REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager to execute the 2022-2024 Memorandum of Understanding Between the City of Santa Clara and the American Federation of State County and Municipal Employees, Local 101 (Unit 6), that incorporates the terms of the Tentative Agreement
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency.
BACKGROUND
The American Federation of State, County and Municipal Employees, Local 101 (hereafter, “Unit 6”) Memorandum of Understanding (hereafter, “MOU”) expired on December 31, 2021.
Given the ongoing challenges related to the COVID-19 pandemic and the surrounding uncertainty, and its impacts on the City’s ongoing budget deficit, the City and Unit 6 engaged in discussions on a successor MOU in an effort to reduce the City’s estimated General Fund deficit. As of February 2022, the City projects a substantial General Fund ongoing shortfall of $19.6 million in FY 2023/24, which is largely the result of COVID-19 induced impacts on the City’s revenues.
As previously noted, the City of Santa Clara’s collective bargaining agreement with Unit 6 expired on December 31, 2021. The City and Unit 6 began negotiations on a successor MOU in August 2021 and met approximately fourteen (14) times. As the parties were unable to reach agreement during negotiations and reached impasse, the City and Unit 6 engaged in mediation beginning in January 2022 and met with the mediator approximately six (6) times. Two mediator’s recommendations for settlement were not ratified by Unit 6 membership. After the conclusion of the mediation process, the City adopted a majority of the mediator’s recommendation for settlement in a package proposal provided to Unit 6 which Unit 6’s membership also rejected. On or about April 28, 2022, Unit 6 provided a counter proposal which the City accepted, and the City and Unit 6 reached a Tentative Agreement on the overall terms of a successor MOU. The Tentative Agreement was ratified by Unit 6 membership on or about April 28, 2022.
DISCUSSION
The recommended action authorizes the City Manager to execute a successor Memorandum of Understanding with a term of January 1, 2022, through and including December 31, 2024, that incorporates the terms of the Tentative Agreement reached between both parties.
The following is a summary of the notable provisions of the Tentative Agreement, and a complete copy of the Tentative Agreement is attached:
Term:
January 1, 2022 - December 31, 2024
Wages:
Effective the first pay period of calendar year 2022, all salary ranges in classifications assigned to Unit 6 shall remain status quo.
Effective the first pay period of calendar year 2023, all salary ranges for employees holding positions in classifications assigned to Unit 6 shall be increased by approximately 5.0%.
Effective the first pay period of calendar year 2024, all salary ranges for employees holding positions in classifications assigned to Unit 6 shall be increased by approximately 4.0%.
One-Time Non-Pensionable Discretionary Cash Payment:
In recognition of, and to help secure the employees' speedy ratification of this MOU, the City has exercised its discretion to provide a one-time discretionary cash payment of $5,000 for regular employees (pro-rated for part-time employees) in the bargaining unit following Council approval of this MOU. The Parties intend and understand that this lump sum payment is non-pensionable and will not be reported to CalPERS. An employee must be employed in a classification assigned to Unit 6 at the time the one-time discretionary cash payment is made to receive the payment.
Healthcare:
Effective January 1, 2023, the City will pay 100% of the premium of the lowest priced Kaiser (Region 1) plan for employees in Unit 6 enrolled at the Employee Only and Employee Plus One levels, and 90% of the premium of the lowest priced Kaiser (Region 1) plan for employees in Unit 6 enrolled in the Employee Plus Two or More level. Employees who select a plan whose premium exceeds the City contribution described above will be responsible for the difference. Employees will not receive any portion of the City’s contribution as cash or any other taxable benefit.
Current employees hired on or before December 31, 2022, who choose not to enroll in a City health plan and meets the requirements set forth in the MOU shall continue to receive a cash-in-lieu amount equal to $946.86/month, while employees hired or rehired on or after January 1, 2023, shall receive a cash-in-lieu amount of $250/month.
Personal Safety Equipment and Raingear:
The non-pensionable flat dollar amount received annually by employees in Unit 6 for personal safety equipment and raingear shall be increased from $400 to $600.
Holidays:
Employees shall be entitled to paid time off equivalent to the number of hours of their regularly assigned shift for City holidays.
Grievance Procedure:
The MOU’s grievance procedure was updated to provide for a deadline from when the grievance should be filed. The grievance procedure was also amended to make an arbitrator’s decision at Step 5 final and binding on the parties whereas previously an arbitrator made an advisory opinion to the City Manager. The parties will continue to split the costs associated with arbitration.
Juneteenth:
The parties reached a Side Letter Agreement to continue discussions related to the Juneteenth holiday.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
The City regularly budgets the total compensation cost for its current employees and integrates known and projected cost increases from MOUs in the City’s annual budget. The ten-year forecast also incorporates the projected labor costs. The costs of this MOU are within budget authority approved by the City Council through the negotiation process.
The chart below reflects the estimated changes in costs in the General Fund as well as all funds over the term of the MOU. The ongoing costs will be factored into the budget and the General Fund ten-year forecast. Over the contract period, the ongoing costs total $1.4 million, of which $862,000 is in the General Fund. The cost of the one-time non-pensionable discretionary cash payment is $665,000, of which $413,000 is in the General Fund. There are sufficient General Fund expenditure savings in fiscal year 2021/22 to absorb these one-time costs.
|
Item |
Description |
Estimated General Fund Cost |
Estimated All Funds Cost |
|
Ongoing Items |
|
Wages (Jan. 2022) |
0% increase |
$0 |
$0 |
|
Wages (Jan. 2023) |
5.0% increase |
$459K |
$749K |
|
Wages (Jan. 2024) |
4.0% increase |
$386K |
$630K |
|
Personal Safety Equipment & Raingear (non-pensionable) |
Increase from $400 to $600 annually |
$17K |
$27K |
|
Total Ongoing |
|
$862K |
$1,406K |
|
One-time Items |
|
Non-Pensionable Discretionary Cash Payment (2022) |
$5,000 per employee (one-time) |
$413K |
$665K |
|
Total One-time |
|
$413K |
$665K |
The costs associated with the changes to healthcare cannot be determined at this time as the City cannot predict enrollment behavior, especially with the change to the City paying 90% of the lowest priced Kaiser (Region 1) premium for employees who enroll in Employee Plus Two or More level and the change to the health in-lieu amount.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>, or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Authorize the City Manager to execute the Memorandum of Understanding between the City of Santa Clara and the American Federation of State County and Municipal Employees, Local 101 (Unit 6) with effective dates of January 1, 2022 - December 31, 2024, that incorporates the terms of the Tentative Agreement.
Staff
Reviewed by: Aracely Azevedo, Director of Human Resources
Approved by: Rajeev Batra, City Manager
ATTACHMENTS
1. Tentative Agreement between the City and Unit 6 dated April 28, 2022
2. Updated Memorandum of Understanding between the City and Unit 6 in Track Change
3. Updated Memorandum of Understanding between the City and Unit 6