association shall remain unchanged. Adopted this day of , 2010. ATTEST: City Clerk Mayor of the City of Newport Beach SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH FIREFIGHTERS ASSOCIATION This Supplemental Memorandum of Understanding modifies the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association for the period of January 1, 2008 to December 31, 2010. Upon the signing of this Supplemental Memorandum, the 2008 -2010 MOU is modified to incorporate these changes. SECTION 1. GENERAL PROVISIONS B. Duration of Memorandum —Amend to read: 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, 2008. This MOU shall remain in full force and effect until December 31, 2011, and the provisions of this MOU shall continue after the date of expiration of this MOU in the event the parties are meeting and conferring on a successor MOU. The parties agree that, if NBFA submits preliminary requests for changes in wages, fringe benefits and other terms and conditions of employment earlier than 90 days prior to expiration of the MOU, the parties will begin negotiations promptly, with the objective of reaching an agreement by December 31, 2011. SECTION 4. FRINGE BENEFITS D. The Retirement Benefit — Amend to read: 1. Pursuant to Section 20691 of the California Government Code, the City shall pay to PERS, on behalf of all safety employees covered by this agreement and hired before April 13, 2010 the entire required normal "safety member" retirement contribution, but not to exceed 9% of the compensation earnable which PERS uses to calculate retirement contributions and benefits. For safety employees hired on or after April 13, 2010, the City will pay 3.5% of the member contribution. Such employees will be eligible to receive the 9% the beginning of their 6t" year of uninterrupted service. For non - safety unit members the City shall pay the 7% of the 8% normal miscellaneous member contribution. In addition, the amount of this City payment of member contributions (EPMC) shall be reported to PERS as special compensation, which is part of the Page 1 of 3 employee's compensation earnable, pursuant to the provisions of Section 20636 (c)(4) of the California Government Code, as amended effective July 1, 1994. This payment shall be credited to the employees' accounts maintained by PERS in accordance with Section 20691 of the California Government Code. NBFA acknowledges that the City is making this payment pursuant to a specific request of NBFA to do so, that the City has made significant financial commitments to NBFA in this MOU in consideration of the members' agreement to relinquish their previously held "irrevocable right" to pay their own PERS contribution and receive a corresponding salary increase, and that the significant financial concessions to NBFA (which included Leave Premium Pay Accounts, changes in the calculation of "hours worked" for purposes of overtime and internal salary adjustments) were made to avoid the potential for increased overtime compensation approximating $450,000 if all NBFA members exercise their irrevocable right to make their own PERS contribution and receive a corresponding salary increase. 2. The City's contract with PERS shall also provide for: a. A 3% @ 50 retirement formula pursuant to the provisions of Section 21252.01 of the California Government Code. b. The military buy -back provisions pursuant to Section 20930.3 of the California Government Code and the highest year benefit pursuant to Section 20042. C. The Level 4 1959 Survivors Benefits. d. Pre - retirement option settlement 2 death benefit pursuant to Section 21548. 3. Pursuant to a separate agreement, non - safety unit members have agreed to have 2.42% of the employer retirement cost added to the employee's rate pursuant to California Retirement Code Section 20516. Non - safety employees now pay 3.42% (2.42% employer and 1% employee) on a pre -tax basis pursuant to IRS Code Section 414(h)(2). 4. Effective December 19, 2009, all safety unit employees will contribute 3.5% of base pay towards retirement costs. This payment will be made on a pre -tax basis through payroll deduction pursuant to IRS Code Section 414(h)(2). This contribution will not affect the reporting of the 9% EPMC for employees hired before April 13, 2010 (Section 20636)(c)(4) of the California Government Code. Page 2 of 3 NEW SEC. TRIAL 48/96 SCHEDULE Unless extended by mutual agreement, the Fire Department will implement a trial 48/96 schedule no later than August 15, 2010. The schedule will initially run for 90 days, subject to cancellation by the City or Association at any time. It may be extended by mutual agreement. Prior to the schedule implementation the City and Association will meet and develop a side letter to govern the trial schedule. Except as provided herein, the Memorandum of Understanding between the City and the Newport Beach Firefighters Association remains in full force and effect. Executed this day of , 2010: NEWPORT BEACH FIREFIGHTERS ASSOCIATION: By: Chad Pon galek, President By: Brian �, V' -P�nt By: J Boyles, Represe ative At -Large By: Rich Thomas, Negotiation Team CITY OF NEWPORT BEACH MIN ith D. Curry, Mayor ATTEST: Leilani Brown, City Clerk APPROVED AS TO FORM: Leonie Mulvihill, Acting City Attorney Page 3 of 3 ATTACHMENT B RESOLUTION NO. 2010 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING EMPLOYER PAID MEMBER CONTRIBUTIONS TIME -IN -GRADE EXCEPTION WHEREAS, the City Council of the City of Newport Beach has elected to pay all or part of the normal member contributions to the California Public Employees' Retirement System (CalPERS) pursuant to Government Code Section 20691, and applicable labor policies and agreements; and WHEREAS, the City Council of the City of Newport Beach may elect a Time -in -Grade Exception to said Employer Paid Member Contributions (EPMC) within a given group or class of employees as defined in Government Code Section 20636(e)(1) and as specifically authorized in Title 2, California Code of Regulations Section 569; and WHEREAS, the City Council of the City of Newport Beach desires to implement a Time -in -Grade Exception. NOW, THEREFORE, the City Council of the City of Newport Beach does RESOLVE to implement a Time -in -Grade Exception as follows: Section 1. The Time -in -Grade Exception shall apply to all safety employees of the Newport Beach Firefighters Association (NBFA). Section 2. The City of Newport Beach elects to continue to pay 9% of the Employer Paid Member Contribution for all current safety employees. Section 3. For employees in the Newport Beach Firefighters Association hired after the date of adoption of this resolution, the City of Newport Beach shall pay 3.5% of the Employer Paid Member Contribution. Section 4. Beginning the sixth (6th) year of uninterrupted service employees will be entitled to payment of EPMC on the same terms that apply to other safety employees in the unit. Adopted this day of 2010. In ATTEST: City Clerk Mayor of the City of Newport Beach COQNCgL ACZAMA f 7 4.13.10 SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH FIREFIGHTERS ASSOCIATION This Supplemental Memorandum of Understanding modifies the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Firefighters Association for the period of January 1, 2008 to December 31, 2010. Upon the signing of this Supplemental Memorandum, the 2008 -2010 MOU is modified to incorporate these changes. SECTION 1. GENERAL PROVISIONS B. Duration of Memorandum — Amend to read: 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, 2008. This MOU shall remain in full force and effect until December 31, 2011, and the provisions of this MOU shall continue after the date of expiration of this MOU in the event the parties are meeting and conferring on a successor MOU. The parties agree that, if NBFA submits preliminary requests for changes in wages, fringe benefits and other terms and conditions of employment earlier than 90 days prior to expiration of the MOU, the parties will begin negotiations promptly, with the objective of reaching an agreement by December 31, 2011. SECTION 4. FRINGE BENEFITS D. The Retirement Benefit — Amend to read: 1. Pursuant to Section 20691 of the California Government Code, the City shall pay to PERS, on behalf of all safety employees covered by this agreement and hired before April 13, 2010 the entire required normal "safety member" retirement contribution, but not to exceed 9% of the compensation earnable which PERS uses to calculate retirement contributions and benefits. For safety employees hired on or after April 13, 2010, the City will pay 3:5% of the member contribution. Such employees will be eligible to receive the 9% the beginning of their 6th year of uninterrupted service. For non - safety unit members the City shall pay the 7% of the 8% normal miscellaneous member contribution. In addition, the amount of this City payment of member contributions (EPMC) shall be reported to PERS as special compensation, which is part of the Page 1 of 3 employee's compensation earnable, pursuant to the provisions of Section 20636 (c)(4) of the California Government Code, as amended effective July 1, 1994. This payment shall be credited to the employees' accounts maintained by PERS in accordance with Section 20691 of the California Government Code. NBFA acknowledges that the City is making this payment pursuant to a specific request of NBFA to do so, that the City has made significant financial commitments to NBFA in this MOU in consideration of the members' agreement to relinquish their previously held "irrevocable right" to pay their own PERS contribution and receive a corresponding salary increase, and that the significant financial concessions to NBFA (which included Leave Premium Pay Accounts, changes in the calculation of "hours worked" for purposes of overtime and internal salary adjustments) were made to avoid the potential for increased overtime compensation approximating $450,000 if all NBFA members exercise their irrevocable right to make their own PERS contribution and receive a corresponding salary increase. 2. The City's contract with PERS shall also provide for: a. A 3% @ 50 retirement formula pursuant to the provisions of Section 21252.01 of the California Government Code. b. The military buy -back provisions pursuant to Section 20930.3 of the California Government Code and the highest year benefit pursuant to Section 20042. C. The Level 4 1959 Survivors Benefits. d. Pre - retirement option settlement 2 death benefit pursuant to Section 21548. 3. Pursuant to a separate agreement, non - safety unit members have agreed to have 2.42% of the employer retirement cost added to the employee's rate pursuant to California Retirement Code Section 20516. Non - safety employees now pay 3.42% (2.42% employer and 1% employee) on a pre -tax basis pursuant to IRS Code Section 414(h)(2). 4. Effective December 19, 2009, all safety unit employees will contribute 3.5% of base pay towards retirement costs. This payment will be made on a pre -tax basis through payroll deduction pursuant to IRS Code Section 414(h)(2). This contribution will not affect the reporting of the 9% EPMC for employees hired before April 13, 2010 (Section 20636)(c)(4) of the California Government Code. Page 2 of 3 NEW SEC. TRIAL 48/96 SCHEDULE Unless extended by mutual agreement, the Fire Department will implement a trial 48/96 schedule no later than August 15, 2010. The schedule will initially run for 90 days, subject to cancellation by the City or Association at any time. It may be extended by mutual agreement. Prior to the schedule implementation the City and Association will meet and develop a side letter to govern the trial schedule. Except as provided herein, the Memorandum of Understanding between the City and the Newport Beach Firefighters Association remains in full force and effect. Executed this day of , 2010: NEWPORT BEACH FIREFIGHTERS ASSOCIATION: M Chad Pon By: `6 Brian McL By: JM Boyles, Re 0 CITY OF NEWPORT BEACH Keith D. Curry, Mayor ATTEST: Leilani Brown, City Clerk ,A OVE AS TO F�I V — Leonie Mulvihill, Acting City Attorney President At -Large Rich Thomas, Negotiation Team Page 3 of 3