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HomeMy WebLinkAboutStaff Report 4154 City of Palo Alto (ID # 4154) City Council Staff Report Report Type: Consent Calendar Meeting Date: 10/28/2013 City of Palo Alto Page 1 Summary Title: Fixing Healthcare Premium Costs for UMPAPA & PMA Title: Adoption of Resolutions Fixing the City of Palo Alto’s Healthcare Premium Costs Under the Public Employees’ Medical and Hospital Care Act (PEMHCA) for Palo Alto’s New Bargaining Units, Palo Alto Police Management Association and Utilities Managers and Professionals Association of Palo Alto From: City Manager Lead Department: Human Resources RECOMMENDATION Staff recommends that Council adopt the attached resolutions fixing the City of Palo Alto’s healthcare premium costs under the Public Employees’ Medical and Hospital Care Act (PEMHCA) for Palo Alto’s new bargaining units, Palo Alto Police Management Association and Utilities Managers and Professionals Association of Palo Alto. BACKGROUND The City of Palo Alto contracts with CalPERS to provide its employees with active and retiree healthcare. On June 24, 2013, Council implemented terms for the Palo Alto Police Management Association (PAPMA) and Utilities Managers and Professionals Association of Palo Alto (UMPAPA). The PAPMA unit currently has seven (7) budgeted full-time employees and UMPAPA includes 24 budgeted positions and 43 members. DISCUSSION Under the provisions of the terms implemented on July 23, 2012 for active Police managers in PAPMA (CMR ID #3034), members started contributing 10% toward medical premiums with the City picking up the remaining 90% of the total premium cost. For active Utilities managers in UMPAPA, members contributing 10% toward medical premiums became effective under terms implemented on June 24, 2013 (CMR ID#3939). City of Palo Alto Page 2 The CalPERS contract amendment process requires Council to approve the attached resolutions as an administrative formality to acknowledge that these management employees are now in a bargaining group and no longer in the non-represented Management and Professional unit. In the past two years, CalPERS has treated active and retiree medical contributions in both these employee groups as if the employees were still included in the non-represented Management and Professional group. Adoption of these resolutions will allow CalPERS to properly administer these benefits and implement any changes in the future. RESOURCE IMPACT The active employee contribution of 10% toward medical for Police Managers effective in July 2012, 2012 was estimated to provide $11,000 in savings for FY 13. The active employee contribution of 10% toward medical for Utilities Managers is estimated to provide $95,000 in savings for FY 14. The FY 14 Adopted Budget does not require adjustment to accommodate this contract amendment. Adoption of these resolutions will not have any fiscal impact. POLICY IMPLICATIONS This recommendation is consistent with City Council direction to achieve structural changes in employee compensation for short-term and long-term savings. ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act (CEQA). Attachments:  Reso Fixing PEMHCA Healthcare Costs (Equal) for UMPAPA (DOCX)  Reso Fixing PEMHCA Healthcare Costs for 22893 for UMPAPA (DOCX)  Reso for Fixing PEMHCA Healthcare Cost for 22893 for PAPMA (DOCX)  Reso for Fixing PEMHCA Healthcare Costs (Equal) PAPMA (DOCX)  June 24, 2013 City Council Minutes Excerpt 13 and 14 (DOC) NEW PERS BY GROUP EQUAL 1 FIXED Revision November 2012 NOT YET APPOVED RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ELECTING TO BE SUBJECT TO THE PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL CARE ACT WITH RESPECT TO MEMBERS OF UTILITIES MANAGEMENT AND PROFESSIONAL ASSOCIATION AND FIXING THE EMPLOYER’S CONTRIBUTION AT AN AMOUNT EQUAL TO OR GREATER THAN THAT PRESCRIBED BY GOVERNMENT CODE SECTION 22892(b) WHEREAS, (1) Government Code Section 22922(a) provides the benefits of the Public Employees' Medical and Hospital Care Act to employees and annuitants of local agencies contracting with the Public Employees' Retirement System on proper application by a local agency; and WHEREAS, (2) Section 22892(a) of the Act provides that a local contracting agency shall fix the amount of the employer's contribution; and WHEREAS, (3) City of Palo Alto hereinafter referred to as Public Agency, is a local agency contracting with the Public Employees' Retirement System; and WHEREAS, (4) The Public Agency desires to obtain for the members of Utilities Management and Professional Association of Palo Alto who are employees and annuitants of the agency, the benefit of the Act and to accept the liabilities and obligations of an employer under the Act and Regulations; now, therefore, be it RESOLVED, (a) That the Public Agency elects, and it does hereby elect, to be subject to the provisions of the Act; and be it further RESOLVED, (b) That the employer's contribution for each employee or annuitant shall be the amount necessary to pay the full cost of his/her enrollment, including the enrollment of family members, in a health benefits plan or plans up to a maximum of the minimum employer contributions per month as prescribed in Section 22892(b)(1) of the Government Code dollars per month, plus administrative fees and Contingency Reserve Fund assessments; and be it further RESOLVED, (c) That City of Palo Alto has fully complied with any and all applicable provisions of Government Code Section 7507 in electing the benefits set forth above; and be it further RESOLVED, (d) That the participation of the employees and annuitants of City of Palo Alto shall be subject to determination of its status as an “agency or instrumentality of the state or political subdivision of a State” that is eligible to participate in a governmental plan within the meaning of Section 414(d) of the Internal Revenue Code, upon publication of final Regulations pursuant to such Section. If it is determined that City of Palo Alto would not qualify as an agency or instrumentality of the state or political subdivision of a State under such final Regulations, CalPERS may be NEW PERS BY GROUP EQUAL 1 FIXED Revision November 2012 obligated, and reserves the right to terminate the health coverage of all participants of the employer. RESOLVED, (e) That the executive body appoint and direct, and it does hereby appoint and direct, the People Strategy and Operations Department Assistant Director to file with the Board of Administration of the Public Employees' Retirement System a verified copy of this Resolution, and to perform on behalf of said Public Agency all functions required of it under the Act and Regulations of the Board of Administration; and be it further RESOLVED, (f) That coverage under the Act be effective on December 1, 2013. ___________________. Adopted at a regular/special meeting of the ________________________ at ____________________ this _________ day of __________________ 20__. Signed: _________________________________ (President, Chairman, etc.) Attest: _________________________________ (Secretary or appropriate officer) NEW PERS BY GROUP EQUAL 1 FIXED Revision July 2009 INSTRUCTIONS This resolution form is the approved form designated by the Public Employees' Retirement System. It should be used by a Public Agency to assure proper filing with the Public Employees' Retirement System for the combined purpose of: 1. Contracting for coverage under the Public Employees' Medical and Hospital Care Act (PEMHCA), and 2. Fixing the employer's contribution toward employees' health insurance at an amount equal to or greater than that prescribed in GC 22892(b) If the resolution (RESOLVED) is filed on or before the tenth day of any month, it will be effective on the first of the following month (date stamped as received in the office of the Board of Administration, Public Employee's Retirement System, 400 Q Street, P.O. Box 942714, Sacramento, CA 94229-2714) WHEREAS, (3) should be completed with full name of the contracting agency. WHEREAS, (4) should be completed with full name of the recognized employee organization. RESOLVED, (b) should be completed to specify the amount of the employer's (agency or district) contribution toward the cost of enrollment for active employees and annuitants. The amount specified by this Resolution would be an amount equal to or greater than that specified in Section 22892(b) as authorized by Section 22892(a) of the Government Code. Minimum employer contributions as prescribed in Section 22892(b). Commencing January 1, 2009, the employer contribution shall be adjusted annually by the Board to reflect any change in the medical component of the Consumer Price Index, and shall be rounded to the nearest dollar. RESOLVED, (c) should be completed with full name of the contracting agency. RESOLVED, (d) should be completed with full name of the contracting agency. RESOLVED, (e) requests the position title of the individual who handles the Public Employees' Medical and Hospital Care Act contract for the Public Agency. RESOLVED, (f) should be completed with the date the coverage is to become effective. Because resolutions serve as our legal contract, we require the original resolution, certified copy with original signatures, or a copy of the resolution with the agency’s raised seal. For resolution processing, deliver to the following: Overnight Mail Service Regular Mail California Public Employees’ Retirement System CASD, Contract & Membership Services Section 400 Q Street Sacramento, CA 95811-6210 California Public Employees’ Retirement System CASD, Contract & Membership Services Section PO BOX 942714 Sacramento, CA 94229-2714 The certification shown following the resolution is to be completed by those individuals authorized to sign for the Public Agency in legal actions and is to include the name of the executive body; i.e. Board of Directors, Board of Trustees, etc., the location and the date of signing. VESTING NEW PERS BY GROUP 100/90 Revision November 2012 Revision July 2009 NOT YET APPROVED RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ELECTING TO BE SUBJECT TO SECTION 22893 OF THE PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL CARE ACT WITH RESPECT TO MEMBERS OF UTILITIES MANAGEMENT AND PROFESSIONAL ASSOCIATION TO ESTABLISH A HEALTH BENEFIT VESTING REQUIREMENT FOR FUTURE ANNUITANTS WHEREAS, (1) Government Code 22893 provides that a local agency contracting under the Public Employees’ Medical and Hospital Care Act may amend its resolution to provide a post retirement vesting requirement to employees who retire for service, and WHEREAS, (2) City of Palo Alto is a local agency contracting under the Act for participation by members of the Utilities Management and Professional Association of Palo Alto WHEREAS, (3) City of Palo Alto certifies, certain employees are represented by a bargaining unit and subject to a memorandum of understanding, and WHEREAS, (4) The credited service for purposes of determining the percentage of employer contributions shall mean service as defined in Section 20069, except that not less than five years of that service shall be performed entirely with the City of Palo Alto and WHEREAS, (5) The contribution for active employees cannot be less then what is defined in Section 22892(b); now, therefore be it RESOLVED, (a) That the employer’s contribution for each annuitant first hired on or after the effective date of this resolution shall be the amount necessary to pay the full cost of his/her enrollment, including the enrollment of family members, in a health benefits plan or plans up to a maximum of 100 percent of the weighted average of the health benefits plan premiums for employees or annuitants enrolled for self alone plus 90 percent of the weighted average of the additional premiums required for enrollment of family members in the four health benefits plans that have the largest number of enrollments during the fiscal year to which the formula applied, plus Administrative fees and Contingency Reserve Fund, and be it further RESOLVED, (b) That the percentage of employer contribution payable for post retirement health benefits for each annuitant shall be based on the employee’s completed years of credited service based upon Government Code Section 22893; and be it further RESOLVED, (c) That City of Palo Alto has fully complied with any and all applicable provisions of Government Code Section 7507 in electing the benefits set forth above; and be it further RESOLVED, (d) That coverage under the Act be effective on December 1, 2013. ___________________. VESTING NEW PERS BY GROUP 100/90 Revision November 2012 Revision July 2009 Adopted at a regular/special meeting of the________________________ at ____________________ this _________ day of__________________ 20__. Signed: _________________________________ (President, Chairman, etc.) Attest: _________________________________ (Secretary or appropriate officer) VESTING NEW PERS BY GROUP 100/90 Revision November 2012 Revision July 2009 INSTRUCTIONS This resolution is the approved form designated by the Public Employees' Retirement System. It should be used by a Public Agency which is contracting for coverage under the Public Employees' Medical and Hospital Care Act when the agency desires to provide a post retirement vesting requirement to future annuitants as authorized by Section 22893 of the Government Code. If the resolution (RESOLVED) is filed on or before the tenth day of any month, it will be effective on the first of the following month (date stamped as received in the office of the Board of Administration, Public Employee's Retirement System, 400 Q Street, P.O. Box 942714, Sacramento, CA 94229-2714) Persons retired prior to this effective date are not affected by this vesting agreement. Please submit a copy of the appropriate agreement or MOU(s) with the vesting resolution. WHEREAS, (2) should be completed with full name of the contracting agency and recognized employee organization. WHEREAS, (3) (choose the appropriate paragraph) WHEREAS, (3) should be completed with full name of the contracting agency. WHEREAS, (4) should be completed with full name of the contracting agency. RESOLVED, (c) should be completed with full name of the contracting agency. RESOLVED, (d) should be completed with the date the coverage is to become effective. Because resolutions serve as our legal contract, we require the original resolution, certified copy with original signatures, or a copy of the resolution with the agency’s raised seal. For resolution processing, deliver to the following: Overnight Mail Service Regular Mail California Public Employees’ Retirement System CASD, Contract & Membership Services Section 400 Q Street Sacramento, CA 95811-6210 California Public Employees’ Retirement System CASD, Contract & Membership Services Section PO BOX 942714 Sacramento, CA 94229-2714 The certification shown following the resolution is to be completed by those individuals authorized to sign for the Public Agency in legal actions and is to include the name of the executive body; i.e. Board of Directors, Board of Trustees, etc., the location and the date of signing. VESTING NEW PERS BY GROUP 100/90 Revision November 2012 Revision July 2009 NOT YET APPROVED RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ELECTING TO BE SUBJECT TO SECTION 22893 OF THE PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL CARE ACT WITH RESPECT TO MEMBERS OF PALO ALTO POLICE MANAGEMENT ASSOCIATION TO ESTABLISH A HEALTH BENEFIT VESTING REQUIREMENT FOR FUTURE ANNUITANTS WHEREAS, (1) Government Code 22893 provides that a local agency contracting under the Public Employees’ Medical and Hospital Care Act may amend its resolution to provide a post retirement vesting requirement to employees who retire for service, and WHEREAS, (2) City of Palo Alto is a local agency contracting under the Act for participation by members of the Palo Alto Police Management Association and WHEREAS, (3) City of Palo Alto certifies, certain employees are represented by a bargaining unit and subject to a memorandum of understanding, and WHEREAS, (4) The credited service for purposes of determining the percentage of employer contributions shall mean service as defined in Section 20069, except that not less than five years of that service shall be performed entirely with the City of Palo Alto and WHEREAS, (5) The contribution for active employees cannot be less then what is defined in Section 22892(b); now, therefore be it RESOLVED, (a) That the employer’s contribution for each annuitant first hired on or after the effective date of this resolution shall be the amount necessary to pay the full cost of his/her enrollment, including the enrollment of family members, in a health benefits plan or plans up to a maximum of 100 percent of the weighted average of the health benefits plan premiums for employees or annuitants enrolled for self alone plus 90 percent of the weighted average of the additional premiums required for enrollment of family members in the four health benefits plans that have the largest number of enrollments during the fiscal year to which the formula applied, plus Administrative fees and Contingency Reserve Fund, and be it further RESOLVED, (b) That the percentage of employer contribution payable for post retirement health benefits for each annuitant shall be based on the employee’s completed years of credited service based upon Government Code Section 22893; and be it further RESOLVED, (c) That City of Palo Alto has fully complied with any and all applicable provisions of Government Code Section 7507 in electing the benefits set forth above; and be it further RESOLVED, (d) That coverage under the Act be effective on December 1. 2013.. VESTING NEW PERS BY GROUP 100/90 Revision November 2012 Revision July 2009 Adopted at a regular/special meeting of the________________________ at ____________________ this _________ day of__________________ 20__. Signed: _________________________________ (President, Chairman, etc.) Attest: _________________________________ (Secretary or appropriate officer) VESTING NEW PERS BY GROUP 100/90 Revision November 2012 Revision July 2009 INSTRUCTIONS This resolution is the approved form designated by the Public Employees' Retirement System. It should be used by a Public Agency which is contracting for coverage under the Public Employees' Medical and Hospital Care Act when the agency desires to provide a post retirement vesting requirement to future annuitants as authorized by Section 22893 of the Government Code. If the resolution (RESOLVED) is filed on or before the tenth day of any month, it will be effective on the first of the following month (date stamped as received in the office of the Board of Administration, Public Employee's Retirement System, 400 Q Street, P.O. Box 942714, Sacramento, CA 94229-2714) Persons retired prior to this effective date are not affected by this vesting agreement. Please submit a copy of the appropriate agreement or MOU(s) with the vesting resolution. WHEREAS, (2) should be completed with full name of the contracting agency and recognized employee organization. WHEREAS, (3) (choose the appropriate paragraph) WHEREAS, (3) should be completed with full name of the contracting agency. WHEREAS, (4) should be completed with full name of the contracting agency. RESOLVED, (c) should be completed with full name of the contracting agency. RESOLVED, (d) should be completed with the date the coverage is to become effective. Because resolutions serve as our legal contract, we require the original resolution, certified copy with original signatures, or a copy of the resolution with the agency’s raised seal. For resolution processing, deliver to the following: Overnight Mail Service Regular Mail California Public Employees’ Retirement System CASD, Contract & Membership Services Section 400 Q Street Sacramento, CA 95811-6210 California Public Employees’ Retirement System CASD, Contract & Membership Services Section PO BOX 942714 Sacramento, CA 94229-2714 The certification shown following the resolution is to be completed by those individuals authorized to sign for the Public Agency in legal actions and is to include the name of the executive body; i.e. Board of Directors, Board of Trustees, etc., the location and the date of signing. NEW PERS BY GROUP EQUAL 1 FIXED Revision November 2012 NOT YET APPROVED RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ELECTING TO BE SUBJECT TO THE PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL CARE ACT WITH RESPECT TO MEMBERS OF PALO ALTO POLICE MANAGEMENT ASSOCIATION AND FIXING THE EMPLOYER’S CONTRIBUTION AT AN AMOUNT EQUAL TO OR GREATER THAN THAT PRESCRIBED BY GOVERNMENT CODE SECTION 22892(b) WHEREAS, (1) Government Code Section 22922(a) provides the benefits of the Public Employees' Medical and Hospital Care Act to employees and annuitants of local agencies contracting with the Public Employees' Retirement System on proper application by a local agency; and WHEREAS, (2) Section 22892(a) of the Act provides that a local contracting agency shall fix the amount of the employer's contribution; and WHEREAS, (3) City of Palo Alto hereinafter referred to as Public Agency, is a local agency contracting with the Public Employees' Retirement System; and WHEREAS, (4) The Public Agency desires to obtain for the members of Palo Alto Police Management Association who are employees and annuitants of the agency, the benefit of the Act and to accept the liabilities and obligations of an employer under the Act and Regulations; now, therefore, be it RESOLVED, (a) That the Public Agency elects, and it does hereby elect, to be subject to the provisions of the Act; and be it further RESOLVED, (b) That the employer's contribution for each employee or annuitant shall be the amount necessary to pay the full cost of his/her enrollment, including the enrollment of family members, in a health benefits plan or plans up to a maximum of the minimum employer contributions per month as prescribed in Section 22892(b)(1) of the Government Code dollars per month, plus administrative fees and Contingency Reserve Fund assessments; and be it further RESOLVED, (c) That City of Palo Alto has fully complied with any and all applicable provisions of Government Code Section 7507 in electing the benefits set forth above; and be it further RESOLVED, (d) That the participation of the employees and annuitants of City of Palo Alto shall be subject to determination of its status as an “agency or instrumentality of the state or political subdivision of a State” that is eligible to participate in a governmental plan within the meaning of Section 414(d) of the Internal Revenue Code, upon publication of final Regulations pursuant to such Section. If it is determined that City of Palo Alto would not qualify as an agency or instrumentality of the state or political subdivision of a State under such final Regulations, CalPERS may be obligated, and reserves the right to terminate the health coverage of all participants of the employer. NEW PERS BY GROUP EQUAL 1 FIXED Revision November 2012 RESOLVED, (e) That the executive body appoint and direct, and it does hereby appoint and direct, the People Strategy and Operations Department Assistant Director to file with the Board of Administration of the Public Employees' Retirement System a verified copy of this Resolution, and to perform on behalf of said Public Agency all functions required of it under the Act and Regulations of the Board of Administration; and be it further RESOLVED, (f) That coverage under the Act be effective on December 1, 2013. Adopted at a regular/special meeting of the ________________________ at ____________________ this _________ day of __________________ 20__. Signed: _________________________________ (President, Chairman, etc.) Attest: _________________________________ (Secretary or appropriate officer) NEW PERS BY GROUP EQUAL 1 FIXED Revision July 2009 INSTRUCTIONS This resolution form is the approved form designated by the Public Employees' Retirement System. It should be used by a Public Agency to assure proper filing with the Public Employees' Retirement System for the combined purpose of: 1. Contracting for coverage under the Public Employees' Medical and Hospital Care Act (PEMHCA), and 2. Fixing the employer's contribution toward employees' health insurance at an amount equal to or greater than that prescribed in GC 22892(b) If the resolution (RESOLVED) is filed on or before the tenth day of any month, it will be effective on the first of the following month (date stamped as received in the office of the Board of Administration, Public Employee's Retirement System, 400 Q Street, P.O. Box 942714, Sacramento, CA 94229-2714) WHEREAS, (3) should be completed with full name of the contracting agency. WHEREAS, (4) should be completed with full name of the recognized employee organization. RESOLVED, (b) should be completed to specify the amount of the employer's (agency or district) contribution toward the cost of enrollment for active employees and annuitants. The amount specified by this Resolution would be an amount equal to or greater than that specified in Section 22892(b) as authorized by Section 22892(a) of the Government Code. Minimum employer contributions as prescribed in Section 22892(b). Commencing January 1, 2009, the employer contribution shall be adjusted annually by the Board to reflect any change in the medical component of the Consumer Price Index, and shall be rounded to the nearest dollar. RESOLVED, (c) should be completed with full name of the contracting agency. RESOLVED, (d) should be completed with full name of the contracting agency. RESOLVED, (e) requests the position title of the individual who handles the Public Employees' Medical and Hospital Care Act contract for the Public Agency. RESOLVED, (f) should be completed with the date the coverage is to become effective. Because resolutions serve as our legal contract, we require the original resolution, certified copy with original signatures, or a copy of the resolution with the agency’s raised seal. For resolution processing, deliver to the following: Overnight Mail Service Regular Mail California Public Employees’ Retirement System CASD, Contract & Membership Services Section 400 Q Street Sacramento, CA 95811-6210 California Public Employees’ Retirement System CASD, Contract & Membership Services Section PO BOX 942714 Sacramento, CA 94229-2714 The certification shown following the resolution is to be completed by those individuals authorized to sign for the Public Agency in legal actions and is to include the name of the executive body; i.e. Board of Directors, Board of Trustees, etc., the location and the date of signing. CITY OF PALO ALTO CITY COUNCIL EXCERPT MINUTES Page 1 of 2 Special Meeting June 24, 2013 13. Resolution 9359 entitled “Resolution of the City of Palo Implementing Terms for Utilities Managers and Professionals Association of Palo Alto Pursuant to California Government Code Section 3505 (continued from June 17, 2013)”. Sandra Blanch, Assistant Director of Human Resources, reported the City negotiated with the Utilities Managers and Professionals Association of Palo Alto (UMPAPA) for two years. On April 30, 2013 UMPAPA declared an impasse and requested that the City's last best offer be presented to the Council for implementation. Key terms for implementation were similar to terms included in the Management and Professional Group Compensation Plan. UMPAPA employees would pay the full employee retirement contribution and would receive a 3 percent pension offset and additional salary increases. Medical cost sharing would be consistent with other bargaining units. New division managers and assistant department directors would be at will employees upon hire. Director Valerie Fong was the only Utilities Manager not subject to UMPAPA. The benefit for professional development would decrease from $1,500 to $500 per year. Government Code Section 3505 required the City to bargain with UMPAPA prior to the end of the fiscal year. James Keene, City Manager, understood the main concerns were compensation, placement of employees within the marketplace, and the risk of losing key employees. The proposal was unusual for an imposed contract in that the City advocated for significant pay adjustments. Concessions were similar to concessions granted by other bargaining units. It was important for the Utilities Managers to be competitive in the marketplace. MOTION: Council Member Klein moved, seconded by Vice Mayor Shepherd to approve a Resolution (Attachment A) implementing the changes described in the City’s Last, Best, and Final Offer to employees in the Utilities Managers and Professionals Association of Palo Alto (UMPAPA). Vice Mayor Shepherd believed Utilities Staff were dedicated and hard working, and hoped the dialog would continue. EXCERPT MINUTES Page 2 of 2 City Council Special Meeting Excerpt Minutes: 6/24/13 Council Member Burt stated the City lost key employees in the Utilities Department because of market changes. The terms granted significant salary increases in order for the City to retain skilled employees. MOTION PASSED: 7-0, Holman, Scharff absent 14. Adoption of a Resolution 9360 entitled “Resolution of the City of Palo Approving Terms for Palo Alto Police Managers' Association (continued from June 17, 2013)”. Kathy Shen, Chief People Officer, reported Palo Alto Police Managers' Association (PAPMA) agreed to pay the full 9 percent retirement contribution with a 3 percent offset. Marcie Scott, Employee Relations Manager, indicated PAPMA was comprised of seven employees in two classifications. The agreement would align PAPMA with other manager groups in terms of overall benefit concessions. Salary ranges for Police Captain and Police Lieutenant would be consistent with the market survey. Employees would pay the full retirement contribution with a 3 percent salary offset. The City contribution for professional development would be eliminated. The annual net savings totaled approximately $81,000. Palo Alto Free Press suggested the Council review the Federal Labor Standard Act of 1938. Police Officers should be exempt employees in order to eliminate overtime costs and should be paid based upon performance. MOTION: Council Member Schmid moved, seconded by Council Member Price to 1) approve a Resolution (Attachment A) approving employee concessions and changes to benefit levels and pay for the Palo Alto Police Managers' Association (PAPMA), 2) approve and direct staff to sign the Letter of Agreement confirming that Palo Alto Police Managers' Association members pay the full CalPERS 9% member pension contribution and receive 3% salary offset as soon as administratively possible, 3) approve tentative agreement eliminating the annual Professional Development contribution of $1,500 per member effective July 1, 2013, and 4) approve tentative agreement to modify the PAPMA salary ranges pursuant to the City's Compensation Market Study, decreasing Police Lieutenant pay range by 2.11% and increasing Police Captain pay range by 10.5%. MOTION PASSED: 7-0 Holman, Scharff absent