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Home My WebLink About13 - Tentative Agreement with the NBLMACTY OF F NEWPORT BEACH City Council Staff Report May 26, 2015 Agenda Item No. 13 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Terri L. Cassidy, Deputy City Manager /Human Resources Director -(949) 644 -3303, tcassidy@newportbeachca.gov PREPARED BY: Rebecca Redyk, Human Resources Manager, and Maggie Williams - Dalgart, Senior Human Resources Analyst PHONE: (949) 644 -3304 and (949) 644 -3337, respectively TITLE: Tentative Agreement with the Newport Beach Lifeguard Management Association ABSTRACT: The Memorandum of Understanding (MOU) between the City of Newport Beach and the Newport Beach Lifeguard Management Association (LMA) expired on July 1, 2014. At the expiration of the contract, City and LMA representatives agreed to delay discussions until after the first of the year. The parties began meeting and conferring in good faith on wages, benefits and other terms and conditions of employment on April 9, 2015 and reached a Tentative Agreement on the provisions of a successor MOU on May 13, 2015. The terms of the Tentative Agreement include changes to wages and benefits for the period July 1, 2014 through December 31, 2017. Consistent with City Council's goal of greater transparency in the labor negotiations process and full disclosure of the costs associated with any agreement, the City Council may consider adopting the successor MOU no sooner than fourteen (14) days from public review of the Tentative Agreement, allowing an opportunity for public comment. RECOMMENDATION: Receive and consider the Tentative Agreement between the City of Newport Beach and the Newport Beach Lifeguard Management Association (Staff Report Attachment A), in advance of adopting a successor Memorandum of Understanding for the period July 1, 2014 through December 31, 2017, to be presented for City Council consideration no sooner than June 9, 2015. FUNDING REQUIREMENTS: A comprehensive estimate of the costs of the successor MOU with the Lifeguard Management Association is included as Attachment B. Fiscal Year 2015 -16 costs are estimated to be $57,812 which can be accommodated in the proposed budget. DISCUSSION: The Newport Beach Lifeguard Management Association represents full -time lifeguard management staff in the classifications of Lifeguard Officer, Lifeguard Captain and Lifeguard Battalion Chief. Employees in 13 -1 these positions are responsible for supervising the 200 part- time /seasonal lifeguards and managing the day -to -day operations of the Marine Operations Division within the Fire Department. On April 9, 2015, representatives for the City which included Jon Holtzman of Renne Sloan Holtzman Sakai LLP, Assistant Chief Marine Operations Rob Williams, Assistant to the City Manager Rob Houston, and Human Resources Manager Rebecca Redyk, and representatives for the Lifeguard Management Association, which included Charles Goldwasser, Attorney for the LMA, Brent Jacobsen, LMA President and Gary Conwell, LMA Treasurer, began meeting and conferring to discuss terms of a new contract. The parties met three times before a Tentative Agreement was reached. The success of the negotiations was based upon an approach both sides agreed to at the outset, which was a commitment to negotiate in good faith and come to the table for honest and productive discussions about the topics. Pension reform and employee contributions toward the pension benefit were a main topic of discussion, as were adjustments to compensation to keep pace with changes in the cost -of- living. Representatives from LMA acknowledged the City's priority to address growing pension obligations, and over the life of the contract employees will contribute an additional 4.6% toward the PIERS benefit, for a total employee pick up of 13.6% by 2017 (LMA employees have been paying 9% since 2011). This amount is among the highest of employee contribution rates of Orange County cities and achieves parity with the similarly stated Council goal of employee pension contributions being comparable with the Police Association (PA Safety employees also will contribute 13.6% of their pay towards pension by the end of their contract). The terms of the Tentative Agreement include: • Term of 3'/2 years from July 1, 2014, through December 31, 2017; • Additional employee contributions to the PERS pension benefit: July 1, 2015 employees contribute an additional 1.6 %, for a total of 10.6% July 1, 2016 employees contribute an additional 1.5 %, for a total of 12.1% July 1, 2017 employees contribute an additional 1.5% for a total of 13.6% • Cost of living adjustments for all members of 2.6% effective the pay period including July 1 , 2015 and 2.5% effective the pay periods including July 1, 2016 and 2017; • An increase of $75 per month to the current $1,349 cafeteria allowance, effective the pay period including July 1, 2015, and an additional $100 per month increase to $1,449 effective January 1, 2016, to be used for purchasing medical, dental, and vision insurance, or excess taken as taxable cash distribution, in accordance with Internal Revenue Code Section 125; • A reduction of the cafeteria benefit from $1,249 to $1,000 per month for existing employees who "opt out' of medical coverage and an increase of the cafeteria benefit from $600 to $1,000 per month for newly hired employees who "opt out' of medical coverage effective the pay period that includes January 1, 2016; • An agreement to reopen negotiations in July 2016 for the purpose of discussing the cafeteria and healthcare benefit due to changes or revisions in law, such as the federal Affordable Care Act; • Creation of a one -time, non - accruing 80 -hour (total) leave bank to provide flexibility in scheduling time off for personal matters. Employees may use up to forty (40) hours in a year; the bank has no cash value and sunsets with expiration of the MOU; • Other changes include: revisions to the Call Out policy, reduction in the Compensatory Time accrual from 120 to 80 hours, changes to the Bereavement Leave policy, and meet and consult on organizational changes regarding staffing in the Marine Operations Division. The estimated cost of the proposed agreement for FY2015 -16 and future years is included in Attachment B. The City Council may consider the terms of this Tentative Agreement in anticipation of the City Manager presenting the complete successor MOU at a future City Council meeting, but no sooner than June 9, 2015. In the spirit of transparency and disclosure, members of the public will have an opportunity to review 13 -2 the terms of this Tentative Agreement over the next two weeks. Interested readers can reference the previous LMA MOU on the City's website as the template upon which the TA terms are based. Typically, the previous MOU is "marked up" in redline and presented to the Council for action. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") 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. 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). ATTACHMENTS: Description Attachment A - Tentative Agreement with NBLMA Attachment B - Cost Estimate of the Tentative Agreement with NBLMA 13 -3 ATTACHMENT A Tentative Agreement Between the City of Newport Beach and the Lifeguard Management Association On May 13, 2015, representatives from the City of Newport Beach and the Newport Beach Lifeguard Management Association (LMA) reached a tentative agreement on the terms for a successor Memorandum of Understanding to the memorandum that expired June 30, 2014. The parties have been meeting collaboratively on issues including employee contributions toward the retirement benefit, cost -of- living adjustments, and increases to the cafeteria benefit. The agreed upon provisions are as follows: • Term July 1, 2014 to December 31, 2017 (42 months) • Compensation 0 2.6% base salary increase effective the pay period including 7/1/15, 0 2.5% base salary increase effective the pay period including 7/1/16, and 0 2.5% base salary increase effective the pay period including 7/1/17. PERS Retirement Contributions Safety • Employees in all Tiers to pay 1 that includes 7/1/15, • Employees in all Tiers to pay 1 that includes 7/1/16, 6% additional cost share effective the pay period 5% additional cost share effective the pay period o Employees in all Tiers to pay 1.5% additional cost share effective the pay period that includes 7/1/17(for a total contribution of 13.6 %), under PERS Gov Code 20516(f). For employees in Tier III, should the statutory member contribution adjust upward or downward, the cost share contribution will adjust accordingly so that the total Tier III contribution is the same as Tiers I & II. Cafeteria Benefit o $75 monthly cafeteria benefit increase effective the pay period that includes 7/1/15 o $100 monthly cafeteria benefit increase effective the pay issue that includes 1/1/16. o Effective the pay period that includes 1/1/16; new hires (full -time employees) who "opt out' of medical coverage shall receive a $1,000 cafeteria benefit allowance (up from $600). o Effective the pay period that includes 1/1/16, the "opt out" benefit shall be adjusted to $1,000 for all employees (down from $1,249 for current employees). o On or before 7/1/16, at the request of either party, the City and Association will reopen negotiations to discuss possible changes to the medical benefit program, contribution levels, or other elements of healthcare services as a result of the Affordable Care Act or changes to laws; any changes to the MOU will occur by mutual agreement of the parties. • Callout o Clarify language to provide one payment of two (2) hours per call out period. 5/13/15 13 -4 Bereavement Leave • Time must be taken "proximate" to the occurrence. • Benefit expanded to include stepmother, stepfather and stepchildren. Non - Accruing Leave Bank • 80 hours of leave time deposited into a non - accruing individual leave bank to be used at employee's discretion upon supervisory approval. • Unit employees will receive 40 hours effective 7/1/15 and additional 40 hours 711/16. Employees hired after 7 /1/15 will receive 40 hours on 7/1/16. Employees hired after 7/1/16 are not eligible for this benefit. • Use of leave may not create overtime backfill. • Non - accruing leave has no cash value and does not get paid out at time of separation. • The benefit and any unused time shall sunset/be forfeited at the conclusion of the contact (December 31, 2017). • Comp Time o Reduce accrual from 120 hours to 80 hours effective the pay period that includes January 1, 2016. Use of leave may not create overtime backfill. • Part -time Employees o Where possible, the City will prorate benefits. If not possible, the City will mirror benefits provided in the PTEANB unit. The City will prepare language for LMA to review. Parties understand that this tentative agreement is dependent upon mutually agreed staffing changes. Should these not occur, the parties will resume negotiations. LMA and City Representatives agree to recommend to their Principals the terms outlined above. This Tentative agreement is subject to appropriate ratification by LMA membership, adoption by City Council, and approval as to form by the City Attorney. For the City of Newport Beach: For the Newport Beach Mfuard Association: Terri L. Cfn.§;sidy, Deputy ¢M) Dated 5/13/15 BpeOt Jacg6wM LMA President for City Charles Golly asser, Attorney for LMA ( / 5/13/15 13 -5 F-AW dr 0711iS1 -1 Estimated Cost of Tentative Agreement for 3112 Year Contract with the Lifeguard Management Association (LMA) (representing 12 full -time Safety positions) PayiBenefit Base Pay - Cost of Living Adjustment 7/15, 7/16, 7/17 Impact of COLA on Payroll "Roll Up" Costs City Pension Contribution 2 Other Compensable Benefits 3 Total All Pays and Compensable Benefits Cafeteria Allowance Increases One -time Non Accruing Leave Bank 4 )tat Cost of Proposed Changes Per Tentative Agreement Offset - Employee Pick Up of PERS Pension Costs Total FY14 -15 FY2015 -16 FY2016 -17 FY2017 -18 Total 0 24,940 49,544 37,382 111,866 0 2,415 4,797 3,620 10,832 0 16,469 32,717 24,685 73,872 0 1,270 2,522 1,903 5,694 0 45,094 89,581 67,590 202,264 0 11,658 13,236 6,618 31,512 0 20,941 21,451 0 42,392 0 77,693 124,268 74,208 276,168 0 (19,881) (39,477) (27,199) (86,557) 0 57,812 84,791 47,009 189,611 Roll up costs include percentage based supplemental pays including scholastic achievement (for degree attainment), longevity (for years of service), and pensionable holiday pay 2 Employer contribution for the PERS pension benefit 3 Includes City contribution to Medicare and the Compensated Absences Fund (cash liability of accrued leave time) " One time leave benefit and not paid directly to employee in compensation; not a direct cost to City, but is included in costing estimate to reflect the value of the benefit 5/26115 13 -6