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HomeMy WebLinkAboutRESO 9278Resolution No. 9278 Resolution ofthe Council of the City of Palo Alto Imposing Terms ofthe City's Last, Best, and Final Offer to the Police Managers' Association Pursuant to Government Code Section 3505.7 ReCitals 1. The Police Managers' Association (hereinafter "Union") petitioned to form a bargaining unit pursuant to the City's Merit Rules, which was accepted by the City of Palo Alto (hereinafter "City") on October 29, 2009. Employee positions in this unit were formerly part of the unrepresented Management, Professional, and Confidential employee group and had the benefits that the City provided to all employees in that group as described in the 2008-09 Management Compensation Plan. 2. The City has made changes to benefits for many other groups, including Management and Professional .employees since October 2009. However, once the Union was formed, the City was required to maintain the status quo on benefits and other terms and conditions of employment for employees in the Union until changes could be negotiated through collective bargaining. 3. Since January 2010 the City and Union have met and engaged in extensive negotiations over the terms of their first Memorandum of Agreement; meeting formally approximately twenty-eight (28) times in an effort to agree on the terms of an initial Memorandum of Agreement. 4. The City made initial proposals on February 12, 2010 and ultimately reduced the economic concessions sought over the course of the meetings between the Parties in order to reach agreement. 5. The Parties reached tentative agreement on 52 issues in and around February 2012. 6. Between March and May 2012, the parties focused discussions on the issue of the amount of medical premiums to be paid by current employees upon retirement, but disagreed on the core issue of whether current employees should be required to contribute in retirement. 7. Four other bargaining units as well as unrepresented Management and Professional employees are already subject to the same language on retiree medical that the City proposed to the PMA. 8. On May 23, 2012, the City declared Impasse. 120718 sdl 8261923 1 9. The Union had the opportunity to request factfinding as an impasse procedure pursuant to state law. 10. The Union did not submit a request for factfinding within the thirty-day timeframe allowed by applicable laws and regulations. 12. In such circumstances Government Code section 3505.7 authorizes the City to unilaterally implement its last, best, and final offer. 13. Notwithstanding all of the efforts described above the Parties remain at an impasse. Therefore, on July 13, 2012, the City gave the Union written notification that the City Council would consider a resolution to unilaterally implement the terms of the City's last, best and final offer at the City Council meeting on July 23, 2012. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Modifications of Terms. The following changes in the terms and conditions of employment of members of the Police Managers' Association bargaining unit shall be implemented as set forth below, effective immediately upon adoption of this resolution except as otherwise specifically provided below for speCific terms and conditions, with additional terms shown in italics: Modification 1-Retirement Benefits. The parties reached a tentative agreement to establish a new pension tier for new employees, the terms of which are imposed as follows: Retirement Benefits a) "3%@50" Safety Retirement (Current Employees) For current employees (those hired prior to the implementation of subsection (b)), the California Public Employees' Retirement System (CaIPERS) retirement formula benefit known as the "3 percent at 50 (3%@50)," per California Government Code section 21362.2, shall continue in effect with the final salary determination for such employees of the "single highest one (1) year period" per California government Code section 20042. b) Second Tier "3% at 55" Safety Retirement (Future Employees) As soon as administratively possible after City Council adoption of this MOA, the City shall amend its contract with CalPERS to provide such employees hired on or after the effective date of the CalPERS amendment with the CalPERS retirement formula benefit known as the "3 percent at 120718 sdl 8261923 2 55 (3%@55)/' per Government Code section 21363.1, with the final salary determination for such employees of the "three (3) highest consecutive years" based on the highest average annual compensation earnable by the member during three (3) consecutive years of employment immediately preceding retirement or the three-year period otherwise designated by the member per Government Code section 20037. c) Employee PERS Contributions The City will continue paying the Employees 9% PERS Contribution per Government Code section 20691. The City will continue contracting with CalPERS to provide "Reporting the Value of Employer Paid Member Contributions as Compensation in Employee's Final Compensation Period" by Contract Amendment per Government Code section 20692. These payments shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. d) 1959 Survivor Benefit The City will continue to provide the basic level (Level 1) of the 1959 Survivor Benefit to eligible employees per Government Code section 21571. e) Military Service Credit The City will continue to contract with CalPERS to provide Military Service Credit as Public Service. Modification 2-Active Employee Medical Plan. The parties reached a tentative agreement on amounts that the City and employees will contribute toward medical benefits for members of the Police Managers' Association, the terms of which are imposed as follows: Active Employee Medical Plans a) PEMHCA Health Plan Except as otherwise set forth herein, the City will maintain the present level of medical benefits for all Association members and their dependents in accordance with the provisions of the Public Employees' Medical and Hospital Care Act (PEMHCA) Health Plans. 120718 sdl 8261923 3 Prior to July 1, 2007 The City paid up to the maximum monthly medical premium for any plan among the existing array of PEMHCA plans. Effective July 1, 2007 Effective July 1, 2007 the City will P$:ly up to the monthly medical premium for the 2nd most expensive plan among the existing array of PEMHCA plans. If an employee wishes to remain in the most expensive PERSCare medical plan, the difference between the PERSCare plan and the monthly medical premium for the 2nd most expensive plan will be paid by the employee. Effective April 1, 2012 Effective April 1, 2012 or as soon as practical thereafter, the City and employees in the Association will share monthly medical costs, with the City paying 90% of the monthly medical premiums for the employee- selected PEMHCA option plan and the employee paying the remaining 10%. The City contribution shall not exceed 90% of the 2nd most expensive plan among the existing array of plans. If CalPERS changes the plans it offers, the City and the Association will meet and confer over the City continuing to provide an equivalent benefit at an equivalent cost. For 2012 the 2nd most expensive plan is Blue Shield. b) Alternative Medical Benefit Program If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through any other employer-sponsored or association- sponsored group medical plan, the employee may elect that alternative medical insurance coverage through the other employer-sponsored or association plan and Waives his/her right to the City of Palo Alto's medical plan insurance coverage for same individuals. Employees electing alternative coverage and no City coverage will receive monthly cash payments. 120718 sdl 8261923 4 For 2012, the rates are as follows: One Party: $284.36 Two Party: $568.71 Family: $739.32 The alternate medical benefit program rates for subsequent years covered by this Agreement will be determined by the City. Modification 3. The terms governing retiree medical coverage for unit employees hired before January 1, 2006 are hereby modified and imposed as follows: Retiree Medical Coverage for Unit Employees Hired Before January 1, 2006. Monthly City-paid premium contributions for a retiree-selected PEMHCA optional plan will be made in accordance with the Public Employees' Medical and Hospital Care Act Resolution for employees that retire onor before December 31,2007. Effective March 1, 2009 the City will pay up to the monthly medical premium for the 2nd most expensive plan among the existing array of plans during the contract term. Any employee who retires before June 1, 2012 will not be required to pay any premium contribution as established in the PERS resolution adopted with this MOA, excluding any required dependent contribution described below. This is due to the timeline required by CalPERS to implement the contribution for retirees. The City contribution for an employee hired before January 1, 2006 who retires on or after June 1, 2012 shall be the same contribution amount it makes for active City employees. For the 2012 calendar year, the City's contribution toward dependent coverage is ninety-five percent (95%) of the difference between the applicable "Employee and One Dependent}} or "Family" maximum employer contribution for "Employee Only" coverage. This contribution for dependents will increase annually by five percent (5%) of the difference between the single party premium and the two-party or family premium, until such time as the premium of the affected dependent(s) is fully covered. For the 2013 calendar year, the City's contribution toward dependent coverage will be 100%. The City and Union agree that, during FY 12-13, at the request of either party, the parties will meet and analyze differences between future 120718 sd1 8261923 5 retiree health benefit contributions for employees covered and not covered by the vesting schedule under Government Code S~ction 22893. The parties agree that either party may make a proposal in contract negotiations over a successor to this MOA. Modification 4 .. Retirement Health Savings Plan. The parties have reached tentative agreement on the establishment of a Retirement Health Savings Plan for unit employees, the terms of which are imposed as follows: The City and Association will work with representatives from ICMA to establish a Retirement Health Savings Plan for Association members. Association participation in the Plan is subject to IRS rules and Plan guidelines as well as any appliCf;lble laws. Association members will make pre-tax contributions to the plan as follows. (1) All members will contribute 1% of their base salary bi-weekly into the Plan. (2) Members within 5 (five) Years of the minimum retirement age (50) will contribute an additional 1% of their base salary bi-weekly into the plan. (3) Upon retirement from the City, each member shall contribute the then current cash value of one hundred (100) hours of vacation into the Plan. The manner and amount of contributions may be periodically modified with the agreement of both parties. Modification 5 -Vacation Cash Out. The parties have reached tentative agreement updated guidelines for the vacation cash out process, the terms of which are imposed as follows: a) Vacation Accrual Vacation will be accrued when an employee is in pay status and will be credited on a bi-weekly basis. Total vacation accrual at anyone time may not exceed three times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status: 120718 sdl 8261923 6 (1) Less than nine years. For employees completing less than nine (9) years continuous service: 120 hours vacation leave per year. The City Manager may adjust the annual vacation accrual of employees hired on or after July 1, 2001 to provide up to forty (40) additional hours (Le. to a maximum annual accrual of one hundred sixty (160) hours) for service with a prior employer. (2) Nine (9), but less than fourteen (14) years. For employees completing nine (9), but not more than fourteen (14) years continuous service; one hundred sixty (160) hours vacation leave per year. (3) Fourteen (14), but less than nineteen (19) years. For employees completing fourteen (14), but not more than nineteen (19) years continuous service; one hundred eighty (180) hours vacation leave per year. (4) Nineteen (19) or more years. For employees completing nineteen (19) or more years continuous service; two hundred (200) hours vacation leave per year. b) Vacation Use Vacation use by police managers will be subject to approval by the Chief of Police or his/her designee. All reasonable efforts will be made to approve vacation requests while maintaining appropriate oversight of public safety operations. Employees shall complete six months continuous service before using accrued vacation leave. c) Vacation Cashout Once each calendar year an employee may cash out eight (8) or more hours of vacation in excess of eighty (80) hours from a minimum of eight (8) hours to a maximum of one hundred twenty (120) hours, provided that the employee has taken at least eighty (80) hours of vacation in the previous twelve (12) months. Effective for the 2012 tax year and each subsequent year, employees must pre-elect an irrevocable number of vacation hours they will cash out during the upcoming year, up to a maximum of one hundred twenty (120) hours, prior to the start of the calendar year. Employees who do not pre- designate or elect to cash out hours will be deemed to have waived the right to cash out any vacation leave in the fol/owing year. 120718 sd1 8261923 7 Employees who pre-designate cash out amounts may request a cash out at any time in the designated tax year by submitting a cash out form to payroll. For employees who have not requested payment of pre- designated cash out amounts by November 1 of each year, Payroll will automatically cash out the pre-designated amount in a paycheck issued on or after November 1. d) Vacation Pay at Termination Employees leaving the municipal service with accrued vacation leave shall be paid the amounts of accrued vacation to the date of termination. Payments for accrued vacation shall be at the employee's current rate of pay; e) Vacation Benefits for Deceased Employees An employee who is eligible for vacation leave and who dies whil~ in the municipal service shall have the amount of any accrued vacation paid to the employee's estate within thirty days. This proration will be computed at the last basic rate of pay. Modification 6. The parties have reached a tentative agreement on changing the Management Annual Leave accrual to a calendar year basis to better coordinate with the updated vacation cash out procedure, the terms of which are imposed as follows: Management Annual Leave At the beginning of each fiscal year regular management and professional employees will be credited with 80 hours of annual leave. This leave is granted in recognition of the extra hours Management and Professional employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provisi~n, la-hour shift workers will receive one shift off for each 8 hours charged; 24-hour shift workers will receive one-half shift off for each 8 hours charged. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the fiscal year. Unused balances as of the end of the fiscal year will be paid in cash unless a different option as indicated above is elected by the employee. 120718 sdl 8261923 8 Effective for the fiscal year 2012/2013, the Management Annual Leave benefit will be transitioned to a calendar year benefit rather than a fiscal year benefit. To accommodate this transition, each Association member will be credited with 40 hours of annual leave for the period between July 1, 2012 and December 31, 2012. Effective for the calendar year 2013 and at the beginning of each subsequent calendar year, each Association member will be credited with 80 hours of management annual leave. Unused balances as of the end of the calendar year will be paid in cash unless a different option as indicated above is elected by the employee. SECTION 2. Scope of Modifications. The only modifications of wages, hours or other conditions of employment within the scope of representation that are modified by this Resolution are those expressly set forth in Section 1 of this Resolution. All other terms and conditions within the scope or representation shall remain unchanged from the 2008-2009 Management a.nd Professional Compensation Plan unless hereafter modified in accordance with applicable law. Nothing in this Resolution shall be construed as depriving the Union of its right each year to meet and confer on matters within the scope of representation, whether or not such matters are included in this Resolution, prior to adoption of the City budget or as otherwise required by law. SECTION 3. If any provision or any part of a provision of this Resolution shall be finally determined to be invalid, illegal, or otherwise unenforceable, such determination shall not impair or otherwise affect the validity, legality, or enforceability of the remaining provision or parts of the provision this Resolution, which shall remain in full force and effect as if the unenforceable provision or part were deleted. II II II II II 120718 sdl 8261923 9