1 STAFF REPORT
DATE: August 22, 2023
TO: Justin Hess, City Manager
FROM: Betsy McClinton, Management Services Director
VIA: Ryan Sizemore, Assistant Management Services Director BY: Julie Chaidez , Senior Administrative Analyst
SUBJECT: Adoption of a Resolution to Approv e a Memorandum of Understanding between the City of Burbank and the Burbank City Employees’ Association from July 1, 2022 – June 30, 2024; Adoption of Resolutions to A pprove Citywide Salary Schedules; and Amendment of the Fiscal Year 2023- 2024 Budget.
RECOMMENDATION
1. Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK
APPROVING A MEMORANDUM OF UNDERSTANDING (MOU) WITH THE
CITY OF BURBANK AND THE BURBANK CITY EMPLOYEES’
ASSOCIATION ( BCEA ) FROM JULY 1, 2022 – JUNE 30, 2024 .
2. Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK
APPROVING A CITYWIDE SALARY SCHEDULE FOR BURBANK CITY
EMPLOYEES’ ASSOCIATION CLASSIFICATIONS RETROACTIVE TO JUNE 26, 2022.
3. Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK
APPROVING A CITYWIDE SALARY SCHEDULE FOR BURBANK CITY
EMPLOYEES’ ASSOCIATION CLASSIFICATIONS RETROACTIVE TO JUNE 25, 2023.
4. Amend the Fiscal Year (FY) 2023-24 Budget by appropriating the total amount of $5,313,647 from revenue account 001.ND000.30010.0000.000000.00000 (General
2 Fund, Non -Departmental, Unassigned Fund Balance) to expenditure account 001.ND01A.60018.0000. 000000.0 0000 (General Fund, Non -Departmental, Salaries Holding).
BACKGROUND
The BCEA represents approximately 600 miscellaneous employees citywide who have various duties and responsibilities. The most recent contract between the City and the BCEA was in effect beginning December 13, 2020, and expired on June 30, 20 22.
The City and the BCEA have reached a tentative agreement for the period of July 1, 2022, through June 30, 2024 . The tentative agreement includes changes in salary and benefits, as listed in the Summary of Contract Changes ( Attachment 4) and reflected in the updated citywide salary schedules (Attachment 2, Exhibit A and Attachment 3, Exhibit A ).
In accordance with Government Code Section 20636 and California Code of Regulations Section 570.5, the California Public Employees’ Retirement System (PERS) requires public agencies to post a publicly available salary schedule to determine earnable compens ation that is approved by the Council at a public meeting. To reflect the proposed salary increas es for BCEA classifications it is necessary for Council to approve two separate salary schedules. One salary schedule, which includes the salary increases that are effective retroactively to June 26, 2022, and another salary schedule, which includes the salary increases that are effective retroactively to June 25, 2023.
An amendment to the FY 2023- 24 Adopted Budget is necessary to cover the costs associated with the negotiated terms of the new BCEA MOU, which will ensure that the City of Burbank can continue to provide exceptional services by remaining competitive in the relevant market to recruit and retain a highly qualified workforce.
DISCUSSION
Negotiations with the BCEA began in March 2022. Since then, staff and the BCEA held 34 negotiation meetings to reach a n agreement that will benefit both BCEA employees and the City. Negotiations centered on the Council’s adopted financial policy that states, “in order to recruit and retain a well -qualified workforce to provide exceptional services, we will compensate employees at a level commensurate with the average of Burbank’s relevant labor market.”
As such, negotiations focused on establishing salary surveys that best approximate the relevant labor markets for both BCEA’s utility and non- utility 3 titles, thereby most effectively preserving Burbank’s ability to recruit and retain highly qualified employees. The surveys revealed a challenging l abor market for cities, with agencies providing higher than usual increases in compensation over the next two to three years to remain competitive.
Additionally, negotiations focused on the disproportionate impact of inflation on BCEA employees who often hold positions that have lower earning capacity.
The City and the BCEA have reached a tentative agreement for the period of July 1, 2022, through June 30, 202 4. This package includes changes in salary and benefits, as listed in the Summary of Contr act Changes ( Attachment 5). Notable contract modifications include:
One-Time Lump Sum Inflation and Retention Payment
To provide immediate financial relief and to acknowledge the disproportionate impact of inflation on BCEA employees, staff recommends a o ne-time lump sum inflation and r etention Payment of $5,000 per employee (prorated for part time employees), paid in two installments: 1) $2,500 as quickly as practical upon Council adoption, 2) the pay date of December 7, 2023.
Salary Adjustments
Burbank’s relevant market includes comparable classifications in comparable municipalities in Southern California, and a salary survey was conducted during negotiations for valuation of relevant market salaries.
Based on the results of that survey, a vast majority of BCEA classifications are significantly below the survey average. On average, the BCEA is approximately
5.78% below the July 2022 market average, reflecting the increases provided by comparable municipalities to remain competitive in the challenging labor market .
To align immediately with the City’s financial policy to pay market wages to recruit and retain a well -qualified workforce, staff proposes an average salary increase of 5.78%, based on survey, effective July 1, 2022. The increase provided to the classifications and the incumbent employees is 100% of the total salary increase necessary to move the salary ranges to the market average as of July 1, 2022 .
Classification s and incumbent employees with top of the range salaries that are at or above the market average as of July 1, 2022, will not receive a July 1, 2022, salary increase. All BCEA classification s and corresponding salary increases effective July 1, 2022, are listed in Column 3 of the BCEA MOU Exhibit N, pages 152- 157 ( Attachment 4).
4 To keep pace with the upward trend reflected in recently settled contracts in BCEA’s relevant markets , staff proposes an additional 3% salary increase for all BCEA classifications and incumbent employees regardless of survey , effective the pay period containing July 1, 2023 , as reflected in Column 5 of the BCEA MOU Exhibit N, pages 152 -157 ( Attachment 4).
Medical Contribution
The City of Burbank is among other public agencies in Southern California who contract with PERS to provide medical insurance to its employees. PERS increased their 2023 medical premiums an average of 6.8% over 2022, and staff calculated that PERS medical premiums have increased an average of close to 5% per year since the COVID pandemic.
Staff proposes to increase the City’s monthly maximum medical contribution by
6.8% to match PERS’ average premium increase in 2023, effective the pay period containing December 1, 2022, and to increase the City’s monthly maximum medical contribution an additional 5% effective the pay period containing December 1, 2023, as shown in Table 1, Column 2.
Table 1: BCEA Medical Contributions
Additional Benefits
The proposed MOU contains additional revisions to benefits intended to elevate or align Burbank ’s standing within its relevant market and to achieve parity among Burbank employees citywide. These revisions are detailed in both Attachment 4 (BCEA Redline MOU) and Attachment 5 (Summary of Contract Changes), and include, but are not limited to:
• Six weeks of paid Parental Leave,
• Addition of Juneteenth National Independence Day as a holiday, • Increase of the employer-paid life insurance policy to $50,000, • Increase of the maximum tuition reimbursement to 75% of the cost up to $5,000 per employee per fiscal year.
Special Pay
The proposed MOU also includes new differentials and increases to existing differentials to address recruitment and retention challenges specific to certain Column 1 Column 2
Effective 12/01/2022 Effective 12/01/2023
1 Party From $620 to $662 From $662 to $695
2 Party From $1,240 to $1,324 From $1,324 to $1,390
Family From $1,610 to $1,720 From $1,720 to $1,805
5 BCEA titles, and to incentivize employees to achieve certifications that enhance the services they provide for the C ity. These changes are detailed in both the BCEA Redline MOU ( Attachment 4) and the Summary of Contract Changes (Attachment 5) and include, but are not limited to:
• Establishment of a Collection Systems Maintenance differential , • Additional and expanded eligibility for professional certificate differentials , • Establishment of a Forensic Specialist Certificate differential , • Establishment of Peace Officer Standards Training (POST) Certification pay,
• Increases to the following existing differentials:
o Water Tr eatment/Distribution Operator Certificate,
o Mobile Crane,
o Second and T hird Shift Assignments .
Finally , the proposed MOU contains minor revisions including clean- up language, which are detailed in the BCEA Redline MOU ( Attachment 4).
ENVIRONMENTAL IMPACT
This activity has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and such as, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs §15378.
FISCAL IMPACT
The total cost of the compensation and benefit changes associated with the proposed BCEA MOU over the two- year contract period is $11,411,561 ($6,390,018 General Fund). Increases in compensation and benefits for Burbank Water & Power (BWP) employees account for approximately 31% of the total cost of the BCEA MOU, or approximately $3.5M over the two- year contract period and will not result in further rate increases for BWP customers beyond those adopted by Council as part of the Fiscal Year 2023- 24 budget.
Sufficient funds are available in the existing FY 2023- 24 General Fund budget to account for $3,319,705 of the General Fund cost, leaving a balance of $3,070,313.
Additionally, there is a non- recurring cost of $2,793,334 ($2,243,334 General Fund) for the One- Time Lump Sum Inflation and Retention payment.
To account for the remaining $3,070,313 General Fund cost of the proposed two- year BCEA MOU and the one- time lump sum payment of $2,243,334, staff is requesting Council authority to amend the FY 2023- 24 Budget by appropriating the total amount of $5,313,647 from revenue account
6 001.ND000.30010.0000.000000.00000 (General Fund, Non- Departmental, Unassigned Fund Balance) to expenditure account 001.ND01A.60018.0000. 000000.00000 (General Fund, Non- Departmental, Salaries Holding).
The ongoing fiscal impact of the changes associated with the proposed BCEA contract is $6,814,728 ($3,086,564 General Fund) per Fiscal Year, which will be incorporated into the Five- Year Financial Forecast.
CONCLUSION
The City and the BCEA have tentatively agreed to the provisions contained in the MOU (Attachment 4 ), pending Council approval. Staff recommends the Council adopt the resolution approving the BCEA MOU. Adoption of the attached resolution will support the Council’s goal of operating the City in a fiscally and managerially responsible manner and will support the Council’s adopted compensation policy to recruit and retain a well -qualified workforce to provide exceptional services to the City of Burbank.
ATTACHMENT S
Attachment 1 – BCEA MOU Resolution
Attachment 2 – Resolution Approving the City’s Salary Schedule Attachment 3 – Resolution Approving the City’s Salary Schedule Attachment 4 – BCEA Redline MOU
Attachment 5 – Summary of Contract Changes