HomeMy WebLinkAbout10-16-122, B1 Mem of Argument Between the City and SLO Policecounci l3acenOa nepont
C I T Y O F S A N L U I S O B I S P O
FROM :
Monica Irons, Director of Human Resource s
Prepared By :Greg Zocher, Human Resources Manage r
SUBJECT :MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF SAN LUI S
OBISPO AND THE SAN LUIS OBISPO POLICE OFFICERS' ASSOCIATION FOR TH E
PERIOD OF JANUARY 1, 2012 THROUGH DECEMBER 31, 201 5
RECOMMENDATIO N
1 . Adopt a resolution adopting and ratifying the Memorandum of Agreement with a four-yea r
term between the City of San Luis Obispo and the San Luis Obispo Police Officers '
Association (POA).
DISCUSSIO N
Backgroun d
POA represents approximately 61 members in classifications of Police Officer, Communication s
Technician, Evidence Technician, Field Service Technician, Property and Evidence Clerk, Polic e
Cadet and Police Records Clerk. Compensation and benefits for this group of employees i s
established by a memorandum of agreement (MOA) and amendments that expired on December 31 ,
2011 . Negotiations with POA commenced in early December 2011 following a notice to th e
association from the City in September 2011 and an informational meeting with PO A
representatives in October 2011 . The notice and informational meeting outlined the Council's labo r
relations objectives as follows :
1.Implement sustainable actions to reduce total employee compensation costs by 6 .8% or a
total of $3 .1 million annually for all funds ($2 .6 million in the General Fund only) as se t
forth in the 2011-13 Financial Plan ; and,
2.Achieve "significant progress" in the area of long-term systemic pension cost containmen t
and reduction, including :
o a shift to employees paying the full member contribution required by CaIPER S
(eight percent for Miscellaneous employees :and nine percent for Safety employees);
thus moving away from EPMC for current and future employees ; and,
o implementation of a second tier retirement benefit, or ,
o other actions that meet this objective .
Several years ago the POA agreed to pay the member contribution to Ca1PERS ' and receive d
equivalent salary increases . Therefore the POA needed to meet the 6 .8% total compensatio n
reduction by other actions . Representatives from POA and the City met on eight occasions befor e
the City declared impasse on June 5, 2012 . While tentative agreements were reached on non -
economic items during the initial negotiation sessions, the parties points of disagreement were a s
follows : 1) the nature and extent of the salary and benefit reductions proposed by the parties t o
achieve a 6 .8% reduction in POA's total compensation ; and 2) the 2% @ 50 Ca1PERS formula to b e
.Meeting Date
10/16/2012
!Item Number
B 1
•
•
POA MOA
Page 2
•implemented by the City for a second tier pension plan for newly hired Safety employees . Th e
City's Employer-Employee Resolution 6620 includes an extensive impasse resolution process tha t
starts with a meeting with the Employee Relations Officer and includes mediation, fact-finding an d
a settlement panel aimed at assisting the parties in reaching agreement prior to Council potentiall y
imposing terms and conditions . From June through September the parties moved through the initia l
steps of the process and were preparing for fact-finding when the POA requested a meeting t o
discuss a revised proposal . The meeting resulted in a tentative agreement, ratified by the PO A
membership on October 4, 2012 .
The following summarizes the key terms of the agreement, which includes lower second tier
pension benefit formulas, reaches an ongoing 6 .8% total compensation in June 2014, and provide s
the estimated total compensation reduction after implementation of each pertinent item :
1 . A four-year MOA term (January 1, 2012 through December 31, 2015).
2 . Salary reductions as follows :
a.2% Salary Reduction effective the first full payroll period in January 201 3
b.2% Salary Reduction effective the first full payroll period in July 2014 .
3 . Cost Sharing of PERS pensio n
a . 3% additional payment toward PERS pension costs effective the first full payrol l
period in January 2014 .
4 . Elimination of Uniform allowance effective January 2013 .
5 . Effective January 2013 two additional full salary steps will be added at the bottom of th e
salary tables for all classifications . The addition of two new salary steps will yield a
reduction in salary and salary related employee costs for each new employee hired afte r
January 1, 2013 . Current employees will receive no increase as a result of the tw o
additional lower steps .
6 . No across the board (e .g . cost of living adjustments) for the term of the agreement .
7 . No increase in the City contribution to health insurance until December 2014 . At that time
the City contribution to health insurance will be modified based on an amount equal to on e
half of the average percentage change for family coverage in the Ca1PERS health plan s
available in San Luis Obispo County . Effective December 2012 employees who opt out o f
the PERS Health Benefit program will receive the employee only contribution .
8 . This group recognizes the necessity of implementing a second tier retirement benefit an d
have agreed to a second tier formula of 2% @ 50 for Police Safety employees using th e
average of the three highest years and 2% @ 60 for Miscellaneous employees using th e
average of the three highest years . The second tiers will be implemented for new employee s
hired after December 6, 2012 or as soon as practical in accordance with Ca1PERS and othe r
State regulations .
9 . Minor wording changes to the MOA to more accurately reflect classification titles, curren t
practices, etc .
10 . All other terms and conditions of the MOA remain unchanged for the term of the agreement .
At the end of this agreement city employees represented by POA will have gone without a cost o f
living adjustment for six years (the last adjustment was a five percent increase received in Januar y
2009) and without an increase in health contributions for six years (the last increase in the City's
health contribution for this group was December 2008).
B1-2 -
POA MOA
Page 3
• On September 12, 2012 Governor Brown signed into law AB 340 the California Public Employees '
Pension Reform Act of 2013 (PEPRA). Under PEPRA, effective January 1, 2013, new lower tie r
pension formulas will go into effect for all new hires who had not worked in the public sector .
Employees hired from another public sector agency would be subject to the retirement formula i n
effect on December 31, 2012 . The ratification of the MOA with POA will allow the City to amen d
the Ca1PERS contract and establish lower second tier retirement formulas for Police Safety an d
Miscellaneous employees hired from public sector agencies after January 1, 2013 . A second tier
pension benefit of 3% at 55 was implemented for Fire Safety effective August 31, 2012 .
FISCAL IMPAC T
As approved by Council, use of one-time savings will be required as the terms of this contract ar e
phased in . For fiscal year 2011/12 one-time savings of $316,307 was used, $492,188 is needed fo r
fiscal year 2012/13, and $264,975 is needed for fiscal year 2013/14 . Effective the first full payrol l
in July 2014 the total compensation cost reductions will result in ongoing annual savings o f
$632,000 which is a 6 .8% reduction for this employee group . In addition, implementation of the
second tier formulas for Police Safety employees and all Miscellaneous employees will result i n
approximately $86,000 in the first year and $1 .1 million in savings in the eleventh year.
Combined with actions taken by the unrepresented management group in January, the Internationa l
Association of Firefighters Local 3523 in March, the unrepresented confidential employees in April ,
the Battalion Chiefs in May, the San Luis Obispo Police Staff Officers' Association in May, and th e
San Luis Obispo City Employees' Association in June, the City achieve slightly more than th e
targeted $3 .1 million in ongoing annual personnel cost reductions when the terms of the agreement s
are fully phased in .
ALTERNATIVE S
Do not approve the resolutions and contract amendments.This alternative is not recommended, a s
the resolutions and contract amendments are consistent with the Council's labor relations objective s
and the City's employer-employee relations policies .
ATTACHMEN T
1.Resolution adopting and ratifying the POA MO A
AVAILABLE FOR REVIEW IN THE COUNCIL OFFIC E
2.MOA between the City of San Luis Obispo and POA, January 1, 2012 through Decembe r
31, 2015 .
B1-3
RESOLUTION NO . (2012 Series)
ATTACHMENT 1
Page 1 of 2
•
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISP O
ADOPTING AND RATIFYING THE MEMORANDUM OF AGREEMENT BETWEE N
THE CITY OF SAN LUIS OBISPO AND THE SAN LUIS OBISPO POLICE
OFFICERS' ASSOCIATION FOR THE PERIOD OF JANUARY 1, 2012 THROUG H
DECEMBER 31, 201 5
WHEREAS,representatives of the San Luis Obispo Police Officers' Association me t
multiple times with City representatives to identify sustainable reductions in total compensatio n
costs ; and
WHEREAS,this agreement achieves Council's labor relations objectives to reduce tota l
compensation costs and implement sustainable pension cost containment and reductions ;
NOW, THEREFORE, BE IT RESOLVED,by the City Council of the City of San Luis Obisp o
as follows :
SECTION 1 .The Memorandum of Agreement between the City of San Luis Obispo an d
the San Luis Obispo Police Officers' Association, attached hereto as Exhibit "A" and incorporate d
herein by this reference, is hereby adopted and ratified .
SECTION 2 . The Director of Finance and Information Technology shall adjust th e
appropriate accounts to reflect the compensation changes .
SECTION 3 .The City Clerk shall furnish a copy of this resolution and a copy of th e
executed Memorandum of Agreement approved by it to : Matt Blackstone, San Luis Obispo Police
Officers' Association and Monica Irons, Director of Human Resources .
Upon motion of
, seconded b y
, and on the following vote :
AYES :
NOES :
ABSENT :
The foregoing resolution was adopted this 16th day of October, 2012 .
B1-4
ATTACHMENT 1
Page 2 of 2
S
Mayor Jan Marx
ATTEST :
Maeve Kennedy Grime s
City Clerk
APPROVED AS TO FORM :
J . Christine Dietrick
J . Christine Dietrick
City Attorney
•
B1-5
SEXHIBITA
A copy of the MOA is in the Council Reading File an d
available for public review . At the time of this repor t
deadline, appropriate signatures were being obtained .
T :\Council Agenda Reports\2012\2012-10-16\MOA SLOPOA (Irons-Zocher)\EXHIBIT A .docx
B1-6