AGENDA REPORT
Meeting Date: February 21, 2023
Item Number:
To: Honorable Mayor & City Council
From: Peter Brown, Labor Negotiator
Subject: FIRST PUBLIC MEETING TO SOLICIT PUBLIC INPUT ON THE UPCOMING LABOR NEGOTIATIONS WITH THE CITY’S SIX (6)
NON-SWORN EMPLOYEE ASSOCIATIONS
Attachments: 1. Presentation from February 9th Community Meeting
RECOMMENDATION
The Council receives public comment related to the upcoming labor negotiations and provides direction to City’s labor negotiator for additional information needed prior to any upcoming closed session at which it may provide direction to its labor negotiator.
INTRODUCTION
The City’s six (6) non-sworn employee associations (listed below) have a Memorandum of Understanding (MOU) which expires on October 6, 2023. • Municipal Employees’ Association
• Part-Time Municipal Employees Association
• Supervisors’ Association
• Confidential Employees’ Association
• Safety Support Employees’ Association
• Management and Professional Employees’ Association
The City is going to commence labor negotiations with each of these associations in the near future. A community meeting was held on February 9, 2023 to provide information and education to the public regarding the upcoming negotiations. Tonight’s meeting is G-2
Meeting Date: February 21, 2023
the formal public meeting where the public may provide input to the Council regarding the upcoming labor negotiations.
DISCUSSION
The City Council follows a process set forth in City Ordinance Regarding the Procedure for Adopting or Amending a Memorandum of Understanding Between the City and an Exclusively Recognized Employee Organization, often referred to as the COIN Ordinance (Civic Openness in Negotiations). The Ordinance includes the following provisions:
1. Adoption of the MOU only after conducting at least two public meetings:
a. one early in the negotiation process
b. one after the negotiations have concluded but prior to MOU adoption
2. Fiscal analysis conducted by an independent firm
3. The MOU and fiscal analysis are to be posted on the City’s website at least two weeks before the Council meeting at which the proposed MOU is considered The City’s labor negotiator conducted a community meeting on February 9, 2023 to provide information to the public about the upcoming labor negotiations process. The information presented to the public at the community meeting included current bargaining unit and average employee costs, retirement benefits and contribution structure and issues likely to be discussed during the upcoming negotiations (a copy of the presentation from the February 9th community meeting is attached). The community meeting was advertised by way of press release, ads in the Beverly Hills Courier and Beverly Hills Weekly and posts on the City’s various social media platforms. The meeting was broadcast live on BHTV channel 35 and the recorded version of the meeting is available on demand via the City’s website. The outreach related to the community meeting was aligned with the Council’s intent to reach and inform as many individuals in the community as possible on the topic of the upcoming labor negotiations.
Tonight’s meeting is the formal opportunity for the public to voice questions, concerns or feedback to the Council early in the negotiation process and prior to officially beginning the meet and confer process for successor memoranda of understanding with each of the employee associations. Following this public meeting and opportunity for public input and comment, the Council will direct its labor negotiator (in a future closed session) regarding strategy and authority for the upcoming negotiations.
FISCAL IMPACT
There is no fiscal impact associated with soliciting input at this time.
Peter Brown
Approved By
ATTACHMENT 1
Labor Negotiations
2023
Community Meeting
February 9, 2023
Overview of Negotiations
2 • The City has 9 employee associations and will be
negotiating with six (6) of them in 2023
• The law in California requires that the City negotiate with each association in good faith to reach an agreement on wages, benefits and other terms and conditions of employment • Once an agreement is reached, the parties approve their labor contract – called a Memorandum of Understanding (“MOU”) and it is posted on the City’s website Negotiations Timeline
3 February 9, 2023 Community Meeting
6:30pm – Council Chambers
February 21, 2023 Council Meeting (Formal)
7pm – Council Chambers
Early April Closed Session(s)April - May Begin negotiations Procedure for Adopting a Memorandum of
Understanding
COIN Ordinance adopted by Council in December 2013
• Independent lead negotiator• Fiscal impact analysis by an independent firm• Adoption of Memorandum of Understanding only after conducting at least two public meetings, one early in the negotiation process and one after negotiations have concluded but prior to MOU adoption • Memorandum of Understanding and fiscal analysis
posted on City’s website at least two weeks before the Council meeting at which the proposed MOU is considered 4 Groups With Whom We Will Be Negotiating
• Municipal Employees’ Association (MEA) • Part-time MEA Unit• Supervisors’ Association• Confidential Employees’ Association• Safety Support Employees’ Association• Management and Professional Employees’ Association All MOUs expire on October 6, 2023
5 The City’s Negotiating Team
The City’s negotiating team includes the following people:
Peter Brown – Independent Labor NegotiatorShelley Ovrom – Director of Human ResourcesKirsten Rowe – Assistant Director of Human ResourcesTatiana Szerwinski – Assistant Finance Director • All of the City’s Memoranda of Understanding (including the MOUs we will negotiate) are on the City’s website on the Human Resources page:
https://www.beverlyhills.org/departments/humanresources/memorandaofunderstanding/ 6 Average Cost per Position for Each MOU[1]
# of Budgeted
Positions
Average Total Cost per
Position
Total MOU Cost
(in millions)
Part-Time Association (MEA)
174 $67,000 $11.6
Confidential Association
23 $138,000 $3.2
Municipal Employees’ Association (MEA) 246 $139,000 $33.9Safety Support Association 97 $152,000 $14.8
Supervisors’ Association
35 $171,000 $6.0
Management and Professional Association 148 $194,000 $28.8 7 [1]Data per Fiscal Year 2022-23 budget and includes seven-year average overtime estimate for each applicable MOU.
Breakdown of Average Position Cost
Salary [1] Benefits [2]
Pension –
Normal Cost
Unfunded
Liability Overtime[3] Total
Part-Time Association (MEA) $49,000 $9,000 $3,000 $5,000 $1,000 $67,000Confidential Association 86,000 28,000 8,000 13,000 3,000 138,000Municipal Employees’ Association (MEA) 82,000 29,000 8,000 13,000 7,000 139,000Safety Support Association 88,000 28,000 8,000 14,000 14,000 152,000Supervisors’ Association 105,000 28,000 10,000 16,000 12,000 171,000
Management and Professional Association 130,000 32,000 12,000 20,000 0 194,000 8 [1] Salary is comprised of base pay, bonus pays, wellness pay [2] Benefits are comprised of cafeteria plan benefits, deferred compensation, Medicare taxes, retiree medical contributions, car allowance, uniform allowance, cellphone stipend, life insurance[3] Overtime represents the seven-year average estimate by position for each applicable MOU.
Public Employee Pension Reform Act
(PEPRA) Overview
“Classic” Employees: hired prior to 1/1/13 or laterals• Maintain existing retirement formula and calculation based on single highest year of pensionable compensation
• Currently, classic non-safety employees pay 8% and safety pay 9% “New Member” Employees: new to CalPERS after 1/1/13
• Lower retirement formula and retirement calculation based on any consecutive three-year average of pensionable compensation • PEPRA requires that “new members” contribute one half the normal cost (currently 6.75% for non-safety and 12% for safety, based on actuarial valuation for FY2022-23) 9 Employee Pension Plan Summary
10 Employee Type
Pension Plan
Type
# of
Employees
as of 2019
# of
Employees
as of 12/31/22 Formula
Employee
Contribution
Miscellaneous
(non-safety)
Classic[1] 458 343 2.5% @ 55 8%
Miscellaneous
(non-safety)
PEPRA[1] 229 316 2% @ 62 8%
Safety
(Police & Fire)
Classic[2] 131 91 3% @ 50 9%
Safety
(Police & Fire)
Classic[2]
(Tier 2)
30 35 3% @ 55 9%
Safety
(Police & Fire)
PEPRA [3] 51 84 2.7% @ 57 12%
[1] Classic and PEPRA Miscellaneous employees currently pay 8% of pension cost. [2] Police Safety employees currently pay 9% of pension cost. [3]PEPRA Safety employees currently pay 12% of pension cost.
Projected Employer PERS Rates
11 Fiscal Year
Normal
Cost*
Unfunded
Liability** Total
Normal
Cost*
Unfunded
Liability** Total
2021-22 10.22% 16.91% 27.13% 20.82% 37.58% 58.40%2022-23 10.07% 16.82% 26.89% 20.18% 38.59% 58.77%2023-24 11.07% 19.55% 30.62% 22.16% 34.83% 56.99%2024-25 10.80% 18.60% 29.40% 21.50% 33.80% 55.30%2025-26 10.60% 13.60% 24.20% 20.80% 31.80% 52.60%2026-27 10.40% 12.40% 22.80% 20.20% 29.70% 49.90%2027-28 10.20% 10.90% 21.10% 19.50% 27.30% 46.80%2028-29 10.00% 8.90% 18.90% 18.90% 27.60% 46.50% *Normal cost is expressed and paid as a percentage of total active payroll. **Amortization of the unfunded accrued liability, is expressed and paid as a dollar amount, but estimated above as a percentage of payroll.
Safety
Miscellaneous (Police & Fire)
Misc.
(Classic)
Misc.
(PEPRA)
Safety
(Classic)
Safety
(PEPRA)
Employer normal cost 10.07% 20.18%Unfunded Liability rate 16.82% 38.59% Combined Employer rate
26.89% 58.77%
Employee paid rate 8.00% 9.00% 12.00%Total pension rate 34.89% 67.77% 70.77% 2022-23 Pension Rate Structure
12 Issues We Anticipate Negotiating In These
Upcoming Negotiations
Economic issues
• Term• Compensation• Health benefits
Non-economic (management operational issues)
• The departments have begun to identify issues they may want to address which deal with the operations of each department 13 Questions?
Next City Council Meeting (Formal)
Tuesday, February 21, 2023
7:00pm
Council Chambers
14