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RESOLUTION APPROVING THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF STOCKTON AND THE STOCKTON POLICE OFFICERS’ ASSOCIATION
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RECOMMENDATION
It is recommended that the City Council adopt by Resolution the attached Stockton Police Officers’ Association (SPOA) successor Memorandum of Understanding (MOU) effective July 1, 2014 through June 30, 2016. The City Council adoption will authorize the City Manager to: 1) execute the MOU; 2) amend the Fiscal Year (FY) 2015-16 Budget to appropriate additional funds; and 3) take actions appropriate to carry out the implementation of the MOU.
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Summary
Representatives of the City began meeting May 5, 2014, with representatives of SPOA on a successor MOU. The SPOA MOU expired June 30, 2014, and, the City and SPOA desired to negotiate a successor MOU effective after that expiration. The successor MOU presented herein contains an increase to the City’s medical contribution effective after ratification; and a 2% cost of living increase adjustment (COLA) to base pay effective July 1, 2015, or the first full pay period following adoption, whichever is later. Both increases are consistent with the City’s Long-Range Financial Plan (L-RFP) as incorporated into the City’s plan for exiting bankruptcy. The SPOA successor MOU contains similar terms and conditions as the prior two years, with other minor changes to enhance retention and increase operational efficiencies. The parties reached a tentative agreement on May 12, 2015 and the City has received notification from SPOA that the bargaining unit membership ratified this successor MOU. The successor MOU is attached in redlined format as Attachment A.
DISCUSSION
Background
The City has had substantial fiscal shortfalls over the past several years culminating in the bankruptcy filing in June of 2012. On June 26, 2012, the City Council adopted a final budget for FY 2012/2013 under the Pendency Plan filed for the bankruptcy proceedings. It also adopted as part of its Pendency Plan changes in compensation and benefits. In December 2012, the City Council adopted a successor MOU for SPOA with a term of two years, July 1, 2012 through June 30, 2014. Now, the existing MOU is expired, and the City and SPOA have since been meeting on the terms of a successor MOU. The focus of these negotiations was to obtain a successor MOU with terms and conditions consistent with the City’s L-RFP.
Present Situation
The relevant amendments under the successor MOU for SPOA are summarized as follows:
1. MOU Contract Term for two years - July 1, 2014 through June 30, 2016 (MOU Section 20);
2. 2% base pay increase (COLA) effective July 1, 2015, or the first full pay period following adoption whichever is later, consistent with the City’s L-RFP (MOU Section 15.1);
3. City Contribution Towards Health Insurance - the City has agreed to increase the City’s capped health insurance premium contribution consistent with the City’s L-RFP (MOU Section 14.1 (c)). The SPOA MOU through June 30, 2014, contained City health premium contribution levels from September 2011, and SPOA has not received an increase in City contribution for the past two fiscal years. Therefore, upon Council approval of this successor MOU, the City’s health premium contribution for SPOA members will increase effective July 1, 2015, or the first full pay period after adoption whichever is later, to the same level as other bargaining units who have reached agreements. The City’s overall contribution increase to SPOA members health insurance premiums from their current contribution levels will be as follows:
• $62 per month for Employee Only;
• $113 per month for Employee plus 1 Dependent; and
• $148 per month for Employee plus 2 or more Dependents;
4. Health Insurance - SPOA has agreed to a reopener clause to meet and confer upon City’s request regarding proposals related to City sponsored medical plans and implementation of the Affordable Care Act (ACA) (MOU Section 14);
5. Police Sergeants working special event hireback as Police Officers - the City has agreed to SPOA’s proposal that Police Sergeants may work overtime for special events at the top step rate of Police Officer when there are insufficient Police Officers volunteering for overtime; however, until such time the City’s payroll system can calculate the Fair Labor Standards Act (FLSA) regular rate of pay for working two different pay rates in a work period, such overtime hours will be paid at the Sergeant rate (MOU Section 11.8);
6. Retention Incentive - 27 hours of leave as a retention bonus for members continuously employed by the City from July 1, 2014 through the first full pay period following Council adoption of this successor MOU; leave time has no cash value until the last pay period of the contract term, at such time unused hours will be cashed out, but will have no cash value for any eligible employees separating prior to the last pay period of the contract term (MOU Section 15.3);
7. Amendment to Holiday Pay provision - MOU language has been updated to clarify Patrol assignment holiday payment practices (MOU Section 12.2); and for Non-Patrol assignment employees who observe holidays they will now receive a special assignment add pay of 5% in exchange for the elimination of extra holiday compensation (MOU Section 15.11);
8. Dispute Resolution- City agrees to waive SPOA’s obligation to sell the property identified in MOU Section 23.7, contingent on dismissal of all pending litigation pursuant to Section 23.6; and
9. Elimination of obsolete language and other language cleanup changes.
FINANCIAL SUMMARY
The cost for the 2% COLA beginning July 1, 2015, is $1,016,000 of which $908,000 is a General Fund cost.
The cost for the health contribution increase is approximately $597,000 annually of which $532,000 is a General Fund cost.
The cost for the retention incentive leave hours is $322,000, in the event all members were to cash out the hours June 30, 2016. Vacancy savings within the Police Department during FY 2014-15 are expected to cover the cost for this retention incentive.
The amendments to Holiday Pay and implementation of the 5% special assignment add pay for Non-Patrol assignments is cost neutral, as the add pay is in exchange for the elimination of extra holiday compensation.
Funding for the 2% COLA and health contribution increase was planned in the Long-Range Financial Plan and additional budget will need to be appropriated to the Police Department FY 2015-16 Budget for the costs associated with this MOU. Appropriations of $63,000 to the Measure W (081) Police Department budget from fund balance and $908,000 to the Police Department General Fund budget are needed for the 2% COLA. Minor adjustments to the Police Grant and Special Program Fund 025 expenditure budget may be made as necessary and allowable within authorized grant funding. No additional appropriation is needed for the health contribution increase. Vacancy savings from FY 2014-15 can be re-appropriated from General Fund available fund balance to the Police General Fund budget in FY 2015-16 in the amount of $296,000 and to the Measure W Police budget in the amount of $26,000 for the one time retention incentive leave hours.
Attachment A - SPOA MOU - redlined