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COUNCIL STAFF REPORT
Agenda Item No. 4
January 28, 2014
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
949 -644 -3002, _dkiff(cDnewportbeachea.gov
Human Resources Department
Terri L. Cassidy, Deputy City Manager /Human Resources Director
949 -644 -3303, tcassidy(a)newoortbeachca.gov
PREPARED BY: Terri L. Cassidy, Deputy City Manager /HR Director
Maggie. Williams - Dalgart, Senior Human Resources Analyst
APPROVED: L(.: 4 A,
V
TITLE: Resolution No. 2014 : Adopting a Memorandum of Understanding
with the Part Time Employees Association of Newport Beach,
ABSTRACT`.
On September 3, 2013, following a certified election, the Part Time Employees
Association of Newport Beach (PTEANB) was formally recognized by the City as the
exclusive representative for certain part -time employees. PTEANB was formed to
replace the United Public Employees of California, Local. 777 (UPEC), which had
disclaimed interest in the Part Time Unit in 2012. In October 2013, City and PTEANB
representatives began meeting and conferring to discuss the terms of an initial
memorandum of understanding between the parties, and on January 14, 2014, the
parties reached agreement. The proposed Memorandum of Understanding represents
agreements reached on wages, benefits, and other terms and conditions of employment
for employees represented by the PTEANB for the period September 3, 2013 through
June 30, 2015. City Council's adoption of the MOU is the last step in the meet and
confer process, completing the agreement.
RECOMMENDATION: 2014 -3
Approve Resolution No. adopting a Memorandum of Understanding between the
City of Newport Beach and the Part Time Employees Association of Newport Beach.
FUNDING REQUIREMENTS:
See financial information in the body of the discussion.
Approval of Resolution Adopting a Memorandum of Understanding with
the Part Time Employees Association of Newport Beach
January 28, 2014
Page 2
DISCUSSION:
In 2012, the United Public Employees of California (UPEC), which had been
representing part-time employees since January 2000, disclaimed interest in the Unit
(effectively abandoning the group). Following a certified election, eligible part-time
employees voted to replace UPEC with the newly formed Part Time Employees
Association of Newport Beach ( PTEANB), to represent approximately 60 employees in
various classifications throughout the City, the majority of which are assigned to
Recreation, Library and Police. Of the 60 employees in the unit, 25 have worked for the
City for ten years or more. The part-time employees serve an important function and
provide excellent service to the Newport Beach community.
The benefits for part-time staff are limited to a cafeteria allowance for medical (or an
"opt -out" cash equivalent) at the rate of $3.75 per hour worked; enrollment in the
California Public Employees Retirement Systems (PERS), with employees contributing
8% toward the benefit; and a Flex Leave benefit of .04 hour for every hour worked (the
average benefit is 46 hours of Flex Leave per year). With the exception of certain
classifications in the Police Department, that received a slight parity adjustment in
September 2012, part-time employees last received a cost -of- living adjustment in
January 2012 (3 %).
The City's negotiating team and PTEANB representatives met on October 30,
November 5, November 25, December 9, 2013, and January 14, 2014, to discuss the
terms of an initial Memorandum of Understanding between the City and newly elected
bargaining unit. Topics included salary adjustments, increased cafeteria benefits, and
new assignment pays. Consistent with City Council's stated goal to reach a "50/50"
shared responsibility for retirement costs, the parties also discussed the need for
increased employee contributions toward the PERS benefit to help offset the growing
obligation of public employee pensions. On January 14, 2014 City and PTEANB
representatives reached agreement on the terms of an initial MOU, which would include
the following:
• Twenty -two month contract, from September 3, 2013 (date of PTEANB
recognition) through June 30, 2015.
• 1.45% cost -of- living adjustments in January 2014, January 2015, and June 2015.
• Additional contributions to the PERS benefit, for a total employee pick -up of
12.35 %. By the end of the contract (June 2015), PTEANB employees will be
contributing nearly 44% of retirement costs. This is consistent with the other
three full -time Miscellaneous bargaining units (City Employees Association,
Professional and Technical Employees Association, the Employees League) and
the Key & Management group.
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Approval of Resolution Adopting a Memorandum of Understanding with
the Part Time Employees Association of Newport Beach
January 28, 2014
Page 3
• Effective January 1, 2014, an increase in the cafeteria benefit by fifty cents (50¢)
per hour, from $3.75 to $4.25, and another increase January 1, 2015, of twenty -
five cents (25¢) per hour, to a total of $4.50 per hour, to offset anticipated
increases in medical premiums. Effective January 2014, the maximum cafeteria
benefit for current employees who "opt -out' of medical will be capped at $3.75
per hour, and upon adoption of the MOU the "opt -out' benefit for new hires will
be eliminated.
• A new benefit, if qualified for: 1) Bilingual Pay, at seventy -five cents (75¢) per
hour for employees certified as bilingual; 2) Matron Pay equal to one hour of
regular pay for Police Department employees assigned Matron duties; and 3)
Night Shift Differential of $1.50 /hour for Police Department employees required to
work shifts between 6 PM and 6 AM. These are similar to full time employees
who perform the same functions.
• An increase in the Flex Leave accrual cap from 80 hours to 100, and elimination
of cashing out hours accrued beyond the maximum.
On January 16, 2014, the PTEANB membership ratified the agreement by majority vote.
The Memorandum of Understanding does not become effective, per Government Code
§3505.1, until the governing body, i.e., City Council, takes action to adopt it. If the City
Council approves adoption of the MOU with the PTEANB, Human Resources and
Finance Department staff will work to implement the terms as soon as practicable.
Fiscal Impact:
The additional contribution employees will make toward the PERS retirement benefit will
offset the increased costs associated with the COLA adjustments (total salary
adjustment equal 4.35% and the corresponding employee contribution toward PERS is
4.35 %). The remaining cost for the increases to the cafeteria benefit, new assignment
pays, and other benefit adjustment is estimated to be $48,700 for the twenty -two month
term of the contract.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act ( "CEQX) 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.
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Approval of Resolution Adopting a Memorandum of Understanding with
the Part Time Employees Association of Newport Beach
January 28, 2014
Page 4
NOTICING:
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).
by:
Terri L. Cassidy
Deputy City Manager /HR
Attachment A: Resolution Adopting a Memorandum of Understanding with the Part
Time Employees Association of Newport Beach
Attachment A
RESOLUTION NO. 2014 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH
ADOPTING A MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF NEWPORT BEACH AND THE PART
TIME EMPLOYEES ASSOCIATION OF NEWPORT BEACH
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 Part Time Employees Association of Newport Beach was duly
elected and recognized by the City of Newport Beach as the exclusive representative
for certain part-time classifications on September 3, 2013; and
WHEREAS, representatives from the City of Newport Beach and representatives
from the Part Time Employees Association of Newport Beach have met and conferred
in good faith over wages, benefits, and other conditions of employment for employees
represented by PTEANB and agreed to the terms of an initial Memorandum of
Understanding; and
WHEREAS, the City Council of the City of Newport Beach desires to establish an
initial Memorandum of Understanding with the Part Time Employees Association of
Newport Beach.
NOW, THEREFORE, the City Council of the City of Newport Beach does
RESOLVE as follows:
Section 1. Wages, hours, fringe benefits and other terms and conditions
of employment of employees represented by Part Time Employees Association of
Newport Beach shall be provided in accordance with the provisions of the attached
Memorandum of Understanding (Exhibit A).
Section 2. The term of the Memorandum of Understanding shall be for
approximately twenty -two months, commencing retroactively to September 3, 2013 and
will remain in full force and effect through June 30, 2015.
Adopted this day of 2014.
I'M
ATTEST:
City Clerk
Mayor of the City of Newport Beach
MEMORANDUM OF UNDERSTANDING
BETWEEN THE CITY OF NEWPORT BEACH AND
THE PART TIME EMPLOYEES ASSOCIATION OF NEWPORT BEACH
This MEMORANDUM OF UNDERSTANDING (hereinafter referred to as "MOU ") is
entered into with reference to the following:
PREAMBLE
1. The Part Time Employees Association of Newport Beach ( "PTEANB" or
"Association "), a recognized employee organization, and the City of Newport
Beach ( "City "), a municipal corporation and charter city, have been meeting and
conferring, in good faith, with respect to wages, hours, fringe benefits and other
terms and conditions of employment.
2. PTEANB representatives and City representatives have reached an agreement
as to wages, hours and other terms and conditions of employment as provided in
this Memorandum of Understanding (MOU) for the period from September 3,
2013 through June 30, 2015.
3. This MOU, upon approval by PTEANB and the Newport Beach City Council,
represents the total and complete understanding and agreement between the
parties regarding all matters within the scope of representation. Except as
limited herein, the City retains all management rights as set forth in the Meyers -
Milias -Brown Act and Resolution No. 2001 -50,
SECTION 1. — General Provisions
A. Recognition
In accordance with the provisions of the Charter of the City of Newport Beach,
the Meyers - Milias -Brown Act of the State of California and the provisions of the
Employer- Employee Relations Resolution No. 2001 -50, the City acknowledges
that PTEANB is the majority representative for the purpose of meeting and
conferring regarding wages, hours and other terms and conditions of
employment for part-time employees in those classifications specified in Exhibit
"A" and meeting the following recognition requirements.
1. Recognition will continue for all employees recognized as of date of
adoption of this MOU; thereafter, employees will become eligible for
recognition after working a cumulative total of 1,000 hours in any fiscal
year.
2. Once eligible for recognition, employees remain covered under the MOU
regardless of the number of hours subsequently worked.
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3. Employees meeting the criteria for the contract year commencing
September 3, 2013 are listed in Exhibit A.
B. Duration of Memorandum
Except as specifically provided otherwise, any ordinance, resolution or action of
the City Council necessary to implement this MOU shall be considered effective
as of September 3, 2013. This MOU shall remain in full force and effect until
June 30, 2015, and the terms and conditions of this MOU shall continue after the
date of expiration of this MOU in the event the parties have not yet agreed upon
a successor MOU.
The terms and conditions of this MOU shall prevail over conflicting provisions of
the Newport Beach City Charter, the ordinances, resolutions and policies of the
City of Newport Beach, and federal and state statutes, rules and regulations
which either specifically provide that agreements such as this prevail, confer
rights which may be waived by any collective bargaining agreement, or are,
pursuant to decisional or statutory law, superseded by the provisions of an
agreement similar to this MOU.
C. Employee Data and Access
Upon request, each July the City shall provide PTEANB a regular list of all unit
members including name, department, and job title.
D. Conclusiveness
This MOU contains all of the covenants, stipulations, and provisions agreed upon
by the parties. Therefore, for the life of this MOU, neither party shall be
compelled to meet and confer concerning any issue contained herein.
E. Modifications
Any agreement, alteration, understanding, variation, or waiver or modification of
any of the terms or provisions of this MOU shall not be binding upon the parties
unless contained in a written document executed by authorized representatives
of the parties.
F. Subcontracting
As provided in the Employer - Employee Relations Resolution No. 2001 -50, the
City shall determine the manner in which City services are to be provided,
including whether the City should provide services directly or contract out work,
including work that is currently being performed by Association members. In the
event the City introduces a plan to outsource services to achieve greater
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efficiency and /or cost savings, and upon request by the Association, the City
shall meet and confer with Association representatives to discuss the impact of
the City's decision to contract out work, prior to contracting out such services.
The City shall retain sole authority to decide whether or not to contract out work,
including work that is currently being performed by Association members. This
provision shall not limit the City's authority to enter into such an agreement for
any City services.
G. Savings
Should any part of this MOU be rendered or declared illegal or invalid by
legislation, decree of court of competent jurisdiction or other established
governmental administrative tribunal, such invalidation shall not affect the
remaining portions of this MOU.
SECTION 2. — Compensation
A. Pay for Time Worked
1. SalaryAdlustments
Effective the pay period including January 1, 2014, employee base
salaries will be increased by 1.45 %.
Effective the pay period including January 1, 2015, employee base
salaries will be increased by 1.45 %.
Effective the pay period including June 30, 2015, employee base salaries
will be increased by 1.45 %.
Notwithstanding the above adjustments, the top step pay rate of Police
Reserve Officer shall be, at a minimum, equal to Step 1 of Police Officer.
2. Compensation for Overtime - Normal Overtime
Normal overtime is defined as any scheduled hours worked in excess of
the basic work week. For the purposes of this section, the basic work
week is 40 hours, or as determined by the Department Director and
approved by the City Manager which occurs between a fixed and regularly
recurring period of 168 hours - 7 consecutive 24 hour periods - beginning
at 0001 on Saturday and ending at midnight the following Friday.
Definition of Hours Worked - Hours worked are defined as hours which
employees are required to be performing their regular duties or other
duties assigned by the City.
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Normal overtime for all non - exempt employees shall be paid at one -and-
one -half (1 -1/2) times the regular rate of pay, as provided under City policy
and in compliance with applicable State and Federal laws or regulations.
3. Assignment Pay (New)
Night Shift Differential: Unit members assigned to the Police Department
who are scheduled to work shall be eligible for night shift differential.of
$1.50 per hour, payable for each regularly scheduled hour worked
between 6:00 p.m. and 6:00 a.m. Additional time worked beyond 6:00
p.m. as an extension of an assigned day shift shall not qualify an
employee for night shift differential. The differential pay is paid only for
hours actually worked.
Matron Pay: Female Police Department employees assigned matron
duties shall receive one (1) hour straight time pay for each shift matron
duties are performed. The employee must work a minimum shift of eight
(8) hours to be eligible.
Bilingual Pay: Employees certified as bilingual (Spanish) shall be eligible
to receive seventy -five cents ($0.75) per hour in bilingual pay. The
certification process will confirm the employee is fluent at the appropriate
conversational level in speaking Spanish. Employees certified shall
receive bilingual pay the first full pay period following certification.
Additional languages may be considered upon Department Director
determination of the benefit to the City and upon approval by the Human
Resources Director.
SECTION 3. — Fringe Benefits
A. Cafeteria Plan
The City has implemented an IRS qualified Cafeteria Plan. Employees shall
have the option of allocating Cafeteria Plan contributions towards the City's
existing medical insurance as program rules allow. Employees shall be allowed
to change coverages in accordance with plan rules and during regular open
enrollment periods. For employees enrolled in medical plans, the cafeteria
amount is inclusive of the PERS designated minimum medical insurance
contribution. Unused Cafeteria Plan funds shall be payable to the employee as
taxable cash back.
Effective September 3, 2013, the City shall contribute $3.75 per hour worked, to
a maximum of 64 hours per pay period. Employees not enrolling in medical
coverage must provide proof of other group coverage in order to receive the
cafeteria benefit.
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Effective the pay period including January 1, 2014, the City's contribution toward
the cafeteria benefit will increase by fifty cents ($0.50) per hour worked, to $4.25
per hour, up to 64 hours per pay period. The maximum cafeteria allowance
provided to employees who execute an "opt -out" agreement will remain at $3.75
per hour, effective January 2014. For employees hired after adoption of this
MOU, and who do not enroll in a medical plan, there will be no cafeteria benefit.
Effective the pay period including January 1, 2015, for employees enrolled in a
City medical plan, the City's contribution toward the cafeteria benefit will increase
by twenty -five cents ($0.25) per hour worked, to $4.50 per hour, to a maximum of
64 hours per pay period.
The City and Association acknowledge that the City's contribution to the cafeteria
benefit meets the intent of the "affordability' requirements under the Affordable
Care Act (ACA) for qualified employees. The City will continue to assess the
cafeteria benefit to confirm ongoing compliance with the ACA. In the event the
City deems the benefit level may not meet the affordability threshold, the City
and PTEANB will meet to discuss compliance options.
B. Pay for Leave
The City implemented a Flex Leave program in which employees receive pay for
leave credits for each hour worked at the rate of .04 hours for each hour worked.
Credits will be placed in an individual Flex Leave bank for each employee and will
be subject to being paid out upon bi- weekly request, only to the extent that an
employee has earned such credits. The maximum accrual of pay for leave hours
will be one hundred (100) hours. Once an employee reaches the maximum
accrual rate, Flex Leave will stop accruing until the employee's balance falls
below 100 hours.
C. Jury Duty
PTEANB employees legally required to serve as a juror, and who provide
appropriate documentation, shall be eligible for leave with pay for jury service
occurring only during the employee's regularly scheduled shift, and as provided in
the City of Newport Beach Employee Policy Manual.
D. Retirement Benefit
1. PERS Retirement
The City contracts with the California Public Employees Retirement
System (PERS) to provide retirement benefits for its Miscellaneous
employees. Pursuant to prior agreements and state mandated reform, the
City has implemented first, second and third tier retirement benefits:
on
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Tier 1: For employees hired by the City on or before November 23, 2012,
the retirement formula shall be the 2.5% 55 calculated on the basis of
the single highest year.
Tier 2: For employees first hired by the City between November 24 and
December 31, 2012, or hired on or after January 1, 2013 and are current
members of the retirement system, as defined in Public Employees
Pension Reform Act, the retirement formula shall be 2%((660 calculated on
the average 36 highest months' salary.
Tier 3: For employees first eligible for the PERS benefit, on or after
January 1, 2013, and who do not meet the Tier 2 criteria, the retirement
formula shall be 2%(a)62 calculated on the average 36 highest months'
salary.
2. Employee Contributions
Effective September 3, 2013, PTEANB employees will continue to pay the
statutory normal member contribution. Employee retirement contributions
referenced below that are in addition to the normal PERS Member
Contribution will be made on a pre -tax basis through payroll deduction, to
the extent allowable by the government tax code. It is recognized that
these payments will not be reported to PERS as contributions toward
either the member or employer rate and fall outside the scope of "cost -
sharing," as provided under GC Section 20516(f).
Tier 1 Employees: Effective the pay period including June 30, 2014, Tier
1 employees shall contribute 8% toward the normal Member Contribution
plus an additional 1.45% of pay toward retirement costs pursuant to
Government Code Section 20516(f), for a total of 9.45 %. Effective the pay
period including January 1, 2015, Tier 1 employees shall contribute an
additional 1.45% of pay toward retirement costs for a total of 10.90 %.
Effective the pay period including June 30, 2015, Tier 1 employees shall
contribute an additional 1.45% of pay toward retirement costs, for a total
employee contribution of 12.35°/x.
Tier 2 Employees: Effective the pay period including June 30, 2014, Tier
2 employees shall contribute 7% toward the normal Member Contribution
plus an additional 2.45% of pay toward retirement costs pursuant to
Government Code Section 20516(f), for a total of 9.45 %. Effective the pay
period including January 1, 2015, Tier 2 employees shall contribute an
additional 1.45% of pay toward retirement costs for a total of 10.90 %; and
effective the pay period including June 30, 2015, Tier 2 employees shall
contribute an additional 1.45% of pay toward retirement costs, for a total
employee contribution of 12.35 %.
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Tier 3 Employees: The minimum statutory employee contribution for
employees in Tier 3 is subject to the provisions of the Public Employees
Pension Reform Act of 2012 (PEPRA) and equals 50% of the "total normal
cost." For FY13 -14, the employee rate is 6.25% and is subject to change
based on annual PERS actuarial valuations.
Effective the pay period including June 30, 2014, Tier 3 employees shall
contribute 6.25% toward the member contribution plus an additional
3.20% of pay toward retirement costs pursuant to Government Code
Section 20516(f), for a total of 9.45 %. Effective the pay period including
January 1, 2015, Tier 3 employees shall contribute an additional 1.45% of
pay toward retirement costs for a total of 10.90 %; and effective the pay
period including June 30, 2015, Tier 3 employees shall contribute an
additional 1.45% of pay toward retirement costs, for a total employee
contribution of 12.35 %.
The City contracts with PERS for the 4th Level 1959 Survivors Insurance
Benefit, $500 Lump Sum Death. Benefit, Sick Leave Credit, Military
Service Credit, 2% Cost of Living Adjustment and the pre- retirement
option settlement 2 death benefit (Section 21548).
3. PARS Retirement
PTEANB employees not enrolled in the PERS retirement system will
participate in the Public Agency Retirement Services (PARS) program.
The City will make a matching 3.75% contribution to PARS on behalf of
the employees.
Employees in the classifications Police Cadet and Police Reserve Officer
are excluded from membership in PERS, as provided in the contract
between the City of Newport Beach and the Board of Administration of the
Public Employees' Retirement System.
E. Other Benefits Not Provided
No other fringe benefits are provided to employees in the Part Time Unit.
SECTION 4. - Miscellaneous.
A. Direct Deposit
All employees shall participate in the payroll direct deposit system.
B. Citywide Classification and Compensation Study
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Concurrent with the adoption of this MOU, the City is undergoing a
comprehensive study of its classification and compensation structure. The City
agrees to meet with the Association during this study to discuss preliminary
findings or recommendations. The parties agree that during the term of this
MOU the City may implement the findings and recommendations of this study
regarding the compensation and classification of employees. Prior to adopting or
implementing final recommendations, the City will meet and confer with the
Association to discuss the possible impact on its members and for the purpose of
discussing pay of part-time positions in full -time classifications.
Executed this day of
ATTEST:
A
2014:
PART TIME EMPLOYEES ASSOCIATION OF NEWPORT
BEACH
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Amy Mayfield, President
Katherine Mielke, Vice President
Cherall Weiss, Secretary/Treasurer
CITY OF NEWPORT BEACH
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Leilani Brown, City Clerk
APPROVED AS TO FORM:
A ro Harp, City Attor ey
Rush N. Hill, II, Mayor
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