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HomeMy WebLinkAbout03.H- City Clerk 3.H DOC ID: 2257 CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION Agreement/Contract Amendment From: Georgeann "Gigi" Hanna M/CC Meeting Date: 01/28/2013 Prepared,by: Georgeann "Gigi" Hanna, Dept: City Clerk Ward(s): All Subject: Resolution of the Mayor and Common Council of the City of San Bernardino Adopting Modifications to Terms and Conditions of Employment for the General Unit Employees, Represented by the International Union of Operating Engineers (IUOE) Financial Impact: Account Budgeted Amount: <<Insert Amount>> Account No. <<Insert Account No» Account Description: <<Insert Account Description Balance as of: «Inert Date>> Balance after approval of this item: <<Insert Amount>> Please note this balance does not indicate available funding. It does not include non-encumbered reoccurring expenses or expenses incurred, but not yet processed. Motion: Adopt Resolution Synopsis of Previous Council Action: The council voted in Open Session to add this item to the January 24 agenda: The Mayor and Council determine that the need to consider and take action on the unilateral imposition (of terms and conditions of employment for the Police, Fire and Mid Management bargaining units) arose after the posting of the agenda." The basis of this finding was that the January 23, 2013 mediation in the United States Bankruptcy Court concluded with no agreement between the City and the bargaining units involved Following Closed Session on January 24, the meeting was continued until 3:30 p.m. Monday, January 28 in the Council Chamber. Supporting Documents: Updated: 1/25/2013 by Georgeann"Gigi" Hanna Packet Pg. 19 M L 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN 3 BERNARDINO APPROVING THE TERMS AND CONDITIONS OF EMPLOYMENT FOR GENERAL UNIT EMPLOYEES, REPRESENTED BY THE INTERNATIONAL 4 UNION OF OPERATING ENGINEERS (IUOE). 5 WHEREAS, in meeting its commitments to the citizens of the City of San 6 Bernardino to maintain a safe and secure community while providing access to 7 cultural, recreational and governmental activities and institutions for all citizens, the g City has employed a workforce; and 9 WHEREAS, most City employees are entitled to collectively bargain with the 10 City regarding terms and conditions of employment; and 11 WHEREAS, as nearly two-thirds of the City's General Fund is tied directly to the salaries and benefits paid to City employees, the City's labor costs for the 2012- 12 2013 Fiscal Year (FY) exceed the City's projected revenues; and 13 WHEREAS, despite cost savings measures previously taken by the City, the 14 City's financial situation is dire with no available cash to meet on-going operating 15 expenses, including payroll, and no revenue or other funding sources are available to 16 balance the City's budget and address prior years' deficits; and 17 WHEREAS, on July 18, 2012, the Mayor and Common Council directed the is filing of a Petition under Chapter 9 of the United States Bankruptcy Code following 19 the adoption of a Declaration of a Fiscal Emergency in the City of San Bernardino. These actions were in response to findings that the financial state of the City is such ZO that the health, safety, and well-being of the residents of the City will be jeopardized 21 absent Chapter 9 bankruptcy protection; and 22 WHEREAS, on November 26, 2012, the Mayor and Common Council adopted 23 the Pendency Plan, Resolution 2012-27, which included the Fiscal Year 2012/13 and 24 Fiscal Year 2013/14 General Fund Budgets which incorporated by reference the Pre- 25 Pendency Plan including the 9-Point Adjustment Plan adopted on September 5, 26 2012, and the revised Fire Department adjustments adopted on October 1, 2012; and 27 WHEREAS, since the filing of the Declaration of Fiscal Emergency on July 18, 2012 and the filing of the Petition under Chapter 9 of the United States Bankruptcy 28 Code, the City's negotiating team has met on several occasions with the IUOE and 3 f1 have exchanged bargaining proposals, financial and other information in order to 1 negotiate in good faith concerning modifications to the terms and conditions of 2 employment consistent with the provisions in the Pendency Plan; and, 3 WHEREAS, the City must present a balanced financial plan, or Pendency 4 Plan, for the General Fund that allows the City to continue to provide effective 5 service, and the Pendency Plan constitutes an emergency within the meaning of the 6 Meyers-Milias-Brown Act, Government Code section 3504.5; and 7 WHEREAS, after having met, the City and the IUOE have reached agreement 8 on certain terms and conditions as set forth below. NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON 9 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 10 11 SECTION 1. The following terms and conditions of employment for General Unit members represented by the International Union of Operating Engineers 12 13 ("IUOE") are approved for implementation effective February 1, 2013: 14 1. CalPERS Retirement Formulas: For all employees employed on or before 15 10/3/11, 2.7% @ 55; Employees hired on or after 10/4/11 to 12/31/12, 2% 16 @ 55; Employees hired on or after 1/1/13, 2% @ 62. 17 2. Cost Sharing of CalPERS Benefits: All employees hired on or before 18 December 31, 2012 shall contribute 9.304% to the CaIPERS benefit 19 representing 50% of the normal cost of benefits as determined by 20 CaIPERS for the 2013-2014 fiscal year. Employees hired on or after January 1, 2013, shall contribute 50% of the normal contributions 21 consistent with the provisions of the Public Employees Pension Reform 22 Act of 2013 (PEPRA). The provisions of Section 414(h)(2) of the Internal 23 Revenue Code (IRC) are applicable to contributions designated as 24 employee contributions made by the City of San Bernardino to the 25 CalPERS and are hereby incorporated herein. 26 3. Salary Concessions: All salary concessions previously agreed to by the Q27 City and the IUOE shall be restored to their prior level and all bargaining 28 unit employees will resume working a forty (40) hour week. 4. Post-Retirement Medical Benefits: Employees hired on or after 1/1/13 1 shall not be eligible to receive payments for retiree medical benefits. The 2 City shall reserve all rights to modify retiree medical plans and the amount 3 of contributions paid by the City. 4 5 5. Suspension of Payments for Accrued Leaves: All payments for accrued sick leave, vacation, and holiday leave time to which employees may be 6 entitled prior to separation from employment (sell-backs) shall remain 7 suspended in accordance with the action of the Common Council on 8 August 6, 2012. All payments for cash-outs upon separation for accrued 9 sick, vacation and holiday leave shall remain suspended in accordance 10 with the action of the Common Council on August 6, 2012. 11 6. Sick Leave Accrual Caps: Effective February 1, 2013, all bargaining unit 12 employees may only accrue a maximum of 1040 hours of sick leave. All 13 bargaining unit employees with accrued sick leave hours in excess of 900 14 hours on February 1, 2013, will have those excess hours converted to a 15 separate excess sick leave bank (ESL). Effective July 1, 2013, 24 hours 16 from the ESL shall be cashed out each quarter of a fiscal year. Fifty 17 percent (50%) of any remaining balances in the ESL at the time of separation shall revert to a PEHP trust. Sick leave earned on or after 18 February 1, 2013, is subject to the 1040 cap. At the time of separation, 19 any employee having six (6) or more years of service, shall convert 20 unused sick leave earned after February 1, 2013 to a PEHP trust as 21 follows: 288 hours or less accrued = no conversion; 289-479 hours = 20% 22 of accrued sick leave; 480-959 hours = 25%; 960 or more hours = 35%. 23 7. Term: The terms and conditions set forth herein shall be in effect from 24 February 1, 2013 through June 30, 2014, and the Pre-petition Agreement 25 shall continue to apply except as expressly set forth herein. The City and 26 the IUOE agree to reopen negotiations in January 2014 for a successor 27 agreement. The City and the IUOE acknowledge that as a result of 28 previous negotiations, several tentative agreements have been reached and that prior to the reopeners in January 2014, both parties agree to 1 continue negotiating with the intent of reaching a comprehensive 2 agreement including both economic and non-economic benefits. 3 4 8. Favored Nations Clause: The City recognizes that this compensation plan 5 implements a reduction or elimination of certain items of compensation and benefits as outlined in the City's Pendency Plan adopted by the Mayor 6 and Common Council on November 26, 2012. It is the intent of the City to 7 reduce or eliminate compensation and benefits for all bargaining units 8 consistent with the parameters set forth in the City's Pendency Plan. If any 9 miscellaneous unit does not agree to the implementation of the 9.304% 10 retirement pick-up, or if any safety group does not agree to, or the 11 Common Council does not implement Items #3 #4 or #9 of the Pendency 12 Plan, the IUOE will not be required to implement the 9.304% concession 13 and the parties agree to reopen negotiations solely on this item. 14 9. Bankruptcy Reservation of Rights: The parties agree that all of the rights of 15 the parties are reserved with respect to the existing prepetition 16 Memorandum of Understanding and any amendment(s) thereof 17 (collectively, the "Prepetition Agreement") between the parties for bankruptcy purposes. 18 19 20 21 22 23 24 25 26 © 27 28 /// 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN 2 BERNARDINO APPROVING THE TERMS AND CONDITIONS OF EMPLOYMENT FOR GENERAL UNIT EMPLOYEES, REPRESENTED BY THE INTERNATIONAL 3 UNION OF OPERATING ENGINEERS (IUOE). 4 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 5 Mayor and Common Council of the City of San Bernardino at a 6 meeting thereof, held on the day of 8 2013, by the following vote, to wit: 9 Council Members: AYES NAYS ABSTAIN ABSENT 10 MARQUEZ 11 JENKINS 12 13 VALDIVIA 14 SHORETT 15 KELLEY 16 JOHNSON 17 MCCAMMACK 18 19 20 Georgeann Hanna, City Clerk 21 The foregoing Resolution is hereby approved this day of 2013. 22 23 24 Patrick J. Morris, Mayor 25 City of San Bernardino 26 Approved as to form: JAMES F. PENMAN, © 27 City Att rney 28 By: -` v CITY OF SAN BERNARDINO— REQUEST FOR COUNCIL ACTION Staff Re ort SUBJECT Resolutions of the City of San Bernardino approving terms and conditions of employment between the City of San Bernardino and 1) General Unit Employees represented by the International Union of Operating Engineers (IUOE); 2) The San Bernardino Police Management Association (SBPMA); 3) The San Bernardino Fire Management Association (SBFMA); and, 4) The San Bernardino Management/Confidential Employees (SBMCE) FINANCIAL IMPACT These actions are necessary to implement the provisions of the Pendency Plan. MOTION: Adopt the four (4) Resolutions. SYNOPSIS OF PREVIOUS COUNCIL ACTION December 17, 2012 -The Mayor and Common Council authorize the implementation of F the Public Employees' Pension Reform Act of 2013 (PEPRA) and related Public Employees' Retirement Law (PERL) amendments which shall become applicable and effective January 1, 2013. November 26, 2012 -The Mayor and Common Council adopted the Pendency Plan, Resolution 2012-27, which included the Fiscal Year 2012/13 and Fiscal Year 2013/14 General Fund Budgets which incorporated by reference the Pre-Pendency Plan including the 9-Point Adjustment Plan adopted on September 5, 2012, and the revised Fire Department adjustments adopted on October 1, 2012. General Employees Bargaining Unit (IUOE) July 2, 2012 - Resolution 2012-188 adopted to extend the term of Resolution 2011-207 until a successor MOU is adopted by the Mayor and Common Council. June 10, 2011- Resolution 2011-207 adopted to approve a Memorandum of Understanding (MOU) with the International Union of Operating Engineers for the General Employee Unit, which included the following concessions for the period January 1, 2011 through June 30, 2012: Continuation of the 10% concessions; Freezing of all merit increases. August 2, 2010 - Resolution 2010-254 adopted to extend the term of Resolutions 2009-33 and 2009-68 from July 31, 2010 through August 15, 2010. Page 1 June 30, 2010 - Resolution 2010-217 adopted to extend the term of Resolutions 2009- 33 and 2009 -68 from June 30, 2010 through July 31, 2010. April 6, 2009 - Resolution 2009-68 to amend Resolution 2005-75 to continue the 10% concession and to clarify Resolution 2009-33 as follows: Specify that the 36- hour workweek will not affect merit increases or PERS reporting of monthly salary for the period of March 1, 2009, through June 30, 2010. February 17, 2009 - Resolution 2009-33 to amend Resolution 2005-75 to implement the following concessions for the period of March 1, 2009 through June 30, 2010: 10% concession (36-hour workweek resulting in a reduction in compensation by 4 hours per week; employees not participating for health or safety reasons and City Attorney staff receive 4 hours of concession leave per week with no cash value or expiration date). Police Management Association (SBPMA) October 18, 2010 Resolution 2010-345 approving a Memorandum of Understanding regarding budget concessions for the period October 1, 2010 through December 31, 2012: Suspension of annual uniform allowance; Reduction of City's monthly contribution towards health care benefits by $886 per month for Captains and $794 per month for Lieutenants; Establishment of a 2-tier retirement formula of 3% at 55 for all employees hired into the bargaining unit after January 1, 2011. August 6, 2009 - Resolution 2009-70 approving a Memorandum of Understanding implementing concessions for the period April 1, 2009 through June 30, 2010: Reduction of City's contribution towards health care benefits for Captains by $866 per month and Lieutenants by $794 per month; Reduction of employee's vacation balances by 2.7 hours (total 40 hours) and employee's holiday balance by 1.9 hours (total 28 hours). Fire Mana-Clernent Association SBFMA December 20, 2010 — Resolution 2010-389 rescinding Resolution 2010-284 and approving a Memorandum of Understanding implementing the following concessions for the period December 1, 2010, through June 30, 2012: Deduction of $790 per month in City contribution towards non-healthcare benefits; Establishment of a 2-tier retirement formula of 3% at 55 for all employees hired into the bargaining unit after January 1, 2011. August 16, 2010 — Resolution 2010-284 amending Resolution 2007-345 and 2009-71 implementing the following concessions for the period September 1, 2010 through June 30, 2012: Contribute flat rate of $301.81 per month to be used to purchase City- sponsored medical, dental, vision, and life insurance; Eliminate tier of 10% above the highest group; Establishment of a 2-tier retirement formula of 3% at 55 for all employees hired into the bargaining unit after January 1, 2011. Page 2 June 30, 2010 — Resolution 2010-217 adopted to extend the term of Resolution 2009- 71 from June 30, 2010 to August 31, 2010. April 6, 2009 - Resolution 2009-71 amending Resolution 2007-345 implementing the following concession for the period April 1, 2009 through June 30, 2010: 10% reduction in base salary. August 4, 2008 — Resolution 2008-306 amending Resolution 2007-345 implementing the following concession for the period of August 1, 2008 through June 30, 2009: Reduce Holiday accrual rate from 15.75 hours per month to 6.28 per month. Management/Confidential Bargaining Unit (SBMCE) July 2, 2012 - Resolution 2012-188 adopted to extend the term of Resolution 2010-276 until a successor MOU is adopted by the Mayor and Common Council. August 16, 2010 - Resolution 2010-276 adopted to amend Resolutions 2009-345 and 2009-35 to implement the following concessions for the period September 1, 2010 through June 30, 2012: Negotiation of 186 formula with no financial impact; Reduction of employees' vacation balance by 2.7 hours (total 40 hours) and employees' holiday balance by 1.9 hours (total 28 hours) through June 30, 2012; Suspension of vacation, holiday, and sick leave sell-back through June 30, 2012. June 30 2010 - Resolution 2010-217 adopted to extend term of Resolutions 2009-35 from June 30, 2010 through August 31, 2010. February 17, 2009 - Resolution 2009-35 amending Resolution 2007-345 implementing the following concessions for the period of March 1, 2009 through June 30, 2010: An additional 5% concession for a 10% total (36-hour workweek resulting in a reduction in compensation by 4 hours per week; employees not participating for health or safety reasons and City Attorney staff receive 4 hours of concession leave per week with no cash value or expiration date). August 4, 2008 - Resolution 2008-306 amending Resolution 2007-345 implementing the following concessions for the period August 1, 2008 through June 30, 2009: 5% reduction in base salary; Reduction of Fire Management holiday accrual rates from 15.75 hours per month to 6.28 hours per month. BACKGROUND As a result of the City's dire financial condition, the City filed for Chapter 9 Bankruptcy following the declaration of a fiscal emergency in the City of San Bernardino on July 18, 2012. These actions were in response to findings that the financial state of the City ® was such that the health, safety, and well-being of the residents of the City would[ be jeopardized absent Chapter 9 bankruptcy protection. Since then, the City has Page 3 presented its financial plan or Pendency Plan in bankruptcy court and must implement now the Plan in order to preserve its Chapter 9 bankruptcy protection. The necessity of implementing the City's Pendency Plan constitutes an emergency within the meaning of the Meyers-Milias-Brown Act, Government Code section 3504.5. It also serves as a roadmap until the bankruptcy court approves a long-term Plan of Adjustment. The Plan of Adjustment will comprehensively restructure the City's debts and obligations and set the City on the path to solvency. As the City of San Bernardino works through the bankruptcy process, the City's negotiating team has met and conferred in good faith with the representatives from the General Unit, the Police Management Unit, the Fire Management Unit, and the Management/Confidential Unit over the past several months regarding the terms and conditions of employment for the period commencing February 1, 2013, through June 30, 2014. The terms and conditions reached with each of the four (4) bargaining units are consistent with the applicable provisions of the Pendency Plan and will assist in balancing the City's General Fund through the pendency period. Parties agree to continue to meet and confer over the terms of a comprehensive MOU including all non-economic language that will coincide with the long-term Plan of Adjustment. The City and the General Unit, the Police Management Association, the Fire Management Association, and the Management/Confidential Unit have agreed on terms and conditions which include all economic concessions set forth in the Pendency Plan. It is recommended that the following actions be approved: • Resolution No. _ , Resolution of the Mayor and Common Council of the City of San Bernardino Adopting Modifications to Terms and Conditions of Employment for the General Unit Employees, represented by the International Union of Operating engineers (IUOE); • Resolution No. _, Resolution of the Mayor and Common Council of the City of San Bernardino Adopting Modifications to Terms and Conditions of Employment for the San Bernardino Police Management Association; • Resolution No. _, Resolution of the Mayor and Common Council of the City of San Bernardino Adopting Modifications to Terms and Conditions of Employment for the San Bernardino Fire Management Association; and, • Resolution No. _, Resolution of the Mayor and Common Council of the City of San Bernardino Adopting Modifications to Terms and Conditions of Employment for the San Bernardino Management/Confidential Unit. Page 4