REPORT TO THE CITY COUNCIL
September 11, 2014
FROM: JEFF CARDELL, Director
Personnel Services Department
BY: KEN PHILLIPS, Labor Relations Manager
Personnel Services Department
SUBJECT
Title
*1. Adopt a Memorandum of Understanding (MOU) between the City of Fresno (City) and the Fresno Police Officers Association (FPOA) - Unit 4 (Police Non-management), covering the period September 11, 2014 through June 30, 2017
*2. Adopt a Memorandum of Understanding (MOU) between the City and FPOA - Unit 9 (Police Management), covering the period September 11, 2014 through June 30, 2017
*3. Adopt a Side Letter of Agreement between the City and FPOA, Unit 4 and Unit 9 regarding a study of FMC provisions regarding Fire and Police retirement benefits
Body
RECOMMENDATIONS
It is recommended that Council approve the attached MOU to implement changes in wages, hours and other terms and conditions of employment for City employees in Unit 4 (Police Non-management), and Unit 9 (Police Management) both represented by FPOA. It is also recommended that Council approve a Side Letter of Agreement with both Units to study FMC provisions regarding Fire and Police retirement benefits and revising the performance evaluation form.
EXECUTIVE SUMMARY
MOU's between the City and FPOA are scheduled to expire on June 30, 2015. The City and the Association have met to explore the possibility of new Agreements to replace the existing MOU's. The parties reached a tentative agreement which was ratified by FPOA members on September 3, 2014.
The term of the new agreements is September 11, 2014 through June 30, 2017. Major provisions include delaying a 2% increase by six months from January 1, 2015 to July 1, 2015; a 2% wage increase December 31, 2016; a decrease in the City share of health and welfare monthly premiums from 80% to 75%, with the City and employees sharing 50% future increases, with a cap of 30% on the employee share; increased employee payments for pension costs, with new employees paying 12% and current employees paying 10%; an end to the Wellness Program; a decrease in both vacation and sick leave accruals by one-half hour each month; and, a cap on the amount of sick leave a new employee can claim for the Health Reimbursement Arrangement, limiting the amount to no more than the amount available when an employee entered DROP.
Council is being asked to approve the MOU's as well as a Side Letter of Agreement which provides for a City/Association study of the feasibility of allowing members of the City of Fresno Fire and Police Retirement System to buy back a portion of retirement after dissolution of a marriage or legal separation and to revise the employee evaluation form for employees in the units.
BACKGROUND
MOU's between the City and FPOA expire on June 30, 2015. The City and the Association have met to explore the possibility of new Agreements to replace the existing MOU's. The parties reached tentative agreements on new MOU's, which, if approved by Council, will include the following significant provisions:
Ø Term: September 11, 2014 through June 30, 2017.
Ø Wages:
o 2% wage increase July 1, 2015 (delayed from January 1, 2015). The bottom of the Deputy Police Range will be placed at 30% below the top of the range.
o 2% wage increase December 31, 2016.
Ø Health & Welfare:
o City share of monthly premiums to be reduced from 80% to 75%.
o Future increases to be shared, 50% by the employee, 50% by the City.
o Employee share to be capped at 30%, City would pay 70%.
o Reopener if any other unit negotiates move favorable benefits.
Ø Pension: City payments towards employee share to end.
o Basic:
§ New employees to pay 12% towards pension costs.
§ Existing employees in Tier 2 to pay 10% towards pension costs.
§ Existing employees in Tier 1 to pay additional 1% towards pension costs.
o Management:
§ New employees to pay 12% towards pension costs.
§ Existing employees in Tier 2 to pay 9% towards pension costs.
o Work towards change in FMC to allow for increased employee share of pension costs.
Ø HRA: New employees who enter DROP are limited to HRA cash out of sick leave which is no greater than the amount of sick leave available when the employee entered DROP.
Ø Bilingual Pay: Employees receiving the premium must be recertified every five years.
Ø Provisions specific to the Basic Unit:
o Sergeants assigned as Training Officer Coordinator to receive premium of $275 per month.
o At the Police Chief's discretion, Training Officers assigned to different shifts may receive incentive pay from $100 to $200 per month depending on the assignment.
o Starting in FY 16, the maximum amount for overtime costs for Guaranteed Leave will increase by $12.500 per semester to a total of $125,000 in FY 16 and $150,000 in FY 17.
o The rate of pay for Special Events will be raised from 1.5 times B step to 1.5 times C step.
Ø Provisions specific to the FPOA Management Unit: Employees who promoted to the Management Unit will be promoted to a step not less than 3.5% above compensation at the lower classification to include all premium pays or 15% above top step Sergeant, whichever is greater.
It is recommended that Council approve the new MOU's which would replace existing Agreements and the attached Side Letter of Agreement on study of pension items and revision of employee performance evaluation forms.
The City Attorney's Office has approved the new MOU's as to form.
ENVIRONMENTAL FINDINGS
Not applicable.
LOCAL PREFERENCE
Not applicable.
FISCAL IMPACT
Over the course of the Agreement, the City will save approximately $7.1 million versus the amount Budget has forecast for the same period of time. Compared to budget forecasts, in FY 15 the savings are approximately $2.3 million, $2.7 million in FY 16, and $2.1 million in FY 17. A spreadsheet outlining the savings and costs for the new Agreements is attached
Approval of the Agreements also averts a long and potentially costly negotiation process on the existing agreements. The savings generated by the Agreements advances the goals of restoring City services and creating a viable General Fund reserve.
Attachments: FPOA Basic MOU, Redline Version
FPOA Basic MOU, Final
FPOA Management MOU, Redline Version
FPOA Management MOU, Final
Side Letter of Agreement
Estimate of Agreement Cost/Savings