SIDE LETTER OF AGREEMENT
CITY OF COSTA
AND
THE COSTA MESA FIREFIGHTERS ASSOCIATION
This Side Letter of Agreement (Agreement) between the City of Costa Mesa (City) and the Costa Mesa Firefighters Association (Association) (collectively “Parties”) is entered into with respect to the following:
WHEREAS, the Parties are currently parties to a Memorandum of Understanding (MOU) with a term that expired on June 30, 2021, but was extended by a side letter (Attached hereto as Exhibit A) to expire on June 30, 2024; and
WHEREAS, the side letter in Section 3.4 provided that if any other bargaining unit in the City receives (through the labor negotiations process) an across-the-board net base salary or certification/specialty/incentive pay increase in excess of 2% (the value of the 14-day FLSA work period) that goes into effect on any date between July 1, 2022 and June 30, 2024, employees in the CMFA will receive an increase in the amount above two percent (2%) on the same effective date as the other association; and WHEREAS, based on the side letter and increases provided to other bargaining units; the following memorializes the parties’ agreement.
The Parties agree to the following modifications to their MOU effective (except as otherwise provided below) upon City Council approval of this Agreement on March 7, 2023 as reflected by the track changes to each of the articles below.
ARTICLE 3 - BASIC SALARIES AND WAGES
3.2 SALARY ADJUSTMENTS - Salary adjustments for each classification will be implemented as follows:
Increase of 2% inclusive of the pay period of January 1, 2023 Increase of 5% inclusive of the pay period of July 1, 2023
3.4 RECRUITMENT AND RETENTION INCENTIVE PAY
Recruitment and Retention Incentive Pay is compensation to incentivize Fire Department sworn employees to remain with the City of Costa Mesa.
Effective the pay period including the pay date of January 6, 2023, employees in this bargaining unit who have been employed in a full-time classification that is represented by this bargaining unit (i.e. Firefighter, Fire Engineer and Fire Captain) in a municipal, state or federal fire department or other agency (as determined by the Fire Chief) for twenty-five (25) years or more (with a maximum of 10 years in such a position outside of the City of Costa Mesa) shall receive recruitment and retention incentive pay of ten percent (10%).
Service in any classification other than Firefighter, Fire Engineer and Fire Captain will not count towards for this purpose.
The parties agree, to the extent permitted by law, the compensation in this section is special compensation and shall be reported as such pursuant to Title 2 California Code of Regulations, Section 571 and 571.1.
ATTACHMENT 3
ARTICLE 6 - RETIREMENT
6.1 A 4. Cost Sharing:
a. Employees in tier 1 subject to the 3%@50 formula pay an additional five percent for cost sharing into their employee account with PERS in accordance with Government Code section 20516(a).
Effective the pay period that includes July 1, 2023, for Classic member employees subject to the 3%@50 formula, cost sharing per Government Code section 20516(a) will be reduced by one and one quarter percent (1.25%) for a net contribution of three and three quarters’ percent (3.75%) per Government Code section 20516(a). When this three and three quarters’ percent (3.75%) is added to the employees’ payment of nine percent (9%) towards their member contribution, employees shall pay twelve and three quarters’ percent (12.75%) compensation earnable towards their pension.
a.b.Employees in tier 2 subject to the 2%@50 formula pay additional retirement contributions into their employee account with PERS as cost sharing as follows:
i. Effective at the beginning of the pay period following City Council approval of this MOU, these employees will pay three percent (3%) compensation earnable as cost sharing in accordance with Government Code section 20516(a). ii. Effective at the beginning of the pay period which includes January 1, 2018, these employees will pay two percent (2%) compensation earnable as cost sharing in accordance with Government Code section 20516(a).
Effective the pay period that includes July 1, 2023, for Classic member employees subject to the 2%@50 formula, cost sharing per Government Code section 20516(a) will be reduced by one and one quarter percent (1.25%) for a net contribution of three and three quarters’ percent (3.75%) per Government Code section 20516(a). When this three and three quarters’ percent (3.75%) is added to the employees’ payment of nine percent (9%) towards their member contribution, employees shall pay twelve and three quarters’ percent (12.75%) compensation earnable towards their pension.
6.1 B 4. Cost Sharing:
a. Employees who are defined as “New Members” by the PEPRA and who subject to the
2.7%@57 formula pay additional retirement contributions as cost sharing as follows:
i. Effective at the beginning of the pay period following City Council approval of this MOU, these employees will pay one and one quarter percent (1.25%) compensation earnable as cost sharing in accordance with Government Code section 20516(f).
ii. Effective at the beginning of the pay period which includes January 1, 2018, these employees will pay an additional one and one quarter percent (1.25%) for a total of two and one half percent (2.50%) compensation earnable as cost sharing in accordance with Government Code section 20516(f).
b. Notwithstanding subparagraph 4(a) above, subsequent to January 1, 2018, the cost share payment for PEPRA employees will fluctuate if the normal cost rate changes. If the half the normal cost rate reduces below 11.50%, the cost share (per Government Code section 20516(f) will go up so that when combined with the half the normal cost rate, the employee is paying a total of 14% for retirement. If the half the normal cost rate increases above 11.50%, the cost share (per Government Code section 20516(f) will go down so that when combined with the half the normal cost rate, the employee is paying a total of 14% for retirement. If the half the normal cost rate goes above 14%, there will be no cost share payment due from the PEPRA new member (Tier 3) employees. Rather, the employee will just pay the applicable half the normal cost rate as determined by CalPERS.
c. Effective the pay period that includes July 1, 2023, for new member employees subject to the
2.7%@57 formula, if one-half of the CalPERS’ annual normal cost rate goes below 12.75% (and it is rounded by CalPERS to the nearest one-quarter of a percent), new member employees subject to the 2.7%@57 formula shall pay the difference between the one-half of the total normal cost rate and twelve and three-quarters; percent (12.75%) of compensation earnable as cost sharing pursuant to Government Code section 20516(f). d. Effective the pay period that includes July 1, 2023, for new member employees subject to the
2.7%@57 formula, if one-half of the CalPERS’ annual normal cost rate exceeds 12.75% (and it is rounded by CalPERS to the nearest one-quarter of a percent), the City will contribute the amount above 12.75% to the deferred compensation account (per IRS Code section 457(b)) of each new member.
REPRESENTATIVES OF THE COSTA MESA REPRESENTATIVES OF THE CITY OF
FIREFIGHTERS ASSOCIATION COSTA MESA
STEVEN CATHEY LORI ANN FARRELL HARRISON
CMFA President City Manager
ALMA L. REYES
CMFA Negotiations Team Member Assistant to the City Manager __________________________________
CAROL L. MOLINA
CMFA Negotiations Team Member Finance Director
KASAMA LEE
CMFA Negotiations Team Member Human Resources Manager