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HomeMy WebLinkAbout06 - Lifeguard Management Association (LMA) Supplemental MOUCITY OF NEWPORT BEACM y Council Staff ` I R p o'' Agenda Item No. 6 June 28, 2011 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 -644 -3302, dkiff @newportbeachca.gov PREPARED BY: Terri L. Cassidy, Human Resources Director APPROVED: TITLE: Supplemental Memorandum of Understanding with the Lifeguard Management Association ABSTRACT: The Memorandum of Understanding (MOU) between the City of Newport Beach and the Lifeguard Management Association (LMA) will expire December 31, 2011. In light of the anticipated reductions in LMA staffing due to economic reasons, the LMA agreed to amend the current MOU. The attached Supplemental MOU (Exhibit A) modifies the existing MOU to reflect full employee pick -up of the CalPERS Member Contribution (9 %), implementation of a 2 % @50 2 -tier retirement formula, and an increase to the cafeteria benefit. :7XVZSTUTI 11A llrxwe F Adopt Resolution 2011- 60 approving the Supplemental Memorandum of Understanding between the City of Newport Beach and the Newport Beach Lifeguard Management Association (LMA); and adopt Resolution 2011- 61 to eliminate the paying and reporting of the Employer Paid Member Contribution (EPMC) for members of the Lifeguard Management Association. FUNDING REQUIREMENTS: There is no funding requirement for this item. The proposed FY11 -12 budget reflects reductions of approximately $700,000 for Lifeguard Operations, which includes an estimated $94,000 in savings as a result of LMA employees picking up the full 9% Member Contribution and $606,000 in additional savings through restructuring of positions within the Lifeguard Management unit. 1 Supplemental Memorandum of Understanding with the Lifeguard Management Association June 28, 2011 Page 2 DISCUSSION: Changes to the proposed FY11 -12 budget were provided to staff and members of the public in April 2011. Included in the budget was a recommendation to reduce the number of full -time Lifeguards and implement other staffing changes. The Lifeguard Management Association expressed concern over the impact to staff and on safety by reducing the number of lifeguard management employees. To work toward a common solution, at my request the Lifeguard Management Association agreed to "reopen" the current contract. The objective of this process was to reach a solution that provided the necessary budget reductions with the least impact on staff. The City and the LMA met and conferred in good faith and reached an agreement on June 13, 2011. The terms of the agreement are reflected the in the Supplemental Memorandum of Understanding (Attachment A) and include the following: G Employee contributions of an additional 5.5% to the 3.5% they are currently paying toward the PERS retirement benefit. In conjunction, the 9% contribution (5.5% plus 3.5 %) will be reported as the "normal safety" Member Contribution and the City will no longer pay or report the value of the Employer Paid Member Contribution (EPMC). C Establishes. a 2 -tier retirement plan with a 2 % @50 formula for newly hired Lifeguard Management Employees. Under the plan, the final salary computation will be the average 36 months' highest salary. G A cafeteria adjustment of $100 per month to cover increases in medical, dental and vision premiums. This increase will align the LMA members' monthly cafeteria benefit with that of the Miscellaneous employees. The provisions of the Supplemental MOU reflect the City Council's philosophy that the responsibility for pension costs should be shared with the employees. The City appreciates the professionalism of LMA's representatives, their willingness to renegotiate contract terms, and to work with the City in meeting its financial obligations. The Supplemental MOU modifies only those items listed above for the remainder of the contract term, which is through December 31, 2011, and it is anticipated that City and LMA will be at the bargaining table again in the fall to discuss additional issues concerning wages, benefits and other terms and conditions of employment. The membership of the Lifeguard Management Association ratified the agreement by majority vote. The Supplemental MOU does not become effective, per Government Code §3505.1, until the governing body, i.e., takes action to adopt it. Upon City Council adoption of the resolution approving the Supplemental Memorandum of Understanding and the resolution eliminating the Employer Paid Member Contribution (Attachment B), 2 Supplemental Memorandum of Understanding with the Lifeguard Management Association June 28, 2011 Page 3 Human Resources and Administrative Services staff will work to implement the provisions as soon as practicable. 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. 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: � CN-v� Dave Kiff City Manager Attachments: A. Resolution to adopt the Supplemental Memorandum of Understanding with the Lifeguard Management Association (includes Exhibit A) B. Resolution to Modify the Paying and Reporting of the Value of the Employer Paid Member Contribution 3 ATTACHMENT A RESOLUTION NO. 2011 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING A SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH LIFEGUARD MANAGEMENT ASSOCIATION WHEREAS, the City Council of the City of Newport Beach previously adopted Resolution No. 2001 -50, the "Employer- Employee Relations Resolution ", to promote improved relations and communication between the City of Newport Beach and its employee associations; and WHEREAS, the City of Newport Beach previously entered into a Memorandum of Understanding with the Newport Beach Lifeguard Management Association for the period of January 1, 2009, through December 31, 2011; and WHEREAS, representatives from the City of Newport Beach and representatives from the Newport Beach Lifeguard Management Association have met and conferred in good faith and agreed to modify the current Memorandum of Understanding; and WHEREAS, the City Council of the City of Newport Beach desires to supplement the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Lifeguard Management Association by adopting the Supplemental Memorandum of Understanding. NOW, THEREFORE, the City Council of the City of Newport Beach does RESOLVE as follows: Section 1. The term of the Supplemental Memorandum of Understanding (Exhibit A) will be for six (6) months, commencing July 1, 2011 through December 31, 2011. Section 2. Changes to wages and benefits shall be modified pursuant to the provisions of the Supplemental Memorandum of Understanding. Section 3. All other terms of the current Memorandum of Understanding between the City of Newport Beach and the Newport Beach Lifeguard Management Association shall remain unchanged. Adopted this day of , 2011. BY Mayor of the City of Newport Beach ATTEST: City Clerk it x mnn A SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH LIFEGUARD MANAGEMENT ASSOCIATION This SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING (hereinafter referred to as "Supplemental MOU ") is entered into modifying the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Lifeguard Management Association for the period of January 1, 2009 through December 31, 2011 (hereinafter "MOU "). Upon signing of this Supplemental MOU, the MOU is modified to incorporate the changes memorialized herein. No other changes are effectuated by the parties. Except as expressly stated in this Supplemental MOU all terms and conditions of the MOU remain in full force and effect. The changes referenced in this Supplemental MOU shall take effect on July 1, 2011 and shall remain in effect for the balance of the term of the MOU. SECTION 4. - FRINGE BENEFITS A. Insurance — Amended to read: 2. City Contribution The City has implemented an IRS qualified Cafeteria Plan. NBLMA members shall participate in this plan. The City contribution toward the Cafeteria Plan shall be as set forth below. 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 Beach Lifeguard Management 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 December 20, 2008, the City's contribution towards the Cafeteria Plan increases to $974 (plus the minimum CalPERS participating employer's contribution). Effective the pay period beginning December 19, 2009, the City's contribution towards the Cafeteria Plan will increase to $1049 (plus the minimum CaIPERS participating employer's contribution). Effective July 2, 2011, the City's contribution towards the Cafeteria Plan will increase to $1149 per month (plus the minimum Ca /PERS Supplemental Memorandum Page 1 of 4 July 1, 2011 through of Understanding December 31, 2011 5 participating employer's contribution). LMA 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. D. The Retirement Benefit- Amended to read: 1. Pursuant to Section 20691 of the California Government Code, the City shall pay to PERS, on behalf of all employees covered by this agreement and hired before May 25, 2010, the entire required normal "safety member" retirement contribution, but not to exceed 9% of the compensation earnable which PERS uses to calculate retirement contributions and benefits. For employees hired after May 25, 2010 the City will pay 3.5% of the member contribution. Such employees will be eligible to receive the 9% the beginning of their 6th year of uninterrupted service. In addition, the amount of this payment shall be reported to PERS as special compensation, which is part of the employee's compensation earnable, pursuant to the provisions of Section 20636 (c)(4) of the California Government Code, as amended effective July 1, 1994. This payment shall be credited to the employee's accounts maintained by PERS in accordance with Section 20691 of the California Government Code. NBLMA acknowledges that the City is making this payment pursuant to a specific request of NBLMA to do so, that the City has made significant financial commitments to NBLMA in this MOU in consideration of the members' agreement to relinquish their previously held "irrevocable right" to pay their own PERS contribution and receive a corresponding salary increase, and that the significant financial concessions to NBLMA (which included Leave Premium Pay Accounts, changes in the calculation of "hours worked" for purposes of overtime and internal salary adjustments) were made to avoid the potential for increased overtime compensation approximating $450,000 if all NBLMA members exercise their irrevocable right to make their own PERS contribution and receive a corresponding salary increase. 2. Effective July 2, 2011, the City will no longer pay or report any portion of the normal "safety member" contribution" and the value of the "employer paid member contribution" (EPMC) will be eliminated. All unit members will pay the full 9% "safety member" contribution of CalPERS reportable earnings. This payment will be made on a pre- tax basis through payroll deduction pursuant to IRS Code Section 414(h)(2). This contribution will not be considered as part of employee's "compensation earnable" under Government Code Supplemental Memorandum of Understanding Page 2 of 4 July 1, 2011 through December 31, 2011 0 section 20636. 3. The City's contract with PERS also prevmdes fef provides the following: a. A 3% @ 50 retirement formula pursuant to the provisions of Section 21362.2 of the California Government Code. b. The military buy -back provisions pursuant to Section 21024 of the California Government Code and the highest year benefit pursuant to Section 20042. C. The Level 4 1959 Survivor Benefit. d. The Pre - Retirement Option Settlement 2 Death Benefit (Section 21548). e. Effective as soon as practicable after adoption of this Supplemental Memorandum of Understanding, but no sooner than July 1, 2011, the City will contract with CalPERS to implement the 2 % @50 retirement formula for all newly hired employees. The 2 % @50 retirement formula "final compensation" shall be defined as set out in Government Code section 20037 and calculated based upon the average of the 36 highest paid consecutive months. . . . ._ NINNIN The parties witness their agreement to the above by affixing their signatures below. Executed this day of June, 2011: Signatures on the following page. Supplemental Memorandum Page 3 of 4 of Understanding July 1, 2011 through December 31; 2011 7 Newport Beach Lifeguard Management Association M Brent Jacobsen, President City of Newport Beach go APPROVED AS TO FORM: By David R. Hunt, City Attorney ATTEST: Leilani Brown, City Clerk Supplemental Memorandum of Understanding Michael F. Henn, Mayor Page 4 of 4 July 1, 2011 through December 31, 2011 51 ATTACHMENT B RESOLUTION NO. 2011- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH RESCINDING RESOLUTION NO. 94 -41 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 LIFEGUARD MANAGEMENT ASSOCIATION WHEREAS, the City Council of the City of Newport Beach previously adopted Resolution No. 94 -41 to pay and report the value of the 9% Employer Paid Member Contribution (EPMC) to CalPERS for employees represented by the Newport Beach City Employees' 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 of Newport Beach and the Newport Beach Lifeguard Management Association has a written agreement which specifically provides the normal member contribution will no longer be paid by the City; 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 no longer pay and report the value of the EPMC. NOW, THEREFORE, the City Council of the City of Newport Beach does 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 Lifeguard Management Association. Section 2. Effective the pay period that includes July 1, 2011, this benefit shall be modified to consist of the City of Newport Beach paying 0.0% of the normal contributions as EPMC and reporting the same percent (value) as compensation earnable. Adopted this day of 2011. VW ATTEST: City Clerk Mayor of the City of Newport Beach 0 SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH LIFEGUARD MANAGEMENT ASSOCIATION This SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING (hereinafter referred to as "Supplemental MOU ") is entered into modifying the Memorandum of Understanding between the City of Newport Beach and the Newport Beach Lifeguard Management Association for the period of January 1, 2009 through December 31, 2011 (hereinafter "MOU "). Upon signing of this Supplemental MOU, the MOU is modified to incorporate the changes memorialized herein. No other changes are effectuated by the parties. Except as expressly stated in this Supplemental MOU all terms and conditions of the MOU remain in full force and effect. The changes referenced in this Supplemental MOU shall take effect on July 1, 2011 and shall remain in effect for the balance of the term of the MOU. SECTION 4. - FRINGE BENEFITS A. Insurance — Amended to read: 2. City Contribution The City has implemented an IRS qualified Cafeteria Plan. NBLMA members shall participate in this plan. The City contribution toward the Cafeteria Plan shall be as set forth below. 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 Beach Lifeguard Management 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 December 20, 2008, the City's contribution towards the Cafeteria Plan increases to $974 (plus the minimum CalPERS participating employer's contribution). Effective the pay period beginning December 19, 2009, the City's contribution towards the Cafeteria Plan will increase to $1049 (plus the minimum CaIPERS participating employer's contribution). Effective July 2, 2011, the City's contribution towards the Cafeteria Plan will increase to $1149 per month (plus the minimum CalPERS Supplemental Memorandum of Understanding Page 1 of 4 July 1, 2011 through December 31. 2011 10 participating employer's contribution). LMA 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. D. The Retirement Benefit- Amended to read: 1. Pursuant to Section 20691 of the California Government Code, the City shall pay to PERS, on behalf of all employees covered by this agreement and hired before May 25, 2010, the entire required normal "safety member" retirement contribution, but not to exceed 9% of the compensation earnable which PERS uses to calculate retirement contributions and benefits. For employees hired after May 25, 2010 the City will pay 3.5% of the member contribution. Such employees will be eligible to receive the 9% the beginning of their 6th year of uninterrupted service. In addition, the amount of this payment shall be reported to PERS as special compensation, which is part of the employee's compensation earnable, pursuant to the provisions of Section 20636 (c)(4) of the California Government Code, as amended effective July 1, 1994. This payment shall be credited to the employee's accounts maintained by PERS in accordance with Section 20691 of the California Government Code. NBLMA acknowledges that the City is making this payment pursuant to a specific request of NBLMA to do so, that the City has made significant financial commitments to NBLMA in this MOU in consideration of the members' agreement to relinquish their previously held "irrevocable right" to pay their own PERS contribution and receive a corresponding salary increase, and that the significant financial concessions to NBLMA (which included Leave Premium Pay Accounts, changes in the calculation of "hours worked" for purposes of overtime and internal salary adjustments) were made to avoid the potential for increased overtime compensation approximating $450,000 if all NBLMA members exercise their irrevocable right to make their own PERS contribution and receive a corresponding salary increase. 2. Effective July 2, 2011, the City will no longer pay or report any portion of the normal "safety member" contribution" and the value of the "employer paid member contribution" (EPMC) will be eliminated. All unit members will pay the full 9% "safety member" contribution of CaIPERS reportable earnings. This payment will be made on a pre- tax basis through payroll deduction pursuant to IRS Code Section 414(h)(2). This contribution will not be considered as part of employee's "compensation earnable" under Government Code Supplemental Memorandum of Understanding Page 2 of 4 July 1, 2011 through December 31. 2011 11 section 20636. 3. The City's contract with PERS alse pFevides ffG provides the following: a. A 3% @ 50 retirement formula pursuant to the provisions of Section 21362.2 of the California Government Code. b. The military buy -back provisions pursuant to Section 21024 of the California Government Code and the highest year benefit pursuant to Section 20042. C. The Level 4 1959 Survivor Benefit. d. The Pre - Retirement Option Settlement 2 Death Benefit (Section 21548). e. Effective as soon as practicable after adoption of this Supplemental Memorandum of Understanding, but no sooner than July 1, 2011, the City will contract with CalPERS to implement the 2 % @50 retirement formula for all newly hired employees. The 2 % @50 retirement formula "final compensation" shall be defined as set out in Government Code section 20037 and calculated based upon the average of the 36 highest paid consecutive months. The parties witness their agreement to the above by affixing their signatures below. Executed this day of June, 2011: Signatures on the following page. Supplemental Memorandum Page 3 of 4 of Understanding July 1, 2011 through December 31, 2011 12 9z_ mez.=_ . . ._ The parties witness their agreement to the above by affixing their signatures below. Executed this day of June, 2011: Signatures on the following page. Supplemental Memorandum Page 3 of 4 of Understanding July 1, 2011 through December 31, 2011 12 Newport Beach Lifeguard Management Association a Brent Jacobsen, President City of Newport Beach APPROVED AS TO FORM: By David R. Hunt, City Attorney ATTEST: M Leilani Brown, City Clerk Supplemental Memorandum of Understanding Michael F. Henn, Mayor Page 4 of 4 July 1, 2011 through December 31, 2011 13