HomeMy WebLinkAbout03-07-2017 Item 11 Adjustments to the Compensation of the Unrepresented Confidential Employees Meeting Date: 3/7/2017
FROM: Monica Irons, Human Resources Director
Prepared By: Nickole Sutter, Human Resources Analyst II
SUBJECT: ADJUSTMENTS TO THE COMPENSATION OF THE UNREPRESENTED
CONFIDENTIAL EMPLOYEES
RECOMMENDATION
Adopt a resolution with a one-year term (January 1, 2017 to December 31, 2017) adjusting the
compensation of the Unrepresented Confidential Employees (Attachments A & B).
DISCUSSION
Background
The City’s confidential group includes five employees: two Human Resources Administrative
Assistants, one Human Resources Specialist, one Legal Assistant, and one Administration
Executive Assistant. These employees are designated as unrepresented in accordance with the
Government Code 3507.5 and Employer-Employee Resolution 6620 because they are privy to
information that affects employee relations and labor negotiations. The confidential employees’
compensation and benefits are established by resolution adopted by Council that expired on
December 31, 2016.
In September 2014, Council adopted Labor Relations Objectives (LROs) that provided guidance
and high level direction for negotiations with all employee groups including discussions with
unrepresented employees. The LROs, outlined below, balance recruitment and retention of well-
qualified employees with fiscal responsibility:
1. Maintain fiscal responsibility by ensuring that fair and responsible employee
compensation expenditures are supported by on-going revenues.
2. Continue to make progress in the area of long-term systemic pension cost containment
and reduction, including reversing the unfunded pension liability trend and other actions
consistent with State law.
3. Continue to effectively manage escalating health benefit costs through balanced cost
sharing and other means while maintaining comprehensive health care coverage for all
eligible employees.
4. As necessary to attract and retain well-qualified employees at all levels of the
organization, provide competitive compensation as articulated in the City’s
Compensation Philosophy.
Framing the Recommendation
Confidential employees are unrepresented which means there are no formal negotiations, as there
are for other regular employees. The group met once in November and again in January given
holidays and schedules. The recommendation before Council was developed in January and is in
line with compensation changes other bargaining groups will receive during the same timeframe.
Discussions with the unrepresented confidential staff were collaborative, cooperative, and
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supportive of Council objectives.
The following areas helped frame the recommendation for the unrepresented confidential group:
1) Movement in the labor market and Consumer Price Index (CPI), 2) Cost of living adjustments
provided in comparison agencies, 3) Changes in compensation negotiated with other bargaining
groups at the City, and 4) Council adopted LRO. The CPI for the San Francisco -Oakland-San
Jose area has experienced an average increase of 2.7% per year over the past five years.
Similarly, comparison agencies indicate negotiating COLAs in the range of 2% to 4% with 2.5%
being the median COLA for 2016-17. All of the City’s represented groups have current
agreements. The duties of the confidential group most closely align with classifications
represented by SLOCEA; therefore, it is recommended that compensation for the confidential
group keep pace with movement in SLOCEA compensation.
Confidential Resolution
The proposed resolution is for one-year and include the modest changes in compensation
outlined below. No further adjustments in compensation for the confidential group is committed
beyond 2017, allowing further analysis by Finance staff of the recent decision by the California
Public Employees’ Retirement System (CalPERS) to reduce the discount rate. While this change
by CalPERS is aimed at ensuring the financial sustainability of the retirement system, it will
have significant financial impacts on the City beginning in 2018-19.
The following is a summary of the key changes included in the Resolution. The Resolution
includes additional revisions as staff did a complete review of compensation and benefit
practices and incorporated more clarity into the resolution:
Term of Resolution
January 1, 2017 to December 31, 2017
Salary
2% Cost of Living Adjustment (COLA) effective the first full period in January 2017, given a
recommendation was developed in January.
Health Contribution
Effective the first payroll following Council adoption, increase City health insurance
contribution by approximately 5% to match contributions provided to the San Luis Obispo City
Employees Association (SLOCEA). Maintain the current cost-sharing model that increases the
City-contribution by 50% of the average percent increase in CalPERS medical premiums in
December 2017 for 2018 premium increases. Discontinue cash back for employees electing
coverage in the City’s health plan, ensuring compliance with the Affordable Care Act and
limiting overtime costs under FLSA.
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FISCAL IMPACT
The cumulative annual ongoing total compensation cost after all items are implemented is
approximately $20,000. Funding is available in the current 2015-17 Financial Plan for cost
increases resulting during that timeframe and subsequent costs are modeled in the Five-Year
Fiscal Forecast.
ALTERNATIVES
Do not approve recommended changes to the resolution. Instead, adopt a resolution that
continues unrepresented confidential employee compensation without changes. This alternative
is not recommended as the resolution is in line with previous Council direction and maintains
parity with other employee groups.
Attachments:
a - Confidential Resolution 2017
b - Exhibit A-Confidentials 2017
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R ______
RESOLUTION NO. (2017 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, REGARDING COMPENSATION FOR THE
UNREPRESENTED CONFIDENTIAL EMPLOYEES AND SUPERSEDING
PREVIOUS RESOLUTIONS IN CONFLICT
WHEREAS, the City has designated the following classifications as confidential
employees pursuant to the Government Code 3507.5 and Employer-Employee Resolution 6620:
Administration Executive Assistant, Human Resources Administrative Assistant I, II, III, Human
Resources Specialist, Legal Assistant, and Legal Assistant/Paralegal; and
WHEREAS, confidential employees are precluded from collective bargaining due to their
proximity to labor negotiations, and therefore are not governed by a collective bargaining
agreement, and
WHEREAS, the City Council is committed to providing competitive compensation as
provided in the City’s adopted Compensation Philosophy.
NOW, THEREFORE, BE IT RESOLVED, that the Council of the City of San Luis
Obispo hereby revises unrepresented confidential compensation as follows:
SECTION 1. The City agrees to increase the salaries of confidential employees with a
2% cost of living (COLA) effective the first full pay period in January 2017; and
SECTION 2. The City shall continue to provide employees certain fringe benefits as set
forth in Exhibit “A”, fully incorporated by reference; and
SECTION 3. The Director of Finance shall adjust the appropriate accounts to reflect the
compensation changes; and
SECTION 4. This Resolution shall be in effect from January 1, 2017 through December
31, 2017.
Upon motion of ___________________________, seconded by ________________________, and
on the following vote:
AYES:
NOES:
ABSENT:
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Resolution No. _____ (2017 Series) Page 2
R ______
The foregoing resolution was adopted this 7th day of March, 2017.
____________________________________
Mayor Heidi Harmon
ATTEST:
__________________________________
Carrie Gallagher
City Clerk
APPROVED AS TO FORM:
__________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Carrie Gallagher
City Clerk
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EXHIBIT “A”
Page 1 of 8
CONFIDENTIAL EMPLOYEES FRINGE BENEFITS 2015-20167
Section A Medical, Dental, Vision
The City shall establish and maintain medical, dental and vision insurance plans for confidential
employees and their dependents. The City reserves the right to choose the method of insuring
and plans to be offered.
PERS Health Benefit Program
The City has elected to participate in the PERS Health Benefit Program. The City shall
contribute an equal amount towards the cost of medical coverage under the Public Employee’s
Medical and Hospital Care Act (PEMHCA) for both active employees and retirees. The City’s
contribution toward coverage under PEMHCA shall be the statutory minimum contribution
amount established by CalPERS on an annual basis. The City's contribution will come out of
that amount the City currently contributes to employees as part of the City’s Cafeteria Plan. The
cost of the City's participation in PERS will not require the City to ex pend additional funds
toward health insurance. In summary, this cost and any increases will be borne by the
employees.
Health Insurance Benefits for Domestic Partners
The City has adopted a resolution electing to provide health insurance benefits to domestic
partners (Section 22873 of the PEMHCA).
The City has elected to participate in the PERS Health Benefit Program pursuant to the Public
Employees’ Medical and Hospital Care Act (PEMHCA) at the PERS minimum contribution
rates, currently $122.00 per month for active employees and retirees.
Conditional Opt Out
Employees who at initial enrollment or during the annual open enrollment period, complete an
affidavit and provide proof of other minimum essential coverage for themselves and their
qualified dependents (tax family) that is not a qualified health plan coverage under an
exchange/marketplace or an individual plan, will be allowed to waive medical coverage for
themselves and their qualified dependents (tax family).
The monthly conditional opt-out amount is $200.
The conditional opt-out incentive shall be paid in cash (taxable income) to the employee. The
employee must notify the City within 30 days of the loss of other minimum essential coverage.
The conditional opt-out payment shall no longer be payable, if the employee and family
members cease to be enrolled in other minimum essential coverage. Employees receiving the
conditional opt-out amount will also be assessed $16.00 per month to be placed in the Retiree
Health Insurance Account. This account will be used to fund the City's contribution toward
retiree premiums and the City's costs for the Public Employee's Contingency Reserve Fund and
the Administrative Costs. However, there is no requirement that these funds be used exclusively
for this purpose nor any guarantee that they will be sufficient to fund retiree health costs,
although they will be used for negotiated employee benefits.
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Resolution No. (20157 Series) EXHIBIT “A”
Confidential’ s Fringe Benefits 2015 - 20162017
Page 2 of 8
Employees with proof of medical insurance elsewhere are not required to participate in the
medical insurance plan and may receive the unused portion of the City’s contribution (after
dental and vision insurance is deducted) in cash in accordance with the City’s cafeteria plan.
Those employees will be assessed $16.00 per month to be placed in the Retiree Health Insurance
Account. This account will be used to fund the Cit y’s contribution toward retiree premiums and
the City’s costs for the Public Employees’ Contingency Reserve Fund and Administrative Costs.
However, there is no requirement that these funds be used exclusively for this purpose, nor any
guarantee that they will be sufficient to fund retiree health costs, although they will be used for
employee benefits.
Dental and Vision Insurance/Dependent Coverage
Effective the first full month following the adoption of this resolutionfor May 2017
premiumsMarch 23, 2017, employee participation in the City's dental and vision plans is
optional. Employees who elect coverage shall pay the dental and/or eye premium by payroll
deductions on a pre-tax basis through the City’s Cafeteria Plan. Employees will be required to
participate in the City’s dental and vision plans at the employee-only rate. Should they elect to
cover dependents in the City’s dental and vision plans, they may do so, even if they do not have
dependent coverage for medical insurance.
Employees shall participate in term life insurance of $4,000 through payroll deduction as a part
of the cafeteria plan.
Section B Cafeteria Plan ContributionHealth Flex Allowance
Employees electing medical coverage in the City’s plans shall receive a health flex allowance, as
defined by the Affordable Care Act (“ACA”), and shall purchase such coverage through the
City’s Cafeteria Plan. If the health flex allowance is less than the cost of the medical plan, the
employee shall have the opportunity to pay the difference between the health flex allowance and
the premium cost on a pre-tax basis through the City’s Cafeteria Plan. Effective December 2017
(for January 2018 premiums), iIf the premium cost for medical coverage is less than the health
flex allowance, the employee shall not receive any unused health flex in the form of cash or
purchase additional benefits under the Cafeteria Plan.
The Effective the first full pay period following the adoption of this resolution, the monthly
health flex allowance amounts City’s contribution to the Cafeteria Plan for regular, full-time
employees are as followswill increase as shown below:
Level of Coverage
*with no cash back option
effective Dec 2017
Current Monthly Rates Monthly Rates Upon
Council Adoption
Employee Only $514 $539
Employee Plus One $1,017 $1,066
Family $1,375 $1,442
Opt-Out $200 monthly
Employee Only $539469 monthly
Employee + 1 $1,066928 monthly
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Resolution No. (20157 Series) EXHIBIT “A”
Confidential’ s Fringe Benefits 2015 - 20162017
Page 3 of 8
Employee + Family $1,4421255 monthly
“Grandfathered” $790 monthly
Effective December 2015 (for the January 2016 premium) and effective December 20176 (for
the January 20187 premium), the City’s total Cafeteria Planhealth flex allowance for group
medical coverage contribution shall be modified by an amount equal to one-half of the average
percentage increase for family coverage in the PERS health plans available in San Luis Obispo
County. For example: if three plans were available and the year-to-year changes were +10%,
+15%, and +20% respectively, the City’s contribution would be increased by 7.5% (10% + 15%
+ 20% ÷ 3 = 15% x 1/2).
Employees hired on September 1, 2008 or thereafter who elect not to be covered and opt out of
the City medical plan will be required to provide proof of medical insurance elsewhere and
receive a $200 per month cafeteria contribution.
Employees hired prior to September 1, 2008 who elected either employee only medical coverage
or who elect to opt out of the City medical plan with proof of medical insurance elsewhere shall
be “grandfathered” in at the $790 per month contribution amount.
Less than full-time employees shall receive a prorated share of the City’s contribution.
The City agrees to continue its contribution to the cafeteria planhealth flex allowance for two (2)
pay periods in the event that an employee has exhausted all paid time off and leave approved under
the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA)
due to an employee's catastrophic illness. That is, the employee shall receive regular City health
flex allowance for the first two (2) pay periods following the pay period in which the employee’s
accrued leave balances reach zero (0) and FMLA/CFRA benefits have been exhausted.
Section C Life and Disability Insurance
The City shall provide the following special insurance benefits:
1. Long-term disability insurance providing 66 2/3% of gross salary (maximum benefit
$5,000 per month) to age 65 for any sickness or accident, subject to the exclusions in
the long-term disability policy, after a 30-day waiting period.
2. In addition to $4,000 term life insurance purchased by the employee , the City
provides through the cafeteria plan $25,000 term life insurance, including accidental
death and dismemberment through the City’s Cafeteria Plan.
Section D Retirement
Employees hired before December 6, 2012
The City agrees to provide the Public Employees' Retirement System’s 2.7% at age 55 plan to all
eligible employees including the amendments permitting conversion of unused sick leave to
additional retirement credit, the 1959 Ssurvivor's Bbenefit – Level Four (4th level), one- year
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Resolution No. (20157 Series) EXHIBIT “A”
Confidential’ s Fringe Benefits 2015 - 20162017
Page 4 of 8
final compensation, the Military Service Credit option, and the Pre-Retirement Option 2 Death
Benefit.
Effective June 27, 2013, employees covered by the 2.7% at 55 plan will pay the full eight percent
member contribution to PERS.
The employee pays to PERS their contribution; as allowed under Internal Revenue Service Code
Section 414 (h) (2) the contribution is made on a pre-tax basis.
“Classic Members” hired on or after December 6, 2012
For “Classic Members” hired on or after December 6, 2012, the City will provide the PERS 2%
at 60 retirement plan using the highest three- year average as final compensation. The second
tier formula will include the following amendments: conversion of unused sick leave to
additional retirement credit, the 1959 Ssurvivor's Bbenefit – Level Four (4th level), the Military
Service Credit option, and the Pre-Retirement Option 2 Death Benefit. Employees hired under
this plan will pay the full member contribution required under the plan, presently seve n percent
(7%). CalPERS determines who is a “classic member” within the meaning of the California
Public Employees’ Pension Reform Act (PEPRA).
The employee pays to PERS their contribution; as allowed under Internal Revenue Service Code
Section 414 (h) (2) the contribution is made on a pre-tax basis.
New Members
For all employees who CalPERS determines are “new members” within the meaning of the
PEPRA, the City will provide the PERS 2% at 62 retirement plan using the highest three- year
average as final compensation.
Effective upon their date of hire, new members will pay 50% of the total normal cost of the
member contribution, as determined by CalPERS.
The employee pays to PERS their contribution; as allowed under Internal Revenue Service Code
Section 414 (h) (2) the contribution is made on a pre-tax basis.
Section E Vacation
Vacation leave is governed by Ssection 2.36.440 of the Municipal Code, except that it may be
taken after the completion of the sixth calendar month of service since the benefit date or earlier
with department head authorization. Each confidential employee shall accrue vacation leave
with the pay at the rate of 12 days (96 hours) per year of continuous service since the benefit date
for the first five years, 15 days (120 hours) per year upon completion of five years, 18 days (144
hours) per year upon completion of ten years, and 20 days (160 hours) upon completion of
twenty years. Vacation leave shall be accrued as earned each payroll periodsemi-monthly
provided that not more than twice the annual rate (not including floating holiday leave) may be
carried over to a new calendar year.
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Resolution No. (20157 Series) EXHIBIT “A”
Confidential’ s Fringe Benefits 2015 - 20162017
Page 5 of 8
Vacation schedules for confidential employees shall be based upon the needs of the City and
then, insofar as possible, upon the wishes of the employee. A department head may not deny a
confidential employee’s vacation request if such denial will result in the loss of vacation accrual
by the employee, except that, a department head may approve a two-month extension of
maximum vacation accrual. However, in no event shall more than one such extension be granted
in any calendar year.
Confidential employees are eligible, once annually in December, to request payment for up to 40
hours of unused vacation provided that an employee’s overall performance and attendance
practices are satisfactory.
Section F Administrative Leave
Confidential employees shall be granted 12 hours of administrative leave per calendar yearthe
first full pay period in January.
Administrative leave hours shall be pro-rated on a monthly basis when a confidential employee
is appointed or leaves employment during the calendar year. The employee’s final check will be
adjusted to reflect the pro-rated hours, however there is no provision to receive cash payment for
unused administrative hours. Unused administration leave will not be carried over year to year
but can be taken through the pay period that December 31st falls within.
Section G Holidays
Confidential employees shall receive eleven (11) fixed plus two (2) floating holidays per year.
The following days of each year are designated as paid holidays:
January 1 – New Year’s Day
Third Monday in January – Martin Luther King Jr. Birthday
Third Monday in February – Presidents’ Day
Last Monday in May – Memorial Day
July 4 – Independence Day
First Monday in September – Labor Day
November 11 – Veteran’s Day
Fourth Thursday in November – Thanksgiving Day
Friday after Thanksgiving
December 25 – Christmas
One half day before Christmas
One half day before New Year’s Day
When a holiday falls on a Saturday, the preceding Friday shall be observed. When a holiday
falls on a Sunday, the following Monday shall be observed. A holiday shall be defined as eight
(8) hours of paid time off for regular full time employees.
When Christmas or New Year’s Holiday falls on a Tuesday or Thursday, the City reserves the
right to close non-essential City services and offices on Monday or Friday (the day adjacent to
the observed holiday). Essential City services are determined at the discretion of the Department
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Resolution No. (20157 Series) EXHIBIT “A”
Confidential’ s Fringe Benefits 2015 - 20162017
Page 6 of 8
Head. Employees scheduled to work in non-essential functions on the days adjacent to the paid
holidays would be required to use appropriate personal leave or take the days as non-pay. The
City would notify employees of closure of non-essential City services and offices no later than
October 31st of the same year in order to provide employees with ample time to plan accordingly.
Confidential employees shall receive 11 fixed plus 2 floating holidays per year. The two (2)
floating holidays shall be accrued on a semi-monthly basis and added to the vacation accrual.
Section H Sick Leave
Sick leave is governed by Ssection 2.36.420 of the Municipal Code. An employee shall accrue
sick leave with pay at the rate of twelve (12) days or the prorated shift equivalent per year of
continuous service since the benefit date. An employee may take up to 48 hours per calendar
year of sick leave if required to be away from the job to personally care for a member of his/her
immediate family as defined in Section 2.36.420, Labor Code 233 and/or Assembly Bill 1522.
This may be extended to 56 hours if a household family member is hospitalized and the
employee submits written verification of such hospitalization.
In conjunction with existing leave benefits, confidential employees with one year of City service
who have worked at least 1,250 hours in the previous year may be eligible for up to 12 weeks of
Family/Medical Leave in accordance with the federal Family and Medical Leave Act and the
California Family Rights Act.
Sick leave may be used to be absent from duty due to the death of a me mber of the employee’s
immediate family as defined in Section 2.36.420, provided such leave shall not exceed forty
working hours for each incident. The employee may be required to submit proof of relative’s
death before being granted sick leave pay. False information concerning the death or
relationship shall be cause for discharge.
According to the following schedule, Upon termination of employment by death or retirement, a
percentage of the dollar value of the employee’s accumulated sick leave will may be paid to the
employee if the employee requests upon termination by retirement, and will be paid to, or the
designated beneficiary or beneficiaries upon termination by death of the employeeaccording to
the following schedule:
(A) Death – 25%
(B) Retirement and actual commencement of CalPERS benefits:
(1) After ten years of continuous employment – 10%
(2) After twenty years of continuous employment – 15%
(3) After twenty-five years of continuous employment – 20%
(4) After thirty years of continuous employment – 25%
Section I Workers’ Compensation Leave
An employee who is absent from duty because of an on-the-job injury in accordance with State
workers’ compensation law and is not eligible for disability payments under Labor Code Section
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Resolution No. (20157 Series) EXHIBIT “A”
Confidential’ s Fringe Benefits 2015 - 20162017
Page 7 of 8
4850 shall be paid the difference between his/her base salary and the amount provided by
workers’ compensation law during the first ninety (90) business days of such temporary
disability absence. Eligibility for workers’ compensation leave requires an open workers’
compensation claim.
Section J Overtime
Definition
Overtime is defined as all hours preauthorized by management and worked by the employee in
excess of forty (40) hours worked in a work week.
Holidays and sick leave will be counted as hours worked for purposes of overtime. All overtime
shall be authorized by the department head or designee prior to being compensated.
Compensation
All overtime as defined in this Section shall be paid in cash at one and one half (1 1/2) the
employee's base rate of pay. All overtime shall be compensated to the nearest five (5) minutes
worked.
Separate and apart from the City's contractual obligation to pay overtime in accordance with this
Section, the City is obligated to calculate and pay, at a minimum, FLSA overtime based on the
federally defined regular rate of pay.
Compensatory Time Off (CTO)
A confidential employee eligible for overtime compensation as defined in this Section may elect
compensation in the form of time off (CTO). An employee may not be compensated in CTO for
more than sixty (60) hours of overtime worked in the calendar year. Accumulated CTO may be
taken through December 31st of each calendar year. Accumulated CTO not taken by midnight
December 31st shall be compensated in cash at straight time. Such compensation shall be paid
in January of the following year.
Work Week for Calculation of Overtime
For all confidential employees working a regular 5/40 work schedule or a 4/10 alternative work
schedule, the work week for the purpose of calculating overtime as defined in this Section shall
be seven consecutive days, beginning at 12:00 am Thursday and ending at 11:59 pm Wednesday.
For all confidential employees working a 9/80 alternative work schedule, the work week for the
purpose of calculating overtime as defined in this Section shall be seven consecutive days,
beginning exactly four hours into their eight-hour shift on the day of the week which constitutes
their alternative regular day off.
Section K Work Out-of-Classification
An out-of-class assignment is the full-time performance of all the significant duties of an
available, funded position in one classification by an individual in a position of another
classification. An employee assigned in writing by management to work out-of-class in a
position that is assigned a higher pay range which is vacant pending an examination or is vacant
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Resolution No. (20157 Series) EXHIBIT “A”
Confidential’ s Fringe Benefits 2015 - 20162017
Page 8 of 8
due to an extended sick or disability leave, shall receive no less than five percent (5%), but in no
case more than the top salary of the higher range, in addition to their regular base rate
commencing on the eleventh consecutive workday of the out-of-class assignment.
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Adjustments to Compensation for the
Unrepresented Confidential Employees
Monica Irons, Human Resources Director
Nickole Sutter, Human Resources Analyst II
March 7, 2017
Recommendation
• Adopt a resolution adjusting the compensation of the
Unrepresented Confidential Employees:
Term of Agreement: Jan. 1, 2017 — Dec. 31, 2017
7 Cost of Living Adjustment:
2% effective Jan. 2017
■ Health Insurance:
Match contribution provided to San Luis Obispo City
Employees Association (SLOCEA).
Cost sharing in Dec 2017 for 2018 premiums
CAT Y
IS pS?
3/8/2017
1
Fiscal Impact
■ Five Year Fiscal Forecast
■ Modeled all increases
■ 2015 - 17 Financial Plan
it Accounts for all compensation adjustments
G1TY off,
� G
Questions Is D
RD : CITY OF SHR LWS OBISPO
3/8/2017
2