1 STAFF REPORT
DATE: May 7 , 2024
TO: Justin Hess, City Manager
FROM: Betsy McClinton, Management Services Director
SUBJECT: Adoption of a Resolution Approv ing a Letter of Agreement Between the City of Burbank and the Burbank City Employees ’ Association Regarding a 3 -12 Schedule Special Compensation Correction
RECOMMENDATION
Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK
APPROVING A LETTER OF AGREEMENT BETWEEN THE CITY OF BURBANK AND THE BURBANK CITY EMPLOYEES ’ ASSOCIATION .
BACKGROUND
The California Public Employees Retirement System (CalPERS) offers a defined benefit retirement plan that is available to most City of Burbank (City) employees, including employees represented by the Burbank City Employees’ Association (BCEA ). Retirement benefits are calculated based on a member’s years of service, age, and final c ompensation . CalPERS defines final compensation as the highest average annual compensation received during a consecutive 12 - or 36 - month period of employment, depending on the employee’s collective bargaining agreement or employer contract.
Certain special compensation above and beyond base salary, such as regularly scheduled overtime pay, is included in the calculation of final compensation if the special compensation meets certain requirements specified in California retirement law. Governm ent Code (GC) § 20636(c) exclusively identifies and defines special compensation items, and California Code of Regulations (CCR) § 571 (a) and (b) outline the requirements for special compensation to be included in the calculation of final compensation .
BCEA employees in the Police Department ’s Communications Center, Jail, and Records Center have consistently worked a 3-12 schedule that mimic s the schedule of sworn Police safety employees, which includes three 12.33 -hour
2 shifts per week and one 12-hour shift once every four weeks. The schedule results in employees working 40 hours on average across the four -week period . However, the 3 -12 schedule generate s regularly scheduled overtime for the 3 -12 BCEA employees in the week they work the additio nal 12 -hour shift . To memorialize the regularly scheduled overtime, Article VIII, § A.4.B.6 - Overtime was added to the BCEA MOUs adopted by Council on December 8, 2020, and August 22, 2023 .
At the time the new section was added to the MOUs, both the City and BCEA agreed that the regularly scheduled overtime generated by the 3 -12 schedule was intended to meet the definition of special compensation under retirement law and would therefore be included in the calculation of final compensation used to dete rmine retirees’ pension amounts .
Since the adoption of the two previous MOUs, CalPERS determined that the language in Article VIII, § A.4.B.6 - Overtime is insufficient and does not meet the requirements of GC § 20636(c) and CCR § 571 (a) and (b) . As such, the final compensation calculation for some current retirees does not include the regularly schedule d overtime and their pensions have been lowered as a result. Future retirees’ pensions will also be impact ed if the language in the two previous MOUs is not corrected.
DISCUSSION
To ensure that the MOU language complies with GC § 20636 and CCR § 571 (a) and (b) , the City and BCEA have tentatively agreed to execute a letter of agreement that revises the current and preceding BCEA MOUs, pending Council approval . The tentatively agreed -upon revisions are necessary to ensure that :
• The regularly scheduled overtime created by the 3 -12 schedule is counted as special compensation in the calculation of final compensation for retirees ;
• Pensions are calculated accurately in the future ; and • Current retirees whose pensions have been impacted are made whole.
CalPERS requires that Council publicly approve and adopt the letter of agreement between the City and BCEA . The modifications to the MOUs are shown (in redline ) in the letter of agreement between the City and BCEA (Attachment 1, Exhibit A ).
ENVIRONMENTAL REVIEW
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.
3 FISCAL IMPACT
There is no fiscal impact to the City; t he modifications to the BCEA MOUs as set forth in the letter of agreement between the City and BCEA are for clarification purposes only .
CONCLUSION
The City and the BCEA have tentatively agreed to the revisions contained in the letter of agreement to revise MOU language pertaining to BCEA employees with a 3 -12 schedule , pending Council approval. Staff recommends Council adopt the resolution approving the revisions to the BCEA MOUs dated July 1, 2022 – June 30, 2024 , and December 1 3, 202 0 – June 30, 202 2, which will ensur e the pensions of BCEA members are calculated as intended , retroactively and on a prospective basis .
ATTACHMENT
Attachment 1 – Resolution