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A. RESOLUTION NO. 2017-109 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AMENDMENT (LETTER OF UNDERSTANDING) TO THE CONTRACT EXTENSION OF THE 2014-2017 MOU BETWEEN THE CITY OF CHULA VISTA AND CHULA VISTA POLICE OFFICER’S ASSOCIATION
B. RESOLUTION NO. 2017-110 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING EMPLOYER PAID MEMBER CONTRIBUTIONS FOR TIER 1 EMPLOYEES IN CLASSIFICATIONS REPRESENTED BY THE CHULA VISTA POLICE OFFICER’S ASSOCIATION EFFECTIVE MAY 10, 2019
C. RESOLUTION NO. 2017-111 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING CESSATION OF PAYMENT, ON EMPLOYER SIDE, FOR OPTIONAL BENEFITS BY TIER 1 EMPLOYEES IN CLASSIFICATIONS REPRESENTED BY CHULA VISTA POLICE OFFICER’S ASSOCIATION AS A RESULT OF TERMINATION OF EMPLOYER PAID MEMBER CONTRIBUTIONS FOR SAID EMPLOYEES EFFECTIVE MAY 10, 2019
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolutions.
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SUMMARY
In February 2017, the City and Chula Vista Police Officer’s Association (CVPOA) engaged in informal discussions to extend and amend the current MOU and an agreement was subsequently reached on the term of the MOU, salary adjustments and benefits, the elimination of Employer Paid Member Contributions (EPMC) for Tier 1 employees in June 2020 (unless otherwise elected by CVPOA to continue EPMC for an additional specified period by paying the full cost for the benefit), and Affordable Care Act (ACA) reopener language. This extended the labor contract for an additional three years, through June 30, 2020.
After further consideration by the CVPOA and additional informal discussions with the City the CVPOA has requested to eliminate Employer Paid Member Contributions (EPMC) for Tier 1 employees in May 2019, over a year earlier than previously negotiated, in exchange for additional wage increases.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378(b)(2) of the State CEQA Guidelines because it is a personnel related action; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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BOARD/COMMISSION RECOMMENDATION
NA
DISCUSSION
The City and CVPOA recently engaged in informal discussions to extend and amend the current MOU and agreement (via a “Contract Extension) was subsequently reached on the term of the MOU, salary adjustments and benefits, the elimination of Employer Paid Member Contributions (EPMC) for Tier 1 employees in June 2020 (unless otherwise elected by CVPOA to continue EPMC for an additional specified period by paying the full cost for the benefit), and Affordable Care Act (ACA) reopener language.
After further consideration by the CVPOA and additional informal discussions with the City the CVPOA has requested to eliminate Employer Paid Member Contributions (EPMC) for Tier 1 employees in May 2019, over a year earlier than previously negotiated, in exchange for additional wage increases.
Below is a summary of the agreement (Amendment (Letter of Understanding) to Contract Extension) reached:
1. Salary Adjustments:
• 2.5% in the first full pay period of July 2017
• 2.5% in the first full pay period of July 2018
• 2% in the first full pay period of July 2019
2. Elimination of EPMC for Tier 1 employees before the first full pay period of May 2019.
The Amendment (Letter of Understanding) to Contract Extension was ratified by a majority of the CVPOA membership on May 25, 2017.
Termination of Employer Paid-Member Contributions for Tier 1 Employees
The City presently pays 9%, on employee side, for retirement benefits for Tier 1 CVPOA represented employees resulting in Employer Paid Member Contributions (“EPMC”) and CVPOA represented employees presently pay, on the employer side, 9% for CalPERS optional benefits.
Pursuant to Government Code section 20691, effective May 10, 2019, the City will cease to pay 9%, on the employee side, for retirement benefits for Tier 1 employees represented by CVPOA resulting in 9% payment by Tier 1 employees represented by CVPOA, on the employee side, for employee contributions for retirement benefits (which they had not been required to pay) and the cessation of EPMC. There will also be a corresponding cessation of a 9% payment by Tier 1 employees on the employer side.
CVPOA may elect to continue EPMC for Tier 1 employees for an additional specified period by paying the full cost for the benefit (in an amount determined by the city’s Actuary). CVPOA must provide the City notice of the aforementioned election to continue the EPMC by providing the City notice by April 1, 2019 and thereafter agreement to a Letter of Agreement (“LOA”), setting the specifics of the payment for the benefit and the term for the benefit extension. After the expiration of the extended term, EPMC may again be the subject of meet and confer for its removal.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently, the 500-foot rule found in California Code of Regulations section 18704.2(a)(1), is not applicable to this decision. Staff is not independently aware, and has not been informed by any Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. These changes support City Initiative 1.2.3 Retain and attract quality employees under the Operational Excellence goal. Employee compensation is instrumental to recruiting and retaining quality employees.
CURRENT YEAR FISCAL IMPACT
The proposed salary adjustments as a result of the updated LOU do not have a net impact on the current fiscal year, as their effective dates are in future fiscal years.
ONGOING FISCAL IMPACT
The proposed salary changes for CVPOA represented employees would increase the City’s annual ongoing operating costs in fiscal year 2018 by an estimated $138,000, most of which is anticipated to be a General Fund Impact. This change has not been included in the fiscal year 2017-18 budget, staff will need to return mid-year with the respective budget amendments.
The fiscal impacts related to the updated salary increases scheduled for 2019 and 2020 will be incorporated in the budgets for those fiscal years. The change in anticipated impacts as a result of the salary change is noted in the table below.
The City may incur additional fiscal liability if the CVPOA elects to continue EPMC benefits at their cost. The actual liability is unknown at this time and may depend on several factors ultimately determined by CalPERS investment performance and Board decisions on future discount rates.
ATTACHMENT
(1) Amendment (Letter of Understanding) to Contract Extension Between the City of Chula Vista and the Chula Vista Police Officer’s Association
Staff Contact: Courtney Chase