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HomeMy WebLinkAbout2024-70 - Approving Side Letter Agreements with Labor Groups Representing City EmployeesRESOLUTION NO. 2024-70 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, APPROVING SIDE LETTER AGREEMENTS WITH LABOR GROUPS REPRESENTING CITY EMPLOYEES WHEREAS, the City Council of the City of Newport Beach ("City Council") previously adopted Resolution No. 2001-50, the "Employer -Employee Relations Resolution," pursuant to authority contained in the Meyers-Milias-Brown Act, Government Code 3500, et seq.; WHEREAS, the City of Newport Beach ("City") promotes effective communication and collaborative working relationships with its employees to foster improved relations while balancing good management practices; WHEREAS, the City previously entered into a Memorandum of Understanding with Newport Beach City Employees Association ("NBCEA"), a recognized organization, for the term of January 1, 2022, through December 31, 2025; WHEREAS, the City previously entered into a Memorandum of Understanding with the Newport Beach Professional and Technical Employees Association ("NBPTEA"), a recognized organization, for the term of January 1, 2022, through December 31, 2025; WHEREAS, the City previously entered into a Memorandum of Understanding with the Newport Beach Employees League ("League"), a recognized organization, for the term of January 1, 2022, through December 31, 2025; WHEREAS, the country has continued to experience inflation and healthcare cost increases since the approval of the Memoranda of Understanding and amendments thereto; WHEREAS, the City Council desires to amend the Memoranda of Understanding between the City and certain recognized organizations by approving Side Letters of Agreement, which provide for an extension of a temporary reduction in the employee retirement percentage contributions, as set forth in Exhibits A through C; and WHEREAS, by adopting this resolution, the City Council also desires to replace certain language contained in the existing Associations' Memoranda of Understanding by adopting the Side Letters of Agreement attached hereto as Exhibits A through C to serve as the controlling language for the remaining term of the respective Memoranda of Understanding. Resolution No. 2024-70 Page 2 of 3 NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. Section 2: The City Council hereby approves, and authorizes the Mayor to execute, all the Side Letters of Agreement attached hereto as set forth in Exhibits A through C, which are incorporated herein by this reference. The employee retirement percentage contributions referenced in the attached Side Letters of Agreement shall prevail over any previously adopted employee retirement percentage contributions that conflict herewith. Section 3: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 4: The City Council finds the adoption of this resolution 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, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Resolution No. 2024-70 Page 3 of 3 Section 5: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 24th day of September, 2024. -�49 Will O'Neill Mayor ATTEST: FLeilani 1. M City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFI E .*_.1 Aaron C. Harp City Attorney Attachments: Exhibit A: Side Letter of Agreement between the City and NBCEA Exhibit B: Side Letter of Agreement between the City and NBPTEA Exhibit C: Side Letter of Agreement between the City and League SIDE LETTER OF AGREEMENT BETWEEN CITY OF NEWPORT BEACH AND THE NEWPORT BEACH CITY EMPLOY A-S'S`OCrAT This Side Letter of Agreement ("Agreement") is made and entered into this 24th day of September 2024, by and between the City of Newport Beach ("City") and the Newport Beach City Employees Association ("Association") (collectively "Parties") with respect to the following: WHEREAS, on November 16, 2021, the City Council adopted Resolution No. 2021-109 approving a Memorandum of Understanding ("MOU") between the Parties with a term of January 1, 2022, through December 31, 2025; WHEREAS, given existing inflationary pressures and to aid in the recruitment and retention of valuable employees, the Parties wish to modify the MOU; and WHEREAS, this Agreement will not have the effect of an agreement, and will not be binding on either party, until it is ratified by the affected bargaining unit and approved by the City Council. NOW, THEREFORE, it is mutually agreed between the Parties as follows: 1. The following language in Section 4, Fringe Benefits, Subsection D, Retirement Benefit, Subsection 2, Employee Contributions, of the MOU, which was previously amended pursuant to the Side Letter Agreement dated November 29, 2022, is hereby amended and shall read as follows: "2. Employee Contributions The Association has agreed to share in the rising cost of pension obligations. Under the terms of this MOU, unit members will contribute additional amounts toward the Ca1PERS retirement benefit, to the extent permissible by law. Should any provision be deemed invalid, the City and Association agree to meet for the purpose of renegotiating employee retirement contributions. Employee retirement contributions that are in addition to the normal Ca1PERS Member Contribution (of 7% or 8%) shall be calculated on base pay, special pays, and other pays normally reported as "PERSable" compensation and will be made on a pre-tax basis through payroll deduction, to the extent allowable by law. It is recognized that these payments will not be reported to Ca1PERS as contributions toward either the Member or Employer rate, as provided under Government Code Section 20516(f). NBCEA Side Letter Agreement Page I of 4 Under a separate agreement and ratified via a contract amendment with CalPERS in 2008, Tier I employees shall contribute 2.42% compensation earnable (as cost sharing) per Government Code section 20516(a). Tier mp oyee�� con i u�fotaemployee con u ion o — 13% as follows: Tier I — Eight percent (8%) member contribution, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 2.58% of compensation eamable as cost sharing per Government Code section 20516(f). Temporary Reduction. Effective the pay period that includes January 1, 2023, Tier I Employees shall contribute a total employee contribution of 11.5% as follows: Tier I — Eight percent (8%) member contributions, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 1.08% of compensation earnable as cost sharing per Government Code section 20516(f). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, Tier I Employees shall contribute a total employee contribution of 13% as follows: Tier I — Eight percent (8%) member contribution, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 2.58% of compensation earnable as cost sharing per Government Code section 20516(f). Tier II Employees - shall contribute a total employee contribution of 13% as follows: seven percent (7%) (compensation earnable) member contribution and six percent (6%) of compensation earnable as cost sharing per Government Code section 20516(f). Temporary Reduction. Effective the pay period that includes January 1, 2023, Tier II Employees shall contribute a total employee contribution of 11.5% as follows: seven percent (7%) (compensation eamable) member contribution and four and one-half percent (4.5%) of compensation eamable as cost sharing per Government Code section 20516(f). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, Tier II employees shall contribute a total employee contribution of 13% as follows: seven percent (7%) (compensation earnable) member contribution and six percent (6%) of compensation earnable as cost sharing per Government Code section 20516(f). Tier III Employees - The minimum statutory employee contribution for employees in Tier III is subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals 13% of pensionable compensation. Temporary Reduction. Effective the pay period that includes January 1, 2023, the minimum statutory employee contribution for employees in Tier III is NBCEA Side Letter Agreement Page 2 of 4 subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total -- - - - _ - �mpa-e-e contribution equals -no -less than 11.5% of pensionables�mpensatiosL(Le, -- ------ the greater of 11.5% or 50% of the "total normal cost"). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, the minimum statutory employee contribution for employees in Tier III is subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals no less than 13% of pensionable compensation (i.e., the greater of 13% or 50% of the "total normal cost"). The City contracts with Ca1PERS for the 41h Level 1959 Survivors Insurance Benefit, $500 Lump Sum Death Benefit, Sick Leave Credit, Military Service Credit, 2% Cost of Living Adjustment and the pre -retirement option settlement 2 death benefit (Government Code Section 21548)." 2. Except as expressly modified herein, all other provisions, terms, and covenants set forth in the MOU shall remain unchanged and shall be in full force and effect. Signatures on the next page NBCEA Side Letter Agreement Page 3 of 4 Executed this 14�Iday of S c «t,K 1p,4f, 2024 By: ULIt., (/ '�— Mariah Stinson, President FOR THE CITY OF NEWPORT BEACH: By: �. Will O'Neill, Mayor CITY OF NEWPORT BEACH APPROVED AS TO FORM: By: Aaron C. Harp, City Attorney ATTEST: go e NBCEA Side Letter Agreement Page 4 of 4 SIDE LETTER OF AGREEMENT BETWEEN CITY OF NEWPORT BEACH THE NEWPORT BEACH PROFESSIONAL AND TECHNICAL EMPLOYEES ASSOCIATION This Side Letter of Agreement ("Agreement") is made and entered into this 24th day of September 2024, by and between the City of Newport Beach ("City") and the Newport Beach Professional and Technical Employees Association ("Association") (collectively "Parties") with respect to the following: WHEREAS, on November 16, 2021, the City Council adopted Resolution No. 2021-109 approving a Memorandum of Understanding ("MOU") between the Parties with a term of January 1, 2022, through December 31, 2025; WHEREAS, given existing inflationary pressures and to aid in the recruitment and retention of valuable employees, the Parties wish to modify the MOU; and WHEREAS, this Agreement will not have the effect of an agreement, and will not be binding on either party, until it is ratified by the affected bargaining unit and approved by the City Council. NOW, THEREFORE, it is mutually agreed between the Parties as follows: 1. The following language in Section 4, Fringe Benefits, Subsection D, Retirement Benefit, Subsection 2, Employee Contributions, of the MOU, which was previously amended pursuant to the Side Letter Agreement dated November 29, 2022, is hereby amended and shall read as follows: "2. Employee Contributions The Association has agreed to share in the rising cost of pension obligations. Under the terms of this MOU, unit members will contribute additional amounts toward the Ca1PERS retirement benefit, to the extent permissible by law. Should any provision be deemed invalid, the City and Association agree to meet for the purpose of renegotiating employee retirement contributions. Employee retirement contributions that are in addition to the nonnal Ca1PERS Member Contribution (of 7% or 8%) shall be calculated on base pay, special pays, and other pays normally reported as "PERSable" compensation (known either as compensation earnable or pensionable compensation) and will be made on a pre- tax basis through payroll deduction, to the extent allowable by law. It is recognized that these payments will not be reported to CalPERS as contributions toward either the Member or Employer rate, as provided under Government Code Section 20516(f). NBPTEA Side Letter Agreement Page 1 of 4 Under a separate agreement and ratified via a contract amendment with CalPERS in 2008, Tier I employees shall contribute 2.42% compensation earnable (as cost sharing)_per Government Code section 20516(a . Tier I Employees - shall contribute a total employee contribution of 13% as follows: Tier I — Eight percent (8%) member contribution, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 2.58% of compensation earnable as cost sharing per Government Code section 20516(f). Temporary Reduction. Effective the pay period that includes January 1, 2023, Tier I Employees shall contribute a total employee contribution of 11.5% as follows: Tier I — Eight percent (8%) member contributions, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 1.08% of compensation earnable as cost sharing per Government Code section 20516(f). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, Tier I Employees shall contribute a total employee contribution of 13% as follows: Tier I — Eight percent (8%) member contribution, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 2.58% of compensation earnable as cost sharing per Government Code section 20516(f). Tier II Employees - shall contribute a total employee contribution of 13% as follows: seven percent (7%) (compensation earnable) member contribution and six percent (6%) of compensation earnable as cost sharing per Government Code section 20516(f). Temporary Reduction. Effective the pay period that includes January 1, 2023, Tier II Employees shall contribute a total employee contribution of 11.5% as follows: seven percent (7%) (compensation earnable) member contribution and four and one-half percent (4.5 %) of compensation earnable as cost sharing per Government Code section 20516(f). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, Tier II employees shall contribute a total employee contribution of 13% as follows: seven percent (7%) (compensation earnable) member contribution and six percent (6%) of compensation earnable as cost sharing per Government Code section 20516(f). Tier III Employees - The minimum statutory employee contribution for employees in Tier III is subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals 13% of pensionable compensation. Temporary Reduction. Effective the pay period that includes January 1, 2023, the minimum statutory employee contribution for employees in Tier III is NBPTEA Side Letter Agreement Page 2 of 4 subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals no less than 11.5% of pensionable compensation i.e., the greater of 11.5% or 50% of the "total normal cost"). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, the minimum statutory employee contribution for employees in Tier III is subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals no less than 13% of pensionable compensation (i.e., the greater of 13% or 50% of the "total normal cost"). The City contracts with CalPERS for the 4ch Level 1959 Survivors Insurance Benefit, $500 Lump Sum Death Benefit, Sick Leave Credit, Military Service Credit, 2% Cost of Living Adjustment and the pre -retirement option settlement 2 death benefit (Government Code Section 21548)." 2. Except as expressly modified herein, all other provisions, terms, and covenants set forth in the MOU shall remain unchanged and shall be in full force and effect. Signatures on the next page NBPTEA Side Letter Agreement Page 3 of 4 Executed this day ofA' u -- , 2024 FOR THE NEWPORT BEACH PROFESSIONAL AND TECHNICAL EMPLOYEES ASSOCIATION: Moni ue Navarrete, President FOR THE CITY OF NEWPORT BEACH: By: Will O'Neill, Mayor CITY OF NEWPORT BEACH APPROVED AS TO FORM: By: C- XarliC. Harp, City Attorney ATTEST: < < O� 1-4EVri� By: : Leilani Brown, ity Clerk U T4' J 1. 'COR NtP NBPTEA Side Letter Agreement Page 4 of 4 SIDE LETTER OF AGREEMENT BETWEEN CITY OF NEWPORT BEACH AND H 1�EWPO-RT-BE-A-eH-EMPL-OYRESQLEAGU This Side Letter of Agreement ("Agreement") is made and entered into this 24th day of September 2024, by and between the City of Newport Beach ("City") and the Newport Beach Employees League ("Association") (collectively "Parties") with respect to the following: WHEREAS, on January 25, 2022, the City Council adopted Resolution No. 2022- 08 approving a Memorandum of Understanding ("MOU") between the Parties with a term of January 1, 2022, through December 31, 2025; WHEREAS, given existing inflationary pressures and to aid in the recruitment and retention of valuable employees, the Parties wish to modify the MOU; and WHEREAS, this Agreement will not have the effect of an agreement, and will not be binding on either party, until it is ratified by the affected bargaining unit and approved by the City Council. NOW, THEREFORE, it is mutually agreed between the Parties as follows: 1. The following language in Section 4, Fringe Benefits, Subsection D, Retirement Benefit, Subsection 2, Employee Contributions, of the MOU, which was previously amended pursuant to the Side Letter Agreement dated November 29, 2022, is hereby amended and shall read as follows: "2. Employee Contributions The Association has agreed to share in the rising cost of pension obligations. Under the terms of this MOU, unit members will contribute additional amounts toward the CalPERS retirement benefit, to the extent permissible by law. Should any provision be deemed invalid, the City and Association agree to meet for the purpose of renegotiating employee retirement contributions. Employee retirement contributions that are in addition to the normal CalPERS Member Contribution (of 7% or 8%) shall be calculated on base pay, special pays, and other pays normally reported as "PERSable" compensation and will be made on a pre-tax basis through payroll deduction, to the extent allowable by law. It is recognized that these payments will not be reported to CalPERS as contributions toward either the Member or Employer rate, as provided under Government Code Section 20516(f). Under a separate agreement and ratified via a contract amendment with CalPERS in 2008, Tier I employees shall contribute 2.42% compensation earnable (as cost sharing) per Government Code section 20516(a). NBEL Side Letter Agreement Page 1 of 4 Tier I Employees - shall contribute a total employee contribution of 13% as follows: Tier I - Eight percent (8%) member contribution, 2.42% of compensation earnable-as-cost sharing per Government Code section 20516(a) and °�f compensation earna be as cost sharing per overnmen Code sec ion 20516(f). Temporary Reduction. Effective the pay period that includes January 1, 2023, Tier I Employees shall contribute a total employee contribution of 11.5% as follows: Tier I - Eight percent (8%) member contributions, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 1.08% of compensation earnable as cost sharing per Government Code section 20516(f). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, Tier I Employees shall contribute a total employee contribution of 13% as follows: Tier I - Eight percent (8%) member contribution, 2.42% of compensation earnable as cost sharing per Government Code section 20516(a) and 2.58% of compensation earnable as cost sharing per Government Code section 20516(f). Tier II Employees - shall contribute a total employee contribution of 13% as follows: seven percent (7%) (compensation earnable) member contribution and six percent (6%) of compensation earnable as cost sharing per Government Code section 20516(f). Temporary Reduction. Effective the pay period that includes January 1, 2023, Tier II Employees shall contribute a total employee contribution of 11.5% as follows: seven percent (7%) (compensation earnable) member contribution and four and one-half percent (4.5%) of compensation earnable as cost sharing per Government Code section 20516(f). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, Tier II employees shall contribute a total employee contribution of 13% as follows: seven percent (7%) (compensation earnable) member contribution and six percent (6%) of compensation earnable as cost sharing per Government Code section 20516(f). Tier III Employees - The minimum statutory employee contribution for employees in Tier III is subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals 13% of pensionable compensation. Temporary Reduction. Effective the pay period that includes January 1, 2023, the minimum statutory employee contribution for employees in Tier III is subject to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals no less than 11.5% of pensionable compensation (i.e., LABEL Side Letter Agreement Page 2 of 4 the greater of 11.5% or 50% of the "total normal cost"). This reduction in the employee contribution rate sunsets at the end of the last full pay period in December 2025. Accordingly, effective the pay period that includes January 1, 2026, the minimum statutory employee contribution for employees in Tier III is subje�to the provisions of PEPRA and equals 50% of the "total normal cost". Tier III employees shall make an additional contribution of pensionable compensation toward retirement pursuant to Government Code section 20516(f), such that the total employee contribution equals no less than 13% of pensionable compensation (i.e., the greater of 13% or 50% of the "total normal cost"). The City contracts with CalPERS for the 4t" Level 1959 Survivors Insurance Benefit, $500 Lump Sum Death Benefit, Sick Leave Credit, Military Service Credit, 2% Cost of Living Adjustment and the pre -retirement option settlement 2 death benefit (Government Code Section 21548)." 2. Except as expressly modified herein, all other provisions, terms, and covenants set forth in the MOU shall remain unchanged and shall be in full force and effect. Signatures on the next page NBEL Side Letter Agreement Page 3 of 4 Executed this day of AAUS US i— , 2024 FOR THE NEWPORT BEACH EMPLOYEES LEAGUE: By: Patrick Piersall, President FOR THE CITY OF NEWPORT BEACH: By: Will O'Neill, Mayor CITY OF NEWPORT BEACH APPROVED AS TO FORM: By. �� dw Aaron C. Harp, City Attorney ATTEST: NBEL Side Letter Agreement Page 4 of 4 STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; the foregoing resolution, being Resolution No. 2024-70 was duly introduced before and adopted by the City Council of said City at a regular meeting of said Council held on the 24th day of September, 2024; and the same was so passed and adopted by the following vote, to wit: AYES: Mayor Will O'Neill, Mayor Pro Tern Joe Stapleton, Councilmember Noah Blom, Councilmember Robyn Grant, Councilmember Lauren Kleiman, Councilmember Erik Weigand NAYS: None ABSENT: Councilmember Brad Avery IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 25th day of September, 2024. !M � Leilani I. Brown City Clerk V 1" Newport Beach, California�— ���Fb RNi