DATE: June 25, 2024
TO: Mayor and City Council
FROM: Director of Human Resources
SUBJECT: Adopt a Resolution Approving the Memorandum of Understanding (“MOU”) between the City of Hayward and the Hayward Fire Chiefs’ Association (“HFCA”) and Authorizing Staff to Execute the Agreement
RECOMMENDATION
That the Council adopts a resolution (Attachment II) approving the MOU between the City of Hayward and the HFCA for the period beginning July 1, 2024 through June 30, 2029, and authorizing the City Manager to execute the MOU.
SUMMARY
The MOU with HFCA expires on June 30, 2024. The proposed resolution (Attachment II) will allow the City Manager to execute an agreement with HFCA for the term beginning on July 1, 2024 through June 30, 2029. The City entered negotiations with HFCA on March 6, 2024, the parties reached a tentative agreement and HFCA ratified the agreement on May 2, 2024. The new agreement will grant members the ability to participate in a retiree medical trust benefit, and receive longevity pay benefits. The successor MOU has also been updated to reflect previously agreed upon modifications to the original MOU contained in side letter agreements and extending the term of the original contract. Additionally, HFCA has agreed to decrease the base rate differential between the classification of Deputy Fire Chief and the Fire Marshal classification from fifteen percent (15%) to ten percent (10%).
BACKGROUND AND DISCUSSION
The City of Hayward has worked hard to continue to provide quality services to the community and preserve employee benefits while taking significant steps toward attaining fiscal sustainability. While the City is experiencing positive economic improvement in many of its key General Fund revenues, such as Property Tax and Sales Tax, the City continues to experience an unprecedented rise in employee benefit costs, particularly pension and healthcare costs. These increases will make it even more challenging for cities to fund ongoing operations and services to the communities we serve while continuing to provide our employees with sustainable retirement and quality healthcare benefit options. The City has partnered with employees who have stepped up to help address the budget gap by reducing expenses related to salaries and benefits such as sharing the cost of benefits including retirement and medical. Like other bargaining units, HFCA members have partnered with the City and helped to reduce personnel expenses through contributions toward the cost of retirement benefits and waiving and delaying salary increases during past contract negotiations. The new agreement will grant benefit adjustments; and employees will also continue to contribute fifteen percent (15%) toward their California Public Employees’ Retirement System (CalPERS) costs and a one percent (1%) contribution towards Other Post-Employment Benefits (OPEB) costs.
The membership was particularly interested in modifications to the agreement to ensure the benefits afforded under the MOU remain competitive in comparison with benefits provided to Local 1909 and other IAFF locals in the Bay Area to encourage employees in said groups to apply for the promotional opportunity of Deputy Fire Chief.
The MOU will allow members to participate in a retiree medical trust benefit, Medical Expense Reimbursement Plan (MERP) and receive a longevity pay benefit mirroring that of the Local 1909 unit.
The successor MOU will also decrease the required fifteen percent (15%) differential between the classification of Deputy Fire Chief and Fire Marshal, the highest paid classification represented by Local 1909, to ten percent (10%). Other MOU changes are generally administrative and include language changes to reflect changes in law and policy.
Key provisions of the amended agreement are summarized in Table 1 below.
Table 1 – Key proposed Changes
MOU Section
Updated Language
Effective Date
MOU Clean-up Language
MOU clean-up language through out
July 1, 2024
5.12 Other Post Employment Benefits
5.13 Retirement Medical Benefit
5.13 Retirement Medical Benefits, Subsection D., Vacation Leave Transfer Participate in Retiree Medical Trust in lieu of supplemental retirement benefit previously established; establish monthly employee contribution based on years of service and monthly employer contribution to Trust or 401(a) of $508.30 based on years of service. During term of this MOU only the City to make lump sum contributions to certain qualified employees to reach calculated benefit level of $508.30/month.
Adding vacation transfer option. Up to 120 hours of accrued vacation leave can be transferred into the Retiree Trust account under qualifying circumstances. Employees who are exempt from Trust contributions may receive cash payment for the vacation in lieu of transfer.
July 1, 2024
6.14 Salaries
The base rate for the classification of Deputy Fire Chief shall be ten (10%) greater than the base rate for Fire Training Officer and Fire Marshal.
July 1, 2024
10.01 Bereavement and Reproductive Loss Leave
Increase bereavement leave from 3 days to 5 days.
Add Reproductive Loss Leave. Reproductive loss events include failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproductive. Employees are allowed a maximum of twenty (20) days for reproductive loss in a twelve (12) month period if multiple events of reproductive loss occur. Full-time employees may utilize the initial three (3) paid workdays plus two (2) unpaid workdays for an initial event. The remaining seventeen (17) allowable reproductive loss days are unpaid.
July 1, 2024
12.01 Fire Education Incentive Program
Remove language referencing 5 year employment requirement.
July 1, 2024
12.03 Longevity Pay
Include longevity pay as follows:
15 years – 2%
16 years – 3%
17 years – 4%
18 years – 5%
19 years – 6%
20 years – 7%
21 years – 8%
22 years – 9%
23 years – 10%
24 years – 11%
25 years – 12%
continuous service pay not to exceed 12%
July 1, 2024
13.08 Duration
5-year term:
July 1, 2024 – June 30, 2029
July 1, 2024
FISCAL IMPACT
The proposed changes result in an estimated additional expedediture in the General Fund of approximately $240,093 over the contract term. Budget adjustments will be included in the FY 2025 mid-year budget process.
STRATEGIC ROADMAP
This agenda item is a routine operational item and does not relate to one of the Council’s Strategic Roadmap.
NEXT STEPS
If adopted, Human Resources staff will finalize the MOU, the City Manager will execute the MOU, and the Finance Department will implement the above changes in coordination with HR.
Prepared by: Marisa Guerrero, Human Resources Manager
Recommended by: Brittney Frye, Director of Human Resources Approved by:
______________________________________
Dustin Claussen, Interim City Manager