HomeMy WebLinkAbout12 - NB-2 - Side Letter Agreements CMFA and CMFMA - 9/4/2012CITY COUNCIL AGENDA REPORT
MEETING DATE: September 4, 2012 ITEM NUMBER:
SUBJECT: SIDE LETTER OF AGREEMENT TO THE JULY 1, 2007 TO JUNE 30, 2013
MEMORANDUM OF UNDERSTANDING BETWEEN THE COSTA MESA FIREFIGHTERS
ASSOCIATION AND THE CITY OF COSTA MESA AND SIDE LETTER OF AGREEMENT
TO THE OCTOBER 26, 2010 —JUNE 30, 2014 BETWEEN THE COSTA MESA FIRE
MANAGEMENT ASSOCIATION AND THE CITY OF COSTA MESA.
DATE: AUGUST 15, 2012
FROM: CEO/HUMAN RESOURCES
PRESENTATION RICHARD FRANCIS, ASSISTANT CHIEF EXECUTIVE OFFICER
BY:
FOR FURTHER INFORMATION CONTACT: RICHARD FRANCIS, AT (714) 754-5688
RECOMMENDATION:
Staff recommends that the City Council:
Approve and adopt the Side Letter of Agreement (LOA) (Attachment A) with the
Costa Mesa Firefighters Association (CMFA) thereby amending certain portions
of the 2007-2013 Memorandum of Understanding (as modified by the October
20, 2010 Side Letter of Agreement) between the Costa Mesa Firefighters
Association and the City; and
2. Approve and adopt the Side Letter of Agreement (LOA) (Attachment B) with the
Costa Mesa Fire Management Association (CMFMA) thereby amending certain
portions of the October 26, 2010 — June 30, 2014 Letter of Agreement between
the Costa Mesa Fire Management Association and the City.
BACKGROUND:
The City's Chief Negotiator and Negotiating Team have been meeting with the
representatives of CMFA and CMFMA to discuss implementing a second tier retirement
system, staffing levels and other items related to wages, hours, terms and conditions of
employment. Specifically, these discussions have focused on two (2) key areas: (1)
CalPERS retirement, second tier 2%@50 and (2) staffing levels as they relate to minimum
staffing.
Although the CMFA and CMFMA were not obligated to meet with the City to discuss the
aforementioned items, they did agree to the concessions as stated and presented on
each of their respective Side Letter of Agreement (Attachments A & B). The following
are key highlights of the respective Side Letters:
Costa Mesa Fire Association (CMF
1. Current employees covered by this agreement shall contribute 5% of the
employee's PERSable earnings towards their employee retirement contribution
through June 30, 2017. This contribution will begin retroactive to the pay period
beginning July 1, 2012.
2. The City will implement the 2%@50 CalPERS Benefit Formula for new
employees. New employees covered by the 2%@50 CalPERS Benefit Formula
shall contribute 9% of the employee's PERSable earnings towards their
employee retirement contribution.
3. Suspension of the RHS (Retirement Health Savings) Program - neither
employee nor employer provides 1 % retiree medical funding through June 30,
2017.
4. Through and including June 30, 2017, there shall be no base salary
adjustments.
5. Staffing level — minimum staffing of Article 12.1 is null and void and to be
replaced by Fire Department Operational Restructuring document (Exhibit A
of Attachment A) prepared by the Fire Chief.
6. The there shall be no extension of the CMFA MOU expiring on June 30,
2014.
Costa Mesa Fire Management Association (CM FMA)
1. Current employees covered by this agreement shall continue contributing 5% of
the employee's PERSable earnings towards their employee retirement
contribution through June 30, 2017. This contribution will begin retroactive to the
pay period beginning July 1, 2012.
2. The City will implement the 2%@50 CalPERS Benefit Formula for new
employees. New employees covered by the 2%@50 CalPERS Benefit Formula
shall contribute 9% of the employee's PERSable earnings towards their
employee retirement contribution.
3. Suspension of the RHS (Retirement Health Savings) Program -neither
employee nor employer provides 1 % retiree medical funding through June 30,
2017.
4. Through and including June 30, 2017, there shall be no base salary
adjustments.
5. Staffing level — minimum staffing is null and void and to be replaced by Fire
Department Operational Restructuring document (Exhibit A of Attachment B)
prepared by the Fire Chief.
6. The City's contribution towards employees' medical and health care benefit
frozen at the 2010 level shall continue to be frozen for calendar year 2013.
If the City Council approves the agreement, staff will begin the process to implement the
second tier retirement formula with PERS.
ALTERNATIVES CONSIDERED
Based upon the direction from City Council to the City's Negotiating Team, no other
alternatives were considered. Reductions totaling $420,000 are being presented for City
Council approval.
E
FISCAL REVIEW
Based on the agreement, the payment of five percent (5%) by the employees towards
the City's PERS retirement cost will produce an annual fiscal savings of approximately
$420,000.
It is anticipated that the reduced retirement benefit (2%@50) for new employees will
produce a savings compared to hiring new employees at the current benefit (3%@50).
CalPERS has communicated that the City's rates could be reduced by approximately
3.5% as the City hires new employees at the new benefit rate. Also, the agreement to
forgo any salary increases through June 2017 would also produce a savings if the City
was required to provide a salary increase, however those savings can not be
determined at this time.
While it is anticipated the Fire Department Operational Restructuring Plan will result in
cost savings, at this point in time, it is difficult to specifically identify the precise cost
savings. However, after the final plan has been determined and before implementation,
a comprehensive cost benefit analysis will be provided.
LEGAL REVIEW
The City Attorney's Office has reviewed the attached documents and, where appropriate,
approved them as to form.
CONCLUSION
City Council approval and adoption of the agreements is needed at this meeting so staff
can implement the agreed upon items to the existing CMFA Memorandum of
Understanding/Letter of Agreement and CMFMA Letter of Agreement.
LANCE M. NAKAMOTO
Human Resources Manager
BOBBY YOUNG
Director of Finance and I.T.
DISTRIBUTION: Chief Executive Officer
City Attorney
City Clerk
RICHARD FRANCIS
Assistant Chief Executive Officer
TOM DUARTE
City Attorney
3
Attachments: (A) Side Letter of Agreement Between the Costa Mesa Firefighters
Association (CMFA) and the City of Costa Mesa.
(B) Side Letter of Agreement Between the Costa Mesa Fire
Management Association (CMFMA) and the City of Costa Mesa.
n
ATTACHMENT A
AMENDMENT TO 2007-2013 MEMORANDUM OF UNDERSTANDING BETWEEN
REPRESENTATIVES OF THE COSTA MESA FIREFIGHTERS ASSOCIATION AND
THE CITY OF COSTA MESA (AS MODIFIED BY THE OCTOBER 20, 2010 SIDE
LETTER OF AGREEMENT)
This AMENDMENT to the 2007-2013 Memorandum of Understanding between
representatives of the Costa Mesa Firefighter Association and the City of Costa Mesa (as
modified by the October 20, 2010 Side Letter of Agreement) shall take precedence over
any and all conflicting provisions within the 2007-2013 MOU and/or the October 20,
2010 Side Letter of Agreement. Unless otherwise indicated all provisions of this
AMENDMENT shall be effective concurrent with City Council adoption of the
AMENDMENT. HOWEVER, THIS AMENDMENT SHALL BE OF NO FORCE
OR EFFECT UNLESS AND UNTIL ADOPTED BY THE CITY COUNCIL.
Representatives of the Costa Mesa Firefighters Association and the City of Costa
Mesa having met and conferred in good faith, do now agree as follows:
1. Article 2 — TERM OF AGREEMENT — there shall be no extension of the
MOU expiring on June 30, 2014. Unless specifically addressed to the
contrary in this AMENDMENT, any and all matters within the scope of
representation, including those within the MOU expiring on June 30,
2014, shall be subject to modification on and after July 1, 2014, subject to
completion of the meet and confer process and any related impasse
proceedings.
2. Article 3 — BASIC SALARIES AND WAGES — through and including
June 30, 2017, there shall be no base salary adjustments, and/or there shall
be no "salary adjustments" as that term is used in MOU Article 3 or as
provided for in MOU Articles 3.2 and/or 3.3 Phase I and/or the October
20, 2010 Side Letter of Agreement. Further, Article 3.3 Phase I shall be
null and void and stricken from the MOU.
3. Article 6 — RETIREMENT — MOU Article 6.1 Ca1PERS shall be amended
to provide that all unit safety members hired on and after City Council
adoption of this AMENDMENT and the effective date of necessary
CalPERS contract AMENDMENTS, shall be enrolled in the Government
Code § 21362 "2% @ 50" pension benefit formula.
As is provided for in Government Code § 20037, said employees who
shall be enrolled in the "2% @ 50" pension benefit formula, shall have
"final compensation" determined by computation of the highest average
annual compensation earnable by the member during any period of three
consecutive years of employment preceding the effective date of the
employee's retirement.
Page 1 of 4
Pursuant to Government Code § 20691, each unit safety member subject
to enrollment in the "2% @ 50" pension benefit formula shall be
individually responsible for contributing 100% of the normal rate of
employee PERS contribution mandated by Government Code § 20678, as
it may from time to time provide. There will be no Employer Paid
Member Contribution (EPMC) under the "2% at 50" pension benefit
formula.
With the exception of the Government Code § 20965 UNUSED SICK
LEAVE SERVICE CREDIT and any optional post-retirement survivor
allowances provided for in Government Code § 21624 or otherwise, said
unit safety members enrolled in the "2% @ 50" pension benefit formula
shall be subject to the CalPERS options described in Section 6.3 of the
MOU, to the extent that any such option is not contrary to the provisions
of this AMENDMENT and/or is otherwise not made available by
CalPERS to unit safety members enrolled in the "2% @ 50" pension
benefit formula.
Effective .retroactive to July 1, 2012, those unit safety members employed
prior to the effective date of the "2% @ 50" pension benefit formula and
who are subject to the Government Code § 21362.2 "3% @ 50" pension
benefit formula, shall be individually responsible for contributing 5% of
"compensation earnable" to the normal rate of local safety member
contribution to CalPERS. This contribution shall be made pursuant to the
City's existing Government Code § 20516(a) cost sharing contract or
Government Code § 20516(f) if Ca1PERS requires the cost sharing to be
made pursuant to subsection (f). The City will continue to pay and report
the value of the Employer Paid Member Contribution (EPMC) at 9% for
those unit safety members employed prior to the effective date of the "2%
at 50" pension benefit formula.
Absent a state law mandate requiring a modification to the amount of
individual -funded payment of normal rates of retirement benefit
contributions, the above member contribution provisions shall not be
subject to modification prior to June 30, 2017.
This AMENDMENT and the MOU shall be subject to a reopener confined
to addressing any state law mandates becoming effective during the term
of the AMENDMENT and MOU and which impact any aspect of the
pension benefits/funding as are applicable to any unit members. The
resultant meet and confer process shall be a good faith process by which to
address in all or part, the offsetting of a reduction in compensation
resulting from the aforesaid statutory mandate(s). As with any
Page 2 of 4
Government Code § 3500 et. seq. meet and confer process, an agreement
in the above regard is not mandated.
4. Article 12 — STAFFING LEVELS — the provisions of MOU Article 12.1
shall in their entirety be null and void and stricken from the MOU.
Article 12.1 shall be replaced by Exhibit A to this AMENDMENT, a
document entitled FIRE DEPARTMENT OPERATIONAL
RESTRUCTURING. Any and/or all provisions in Exhibit A shall be
subject to change based upon concurrence of the Fire Chief and the Chief
Executive Officer. Although the Fire Chief and/or Chief Executive
Officer shall solicit and consider Association perspectives regarding any
such contemplated change, the solicitation and consideration of
Association perspectives shall not be governed by the requirements of
Government Code § 3500 et. seq., the Meyers-Milias-Brown Act.
Therefore, the Association clearly, knowingly, and unequivocally waives
it rights to engage in the meet and confer process as a condition precedent
to any change in the Exhibit A.
As regards unit members employed prior to City Council adoption of this
AMENDMENT, through and including June 30, 2017, there shall be no
layoff. This provision shall be of no force or effect on and after July 1,
2017.
Through and including June 30, 2017, any City contracting with a third
parry (public sector) for provision of any or all functions presently
performed by City employees occupying classifications represented by the
Costa Mesa Firefighters Association, shall not result in the layoff of any
unit member employed prior to City Council adoption of this
AMENDMENT. This provision shall be of no force or effect on and after
July 1, 2017.
Further, through and including June 30, 2017, the Costa Mesa Fire
Department shall remain operational as a department of the City.
5. WORK SCHEDULE — attached to this AMENDMENT as Exhibit B is an
exemplar of the 56 hour work week schedule that shall not be subject to
modification prior to July 1, 2017. (The 56 hour work week is based on
24 hour shifts.) This provision shall not prevent shift/assignment changes
impacting the actual days of the week that any unit member works.
6. Article 7 — RETIREE MEDICAL PROGRAMS — MOU Article 7.1
RETIREMENT HEALTH SAVINGS PLAN shall be suspended, resulting
in a suspension of the MOU Article 7.1 mandated I% employee and I%
Page 3 of 4
City contributions to the plan. Accordingly, there shall be a suspension of
the payroll deduction of the I% former employee mandated contribution.
If permitted by any applicable statute or regulation, any future City
funding of the Retirement Health Savings Plan shall terminate. If not
permitted by applicable statute, the City shall have the option of either: 1)
dissolving the Plan or 2) suspending any and all City funding of the Plan
without time limitation.
7. Any provisions of this AMENDMENT which specifically provide for a
matter within the scope of representation remaining unchanged through
June 30, 2017, shall be subject to modification thereafter by means of the
meet and confer process and any then -applicable impasse resolution
proceedings, unless it is also provided that the particular provision shall be
of no force or effect on or after July 1, 2017, in which case the terms and
conditions of employment existing prior to this AMENDMENT, shall be
reinstated effective July 1, 2017.
AGREED:
Costa Me6a Firefighters Association
City of Costa Mesa
__ Date
L-3 ,-9\o
. 9 Date
Page 4 of 4
EXHIBIT "A" August 14, 2012
CITY OF • . MESA
FIRE DEPARTMENT
INTEROFFICE MEMORANDUM
TO: THOMAS R. HATCH, CHIEF EXECUTIVE OFFICER
FROM: TOM ARNOLD, INTERIM FIRE CHIEF
DATE: July 6, 2012 (revised August 10, 2012)
SUBJECT: FIRE DEPARTMENT OPERATIONAL RESTRUCTURING
Background
On May 17, 2012, 1 presented a proposal to the City Council that restructures the way the Fire
Department provides service to the community. This memo outlines the proposal and the steps
necessary to implement it. In my conclusion, I stated that this proposal will:
• Increase the number of response units
• Increase the availability of units
• Improve response times
• Increase service to community
• Reduce the number of fire operations personnel from 87 to 81
Proposal Details
• Consider closing Metro fire station 6 at 3350 Sakioka Drive
• Place 1 fire unit & 1 fire ambulance in each of the remaining 5 stations
• Staff 4 engine companies with one fire captain, one fire engineer, & one firefighter each
• Staff 1 quint style truck company with one fire captain, 2 fire engineers, & 1 firefighter
• Staff 5 fire ambulances with 2 firefighter paramedics each
• Staff 1 command unit with 1 fire battalion chief
Unit Placement
Royal Palm station 1
Baker Street station 2
Park Avenue station 3
Placentia station 4
For the Firefighters Association
Date:
Tim Vasin
2803 Royal Palm Drive
800 Baker Street
1865 Park Avenue
2300 Placentia Avenue
Pagel of 2
1 engine company
1 engine company
1 engine company
1 engine company
1 fire ambulance
1 fire ambulance
1 fire ambulance
1 fire ambulance
For the City
Date:
Tom Hatch
EXHIBIT "A" August 14, 2012
Civic Center station 5 2450 Vanguard Way 1 truck company 1 fire ambulance
1 command unit
Total fire personnel per shift - 27
Capital Outlay Requirements
• Purchase 7 ambulances (5 frontline, 2 reserves)
• Purchase equipment required for ambulances
• Retrofit existing ladder truck with a fire pump and water tank
• Modify Civic Center station 5 to accommodate the quint style truck company and
command unit
Page 2 of 2
For the Firefighters Association
Date:
Tim Vasin
For the City
Date:
Tom Hatch
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ATTACHMENT B
AMENDMENT TO OCTOBER 26,2010 -JUNE 30, 2014 LETTER OF AGREEMENT
BETWEEN THE COSTA MESA FIRE MANAGEMENT ASSOCIATION
AND THE CITY OF COSTA MESA
This AMENDMENT to the October 26, 2010 -June 30, 2014 LETTER OF
AGREEMENT between representatives of the Costa Mesa Fire Management Association
and the City of Costa Mesa shall take precedence over any and all conflicting provisions
within said Letter of Agreement or within any City Council approved Resolution or
conflicting past practices within the scope of representation. Unless otherwise indicated,
all provisions of this AMENDMENT shall be effective concurrent with City Council
adoption of the AMENDMENT. HOWEVER, THIS AMENDMENT SHALL BE OF
NO FORCE OR EFFECT UNLESS AND UNTIL ADOPTED BY THE CITY
COUNCIL.
Representatives of the Costa Mesa Fire Management Association and the City of
Costa Mesa having met and conferred in good faith, do now agree as follows:
1. ARTICLE 2 — TERM OF LETTER OF AGREEMENT — there shall be no
extension of the LETTER OF AGREEMENT expiring on June 30, 2014.
Unless specifically addressed to the contrary in this AMENDMENT, any
and all matters within the scope of representation, including those within
the LETTER OF AGREEMENT, shall be subject to modification on and
after July 1, 2014, subject to completion of the meet and confer process
and any related impasse proceedings.
2. BASIC SALARIES AND WAGES — through and including June 30,
2017, there shall be no base salary adjustments, and/or there shall be no
"salary adjustments" as that term is used in LETTER OF AGREEMENT
ARTICLE VII.
3. ARTICLE II — RETIREMENT — The LETTER OF AGREEMENT shall
be amended to provide that all unit safety members hired on and after City
Council adoption of this AMENDMENT and the effective date of
necessary Ca1PERS contract AMENDMENTS, shall be enrolled in the
Government Code § 21362 "2% @ 50" pension benefit formula.
As is provided for in Government Code § 20037, said employees who
shall be enrolled in the "2% @ 50" pension benefit formula, shall have
"final compensation" determined by computation of the highest average
annual compensation earnable by the member during any period of three
consecutive years of employment preceding the effective date of the
employee's retirement.
Pursuant to Government Code § 20691, each unit safety member subject
to enrollment in the "2% @ 50" pension benefit formula shall be
individually responsible for contributing 100% of the normal rate of
Page 1 of 3
employee PERS contribution mandated by Government Code § 20678, as
it may from time to time provide. There will be no Employer Paid
Member Contribution (EPMC) under the "2% at 50" pension benefit
formula.
With the exception of any optional post-retirement survivor allowances
provided for in Government Code § 21624 or otherwise, said unit safety
members enrolled in the "2% @ 50" pension benefit formula shall be
subject to the Ca1PERS options described in Section 6.3 of the LETTER
OF AGREEMENT, to the extent that any such option is not contrary to the
provisions of this AMENDMENT and/or is otherwise not made available
by CalPERS to unit safety members enrolled in the "2% @ 50" pension
benefit formula.
Through and including June 30, 2017, unit safety members employed prior
to the effective date of the "2% @ 50" pension benefit formula and who
are subject to the Government Code § 21362.2 "3% @ 50" pension benefit
formula, shall be individually responsible for contributing 5% of
"compensation earnable" to the normal rate of local safety member
contribution to Ca1PERS. This contribution shall be made pursuant to the
City's existing Government Code § 20516 cost sharing contract. The City
will continue to pay and report the value of the Employer Paid Member
Contribution (EPMC) at 9% for those unit safety members employed prior
to the effective date of the "2% at 50" pension benefit formula.
Absent a state law mandate requiring a modification to the aLETTER OF
AGREEMENTnt of individual -funded payment of normal rates of
retirement benefit contributions, the above member contribution
provisions shall not be subject to modification prior to June 30, 2017.
This AMENDMENT shall be subject to a reopener confined to addressing
any state law mandates becoming effective during the term of the
AMENDMENT and which impact any aspect of the pension
benefits/funding as are applicable to any unit members. The resultant
meet and confer process shall be a good faith process by which to address
in all or part, the offsetting of a reduction in compensation resulting from
the aforesaid statutory mandate(s). As with any Government Code § 3500
et. seq. meet and confer process, an agreement in the above regard is not
mandated.
4. LAYOFFS/CONTRACTING - As regards unit members employed prior
to City Council adoption of this AMENDMENT, through and including
June 30, 2017, there shall be no layoff. This provision shall be of no force
or effect on and after July 1, 2017.
Page 2 of 3
Through and including June 30, 2017, any City contracting with a third
party (public sector) for provision of any or all functions presently
performed by City employees occupying classifications represented by the
Costa Mesa Fire Management Association, shall not result in the layoff of
any unit member employed prior to City Council adoption of this
AMENDMENT. This provision shall be of no force or effect on and after
July 1, 2017.
Further, through and including June 30, 2017, the Costa Mesa Fire
Department shall remain operational as a department of the City.
5. WORK SCHEDULE — attached to this ADMENDMENT as Exhibit A is
an example of the 56 -hour work schedule that shall not be subject to
modification prior to July 1, 2017. (The 56 hour work week is based upon
24 hour shifts). At the sole discretion of the Fire Chief with concurrence
by the City's Chief Executive Officer, one unit member can be assigned to
a forty (40) hour per week administrative assignment.
6. ARTICLE III — RETIREE MEDICAL PROGRAM — RETIREMENT
HEALTH SAVINGS PLAN shall be suspended indefinitely, resulting in a
suspension of the mandated 1 % employee and I% City contributions to
the plan. Accordingly, there shall be a suspension of the payroll deduction
of the I% former employee mandated contribution.
If permitted by any applicable statute or regulation, any future City
funding of the Retirement Health Savings Plan shall terminate. If not
permitted by applicable statute, the City shall have the option of either: 1)
dissolving the Plan or 2) suspending any and all City funding of the Plan
without time limitation.
7. ARTICLE VIII — the City's contribution towards employees' medical and
health care benefits shall be frozen at the 2010 level for calendar years
2011, 2012 and 2013.
AGREED:
Costa Mesa Fire Management Association Date
rty of Costa Mesa Date
Page 3 of 3
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