HomeMy WebLinkAbout11. DPMA Side Letter 2011-15 07-24-12RECOMMENDATION:
TO: Mayor and Members of the City Council
FROM: Office of the City Manager
By: Irma Youssefieh, Human Resources Director
Staff requests the City Council adopt the attached resolution:
DISCUSSION:
AGENDA MEMO
CITY OF DOWNEY, CALIFORNIA
DATE: July 24, 2012
SUBJECT: AMENDMENT TO THE MEMORANDUM OF UNDERSTANDING
BETWEEN THE CITY OF DOWNEY AND THE DOWNEY POLICE
MANAGEMENT ASSOCIATION
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY AMENDING
THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF DOWNEY
AND THE DOWNEY POLICE MANAGEMENT ASSOCIATION (July 1, 2011 — June
30, 2015) BY ADOPTING THE SIDE LETTER OF AGREEMENT.
Staff has reached agreement with the Downey Police Management Association (DPMA)
that represents ten employees in the classifications of Police Captain and Police
Lieutenant. The Side Letter of Agreement represents positive outcomes between the
City and the DPMA on the subject of deferring a scheduled 4.25% salary increase and a
.5% increase in education incentive pay from 2012 to 2014 plus other employee
concessions to assist the City in meeting a balanced budget for Fiscal Year 2012 -2013.
In addition to the pay deferral, other concessions include: benefit reductions effective
July 1, 2012 in the City's medical insurance program; a change from a self- funded
medical program to a fully- insured medical program under the CaIPERS Public
Employees' Medical Hospital and Care Act (PEMHCA) effective October 1, 2012 with a
reopener in June 2013 to discuss further changes to insure medical cost savings are
maintained in Fiscal Year 2013 -2014; an employee contribution of 4% compensation
towards employer retirement costs that begins with the pay period that includes July 1,
2013 and an additional 2% (for a total of 6 %) contribution starting in the pay period that
includes July 1, 2014; and, an agreement on the implementation of the 3% @ 55
second tier retirement formula for police safety new hires with the provision that each
new hire shall pay the full 9% of member contribution towards retirement.
To generate additional savings in personnel costs beyond normal attrition, the City
offers eligible DPMA employees an early retirement incentive through August 31, 2012
for salary savings from certain positions that will not be filled or filled by internal
promotion that provides for a Police Officer new hire under the second tier retirement
formula.
The Side Letter of Agreement is a product of a labor negotiation process involving the
Downey Police Management Association and City management representatives. This
process was completed in accordance with State law and the City's Personnel Rules
and Regulations.
Upon the completion of mutually agreed upon language clean up that does not involve
substantive or economic impact provisions, a comprehensive Memorandum of
Understanding will be submitted for adoption by the City Council that incorporates this
Side Letter Agreement.
FISCAL IMPACT: Salary savings of approximately $105,000 will be deferred to Fiscal
Year 2014 -2015. Based on current information available and dependent upon total
claims incurred by the City's self- funded medical plan at termination, City -wide medical
savings are projected to be approximately $1.5M in Fiscal Year 2012 -2013. Additional
savings in personnel costs in Fiscal Years 2013 -2014 and 2014 -2015 is approximately
$89, 000.
S:\Agenda Memos CC 2012- 13 \07- 24- 12 \DPMASideLetter.doc
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY
AMENDING THE MEMORANDUM OF UNDERSTANDING BETWEEN THE
CITY OF DOWNEY AND THE DOWNEY POLICE MANAGEMENT
ASSOCIATION (July 1, 2011 — June 30, 2015) BY ADOPTING THE SIDE
LETTER OF AGREEMENT.
WHEREAS, on July 12, 2011, the City Council of the City of Downey adopted
Resolution No. 11 -7282 for the purpose of adopting the Memorandum of Understanding
(MOU) between the City and the Downey Police Management Association (DPMA); and
Subsequent to the adoption of the MOU, the City of Downey and the DPMA
agreed to changes to the MOU that are reflected in a Side Letter of Agreement between
the City and the DPMA ( "Side Letter Agreement ") attached hereto as Exhibit A and
incorporated herein by this reference.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The Side Letter of Agreement attached hereto as Exhibit A is
approved and adopted.
SECTION 2. The Side Letter of Agreement amends the MOU between the City
of Downey and the DPMA.
ATTEST:
SECTION 3. The City Clerk shall certify to the adoption of this resolution.
APPROVED AND ADOPTED this 24 day of July, 2012.
ADRIA M. JIMENEZ, City Clerk, CMC
ROGER C. BROSSMER, Mayor
RESOLUTION NO.
PAGE TWO
HEREBY CERTIFY that the foregoing Resolution was adopted by the City
Council of the City of Downey at a regular meeting held on the 24 day of July, 2012, by
the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Council Members:
Council Member:
Council Member:
Council Member:
ADRIA M. JIMENEZ, City Clerk, CMC
EXHIBIT A
SIDE LETTER OF AGREEMENT
CITY OF DOWNEY
AND
DOWNEY POLICE MANAGEMENT ASSOCIATION
The City of Downey ( "City ") and the Downey Police Management Association ( "DPMA ") hereby
agree to this Side Letter of Agreement to the Memorandum of Understanding ( "MOU ") between
them that is in effect from July 1, 2011 through June 30, 2013.
WHEREAS, the wages, hours and other terms and conditions of employment of classifications
represented by DPOA are expressed in the MOU for the period covering July 1, 2011 through
June 30, 2013; and
WHEREAS, the City is experiencing financial hardship and asked DPMA to modify those
wages, hours and other terms and conditions of employment set forth in the MOU to assist the
City; and
WHEREAS, the Parties have recently met and formally discussed modifying the terms of the
MOU and reached an agreement;
NOW THEREFORE, the Parties have agreed to amend the MOU as follows:
1. Article III - BASIC COMPENSATION PLAN - Section 1, is hereby amended to read as
follows:
Section 1.
A. Effective the pay period that includes July 1, 2014, all represented classifications
shall receive an across the board base salary increase of four and one - quarter
percent (4.25 %).
Section 5.
A. Effective the pay period that includes July 1, 2014, all eligible employees shall
receive six and one -half percent (6.5 %) of the base rate of pay for an Associate's
degree and /or an Intermediate Peace Officers Standards and Training (POST)
Certificate.
B. Effective the pay period that includes July 1, 2014, all eligible employees shall
receive ten percent (10 %) of base rate of pay for a Bachelor's degree or Advanced
POST certificate.
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2. Article X — MEDICAL, DENTAL AND LIFE INSURANCE - Section 1, Medical Insurance, is
hereby amended to read as follows:
Section 1.
A. Effective July 1, 2012 to September 30, 2012, the City shall provide medical
insurance benefits as follows:
Downey Self- Funded Plan:
1. Increase in the Annual Deductible for In- Network/Out -Of- Network from $100 (per
person) /$250 (per family) to $500 (per person) /$1000 (per family).
2. Reduce Out of Network co- insurance rate from 80% to 70 %.
3. Increase the maximum Out of Pocket, excluding the prescription benefit out -of-
pocket, from In- Network/Out -Of- Network $250 (per person) /$500 (per family) to
$2,500 (per person) /$5,000 (per family).
4. Increase in prescription cost from $3 for generic products (Tier 1); $5 for
preferred brand products (Tier 2), and $0 mail order to:
a. 30 day supply: $10 generic /$15 brand /$45 non - formulary brand
b. 90 day supply by mail order: $20 generic /$30 brand /$90 non - formulary
brand.
5. Increase office visit co- payment from $0 to $20.
6. The City shall continue to contribute one hundred percent (100 %) of the cost of
coverage for an employee plus his qualified dependent(s) in this plan.
Kaiser:
1. Increase Co -Pay from $5 to $10.
2. The City shall continue to contribute one hundred percent (100 %) of the premium
cost to provide coverage for an employee plus his or her qualified dependent(s)
in this plan.
B. Effective for coverage beginning October 1, 2012, the City shall contract with
CaIPERS for the provision of medical insurance benefits under the Public
Employees' Medical Hospital Care Act (PEMCHA):
1. The City shall contribute 100% of the premium cost of any plan selected by the
employee to provide coverage for the employee and his or her qualified
dependents, except that if the employee selects the PERSCare plan, the
employee must pay the difference between the PERSCare premium and the next
highest premium.
2. If the City's cost of providing health care benefits is projected to exceed $7.8
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million for FY 2013 -2014, the City and the Association agree to meet and confer
in June 2013 to discuss further changes to this Section. If so, the City and the
Association agree that the maximum contribution to the medical premium that
the City can impose, following exhaustion of the meet and confer process, is the
difference between the $7.8 million and the projected cost of Fiscal Year 2013-
2014 medical insurance, not to exceed twenty percent (20 %) of the premium.
3. The parties shall, by mutual agreement, make any necessary and legal
modifications to the retiree medical benefits provisions in the Memorandum of
Understanding necessary for conversion to the PEMHCA program that are
consistent with the benefits set forth in Article XI, Section 4.
C. [The existing provisions of subsection B of the MOU shall remain unchanged and
shall be "renumbered" as Subsection C]
4. Article XI — RETIREMENT is hereby amended to read as follows:
Section 2. 3% at 50 Retirement Formula Benefit. Employees hired prior to the
effective date the City's contract with CaIPERS is amended on or after July 1, 2012, shall
be provided the 3% at 50 retirement formula, as set forth in California Government Code
Section 21362.2.
A. Effective the pay period that includes July 1, 2013, employees shall begin to
have deducted, on a pre -tax basis, four percent (4 %) of CaIPERS reportable
compensation, pursuant to California Government Code Section 20516(f).
B. Effective the pay period that includes July 1, 2014, employees shall have
deducted an additional two percent (2 %) of CaIPERS reportable compensation,
for a total of six percent (6 %), on a pre -tax basis, pursuant to Government Code
Section 20516 (f).
C. Should an employee be mandated by a change in law or other action to
contribute any portion of the required employee contribution to CaIPERS, the
City shall take all action necessary to reduce the deduction then being made
pursuant to California Government Code Section 20516(f), above, by the
amount of the mandated employee contribution.
D. The City shall take action, if necessary, to pass a resolution setting forth that
all deductions or contributions under this Section shall be regarded as a pick -up
of retirement costs pursuant IRC 414(h)(2).
Section 3. 3% at 55 Retirement Formula Benefit. Employees hired on or after the
effective date the City's contract with CaIPERS is amended on or after July 1, 2012, shall
be provided the 3% at 55 retirement formula, pursuant to California Government Code
Section 21363.1.
A. Employees covered hereunder shall pay, on a pre -tax basis, the nine percent
(9 %) required employee (member) contribution to CaIPERS.
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B. The City shall take action, if necessary, to pass a resolution setting forth that all
deductions or contributions under this Section shall be regarded as a pick -up of
retirement costs pursuant IRC 414(h)(2).
Section 5. Supplemental Employee Retirement Plan (SERP). The City shall offer a
SERP program that provides eligible employees with a monthly income supplement to
their regular CaIPERS retirement pension benefit or other retirement income. The SERP
program is limited to employees who are at least age 50 and have completed twenty -five
(25) years of full -time continuous City service by June 30, 2012 and who meet the
following Eligibility Guidelines:
A. Employee must be eligible to retire from CaIPERS.
B. Employee must submit a letter of resignation and SERP enrollment package by
the deadline of August 13, 2012 or by an authorized extended date prior to
August 31, 2012.
C. Employee must retire from the City by August 31, 2012 (last day worked).
D. The CaIPERS effective date of retirement date is on or before September 1,
2012.
5. Article XXIV - TERM OF MEMORANDUM OF UNDERSTANDING is amended to read as
follows:
"The term of this Memorandum of Understanding shall commence on July 1, 2011 and
shall expire on June 30, 2015."
6. Article XIX — MISCELLANEOUS is amended by the Addition of Section 3, which shall
provide as follows:
Section 3. No Layoffs. The City hereby acknowledges that unit members have made
concessions in wages, hours and /or working conditions when not otherwise required to
do so, and agrees that, as valid consideration for said concessions, it hereby waives its
right to, and otherwise agrees that it shall not, lay off from City employment any
bargaining unit employee from the effective date of this Agreement to June 30, 2015.
Nothing in this provision shall impact the City's management right to eliminate or not fill
positions.
Side - Letter Implementation
The parties further agree that they shall continue to meet and confer regarding language clean
up issues in the Memorandum of Understanding and that both parties shall exchange any such
language clean up issues by September 15, 2012. The language clean up issues shall not
include substantive changes or changes that have an economic impact. Upon completion of the
meet and confer process regarding language clean up, the parties agree to submit a
comprehensive Memorandum of Understanding for ratification by the Association and adoption
by the City Council that will incorporate this Side Letter Agreement.
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IN WITNESS WHEREOF, the parties hereby execute this agreement as follows:
City of Downey Police Management City of Downey
Association
Dean Milligan,
President
Dated: Dated:
John Oskoui
Assistant City Manager