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HomeMy WebLinkAbout21 - Labor Agreement - Newport Beach Police Association - NBPAP 3 Agenda Item No. 21 June 26, 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 - 644 -3002, dkiff @newportbeachca.gov PREPARED BY: Dave Kiff, City Manager APPROVED: lL y\ TITLE: Labor Agreement: Newport Beach Police Association (NBPA) ABSTRACT: The City's negotiators and the Newport Beach Police Association (NBPA) have reached a tentative agreement on a Memorandum of Understanding (MOU) for the term of January 1, 2012 through June 30, 2014. The Council's ratification of the MOU would complete the agreement. RECOMMENDATION: 1. Authorize Mayor Gardner to execute a Memorandum of Understanding (MOU) with the Newport Beach Police Association (NBPA). 2. Adopt Resolutions 2012 -57 relating to PERS and ending reporting of Employer - Paid Member Contributions (EPMC) over time. 3. Designate the City Manager as the authorized representative to execute subsequent written agreements under Section 5(B) of the MOU (Work Schedules). FUNDING REQUIREMENTS: See financial information in the body of the discussion text. DISCUSSION: The roughly 184 - member Newport Beach Police Association (NBPA) is the recognized labor group for the "rank and file" staff of the Newport Beach Police Department. Positions included in the NBPA are the roughly 103 sworn (or "safety ") positions of Police Officer and the roughly 81 non -sworn (civilian or "miscellaneous ") positions of Animal Control Officer, Dispatcher, Crime Prevention Specialist, Crime Scene LaborAgreement: Newport Beach Police Association (NBPA) June 26, 2012 Page 2 Investigator, Community Services Officer, Parking Control Officer, Jail Custody Officers, and more. The NB Police Management Association (PMA) represents the classifications of Police Sergeant, Police Lieutenant, and Police Captain and are not within this bargaining group nor part of this MOU. Three Police Department positions are not included in any bargaining unit — Police Chief and Deputy /Assistant Chief (2). The civilian position of PD Support Services Administrator is within the "Key and Management" unit. The City and the Association follow California law relating to collective bargaining, specifically the Meyers - Milias -Brown Act. The MMBA guides the negotiating process, including "meet and confer" direction as well as impasse procedures. When negotiations are complete, a memorandum of understanding (MOU) is the typical form for the City's labor agreements. The current MOU for the NBPA expired at the end of December 31, 2011. The City and NBPA have been negotiating since October 2011, but a number of challenging issues have taken time to address. As such, negotiations continued past the expiration date but have now concluded, subject to the City Council's approval (the NBPA membership has approved the proposed MOU). The key terms in this proposed MOU are as follows: 1. Term: January 1, 2012 through June 30, 2014. 2. Pension Contributions & Employer -Paid Member Contribution (EPMC) a. NBPA Safety members currently have agreed to deduct 3.5% of base pay deducted from their paychecks to assist the City in pension obligations. During this time, the City was still reporting 9% as the EPMC. This payroll deduction was temporary, and legally ended January 1, 2012, but was voluntarily continued by NBPA members. Under the proposed MOU, this deduction would restart and would roll into a permanent contribution of 3.5% of compensation towards the "Employee Share" of the 3% at 50 Pension program for current employees. Concurrently with the timing of this 3.5% switch, the amount paid and reported as EPMC would decline from 9% to 5.5 %. b. NBPA Safety members would, in the course of the MOU, pay an additional 5.5% of compensation towards the Employee Share, making the total paid by employees nine percent (9 %) of compensation. 9% is the full "Employee Share" for the PERS 3% at 50 Safety formula. Each time an additional percentage is paid by the employee, EPMC would be reduced until it reaches zero (and would be reported as zero). Labor Agreement. Newport Beach Police Association (NBPA) June 26, 2012 Page 3 c. NBPA non -swom members ( "Miscellaneous ") receive a 2.5% at 55 Pension benefit. NBPA non -swom members currently pay 1% on the Employee Share towards pensions and additionally pay 2.42% of the Employer Share, for a total of 3.42 %. This MOU would direct that NBPA non -sworn members pay another 5.58% (all on the Employee Share side) towards pension costs, bringing them to eight percent (8 %). At this time, 2.42% would remain reported as EPMC, because this 8% still leaves 2.42% on the Employee's Share being paid by the City. This MOU addresses that by agreeing that, if the remainder of the City's Miscellaneous employees also pick up the remaining 2.42% (leading to reporting 0% EPMC), the City could "reopen" the MOU to seek the same contribution from NBPA's Miscellaneous employees. See Attachment B for more details about how the EPMC reporting works. 3. 2nd Tier for New Hires. This MOU proposes that new employees to the NBPA membership be brought in under the following "2nd Tier" retirement formula: a. For Safety personnel, a "3% at 55" defined benefit plan. This means that a new safety hire to the NBPD would be enrolled in the Cal -PERS plan that allows them to retire at age 55 with 3% of salary for each year worked at the NBPD (up to 90% of salary). Pensionable salary would be based on the average of the highest three years of compensation. New hires would pay 9% of pensionable compensation for their retirement costs immediately on hire (thus there would be zero EPMC for these employees). L For NBPA Miscellaneous employees, a "2% at 60" defined benefit plan with the new employee paying the full 7% employee share, 0% EPMC, and the employee's pensionable salary being based on the highest three -year average compensation. This means that a new non -safety hire to the NBPD would be enrolled in the Cal -PERS plan that allows them to retire at age 60 with 2% of salary for each year worked at the NBPD. 4. Additional Pension Cost Sharing & 26.5% Total Pension Cost Floor /Cap. This MOU proposes that, after the 3% at 55 Plan for new hires is contracted within PERS (July 1, 2013), the City shall give a 3.1% increase in salary to NBPA Sworn members that is immediately offset by a 3.1% deduction in pay that would be an additional payment on the Employer's Share of the PERS costs. At that point in time, the City estimates that sworn NBPA members will be paying about 26.5% of the total cost of their pension benefit. This MOU provides that, in the event that the City s pension costs increase from that point forward during the term of the MOU, NBPA members will pay up to 2% of pensionable salary more towards the Employer's Share without a compensating offset. Similarly, should the City's pension costs go down, NBPA members would be eligible for up to a 2% decrease in their contribution to the Employer's Share. :3 e_! Labor Agreement: Newport Beach Police Association (NBPA) June 26, 2012 Page 4 5. Cost of Living Adjustment (COLA). This MOU proposes that the NBPA membership receive two "collared" COLAs. Both would be based on the change in the Consumer Price Index (CPI) from generally a year prior with a floor of 1% and a cap of 2 %. As a result, the minimum COLA in this 30 -month MOU period would be 2% with the maximum at 4 %. The current cost of living has been increasing at slightly more than 3% per year (or 7.5% over 30 months). 6. Medical Insurance Contribution. The City's "cafeteria" plan sets aside a sum of money per month for each employee to purchase medical insurance from one of the City's vendors, or to take cash if other insurance is available through a spouse or partner, Currently, NBPA members receive $1,124 /month plus an additional amount ($112 /month) if they are in a PERS medical program. This MOU proposes that the City's contribution go to $1,324 /month in three steps during the MOU. 7. Retiree Medical Trust. This MOU directs that the City make a $100 /month contribution per employee to a retiree medical trust effective January 1, 2013. This trust would not be administered by the City. 8. Additional Leave Time, Currently, NBPD members have among the lowest "flex" (vacation and sick combined) leave accruals of our comparison cities. As a part of this negotiations process, the City consented to allowing an additional 12 hours of leave to be accrued per employee per year starting July 1, 2012, 9. Other. The negotiators have tentatively agreed to these additional changes (others are fairly minor and not listed): a. Severance would be capped at 10 weeks (otherwise one week for every year worked in Newport Beach). b. "Unit Pay," This MOU would close off Scholastic Achievement Pay for new hires if they received only educational units, not degrees. c. A new lower step for entry-level officers would be created, five percent (5 %) below the current bottom step for the Police Officer classification. d. If a person separates from employment, cash -out of certain leave time would be at 100% of the amount, not 109% as was in the current MOU. e. Persons who opt -out of the City's Medical Plans (and who have other insurance) have a cap of $1,274 /month. FINANCIAL IMPACT OF THIS MOU: Financially, our best estimate shows that the net impact of the entirety of the MOU increases the City's cost by about $205,000 across the duration of the MOU for the :,j Labor Agreement: Newport Beach Police Association (NBPA) June 26, 2012 Page 5 NBPA unit. This increase is less than 0.5% of the total Police budget of $41,820,000 for FY 2012 -13. The $205,000 in increased costs reflect: 1. Sworn membership changes that will result in about $168,000 in savings over the MOU term; plus 2. Miscellaneous membership changes, in part because of the impact of the cafeteria increases on lower -salary employees, will increase City costs by about $374,000 over the MOU term. Should the City be able to reopen the MOU for additional pension pickups for Misc PA employees, additional savings may be attained, but costs incurred as well. Importantly, the cost estimate here includes the cost of the COLAs and the increased cafeteria amounts as well as the savings associated with two critical things: 1. 2 "d Tier. Bringing in new employees at a different, less generous retirement tier (3% at 55 and 2% at 60) has a long -term benefit that increases in value each year, as Old Tier employees retire and are replaced by New Tier employees. It starts out fairly small (net savings across this MOU estimated at about $70K). 2. Employees paying the Employee Share of the pension benefit — this reduces the City's cost in three ways: a) The employee is paying something the City once paid; b) The City no longer has to pay a PERS charge based on the fact that the City was paying the Employee's share (called "PERS on PERS "); and c) The City's overall pension obligation is calculated on a lower base - not 109% of pensionable salary (with growth assumptions of 3.25% /year) but 100% of pensionable salary. Considering the 2 "d Tiers (Safety and Misc), the additional employee contributions, and the elimination of the EPMC, the net savings to the City for solely these retirement - related changes for the NBPA unit is about $1,500,000 over the MOU term, or about $600,000 on an annual basis (although due to the timing of the MOU items, the annualized savings number varies fiscal year to fiscal year). The chart on the next page shows how one aspect of the savings (eliminating EPMC and thereby reducing pensionable payroll as well as PERS on PERS) works for one generic employee specifically. Labor Agreement: Newport Beach Police Association (NBPA) June 26, 2012 Page 6 How EPMC and PERS on PERS affects City Pension Costs $ Under Current (old) MOU Net City Pension Cost for This Employee Police Officer (PERS-able Pay) S 84,000 Total Pension Costfor This Employee $ 41,142 Net City Pension Costfor This Employee $ 38,202 Amount Employee Pays towards Pension $ 2,940 % of Total Pension Cost Paid by City 92.9% % of Total Pension Cost Paid by Employee 7.15% At Conclusion of MOU Police Officer (PERS -able Pay- includes COLAs +3.1 %) $ 90,103 Total Pension Cost for This Employee $ 41,087 Net City Pension Cost for This Employee $ 30,184 Amount Employee Pays towards Pension $ 10,902 %of Total Pension Cost Paid by City $ 1,323 73.5% % of Total Pension Cost Paid by Employee 26.5% City Retirement Savings for this EE- this MOU from Current MOU $ 8,017 It is important to note that, with the changes in this MOU and since the date of the NBPA membership's last raise, the purchasing power of an NBPA member's paycheck -- if he or she was at top step - will have declined substantially (estimated at from -12% to -17 %) between December 2008 and June 2014 if inflation remains at about three percent (3 %) per year. As a case in point, the City's cafeteria increases generally have just kept up with health care inflation (thought it depends on the plan selected), and have always resulted in out of pocket expenses for these family plans: I will conclude this staff report noting my appreciation for the NBPA leadership's participation in this challenging process and the membership's vote to approve this MOU. MOU discussions are never easy, and they were especially challenging this term, as the City sought additional pension contributions and the 2nd Tier that would necessarily impact NBPA members' compensation. I appreciate the NBPA's approach, as well as the Council's approach in seeking respectful but meaningful change. 6- 00 s e s Blue Shield Family PPO $ 1,164 $ 1,517 30.33% PORAC Family Plan $ 1,076 $ 1,323 22.96% City Cafeteria (NBPA) $ 971t7$ 1,276 31.41% I will conclude this staff report noting my appreciation for the NBPA leadership's participation in this challenging process and the membership's vote to approve this MOU. MOU discussions are never easy, and they were especially challenging this term, as the City sought additional pension contributions and the 2nd Tier that would necessarily impact NBPA members' compensation. I appreciate the NBPA's approach, as well as the Council's approach in seeking respectful but meaningful change. 6- Labor Agreement: Newport Beach Police Association (NBPA) June 26, 2012 Page 7 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). Submitted by Dave Kiff City Manager Attachments: A. Key Provision Summary B. EPMC & Retirement Comparison with Other Bargaining Units C. Resolution 2012 - relating to PERS and the EPMC D. Proposed MOU with the NBPA r. Attachment A Key Provisions of the NBPA -City proposed MOU 1y er - -_ _ __f - � = r .�,. • � � Tr # �P'Y�a: t,;�` - - • �; -mom-: e . - _ N �i al' ,, . '. - r T r. _ •pay Temp 3-5% payroll pay 2.7s% more Pay 2.29% more on EE Side. Members pay at least 5.58% deduction made Penslon Pickup on EE Side (EE More Icku P ppast8 %total Pay 3.5 %moreon EE Side IEE on EE side and 2.42% on ER Members 12.1% with zero Pension Pickup permanent, moves to Sha at subject to reo ener. Share now at 9 %) side 8 %) d reporting of EPMC EE share (EE Share 1 -2% Min 2 %, max 4% Retiree Medical Trust .25%) 6 .25 %J Members are at $100 /mo Medical .550 1Montb now at 3.5 %J +$100 1Month +$50 /Month Members are at$1,325 /mo Additional Leave Time 12 hours /yr 3.1% pay Increase offset wl th Members receive 12 more Additional Penslon 3.1% pension contribution, hours of leave er yea r. Cost Share for Sworn 26,5 9&Total Pension Cost Floor /cop applies. COLA I 1 1 1 -2% 1 1 1 -2% Min 2 %, max 4% Medical +S50 /Month +$100 /Month +550 /Month Members are at$1,325 /mo Retiree Medical Trust + S300 /Month Members are at $100/mo Additional Leave Time ]2 hours /yr Members receive 12 more hours of leave per year. 1y er - -_ _ __f ANOM Pay 2.29% more on EE Side. Members pay at least 5.58% Pay 2.29% more Penslon Pickup More Icku P ppast8 %total on EE side and 2.42% on ER on Eslde EEsl subject to reo ener. side 8 %) COLA 1.2% 1 -2% Min 2 %, max 4% Retiree Medical Trust * $100 /Month Members are at $100 /mo Medical .550 1Montb +$100 1Month +$50 /Month Members are at$1,325 /mo Additional Leave Time 12 hours /yr Members receive 12 more hours of leave er yea r. 1y Labor Agreement: Newport Beach Police Association (NBPA) June 26, 2092 Page 9 Attachment B EPMC & Retirement Contribution Comparison of Selected Other Bargaining Units — Sworn and Misc MOU and Date NBPASworn °• • rn NBFAMisc 'Lifeguards, most Other Temp 3.5% Payrol I 3.S% Payrol O,IdlCurrentMOU Deduction, EE Pays 3.42 %, Deduction, EE Pays 3.42 %, E£ Pays 9 %, EE Pays 5.58 %, 7% EPMC 7% EPMC 0EPMC 2.42% EPMC 9% EPMC 9% EPMC Upon Adoption of EE Pays 3.5%, EE Pays 3.5 %, EE Pays 6.5 %, N/A New MO.0 5.5% EPMC 5.5% EPMC 3.92% EPMC July 1, 2012 EE Pays 6.25 %, E£ Pays 5.71 %, 2-7S% EPMC 4.71% EPMC EE Pays 7 %, EE Pays 8 %, January 1, 2013 2.0% EPMC 2.420/. EPMC July 1, 2013 EE Pays 12.1 %, EE Pays 8 %, Subject to 0% EPMC 2.42% EPMC Pending January 1, 2014 EE Pays 9 °.6, Negotiations 0% EPMC By June 30 ' 2014 EE Pays 12.1%, EE Pays 8 %, EE Pays 9 %, EE Pays 8 %, £E Pays 9 %, 0% EPMC 2.42 %EPMC 0% EPMC 2.42 %EPMC° 0% EPMC Notes: 'Subject to reopener. 2 Subject to "me too" provision. C"l Attachment C RESOLUTION NO. 2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH RESCINDING RESOLUTIONS NO. 94-40 AND 2010 -75 TO MODIFY THE PAYING AND REPORTING OF THE VALUE OF THE EMPLOYER PAID MEMBER CONTRIBUTION TO THE CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM (CALPERS) FOR EMPLOYEES REPRESENTED BY THE NEWPORT BEACH POLICE ASSOCIATION WHEREAS, the City Council of the City of Newport Beach previously adopted Resolutions No. 94 -40 and 2010 -75 to pay and report the value of the Employer Paid Member Contribution (EPMC) to CalPERS for employees represented by the Newport Beach Police Association; and WHEREAS, the City Council of the City of Newport Beach has the authority to implement Government Code Section 20636(c)(4) pursuant to Section 20691 to report the value of the Employer Paid Member Contribution if provided for in a labor agreement; and WHEREAS, the City Council of the City of Newport Beach and the Newport Beach Police Association have a written agreement which specifically provides a portion of the normal member contribution to be paid by the employer and reported as additional compensation; and WHEREAS, one of the steps in the procedures to implement Section 20691 is the adoption by the City Council of the City of Newport Beach of a resolution to modify the paying and reporting of the EPMC; and WHEREAS, the City Council of the City of Newport Beach has identified the following conditions for the purpose of its election to pay and report the value of the EPMC. NOW, THEREFORE, the City Council of the City of Newport Beach does hereby RESOLVE to pay and report the value of EPMC as follows: Section 1. This benefit shall apply to all employees represented by the Newport Beach Police Association (NBPA). Section 2. Effective the first payroll period commencing on and after July 1, 2012, this benefit shall be modified to consist of paying 2.75% of the normal contributions as EPMC for NBPA sworn employees and 4.71% of the normal contributions as EPMC for NBPA non -sworn Miscellaneous employees, and reporting the same percent (value) as compensation eamable (excluding Government Code Section 20636(c)(4)) as additional compensation. Section 3. Effective the first payroll period commencing on and after July 1, 2013, this benefit shall be modified to consist of paying 0% of the normal contributions as EPMC for NBPA sworn employees and 2.42% of the normal contributions as EPMC for NBPA non -sworn Miscellaneous employees, and reporting the same percent (value) as compensation earnable (excluding Government Code Section 20636(c)(4)) as additional compensation. go ATTEST: City Clerk Adopted this 26th day of June, 2012. Nancy Gardner, Mayor of the City of Newport Beach i� MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH POLICE ASSOCIATION This MEMORANDUM OF UNDERSTANDING (hereinafter referred to as "MOU ") is entered into with reference to the following. PREAMBLE 1. The Newport Beach Police Association ( "NBPA "), 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. NBPA 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, 2012 to June 30, 2014 and this tentative agreement has been embodied in this MOU, which has been executed concurrently. 3. This MOU, upon approval by NBPA and the Newport Beach City Council, represents the total and complete understanding and agreement between the parties regarding all matters set forth herein. 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's /Employee Labor Relations Resolution No. 7173, the City acknowledges that NBPA is the majority representative for the purpose of meeting and conferring regarding wages, hours and other terms and conditions of employment for all employees in those classifications specified in Exhibit "A" or as appropriately modified in accordance with the Employer /Employee Resolution. All other classifications and positions not specifically included within Exhibit "A" are excluded from representation by NBPA. B. Duration of Memorandum 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, 2012. This MOU shall remain in full force and effect until June 30, 2014, and the provisions of this MOU shall continue after the date of expiration of J this MOU in the event the parties are meeting and conferring on a successor MOU. 2. 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. Release Time 1. NBPA members shall be allowed to participate in the following activities during scheduled working hours without loss of pay ('Release Time "): a. attendance at off -site meetings, conferences, seminars or workshops related to matters within the scope of representation; b. to prepare for scheduled meetings between the City and NBPA during the meet and confer process. C. i. to travel to, and attend scheduled meetings between the City and NBPA during the meet and confer process. ii. to travel to and attend scheduled grievance and disciplinary hearings. iii. to meet, for up to one hour, with their representative prior to a hearing described in subsection C.c.ii above. 2. NBPA shall designate certain members as those members entitled to release time. In no event shall any one designate be entitled to use more than 100 hours of Release Time (exclusive of actual time spent meeting with City representatives on matters relating to the scope of representation), within any calendar year. Designates must give reasonable advance notice to, and obtain permission from, their supervisor prior to use of release time, or, prior to adjusting work hours per subsection C.2.a. Requests for release time shall be granted by the supervisor unless there are specific circumstances that require the designate to remain on duty- 2 li� Designates shall, to the maximum extent feasible, receive shift assignments compatible with participation in the meet and confer process. a. Any NBPA negotiating team member may request and shall (subject to the approval process above) be granted Hex work hours on any scheduled work day during which the negotiating team member is to attend a meet and confer session. Employees may flex starUfinish time up to two (2) hours. 3. City grants NBPA members the right to engage in the activities described in subsection 1(c) at any time without any reduction to City — provided Release Time or to any Release Time bank created pursuant to subsection C.S. 4. City Grants NBPA 500 hours of Release Time per calendar year to engage in the activities described in subsection C.1.a and 1.b. (City — provided Release Time.) NBPA may accumulate up to 300 hours of City— provided Release Time. 5. In addition to City — provided Release Time and Release Time provided pursuant to subsection C.3, NBPA members may contribute up to two hours of earned compensatory time off ( "CTO ") to an NBPA Release Time Bank. Members may contribute earned CTO only during the period from July 1 through August 15 during any calendar year. However, members shall not have the right to contribute CTO to the NBPA Release Time bank if NBPA has accumulated more than 600 hours of total Release Time. Any NBPA member who contributes CTO to the Release Time Bank gives up any right to usage of, or payment for, the contributed CTO. Contributions may be made only in hourly increments. Contributions shall be on forms prepared by the City which shall then be submitted to the appropriate department employee. City shall advise NBPA as to the balance of hours in the Release Time Bank upon request. For purposes of this subparagraph only, the term "compensatory time off or CTO" includes accrued flex leave, accrued vacation leave, and accrued holiday time. 6. There is no entitlement to release time for any matter not set forth above. D. Scope 1. All present written rules and current established practices and employees' rights, privileges and benefits that are within the scope 3 15 of representation shall remain in full force and effect during the term of this MOU unless specifically amended by the provisions of this MOU. 2. Pursuant to this MOU, the City reserves and retains all of its inherent exclusive and non —exclusive managerial rights, powers, functions and authorities ("Management Rights ") as set forth in Resolution No. 2001 -50. Management Rights include, but are not limited to, the following, a_ the determination of the purposes and functions of the Police Department; b. the establishment of standards of service; C. to assign work to employees as deemed appropriate; d. the direction and supervision of its employees; e. the discipline of employees; f. the power to relieve employees from duty for lack of work or other legitimate reasons; g. to maintain the efficiency of operations; h. to determine the methods, means and personnel by which Police Department operations are to be conducted; the right to take all necessary actions to fulfill the Department's responsibilities in the event of an emergency; the exercise of complete control and discretion over the manner of organization, and the appropriate technology, best suited to the performance of departmental functions. The practical consequences of a Management Rights decision on wages, hours, and other terms and conditions of employment shall be subject to the grievance procedures. E. 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, and each party expressly waives its rights to request the other to meet and confer concerning any issue relating 4 primarily to matters within the scope of representation except as expressly provided herein or by mutual agreement of the parties. No representative of either party has the authority to make, and none of the parties shall be bound by, any statement, representation or agreement which is not embodied in this MOU. Subject to the paragraph above, this section shall not be construed to prevent the Newport Beach Police Department from giving notice to the Association and affording the Association the opportunity to meet and confer on the impact of policy changes or the exercise of management rights. However, the terms of this MOU may not be modified through the impact negotiations process; except by mutual agreement. F. 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. G, Bulletin Boards Space shall be provided on bulletin boards within the Police Department at their present location for the posting of notices and bulletins relating to NBPA business, meetings, or events. All materials posted on bulletins boards shall indicate the name of the organization responsible. Material posted shall not contain personal attacks on any City official or employee, any material which constitutes harassment, discrimination or retaliation on the basis of race, gender, ethnicity, religion or other statutorily or constitutionally impermissible basis, or any pornographic or obscene material. H. No Strike The parties recognize their mutual responsibility to provide the citizens of Newport Beach with uninterrupted municipal services and, therefore, the parties agree not to conduct concerted strike, work slowdown, sick out, withholding of services, or lockout activities. Savings If any provision of this MOU shall be held invalid by any court of competent jurisdiction, or if compliance with or enforcement of any provision shall be restrained by court action, or other established governmental administrative tribunal, the remainder of this MOU shall not 5 be affected, and the parties shall replace such invalidated provision with another of similar or equal value through the negotiations process. J. Impasse In the event of an impasse (the failure to agree on a new MOU after the express term of the existing MOU has expired), the parties may agree on mediation pursuant to the procedure outlined in Section 16 of Resolution No. 2001 -50. SECTION 2. —Compensation A. Salary Adjustments —this MOU Period Effective the first payroll period commencing on or after July 1, 2012, there shall be a base salary increase of not less than 1.0 %, nor more than 2.0 %. The precise amount of the increase shall be determined with reference to the percent increase in the Consumer Price Index (All Urban Consumers) for the Los Angeles, Riverside, Orange County areas for the 12 consecutive months ending on April 30, 2012. If there is either a decrease in the CPI, no increase in the CPI or the increase is less than or equal to 1.0 %, the base salary increase shall be 1.0 %. If the increase is greater than 1.0 %, the base salary increase shall be in the same amount, but in no event, greater than 2.0 %. 2. Effective the first payroll period commencing on or after July 1, 2013, there shall be a base salary increase of not less than 1.0 %, nor more than 2.0 %. The precise amount of the increase shall be determined with reference to the percent increase in the Consumer Price Index (All Urban Consumers) for the Los Angeles, Riverside, Orange County areas for the 12 consecutive months ending on April 30, 2013. If there is either a decrease in the CPI, no increase in the CPI or the increase is less than 1.0 %, the base salary increase shall be 1.0 %. If the increase is greater than 1.0 %, the base salary increase shall be in the same amount, but in no event, greater than 2.0 %. 3. Concurrent with City Council adoption of the 2012 -2014 MOU, the "Police Officer" classification, Schedule J20, shall reflect a new lowest salary step of 5% below the lowest base salary step in place prior to the adoption of this MOU. This salary step may advance over time as adjustments are made to base salary that apply to the entire Police Officer classification, but shall always remain 5% below the step above it. C. s 4. Concurrent with the July 1, 2013 implementation of the 3.1% Government Code § 20516(a) cost sharing as to all unit safety members (see Section 4.D. below,) the base salary for all unit safety members shall be increased by 3.1 %. B. Code Seven /Duty Incentive Time The City and NBPA have agreed to eliminate entitlement to compensation for duty incentive time and Code Seven time based upon implementation of the 9/80 work schedule and a Settlement Agreement between the City and NBPA. NBPA and its members agree that the provisions and rules relative to entitlement to compensation for duty incentive time or Code Seven time survive the termination of this MOU, that the provisions of the settlement agreement are in full force and effect and that no request for compensation for duty incentive time or Code Seven time at variance with the provisions of existing rules or the settlement agreement shall be made at any time in the future by NBPA or any of its members. C. Overtime 1. Employees shall be entitled to overtime compensation at the rate of time and one half the regular rate of pay for hours worked in excess of their regularly scheduled shift. Paid time off shall be considered time worked for overtime calculation purposes. 2. Employees shall also be entitled to overtime compensation for hours worked in excess of 2,080 hours in the 12 month period commencing January 1st of each year. These overtime payments shall be offset by Section 1 above. 3. Overtime compensation shall be in the form of compensatory time off or pay at the election the employee. Maximum compensatory time accrual shall be 120 hours. All overtime worked for employees at the CTO maximum shall be paid. 4. The current practice for scheduling and approving CTO shall continue for the term of this agreement. CTO is approved on a "first come, first served" basis. Department policy is to approve CTO unless the use of CTO would result in staffing below minimum levels established by the Department, or the Department has a special circumstance or an operational need that requires staff resources above its established minimum levels- The Association may reopen negotiations concerning the protocol of approving CTO requests if the Department's staffing level drops such that it routinely runs at or below minimum staffing levels. 7 5. The Police Department has the discretion to schedule any of its employees to work a regular work day on July 4th, regardless of the day of the week or job assignment. This may include modifying work schedules and /or days off according to deployment needs. Unit employees who actually work July 4th will be compensated at their regular hourly rate, plus premium pay equal to 1/2 of the hours actually worked on that day. Employees will be provided their regular number of days off for the month of July (unless otherwise scheduled on an overtime basis), which will be selected /assigned according to the normal practices of their particular work unit. Should the employees work an additional shift in subsequent leap years compensation shall be paid at the appropriate rate of overtime pay, 6. The City and NBPA jointly petitioned the NLRB and were granted a 7(b) exemption of the Fair Labor Standards Act to allow for use of the overtime standards as set forth in this section. The exemption allows continued use of the Department's alternative /semi- flexible schedule. D. Overtime Compensation - Court 1. Compensation - Employees shall receive either compensatory time or paid time at their discretion. 2. On -Call - Off -duty employees on call for court who have not been canceled prior to the scheduled standby time shall, whether extended or not, be compensated at a rate equal to the actual standby time, with a minimum of one (1) hour paid at time and one - half the employee's regular rate of pay. 3. Appearance - Off -duty employees who are required to appear in court shall be compensated for the actual time involved with a minimum of two (2) hours paid at time and one -half the employee's regular rate of pay. Employees appearing in court after being on call the same day shall be compensated from the time listed on the subpoena until released by the court. 4. Cancellation — Off -duty employees whose court appearance is cancelled with less than 12 hours notice shall receive a payment for one hour at the employee's regular rate of pay. E. Master Police Officer Recognition Program The City and NBPA agreed to institute a Master Officer Recognition Program ( "MORP ") on July 4, 1987. The intent of the MORP is to attract 8 ra (} highly qualified and experienced lateral officers and encourage NBPA members to remain with the Newport Beach Police Department by compensating employees who have acquired special skills, training and ability through years of service. The MORP is comprised of four levels with progressively higher compensation paid as years of service and experience increase. For the purposes of this Section E, credits shall be defined as follows: Completion of any Police Academy shall equal 0.25 credits. One Credit shall equal: 1) Two years of experience as a sworn police officer in patrol, bikes, K9, motors, accident investigation, helicopters, or any other uniformed assignment, or 2) One year of assignment as a detective, with partial credit earned at quarterly intervals (three months = 0.25 credits), or 3) 2080 hours of service as a Field Training Officer. Years of sworn service includes actual time employed as a police recruit or similar classification in a police training academy, not to exceed six months. Effective concurrent with City Council adoption of the 2012 -2014 MOU, lateral hires shall be authorized to utilize pre - Newport Beach "years of sworn service" and years of "specialty assignment' service, in satisfying those Master Office requirements set forth herein. A lateral hire shall be ineligible to participate in the "MORP" until successfully completing the mandated probationary testing period. Except for E3 above, MORP shall commence beginning the first full pay period after the employee qualifies for each Master Officer step. It is the responsibility of the employee to apply for MORP pay or any increase in MORP compensation level. The City reserves the right to administratively modify the MORP program so as to structure it as a Special Pay rather than an element within the base rate, as long as the overall compensation of the employees is not reduced. The Association will be given advance notice if such a change is to be implemented. The requirements and compensation of the four levels of MORP are summarized as follows: 9 MASTER OFFICER I Requirements. A MORP I candidate must have: 1. A minimum service of five (5) years as a sworn Police Officer, including one credit; and 2. An intermediate POST Certificate or the educational equivalent; and 3. Must maintain at least an overall "meets standards" or equivalent rating on their most recent performance evaluation. Compensation: Five percent (5 %) base salary step increase. MASTER OFFICER fl Requirements: A MORP II candidate must have all of the qualifications of a MORP I candidate plus: 1. A minimum service of eight (8) years as a sworn Police Officer; and 2. An advanced POST Certificate, or the educational equivalent; and 3. Must maintain at least an overall "meets standards" rating on their most recent performance evaluation. Compensation: Five percent (5 %) base salary step increase above Master Officer I. MASTER OFFICER III Requirements: A MORP III candidate must have all of the qualifications of a MORP II candidate plus: 10 �i r-� 1. A minimum service of ten (10) years as a sworn Police Officer, including two credits; and 2. Must maintain at least an overall "meets standards" rating on their most recent NBPD performance evaluation. Compensation: Five percent (5 %) base salary step increase above Master Officer II. MASTER OFFICER IV Requirements: A MORP IV candidate must have all of the qualifications of a MORP III candidate plus: 1. Minimum service as a sworn Police Officer: a. Fifteen (15) years plus a Bachelors degree or a minimum of 120 semester units b. Twenty (20) years plus a minimum of 90 semester units C. Twenty -five (25) years plus a minimum of 60 semester units The above must include three credits; and 2. At least one year assigned as an FTO in the Patrol Division, regardless of the number of hours actually training, or have attended the POST FTO school; and 3. Must receive and maintain at least an overall "meets standards" rating on their most recent NBPD performance evaluation. Compensation: Five percent (5 %) base salary step increase above Master Officer III. F. Education Retention Incentive Program Effective the pay period beginning June 23, 2007, the City shall institute the Education Retention Incentive Program to retain experienced, well- 11 4 ---% educated non -sworn employees. Employees shall be eligible for payment for education beyond minimum qualifications and years of service as follows. Incentive pay shall commence beginning the first full pay period after the employee qualifies. It is the responsibility of the employee to apply for incentive pay or any increase in compensation level. Education Years of City Service 30 units 15 AA or 60 units 12 MA/BA or 120 units 8 A graduate degree Is the only eligible increment of education for positions requiring BA. Compensation: Five percent (5 %) of member's base monthly salary. G. Scholastic Achievement Pay Sworn NBPA members are entitled to additional compensation contingent upon scholastic achievement ( "Scholastic Achievement Pay "). Sworn NBPA members may apply for increases pursuant to this Section when eligible and scholastic achievement pay shall be included in the member's paycheck for the pay period immediately after approval by the Chief of Police. It is the responsibility of the NBPA member to apply for Scholastic Achievement Pay. Approval of the member's application shall not be unreasonably withheld or delayed, and the member shall not be entitled to receive scholastic achievement pay prior to the date the application is approved even though the member may have been eligible prior to approval. Scholastic achievement pay is contingent upon years of service and the number of units and/or degrees received by the employee. Effective the pay period beginning January 20, 2007 (prospectively), years of service shall include time employed as a police recruit or similar classification in a police training academy, not to exceed six months. For persons hired on or after the adoption date of this MOU, a "degree" shall be defined as a degree awarded by an institution accredited by the State of California, the United States Department of Education, the Council for Higher Education, or the Distance Education Training Council. Eligibility to receive compensation shall be conditioned upon a determination by the appointing authority that the major in which a degree is earned and /or a substantial number of earned units which will qualify the individual for a degree, are in a field or protocol reasonably likely to enhance the employee's job performance. 12 .P The Plan consists of five levels which reflect multipliers of the base monthly salary. Qualifying units and /or degrees must be awarded by accredited community colleges, state colleges or universities. The following is a schedule of monthly payments pursuant to the Scholastic Achievement Program: Scholastic achievement pay is: Years of Service: 30 Units 60 Units 90 Units BA/BS MAIMS /JD 2 1% 1% 1% 1% 1% 3 1% 2% 3% 5.5% 5.5% 4 1% 2% 3% 5.5% 6.5% Any unit members hired on and after City Council adoption of this 2012- 2014 MOU shall be ineligible for any scholastic pay based upon having obtained units only. H. Non -sworn Personnel Shift Differential The night shift differential pay for non -sworn personnel shall be $1.50 per hour between the hours of 6 p.m. and 6 a.m. Training Pay Police Officers assigned to Field Training Officer duties for either Regular or Reserve officers and Civilian Employees assigned to training duties for new employees are entitled to receive compensation for these extra duties. To be eligible for compensation, the employee shall have completed a 40 -hour FTO course and shall be required to complete a Daily Evaluation Report for each shift worked with a trainee. Employees assigned full training responsibilities who have not completed the FTO course shall be eligible for compensation pending course completion. Employees will be compensated for each shift worked as an FTO with a trainee at the rate of 1.5 straight time hours per shift: The following classifications are not eligible for training pay consistent with existing department/division practice. Sr. Community Service Officer Sr. Custody Officer Sr. Animal Control Officer Sr. Police Dispatcher Sr. Crime Scene Investigator 13 J K. Motor Officer Pay Assigned Motor Officers shall receive six (6) additional hours of overtime per month pursuant to this City and Association mutual agreement that the six (6) additional hours of overtime represent reasonable compensation for maintenance of the motorcycle in a clean and serviceable condition. Canine Officer Employees assigned to work as Canine Officers, (in accordance with individual signed contracts between the employees and department) shall receive additional compensation at the rate of six (6) additional hours of overtime pay per month (six hours of time and a half equals nine (9) hours of compensation). This pay is recognition of the additional hours required of employees assigned to care for a City dog. City and Association mutually agree that the additional six (6) hours pay does represent reasonable compensation for the additional tasks required in maintaining the canine. No employee shall work more than six (6) hours in performing Canine Officer duties without the express direction of their supervisor. L. Matron Pav Any female non -sworn employees assigned matron duties shall receive one (1) hour straight time pay for each shift matron duties are performed. M. Minimum Call Back The following shall determine the type of compensation for the overtime worked: a. Court (two hour minimum). b. Call Out - off duty personnel called out for a special assignment (two hour minimum). C. Payment shall not be made for employees required to return to work to correct work errors. d. Call back shall be paid only for hours not contiguous to the employees regular work schedule when they are required to physically return to work. 14 N. Bilingual Pay Employees certified as bilingual (Spanish) shall be eligible to receive Two Hundred ($200.00) Dollars per month in bilingual pay. The existing certification process will confirm that employees are fluent at the street conversational level in speaking, reading and writing Spanish. Employees certified shall receive bilingual pay the first full pay period following certification. Additional languages may be certified for compensation pursuant to this section by the Chief of Police. O. Certification Pay Unit employees in Mechanic classification shall be eligible for annual certification pay as follows: 1. Smog License - $250.00 2. Fire Mechanic State Level I - $100.00 3. Fire Mechanic State Level II - $200.00 4. ASE Certification - $25.00 per certification up to a maximum of eight (8) and $100.00 for possessing a current ASE Master Truck Technician and $100.00 for possessing a current ASE Master Automobile Technician certification. 5. Commercial Drivers License, Class A- $100.00 6. Commercial Drivers License, Class B - $75.00 P. Uniform Allowance. The City reports to PERS a uniform allowance amount of $1,100 per year for sworn officers; $118.56 per year for non -sworn personnel. SECTION 3. —Leaves A. Flex Leave 1. NBPA members shall accrue (prospectively) flex leave based on the greater of their total continuous years of full -time service with the City of Newport Beach, or their total full -time employment as a sworn law enforcement officer, including up to a maximum of six months time employed as a police recruit or similar classification in 15 -a I a police training academy. NBPA members shall accrue Flex leave at the following rates: Years of Cont. Service: 1 but less than 5 5 but less than 9 9 but less than 12 12 but less than 16 16 but less than 20 20 but less than 25 25 and over Adjusted Accrual Per Pay Period: 5.85 6.46 7.08 7.70 8.31 8.92 9.54 Starting July 1, 2012, the above accrual schedule shall change to: Years of Con't. Service: 1 but less than 5 5 but less than 9 9 but less than 12 12 but less than 16 16 but less than 20 20 but less than 25 25 and over Adjusted Accrual Per Pay Period: 6.31 6.92 7.54 8.16 8.77 9.38 10.00 2. NBPA and the City acknowledge that employees assigned the 9181 work schedule accrue one (1) additional hour per pay period in addition to the accrual levels set forth above. 1 The Flex leave program shall be administered as follows: a. NBPA members shall not accrue flex leave until continuously employed by the Newport Beach Police Department for a period of six (6) months provided, however, if a member on the flex leave program becomes sick during the first six months of employment, the City will advance up to thirteen (13) pay periods of paid leave time for use by the member to recover from illness. In the event the City advances paid leave time and the employee is terminated or resigns before completing six months of continuous employment, the member's final check shall be reduced by an amount equal to the number of flex leave hours advanced multiplied by the member's hourly rate of pay. 16 I r` b. NBPA members shall accrue thirteen pay periods of flex leave immediately upon completion of six (6) months continuous employment with the Newport Beach Police Department, provided however, this amount shall be reduced by any flex leave time advanced during the first six months of employment. C. Members employed by the City prior to initiation of the flex leave program have had then current accrued vacation time converted to flex leave on an hour for hour basis with then current sick leave placed in a bank to be used as provided in Section 11.2 of the City of Newport Beach Employee Policy Manual. Members entitled to use sick leave pursuant to Section 11,2A of the Employee Policy Manual must notify appropriate department personnel of their intention to access the sick leave bank and, in the absence of notification, absences will be charged to the member's flex leave account. Members who wish to convert an absence from flex leave to sick leave must submit a written request to the Chief of Police within twenty (20) days after the absence (20 days from the last absence in the event the member was continuously absent for more than one day) specifying the nature of the illness and the person notified of the intent to use sick leave, or the reasons for the failure to notify appropriate department personnel. The Chief of Police shall grant the request for conversion if the member submits a written statement signed by his or her attending physician confirming the illness and the Police Chief determines that the member's failure to notify appropriate departmental personnel was reasonable under the circumstances. d. NBPA members shall be entitled to accrue flex leave up to seventy (70) times the members bi- weekly flex leave accrual rate (Flex Leave Accrual Threshold). NBPA members first hired by the City prior to September 1, 1997, shall be paid for all flex leave that accrues in excess of the flex leave accrual threshold (Flex Leave Spillover Pay). Flex Leave Spillover Pay will be paid at the members regular hourly rate of pay. Effective during the first pay period of January, 1998, NBPA members who have not utilized at least 80 hours of flex leave during the prior calendar year shall not accrue flex leave in excess of the Flex Leave Accrual Threshold and shall not be entitled to Flex Leave Spillover Pay. 17 ) i NBPA members first hired, or rehired by the City subsequent to September 1, 1997, shall not be eligible for Flex Leave Spillover Pay and shall not be entitled to accrue flex leave in excess of the Flex Leave Accrual Threshold. Employees who have accrued in excess of seventy (70) times the member's bi- weekly accrual rate concurrent with adoption of the 2012 MOU, shall accrue no additional time unless through use of time or any authorized cash payment, the accrued hours decrease to less than seventy (70) times the bi- weekly accrual rate. Except for persons eligible for Spillover Pay, in no case shall leave that would have been accrued in excess of the above limitations be earned for cash conversion. e. All requests for scheduled flex leave shall be submitted to appropriate department personnel. Flex leave may be granted on an hourly basis. In no event shall a member take or request flex leave in excess of the amount accrued. f. Members shall be paid for all accrued flex leave at their then current hourly rate of pay upon termination of the employment relationship. g. Should approved leave be canceled due to the needs of the City, a reasonable extension of time (up to 90 days) will be granted for employees to reschedule the leave without the loss of spillover or leave accrual. h. Employees actually working 2088 hours per year shall be credited with two hours holiday pay per quarter worked on the 12 hour schedule. B. Holiday Time NBPA members shall accrue holiday time at the rate of 96 hours per fiscal year (July 1 through June 30th), and at the rate of 3.7 hours per pay period. Option 1 (Default): Unless otherwise irrevocably elected by the employee, holiday compensation shall be paid in cash along with the employee's regular bi- weekly check, and will be reported to PERS as special compensation in addition to the employee's bi- weekly base salary. Option 2: Within 60 days of NBPA membership, NBPA members may irrevocably elect to have all or any portion of the 3.7 hours of accrued 18 7r holiday compensation added to the member's flex leave bank on a bi- weekly basis in lieu of a cash payment. Once holiday time is accrued to the member's flex leave bank, all rules and opportunities concerning the flex leave program (described elsewhere in this MOU and in the Employee Policy Manual) will apply (e.g. usage, maximum balance, spillover, periodic payout, etc). Pay for any time taken from the flex leave bank, and any spillover pay or other payout for flex leave, will not be reported to PERS as special compensation. C. Leave Pay Off For the term of this agreement, NBPA members shall receive payment for any accrued leave upon termination at the rate of 100% of their base hourly rate. D. Bereavement Leave Bereavement Leave shall be defined as the necessary absence from duty by employee having regular or probationary appointment because of the death or terminal illness in his /her immediate family. NBPA members shall be entitled to forty (40) hours of bereavement leave per incident (terminal illness followed by death is considered one incident). Immediate family shall mean an employee's father, mother, brother, sister, spouse /domestic partner, child or grandparent, and the employee's spouse /domestic partner's father, mother, brother, sister, child or grandparent. E. Leave Sellback Twice annually, employees shall have the option of selling back, on an hour for hour basis, accrued flex or vacation leave. In no event shall the flex or vacation leave balance be reduced below one hundred and sixty (160) hours. F. Worker's Compensation Leave 1. Sworn Members Any NBPA member who is a sworn peace officer and incapacitated by reason of any injury or illness which has been determined to have arisen out of or in the course of his or her employment shall receive compensation in accordance with the provisions of Section 4850 et. seq. of the Labor Code of the State of California. 19 { l J G. 2. Non —sworn Members Any employee incapacitated by reason of any injury or illness which has been determined to have arisen out of or in the course of his or her employment shall receive, in addition to temporary disability compensation pursuant to the laws of the State of California, an additional sum which, when added to temporary disability payments, provides the injured employee with regular compensation. Regular compensation is defined as the salary for the position and step occupied by the employee on the date of the job — related illness or injury. Payment shall commence with the first day of approved absence and end with the termination of temporary disability, or the expiration of six (6) months, whichever occurs first. Scheduling of Medical Treatment for Industrial Injuries Time spent by an employee receiving medical attention during the employee's normal working hours is considered hours worked and compensable, when the City or its representative schedules the appointment. When an employee is temporarily totally disabled due to an industrial injury, and is unable to perform even limited duty in the workplace, all appointments, whether arranged by the City or the employees, shall be considered as occurring during normal working hours. The employee shall not be entitled to any additional compensation, regardless of the employee's regular work schedule or the type of compensation currently received, except as otherwise required by law. When an employee has been released to either full or limited duty and has returned to the workplace, time spent receiving ongoing medical treatment, such as physical therapy or follow -up visits that are not scheduled by the City, is not considered hours worked and therefore, is not compensable. To avoid disruption in the workplace, an employee shall schedule such appointments to occur during off duty hours whenever possible. In the event such scheduling is not available, employee may be allowed to attend an appointment during their regularly scheduled duty shift with prior supervisory approval. Regular recurring appointments (i.e., weekly physical therapy) must be scheduled off duty. 20 i ;: SECTION 4. —Fringe Benefits A. Insurance 1. Benefits Information Committee City has established a Benefits Information Committee (BIC) composed of one representative from each employee association group and up to three City representatives. The Benefits Information Committee has been established to allow the City to present data regarding carrier and coverage options, the cost of those options, appropriate coverage levels and other health programs. The purpose of the BIG is to provide each employee group with information about health insurance /programs and to receive timely input from associations regarding preferred coverage options and levels of coverage. 2. Medical Insurance The City has implemented an IRS qualified Cafeteria Plan. In addition to the amounts listed below, the City shall contribute the minimum CalPERS participating employer's contribution towards medical insurance. Employees shall have the option of allocating Cafeteria Plan contributions towards the City's existing medical, dental and vision insurance /programs. The City and the Newport Police Employees Association will cooperate in pursuing additional optional benefits to be available through the Cafeteria Plan. Any unused Cafeteria Plan funds shall be payable to the employee as taxable cash back. Employees shall be allowed to change coverages in accordance with plan rules and during regular open enrollment periods. Effective the pay period beginning on or immediately after • March 1, 2012, the City's contribution towards the Cafeteria Plan will increase to 1,174.00 (plus the minimum CalPERS participating employer's contribution.) • January 1, 2013, the City's contribution towards the Cafeteria Plan will increase to $1,274.00 (plus the minimum CalPERS participating employee's contribution.) • January 1, 2014, the City's contribution towards the Cafeteria Plan will increase to $1,324.00 (plus the minimum CalPERS participating employee's contribution.) 21 j NBPA members who do not want to enroll in any medical plan offered by the City must provide evidence of group medical insurance coverage, and execute an opt -out agreement releasing the City from any responsibility or liability to provide medical insurance coverage on an annual basis. Those members participating in the opt -out program shall be permitted to cash out no more than $1,274.00 /monthly. 3. Dental Insurance The existing or comparable dental plans shall be maintained as part of the City's health plan offerings as agreed upon by the Benefits Information Committee. 4. Vision Insuran The existing or a comparable vision plan shall be maintained as part of the City's health plan offerings as agreed upon by the Benefits Information Committee. 5. Chances in Insurance Carriers and Coverages There shall be no change in Insurance carriers or coverages during the term of this agreement unless the City has given prior notice to the Association and, upon request, met and conferred. B. Additional I nsurance/Prog rams 1. IRS Section 125 Flexible Spendinq Account Section 125 of the Intemal Revenue Code authorizes an employee to reduce taxable income for payment of allowable expenses such as child care and medical expenses. The City shall maintain a "reimbursable account program" in accordance with the provisions of Section 125 of the Internal Revenue Code, pursuant to which an Association member may request that medical, child care and other eligible expenses be paid or reimbursed by the City out of the employee's account. The base salary of the employee will be reduced by the amount designated by the employee for reimbursable expenses. 22 s R 2. Disability Insurance The City shall provide Short-term (STD) and Long -term (LTD) disability insurance to all regular full time employees with the following provisions: Weekly Benefd 66.67% gross weekly wages Maximum Benefit $10,000lmonth Minimum Benefit $50 Waiting Period 30 Calendar Days Employees shall not be required to exhaust accrued paid leaves prior to receiving benefits under the disability insurance program. Employees may not supplement the disability benefit with paid leave once the waiting period has been exhausted. Concurrent with the commencement of this program, employees assumed responsibility for the payment of the disability insurance cost in the amount of one (1.0 %) percent of base salary. Simultaneously, the City increased base wages by one (1.0 %) percent. 3. Life Insurance The City shall provide life insurance for all regular full -time employees in $1,000 increments equal to one times the employee's annual salary up to a maximum of $50,000. At age 70 the City-paid life insurance is reduced by 50% of the pre -70 amount. This amount remains in effect until the employee retires from City employment. Employee Assistance Program City shall provide an Employee Assistance Program (EAP) through a properly licensed provider. Association members and their family members may access the EAP subject to provider guidelines. D. The Retirement Benefit (Superseding inconsistent April 13, 2010 SUPPLEMENTAL MOU and inconsistent 2008 -2010 MOU provisions) 23 : 1. Current Non -Sworn Members (Miscellaneous) a. Pursuant to a separate agreement, miscellaneous (non - safety) unit members have agreed to have 2.42% of the employer retirement cost added to the employee's rate pursuant to California Government Code Section 20516. Non -safety erriployees now pay 3.42% of retirement costs (2.42% employer cost sharing and 1% employee normal member contribution) on a pre -tax basis pursuant to IRS Code Section 414(h)(2). Effective the first pay period after July 1, 2012, non -safety employees shall in addition to the Government Code §20516 cost sharing provision described above, pay an additional 2.29% of compensation as and for the individual members normal employee PERS contributions required to be paid by PERS (totaling 3.29% towards Employee's Rate plus 2.42% towards Employer's Rate). Said payment shall be made pursuant to Government Code § 20691. Effective the first pay period after July 1, 2013, non -safety employees shall in addition to the Government Code §20516 cost sharing provision described above, pay an additional 2.29% of compensation as and for the individual members normal employee PERS contributions required to be paid by PERS (totaling 5.56% towards Employee's Rate plus 2.42% towards Employer's Rate or 8% of pensionable compensation). Said payment shall be made pursuant to Government Code § 20691. Effective at such time as one or more of the City's other Miscellaneous units agrees to an additional employee contribution within this MOU term, NBPA agrees to reopen negotiations for the purpose of considering an equivalent contribution. d. The City provides the Public Employees' Retirement System retirement formula of 2.5% at 55 for unit members hired prior to implementation of the 2% at 60 retirement formula (see below,) e. The provisions of this 2012 -2014 MOU shall supersede and take precedence over any other inconsistent provisions in the September 9, 2007 SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF 24 _ f r NEWPORT BEACH AND THE POLICE EMPLOYEES ASSOCIATION. 2. Current Sworn Members a. The City provides the Public Employees' Retirement System retirement formula of 3% at 50. b. Effective concurrent with City Council adoption of this MOU, the April 13, 2010 Supplemental Memorandum of Understanding SECTION 4 FRINGE BENEFITS shall be modified to reflect that the 3.5% payroll deduction made by all safety unit employees as regards funding of retirement, shall continue in said amount but shall be made pursuant to Government Code § 20691. C. Effective the first payroll period commencing on and after July 1, 2012, sworn unit members shall pay an additional 2.75% of compensation as and for the individual member's normal employee PERS contributions required to be paid by PERS (totaling 6.25% on Employee's Rate). Said payment shall be made pursuant to Government Code § 20691. d. Effective the first payroll period commencing on and after July 1, 2013, sworn unit members shall pay an additional 2,75% of compensation as and for the individual member's normal employee PERS contributions required to be paid by PERS (totaling 9.0% on Employee's Rate). Said payment shall be made pursuant to Government Code § 20691. 3. 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 (subject to the Amendment described in Section 5, below.) 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. The PERS pre- retirement option settlement 2 death benefit (Section 21548) for miscellaneous and safety members. NLI 4. To the extent during the term of this Memorandum of Understanding, that the City pays a portion of the normal PERS contributions of members, said payments shall be reported to PERS as special compensation as is authorized by Government Code §20636(c)(4). Payment by any unit member of the individual member's normal employee PERS contributions required to be paid by PERS, shall not be reported to PERS as special compensation as was authorized by Government Code § 20636(c)(4) or by any other authority. 5. All employees hired following City Council adoption of this 2012- 2014 Memorandum of Understanding and implementation of enabling contract amendment(s) with CalPERS, whenever those amendment(s) shall be made, shall be subject to the following retirement benefits. a. Safety personnel — the 3% at 55 retirement formula with the retiree's annuity being calculated based upon the employee's compensation earnable during the highest paid consecutive thirty -six (36) month period preceding the effective date of retirement. b. Miscellaneous personnel — the 2% at 60 retirement formula with the retiree's annuity being calculated based upon the employee's compensation earnable during the highest paid consecutive thirty -six (36) month period preceding the effective date of retirement. C. All such hirees shall individually pay 100% of the statutorily mandated member normal employee PERS contribution. d. Unless specifically modified herein, said newly hired employees shall be subject to other then -existing City-PERS contract provisions. 6. Safety Member Government Code §20516 Cost Sharing. Effective on July 1, 2013 or as soon thereafter as is reasonably possible, the City shall amend its contract with PERS to provide for a Government Code Section 20516(a) authorized cost sharing by safety unit members of the cost of optional retirement benefits. The Section 20516(a) contract amendment shall provide for all safety unit members to participate in cost sharing by a contribution of 3.1% of member compensation towards the current service cost of 26 N benefits. This 3.1% cost sharing contribution shall be treated as normal member PERS contributions to the extent mandated by statute. However, the parties acknowledge that implementing the Government Code § 20516(a) PERS contract amendment as to all unit safety members is contingent upon the cost sharing contribution being uniform with respect to all local police officers within the City and /or to compliance with any and all other provisions as may be mandated by statute and /or PERS. (Compliance with the requirement of uniform contribution with respect to all local police officers, will require a future agreement with the Newport Beach Police Management Association which is in accord with the cost sharing agreement of the Newport Beach Police Association.) The parties acknowledge that compliance with the Section 20516(a) "uniform contribution" requirement within the classification of all local police officers, is not a certainty and may not be possible at the time of adoption of this 2012 -2014 MOU. The parties further acknowledge that implementation of a Section 20516(a) PERS contract amendment is contingent upon PERS determining that all conditions precedent to a Section 20516(a) contract amendment have been met. Therefore, the parties acknowledge that implementing a Government Code § 20516(a) PERS contract amendment as to unit safety members will entail the passage of an unspecified period of time and in fact, may not be approved by PERS. Therefore, the parties further agree that If a Section 20516(a) PERS contract amendment is not implemented effective July 1, 2013, the parties shall effective July 1, 2013, utilize Government Code § 20516(f) to effectuate the 3.1% safety member cost sharing contribution. Implementation of cost sharing pursuant Section 20516(f) shall remain in full force and effect unless or until a Section 20516(a) contract amendment is approved by PERS. To the extent authorized by the IRS and /or Franchise Tax Board, Section 20516(f) cost sharing shall be implemented through pre -tax payroll deductions. Finally, f for any reason unit safety member cost sharing is not authorized by either Section 20516(a) or (f), then effective concurrent with either disallowance by PERS of such cost sharing or a Superior Court judgment being rendered disallowing cost sharing pursuant to Section 20516(a) or (f), the above Section 2.A(f) 3.1% base salary increase shall be immediately terminated 27 3�i and the parties shall reconvene the meet and confer process confined to the issue of a replacement for the 3.1% cost sharing and 3.1% base salary increase. Attached to this Memorandum of Understanding as Exhibit 1 is a March 1, 2012 letter from PERS Senior Pension Actuary, Kerry Worgan. Based upon the representations made in Exhibit 1, it is the agreement of the parties that unless and /or until modified pursuant to the meet and confer process or as mandated by law, these designated safety member cost sharing contributions shall continue until the August 26, 2020 "expiration date" designated in Exhibit 1 and shall then concurrently revert to the amount of 2.142% on August 26, 2020, unless and /or until said amount is modified pursuant to the meet and confer process and /or requirements of law. 7. The parties further agree and acknowledge that if during the term of the MOU, State statutory or other requirements of law change to mandate modifications to substantive retirement benefits and /or the mariner of funding such benefits, the parties shall promptly reconvene the meet and confer process in order to address the impact of any such mandatory statutory or other changes in the law. MOU changes which are required in order to bring the Agreement into conformance with mandatory statutory or other requirements, shall be implemented concurrent with the effective date of said statutory/other changes of law, regardless of the impact - related meet and confer process having been convened or completed. 8. Percent of retirement funding amount to be paid by safety members. The CalPERS safety retirement defined benefit plan is funded by CalPERS mandated employer contributions based on a percentage of payroll (and statutorily mandated employee member contributions, as well.) The combined employer and member contribution percentages constitute the cost of funding the safety retirement plan. Effective concurrent with implementation of the above July 1, 2013 safety member payment of 9% of compensation as and for the individual member's normal employee PERS contributions, unit members who are safety employees shall be funding 26.5% of the cost of the safety retirement plan. (The 26.5% amount is the result of adding the July 1, 2013 9% normal member contribution to the above described 3.1% employee organization agreement that its safety members shall pay 3.1% of the employer cost of retirement funding, pursuant to Government Code § 20516.) 28 Lj,7 The safety member funding of 26.5% of the cost of the retirement plan shall remain in full force and effect on and after July 1, 2013, subject to the mandate that maintenance of the 26.5% member funding of the retirement cost shall be limited to an increase or decrease in Government Code § 20516 employee cost sharing of 2.0 %. For example, maintenance of 26.5% employee retirement funding rate shall result in a maximum Government Code § 20516 employee cost sharing of 5.1% and a minimum of 1.1 %. In the event that compliance with the above 26.5% member funding of retirement cost would result in member funding an excess any statutory or other legal limitations on such funding, each affected employee shall fund the maximum amount (not to exceed 26.5% plus or minus 2 %) allowed by statute or other legal authority. E. Retiree Medical Benefit 1, Background In 2005, the City and all Employee Associations agreed to replace the previous "defined benefit" retiree medical program with a new "defined contribution" program. The process of fully converting to the new program will be ongoing for an extended period. During the transition, employees and (then) existing retirees have been administratively classified into one of four categories. The benefit is structured differently for each of the categories. The categories are as follows: a. Category 1 - Employees newly hired after January 1, 2005. b. Category 2 -Acti ve employees hired prior to January 1, 2005, whose age plus years of service as of January 1, 2005 was less than 50 (46 for public safety employees). C. Category 3 - Acti ve employees hired prior to January 1, 2005, whose age plus years of service was 50 or greater (46 for public safety employees) as of January 1, 2005. d. Category 4 - Employees who had already retired from the City prior to January 1, 2005, and were participating in the previous retiree medical program. 2. Program Structure This is an Integral Part Trust (IPT) Medical Expense Reimbursement Program Plan (MERP). 29 a. For employees in Category 1, the program is structured as follows: Each employee will have an individual MERP account for bookkeeping purposes, called his or her "Employee Account." This account will accumulate contributions to be used for health care expense after separation. All contributions to the plan are either mandatory employee contributions or City paid employer contributions, so they are not taxable to employees at the time of deposit. Earnings from investment of funds in the account are not taxable when posted to the account. Benefit payments are not taxable when withdrawn, because the plan requires that all distributions be spent for specked health care purposes. Contributions will be in three parts. Part A contributions (mandatory employee contributions): 1% of Salary. Part B contributions (employer contributions): $1.50 per month for each year of service plus year of age (updated every January 151 based on status as of December 315 of the prior year). Effective January 2008, this contribution will increase to $2.50 per month. Part C contributions (leave settlement as determined by Association): The Association will determine the level of contribution for all employees it represents, subject to the following constraints. All employees within the Association must participate at the same level, except that Safety members and Non - safety members within an Association may have different levels. The participation level should be specified as a percentage of the leave balance on hand in each employee's leave bank at the time of separation from the City. For example, if the Association wishes to specify 50% of the leave balance as the participation level, then each member leaving the City, or cashing out leave at any other time, would have the cash equivalent of 50% of the amount that is cashed out added to the MERP, on a pre -tax basis. The remaining 50% would be paid in cash as taxable income. Individual employees would not have the option to deviate from this breakout. The Association has decided to participate in Part C contributions at the level of zero percent (0 %) for Flex/Vacation Leave and zero 30 percent (0 %) for Sick Leave. This amount may be changed, on a go forward basis, as part of a future meet and confer process. However, the participation level must be the same for all employees within the Association except that Safety members and Non - safety members within an Association may have different levels. Additionally, the purpose and focus of these changes should be toward long -term, trend type adjustments. Due to IRS restrictions regarding "constructive receipt," the City will impose restriction s against frequent spikes or drops that appear to be tailored toward satisfying the desires of a group of imminent retirees. Spillover pay is not eligible for Part C contributions. Nothing in this section restricts taking leave for time off purposes. Sick leave balances may also be included in the MERP Part C contributions, but only to the extent and within all the numeric parameters specified in the Employee Policy Manual. Section 11.21 of the Manual contains a schedule which specifies the amount of sick leave that can be 'bashed out," based on time of service. The manual also caps the number of hours that can be "cashed out' at 800, and specifies that sick leave hours are "cashed out" on a 2 for 1 basis (800 hours of sick leave are converted to 400 hours for cash purposes). Sick leave participation is a separate Rem from vacation/flex leave participation, and thresholds must be separately idenfified by the Association. Part A contributions may be included in PERS compensation. Part B and Part C contributions will not be included in PERS compensation. Part A contributions begin upon enrollment in the program and are credited to each MERP Employee Account each pay period. Eligibility for Part B contributions is set at five years of vested City employment. At that time, the City will credit the first five years worth of Part B contributions into the Employee Account (interest does not accrue during that period). Thereafter, contributions are made bi- weekly. Part C deposits, if any, will be made at the time of employment separation. Each Employee has a right to reimbursement of medical expenses (as defined below) from the Plan until the Employee Account balance is zero. This right is triggered upon separation. If an employee leaves the City prior to five years employment, only the Part A contributions and Part C leave settlement contributions, if any, will be in the MERP Employee Account. Such an employee 31 ys will not be entitled to any Part B contributions. The exception to this is a full -time employee, participating in the program, who leaves the City due to industrial disability during the first five years of employment. In such cases, the employee will receive exactly five years worth of Part B contributions, using the employee's age and compensation at the time of separation for calculation purposes. This amount will be deposited into the employee's MERP account at the time of separation. Distributions from MERP Employee Accounts are restricted to use for health insurance and medical care expenses after separation, as defined by the Internal Revenue Code Section 213(d) (as explained in IRS Publication 502), and specified in the Plan Document. In accordance with current IRS regulations and practices, this generally includes premiums for medical insurance, dental insurance, vision insurance, supplemental medical insurance, long term care insurance, and miscellaneous medical expenses not covered by insurance for the employee and his or her spouse and legal dependents — again only as permitted by IRS Publication 502. Qualification for dependency status will be determined by guidelines in IRC 152. If used for these purposes, distributions from the MERP accounts will not be taxable. Cash withdrawal for any other purpose is prohibited. Under recent IRS Revenue Ruling 2005 -24, any balance remaining in the Employee Account after the death of the employee and his or her spouse and /or other authorized dependents (if any) must be forfeited. That particular MERP Employee Account will be closed, and any remaining funds will become general assets of the plan. The parties agree that the City's Part B contributions during active employment constitute the minimum CalPERS participating employer's contribution towards medical insurance after retirement. The parties also agree that, for retirees selecting a CalPERS medical plan, or any other plan with a similar employer contribution requirement, the required City contribution will be withdrawn from the retiree's MERP account. b. For employees in Category 2, the program is the same as for those in Category 1, with the following exception: In addition to the new plan contributions listed above, current employees who fully convert to the new plan will also receive a one -time City contribution to their individual MERP accounts that equates to $100 per month for every month they contributed to the previous "defined benefit' plan, to a maximum of 15 years (180 months). This contribution will be made only if the employee retires 32 1,14 from the City and at the time of retirement. No interest will be earned in the interim. Employees in Category 2 who had less than five years service with the City prior to implementation of the new program will only receive Part B contributions back to January 1, 2006 when they reach five years total service. C. For employees in Category 3, the program is the same as for those in Category 2, with the following exception: For employees in this category, the City will make no Part B contributions while the employees are still in the active work force. Instead, the City will contribute $400 per month into each of their MERP accounts after they retire from the City, to continue as long as the employee or spouse is still living. Each employee will contribute a flat $100 per month to the plan for the duration of their employment to partially offset part of this expense to the City. The maximum benefit provided by the City after retirement is $4,800.00 per year, accruing at the rate of $400.00 per month. There is no cash out option for these funds, and they may not be spent in advance of receipt. Employees in this category will also receive an additional one -time City contribution of $75 per month for every month they contributed to the previous plan prior to January 1, 2006, up to a maximum of 15 years (180 months). This contribution will be made to the MERP account at the time of retirement, and only if the employee retires from the City. No interest will be earned in the interim. d. For employees (retirees) in Category 4, the structure is very similar to the previous retiree medical program except that there is no cost share requirement, and the $400 Cif contribution after retirement can be used for any IRS authorized purpose not lust City insurance premiums. Effective July 1, 2006, a MERP account has been opened for each retiree in this category, and the City will contribute $400 per month to each account as long as the retiree or spouse remains living. For existing NBPA retirees in this category, the $400 was increased to $450 effective July 1, 2006. The NBPA and Police Management Association have agreed to reimburse the City for half of the cost of this increase, on an ongoing basis. To that end, the City will 33 invoice NBPA at the end of each quarter for half the actual cost of this increase during the previous three months. 3. Administration Vendors have been selected by the City to administer the program. The contract expense for program -wide administration by the vendor will be paid by the City. However, specific vendor charges for individual account transactions that vary according to the investment actions taken by each employee, such as fees or commissions for trades, will be paid by each employee. The City's Deferred Compensation Committee, or its successor committee, will have the authority to determine investment options that will be available through the plan. 4. Value of Benefit For all purposes, including compensation comparisons, the Retiree Medical Program shall be valued at 1% of salary on which PERS retirement is based (Part A); plus .25% of other compensation (Part B). F. City Contribution to PORAC Retiree Medical Trust (RMT) Effective the first payroll period starting on or after January 1, 2013, the City shall contribute $100.00 per month, per unit member to the PORAC Retiree Medical Trust. Said City contributions shall be made through pre- tax payroll deductions in the $100.00 uniform amount for all unit employees. At no time shall the City be liable for administering the PORAC RMT, paying fees towards it, remedying or covering any losses by it, or assuming any of the PORAC RMT's liabilities or legal obligations. In the event the City is required to pay or withhold payroll taxes on employee contributions, the parties shall immediately meet and confer in good faith to attempt to implement equitable adjustments to the contributions referenced herein. In the event that the City finds no equitable remedies or adjustments, City may discontinue the contribution. In the even the PORAC RMT ceases to operate, the Association shall designate an alternate retiree medical vehicle to which the City contribution shall be made, with said contribution being conditioned upon maintenance of all pre -existing terms and conditions existing during operation of the PORAC RMT. 34 G. Tuition Reimbursement NBPA members attending accredited community colleges, colleges, trade schools or universities may apply for reimbursement of one hundred percent (100 %) of the actual cost of tuition, books, fees or other student expenses for approved job - related courses- Beginning July 1, 2012, the maximum tuition reimbursement for both sworn and non -sworn personnel shall be $1,400 per fiscal year. H. Physical Conditioning Equipment/Apparel City has acquired fitness equipment for use by members in maintaining physical fitness. City shall budget $5,000 -00 per each calendar year for the maintenance, repair, improvement, or replacement of fitness equipment. Any purchase of new equipment shall be subject to the concurrence of the Department. All exercise facilities and equipment will be available to all members of the department. SECTION 5. - Miscellaneous Provisions A. Reductions in Force /Layoffs The provisions of this section shall apply when the City Manager determines that a reduction in the work force is warranted because of actual or anticipated reductions in revenue, reorganization of the work force, a reduction in municipal services, a reduction in the demand for service or other reasons unrelated to the performance of duties by any specific employee. Reductions in force are to be accomplished, to the extent feasible, on the basis of seniority within a particular Classification or Series and this Section should be interpreted accordingly. 1. Definitions a. "Layoffs" or "Laid off' shall mean the non - disciplinary termination of employment. b. "Seniority" shall mean the time an employee has worked in a Classification or Series calculated from the date on which the employee was first granted permanent status in their current Classification or any Classification within the Series, subject to the following: i. Credit shall be given only for continuous service subsequent to the most recent appointment to permanent status in the Classification or Series; 35 ii. Seniority shall include time spent on industrial leave, military leave and leave of absence with pay, but shall not include time spent on any other authorized or unauthorized leave of absence. C. "Classification" shall mean one or more full time positions identical or similar in duties and embraced by a single job title authorized in the City budget and shall not include part—time, seasonal or temporary positions. Classifications within a Series shall be ranked according to pay (lowest ranking, lowest pay). d. "Series" shall mean two or more Classifications within a Department which require the performance of similar duties with the higher ranking Classifications) characterized by the need for less supervision by superiors, more difficult assignments, more supervisory responsibilities for subordinates. The City Manager shall determine those Classifications which constitute a Series. e. "Bumping Rights ", 'Bumping" or "bump" shall mean the right of an employee, based upon seniority within a series, to displace a less senior employee in a lower Classification within the Series. No employee shall have the right to Bump into a Classification for which the employee does not possess the minimum qualifications such as specialized education, training or experience, 2. Procedures In the event the City Manager determines to reduce the number of employees within a Classification, the following procedures are applicable: a. Temporary and probationary employees within any Classification shall, in that order, be laid off before permanent employees. b. Employees within a Classification shall be laid off in inverse order of seniority; C. An employee subject to layoff in one Classification shall have the right to Bump a less senior employee in a lower ranking Classification within a Series. An employee who has Bumping Rights shall notify the Department Director within three (3) working days after notice of layoff of his /her intention to exercise Bumping Rights. d. In the event two or more employees in the same Classification are subject to layoff and have the same seniority, the employees shall be laid off in inverse order of their position on the eligibility list or 36 j�(t lists from which they were appointed. In the event at least one of the employees was not appointed from an eligibility list, the Department Director shall determine the employee(s) to be laid off. 3. Notice Employees subject to layoff shall be given at least thirty (30) days advance notice of the layoff or thirty (30) days pay in lieu of notice. In addition, employees laid off will be paid for all accumulated paid leave, holiday leave (if any), and accumulated sick leave to the extent permitted by the Employee Policy Manual. 4. Re— Employment Permanent and probationary employees who are laid off shall be placed on a Department re—employment list in reverse order of layoff. The laid off former employee shall remain on the re- employment list for not to exceed two (2) years from the date of layoff. In the event a vacant position occurs in the Classification which the employee occupied at the time of layoff, or a lower ranking Classification within a Series, the employee at the top of the Department re—employment list shall have the right to appointment to the position, provided, he or she reports to work within seven (7) days of written notice of appointment. Notice shall be deemed given when personally delivered to the employee or deposited in the U.S. Mail, certified, return receipt requested, and addressed to the employee at his or her last known address. Any employee shall have the right to refuse to be placed on the re—employment list or the right to remove his or her name from the re—employment list by sending written confirmation to the Human Resources Director. 5. Severance Pay Permanent employees who are laid off shall, as of the date of layoff, receive one week severance pay for each year of continuous service with the City of Newport Beach, but in no case to exceed ten (10) weeks of severance compensation. B. Work Schedules Nothing contained herein is intended to abridge management's right to schedule work to meet the Police Department's needs of providing services in an efficient and safe manner. Management recognizes its obligations under the Meyers- Milias -Brown Act to meet and confer before making any substantive changes to work schedules that impact an employee's conditions of employment. 37 d.? l I . Substantive Work Schedule Modifications Newport Beach Police Department currently has available a variety of work schedules including 5/8, 3/12, 9181 and 4110 schedules. Except in the case of emergency, prior to moving any employee or group of employees from one work schedule to another (for example from a 9/81 to a 3/12 schedule), the Department shall notify, and upon request, meet and confer with the Association in advance of any schedule change. If an emergency prohibits meeting and conferring prior to the schedule change, the Department shall meet and confer with the Association as soon as is reasonably possible after the schedule change. 2. Non - Substantive Schedule Modifications In the event of any non - substantive change to an employee's work schedule (changes in starting times, days off, etc), Management agrees to give as much advance notice of said change as possible and to give reasonable regard to the needs of the employees to make adjustments to their personal schedules and commitments related to the change in work schedules. 3. Transfers Transferring an employee to an assignment with a different work schedule shall not be considered a change to modified work schedules and shall not obligate Management to meet and confer over said change. C. Seniority Definition and Policy In order to clarify "seniority" practices, the following definition and policy for "seniority" determinations are adopted effective the date of this Agreement. "Seniority" position among members belonging to the same classification and determined prior to the date of this Agreement shall not change, regardless of the method of determination. a. Unless otherwise specified, for purposes of employment practices and vacation selection in which "seniority" is a consideration, "seniority" is defined and determined as the period of time of continuous full time employment within a classification. b. Determination of seniority date upon promotion or demotion of full time employees: 38 >Ij i. An employee promoted into any higher classification shall obtain their seniority date based upon their date of promotion, relative to others in the classification into which the employee promotes. ii. An employee who voluntarily or involuntarily demotes into any lower classification shall retain the oldest seniority date from any prior full time classification from which they promoted or to which they are re- classified. C. Part time employees have no seniority rights, and any full time employee who resigns their full time position and accepts a part time appointment shall forfeit any seniority, even upon re- appointment to a full time position. d. Nothing in this definition is intended to affect any other employment right or consideration that may be based upon total years of service, initial appointment date, or any other date of hire or change in employment status. e. In the event there is a conflict between members of a classification hired on the same day, seniority position shall be determined by order of hire based upon issuance of Employee ID numbers. f. For the class of police officer, seniority is determined based upon the date of appointment as a police officer, not date of hire as a police recruit. 2. Nothing contained herein is intended to abridge management's right to schedule employees to work or deny leave requests that management feels will interfere with the efficient running of the Police Department or present a safety hazard to employees or the community. The Department shall continue its practice of allowing employees to sign up for vacations, shifts and days off by seniority. The Department shall have the right to deviate from seniority in shift preference selection as necessary to meet training needs, train probationers, separate employees, meet specialized qualification needs, and /or to correct experience imbalances in accordance with existing practice. In 'the event Management wishes to propose substantive changes to the existing practice of sign -up for vacations, shifts and days off by seniority, it shall give notice to the Association and meet and confer to seek mutually agreeable solutions and /or remedies. In the event that a mutually agreeable solution or remedy is not found, Management may deviate from the prior seniority criteria to the extent necessary to meet operational or safety needs. 39 p -1 va D. Grievance Procedure 1. Definition The term "grievance" means a dispute between NBPA or any member and the City regarding the interpretation or application of rules or regulations governing the terms and conditions of employment, any provision of the Employee Policy Manual, any provision of Resolution No. 7173, or this MOU. 2. Guidelines Any NBPA member may file a grievance without fear of retaliation or any adverse impact on any term or condition of employment. a. A grievance shall not be filed to establish new rules or regulations, change prevailing ordinances or resolutions, nor circumvent existing avenues of relief where appeal procedures have been prescribed. b. An employee may be self— represented or represented by one other person. C. An employee and any representative shall be given notice of the time and place of any grievance proceeding, the opportunity to be present at such proceedings, a copy of any written decision or communication to the employee concerning the proceedings, and any document directly relevant to the proceedings. d. All parties shall engage in good faith efforts to promptly resolve the grievance in an amicable manner. The time limit specified may be extended upon mutual agreement expressed in writing. e. The procedures in this MOU represent the sole and exclusive method of resolving grievances. 3. Procedure for NBPA Members Step 1 — The employee shall orally present the grievance to his or immediate supervisor within fifteen (15) calendar days after the member knew, or in the exercise of reasonable diligence should have known, the act or events upon which the grievance is based. The immediate supervisor shall conduct any appropriate investigation and meet with the employee no more than fifteen (15) calendar days after presentation of the grievance. The employee shall be given at least 24 hours notice of the 40 meeting. The meeting shall be informal, and the employee may have a representative present. Any employee not satisfied with the decision of his or her immediate supervisor may proceed to Step 2. Step 2 — If an employee is dissatisfied with the decision of his or her immediate supervisor, the employee may proceed to Step 2 by submitting a written grievance to the supervising captain. Any employee dissatisfied with the decision of his or her immediate supervisor may submit a written grievance to the supervising Captain. The written grievance shall be filed within seven (7) calendar days following receipt of the immediate supervisor's decision. The written grievance must contain a complete statement of the matters at issue, the facts upon which the grievance is based, and the remedy requested by the employee. The supervising Captain shall meet with the employee and any representative in an effort to resolve the grievance. The meeting shall be scheduled no more than fifteen (15) calendar days following receipt of the appeal unless deferred by the consent of both parties. The Captain shall provide the employee with a written decision on the appeal within fifteen (15) calendar days after the meeting. Step 3 — Appeal to Chief of Police. Any employee dissatisfied with the decision of the supervising captain may proceed to Step 3 by submitting a written appeal to the Chief of Police. The written appeal must be fled with the Chief of Police within seven (7) calendar days following receipt of the supervising captain's decision. The written appeal must contain a complete statement of the matters at issue, the facts upon which a grievance is based, and the remedy requested by the employee. The Chief of Police shall meet with the employee and any representative in an effort to resolve the grievance. The meeting shall be informal and the discussion should focus on the issues raised by the grievance. The meeting shall be scheduled no more than fifteen (15) calendar days following receipt of the appeal unless deferred by the consent of both parties. The Chief of Police shall provide the employee with a written decision on the appeal within fifteen (15) calendar days after the meeting. Step 4 — Appeal to City Manager. In the event the employee is dissatisfied with the decision of the Chief of Police, the employee may proceed to Step 4 by submitting a written appeal of the decision to the City Manager. The written appeal must be filed within seven (7) calendar days following receipt of the Police Chiefs decision. The written appeal shall contain a complete statement of the matters at issue, the facts upon which the grievance is based, the decisions of the supervising captain and Chief of Police, and the remedy requested by the employee. The City Manager shall meet with the employee and his or her representative in an effort to resolve the grievance and to receive any additional information the employee or department may have relative to the matter. The meeting 41 1-7 shall be scheduled no more than fifteen (15) calendar d ays following receipt of the appeal unless deferred by the consent of both parties. The City Manager shall provide the employee with a written decision within fifteen (15) calendar days after the meeting. The decision of the City Manager shall be final. 4. Association Grievance A grievance affecting more than one NBPA member may be fled by NBPA on behalf of the affected employees with the Chief of Police. The grievance shall contain a complete statement of the matters at issue, the facts upon which the grievance is based, and the remedy requested by NBPA. The Chief of Police shall meet with NBPA representatives within fifteen (15) calendar days following receipt of the grievance and provide a written decision on the grievance within fifteen (15) calendar days after the meeting. In the event NBPA is dissatisfied with the decision of the Chief of Police, it may appeal to the City Manager by following the procedures outlined in Step 4 of the procedure applicable to individual employees. In the event NBPA is dissatisfied with the decision of the City Manager, it may appeal the decision to the Civil Service Board by filing a written notice of appeal within fifteen (15) calendar days after receipt of the decision. E. Pre - Hearing Briefs Each party is entitled to the other party's pre- hearing brief, if any. F. Use of Tobacco Products All employees hired after January 1, 1999, shall not smoke or use any tobacco products at any time while on, or off duty. Employees shall be required to sign an agreement consistent with this section. Violation of this agreement will subject the employee to disciplinary action. Smoking an occasional celebration cigar (birth of a child, etc.) shall not be considered a violation of this policy. G. Direct Deposit All Unit employees shall participate in the City's Direct Deposit Program. H. Compensation Study Should the City conduct a classification /compensation study involving any police department classifications, it will consult with the Association on all aspects of the study, including study design, implementation, and findings. Any compensation changes recommended by the study will be subject to the meet and confer process. CV: 'Y + Contract Negotiations The parties agree that, if NBPA submits preliminary requests for changes in wages, fringe benefits and other terms and conditions of employment earlier than 90 days prior to expiration of this MOU (as provided in Section 18. Timetable for Submission of Requests of the Employer - Employee Relations Resolution), the parties will begin negotiations promptly, with the objective of reaching agreement by July 1, 2014. Signatures are on the next page. 43 �`C ATTEST: m Leilani Brown City Clerk Executed this _ th day of June, 2012: APPROVED AS TO FORM: A �-- C �y-1i �- Aaron Harp, City Attorney NEWPORT BEACH POLICE ASSOCIATION m Michael O'Bierne, President CITY OF NEWPORT BEACH 1A CC! Nancy Gardner, Mayor California Puhlic Employees' Retirement System Actuarial Office P.O. Box 942701 Sacramen!o, CA 94229 -2701 TTY: (916j 7953240 �11 "L'1V i888) 2257377 Phone (918) 79527nn lax 1� 1V w .catpors.ca.gov March 1. 2012 Mr. Dan Matusiev:icz City of Newport Beach P.O. Box 1768 Newport Beach, Ca 92658-8915 Dear Mr. Matusiewicz: This letter gives information on the maximum amount of employee cost share for your Safety Plan. Current Public Employee Retirement Law allows permanent cost sharing of the normal cost (NC) and 20 years of cost sharing due to the increase in unfunded liability (UL) from some past amendment. The 20 years of cost sharing due to the increase in unfunded liability begins from the effective date of the contract amendment. The tables that follow lay out all the necessary information for the maximum amount of cost sharing: Remember, that these are maximum cost share amounts. Actual cast share amounts can be anything up to the amounts listed above. Should you have any questions, I can be reached at 916- 795-0003. Sincerely. Kerry Worgan, FSA, FCIA, MAAA Senior Pension Actuary, CalPERS EXHIBIT 11 Safety Police Plan Amendment 3% @ 55 Effective Date 8/26/2000 NC Increase 2.142% UL Increase 5.096% Temporary Cost Share 7.238% Temporary Expiration Date 8/26/2020 Permanent Cost Share 2.142% Remember, that these are maximum cost share amounts. Actual cast share amounts can be anything up to the amounts listed above. Should you have any questions, I can be reached at 916- 795-0003. Sincerely. Kerry Worgan, FSA, FCIA, MAAA Senior Pension Actuary, CalPERS EXHIBIT 11