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HomeMy WebLinkAbout05 - Supplemental MOU for NB Fire Management Associatoin (NBFMA)CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 5 November 23, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dave Kiff, City Manager 949 - 644 -3000, dkiff(a)newportbeachca.gov Terri L. Cassidy J.D., Human Resources Director 949 - 644 -3303, tcassidy(a)newportbeachca.gov SUBJECT: Approval of Resolution Adopting a Supplemental Memorandum of Understanding between the City of Newport Beach and the Newport Beach Fire Management Association; and Adoption of Resolution Implementing a CalPERS Time -In -Grade Exception ISSUE: The Memorandum of Understanding (MOU) between the City of Newport Beach and the Newport Beach Fire Management Association (NBFMA) expires December 31, 2010, and City and NBFMA representatives have met and conferred and reached a tentative agreement for Supplemental MOU. The City Council may consider approving the resolutions to adopt the Supplemental MOU and implement a Time -in -Grade Exception, as provided for the in tentative agreement. Staff recommends the City Council approve the following: 1) A resolution adopting a Supplemental MOU between the City of Newport Beach and the NBFMA, extending the term to December 31, 2011, (Attachment A), and 2) A resolution implementing a Time -in -Grade Exception for newly hired employees, effective the date of adoption of the resolution (Attachment B). DISCUSSION: In February 2010, City representatives and representatives from the Newport Beach Fire Management Association began meeting and conferring in good faith to negotiate the provisions of a successor MOU. Over the next several months there was significant change in the management of the Fire Department, as well as turnover in FMA Supplemental MOU with NBFMA November 23, 2010 Page 2 membership, delaying talks between the City and FMA. Recently, in a show of good faith, the City and FMA resumed talks. Negotiation discussions included the status of the City budget and the financial challenges facing the City. Recognizing the growing concern over public employee pensions, the City and NBFMA came to a tentative agreement for a Supplemental MOU that includes a provision for NBFMA members to contribute a greater share toward retirement costs, as well as provide a Time -in -Grade Exception for newly hired employees. Consistent with direction provided by the City Council in closed session, and in accordance with the Brown Act, Government Code Section 54957.6 that authorizes the City Council to confer with the City's negotiators, the City and NBFMA have reached a tentative agreement. The provisions of the Supplemental Memorandum of Understanding between the City and NBFMA are as follows: • Extend the Current MOU by 12 months to December 31, 2011; • Salaries and cafeteria benefits will remain unchanged; • Employees promoted into the FMA unit from the Newport Beach Firefighters Association (NBFA) after July 30, 2010, will contribute 3.5% toward retirement through a pre -tax payroll deduction, effective November 6, 2010; • All other unit employees will contribute 5.0% toward retirement through a pre -tax payroll deduction, effective November 6, 2010; • New safety hires to pay an additional 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); • All other terms of the original MOU shall remain unchanged. The membership of the NBFMA ratified the agreement by a majority vote 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. Pursuant to Government Code Section 20636(e)(1), the City Council may elect a Time - in -Grade Exception to allow newly hired employees to pay a greater portion of the PERS Employer Paid Member Contribution (EPMC). In order for the City Council to implement the Exception provided for in the Fire Management Association MOU, the City Council must adopt a resolution defining the terms. Supplemental MOU with NBFMA November 23, 2010 Page 3 If the City Council approves the attached resolutions, staff will strive to implement the terms of the Supplemental MOU and Time -in -Grade Exception as soon as possible. Environmental Review: Not applicable. Public Notice: Seventy -two hours notice has been given pursuant to the Brown Act. No further notice is legally required. Funding Availability: There is no cost for this recommendation. The employee contribution toward retirement via pre -tax payroll deduction will provide the City an estimated savings of $43,693.44 for the contract period. Submitted by: Dave Kiff City Manager Terri L. Cassidy, J.D. Human Resources Director Attachments: A - Resolution Adopting a Supplemental Memorandum of Understanding B — Resolution Adopting a Time -in -Grade Exception ATTACHMENT A i 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 FIRE MANAGEMENT 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 employee associations; and WHEREAS, the City of Newport Beach previously entered into a Memorandum of Understanding with the Newport Beach Fire Management 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 Fire Management 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 Fire Management 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 Fire Management 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 (Exhibit). Section 3. All other terms of the current Memorandum of Understanding between the City of Newport Beach and the Newport Beach Fire Management Association shall remain unchanged. Adopted this day of , 2010. ATTEST: City Clerk Mayor of the City of Newport Beach EXHIBIT SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH FIRE MANAGEMENT ASSOCIATION This Supplemental Memorandum of Understanding modifies the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Fire Management 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, NBFMA will submit preliminary requests for changes in wages, fringe benefits and other terms and conditions of employment not less than 90 days prior to expiration of the MOU, and that 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 November 23, 2010, (or the effective date of the change in the newly hired employees contribution, whichever is later) 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 into the City after November 23, 2010 (or as soon thereafter as possible based on PERS approval), 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. In addition, the Page 1 of 3 amount of the City payment of member contributions (EPMC) shall be reported to PERS as special compensation, which is part of the 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. NBFMA acknowledges that the City is making this payment pursuant to a specific request of NBFMA to do so. 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 service credit as public service pursuant to Section 21024 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. Effective November 6, 2010, all safety unit employees hired into the unit July 31, 2010 or later will contribute 3.5% of base pay towards retirement costs. Employees hired into the unit prior to July 31, 2010 will pay 5.0 %, also effective November 6, 2010. Both of these payments will continue through December 31, 2011. These payments 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 November 23, 2010 (Section 20636)(c)(4) of the California Government Code. NEW SEC. TRIAL 48/96 SCHEDULE The Fire Department has implemented a trial 48/96 schedule. The schedule may be canceled by the Department, at its discretion. Except as provided herein, the Memorandum of Understanding between the City and the Newport Beach Fire Management Association remains in full force and effect. Signatures are on the next page. Page 2 of 3 Executed this day of rM NEWPORT BEACH FIRE MANAGEMENT ASSOCIATION: CITY OF NEWPORT BEACH m Keith D. Curry, Mayor ATTEST: Leilani Brown, City Clerk APPROVED AS TO Atto By: Chip Duncan, President r By: Je Boyles, Nego is Page 3 of 3 Executed this l I day of N 0 f Y`1 b ee' , 2010: NEWPORT BEACH FIRE MANAGEMENT ASSOCIATION: ( Chip Duncan, Presidsat CITY OF NEWPORT BEACH M.- Keith D. Curry, Mayor ATTEST: Leilani Brown, City Clerk APPROVED AS TO FORM: David R. Hunt, City Attorney Page 3 of 3 RESOLUTION NO. 2010 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING EMPLOYER PAID MEMBER CONTRIBUTIONS TIME -IN -GRADE EXCEPTION ATTACHMENT B 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 (CaIPERS) 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 and abide by the provisions of Title 2, California Code of Regulations Section 569. NOW, THEREFORE, the City Council of the City of Newport Beach does RESOLVE as follows: Section 1. The City of Newport Beach shall implement a Time -in -Grade Exception for employees of the Newport Beach Fire Management Association (NBFMA). Section 2. The City of Newport Beach elects to continue to pay 9% of the Employer Paid Member Contribution for all current Newport Beach Fire Management Association employees. Section 3. For employees newly hired by the City of Newport Beach into a Newport Beach Fire Management Association represented position 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 subject to the Time -in -Grade Exception 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