REPORT TO COUNCIL
SUBJECT
Title
Approve the 2017-2020 Memorandum of Understanding between the City of Santa Clara and American Federation of State, County and Municipal Employees (AFSCME) Local 101
Report
BACKGROUND
The Memorandum of Understanding (MOU) between the City and AFSCME (Unit 6) expired on December 16, 2017. The City and AFSCME Unit 6 came to a tentative agreement on a three year successor MOU on March 8, 2018. Unit 6 voted to approve that successor MOU on March 15, 2018.
DISCUSSION
This report recommends approval of the successor MOU, which, if approved by the City Council, will be in effect from December 17, 2017 through and including December 26, 2020.
The significant provisions of the new MOU are as follows:
Wages
• 3% wage increase retroactive to December 17, 2017
• 1% wage increase effective December 16, 2018
• 2.5% wage increase effective December 15, 2019
Holidays
Four additional non-permanent paid holidays for 12/26/17, 12/27/17, 12/28/17, and 12/29/17; four additional non-permanent paid holidays for 12/26/18, 12/27/18, 12/28/18, and 12/31/18; and four additional non-permanent paid holidays for 12/26/19, 12/27/19, 12/30/19 and 12/31/19. Employees who used leaves for the days or hours on and between 12/26/17 and 12/29/17 will receive banked days or hours off which must be used in 2018. These non-permanent paid holidays will only be for these three MOU years.
California Public Employees’ Retirement System (CalPERS)
The City and Unit 6 agreed that if CalPERS should implement a change in its actuarial methodology (i.e. assumed discount rate, smoothing methodology, demographic assumptions, etc.) which change would have a material impact on the City’s employer contribution, the City and AFSCME agree to meet and confer regarding this change and its impacts.
Medical
• Incorporate the Affordable Care Act Side Letter between the City and Unit 6 executed on September 28, 2017. This Side Letter modified the prior MOU language to conform the City's health contributions and MOU provisions to IRS requirements under the Affordable Care Act.
• Effective retroactive to January 1, 2018, a $200 per month increase in City contributions to premiums for employees that enroll in a City health plan, to $1,182 per month.
• Effective June 1, 2018, increase the City's monthly contributions to premiums for employees that enroll in a City health plan to an amount equal to the two-party Kaiser rate of $1,564.87 per month.
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 primary cost impact is in the wage increase of 3% the first year, 1% for the second year and 2.5% for the third year. These wage increases over the MOU period amount to approximately $2,405,000 million for all funds ($1,491,000 in the General Fund). Additionally for those that enroll in health insurance coverage, the City will contribute an additional $200 per month through May 2018. This cost will increase effective June 1, 2018 to reflect health insurance coverage of two-party Kaiser Health Plan or $1,564.87 per month. The projected cost increase of this health benefit is approximately $1,540,000 for all funds ($955,000 in the General Fund) over the three year MOU term. The total cost for the successor MOU over its three year term is approximately $3,945,000 with 62% (or $2,446,000) of expenses in the City’s General Fund. The increased cost for FY 2017/18 will be absorbed within existing department appropriations primarily due to expenditure savings related to vacancies. The FY 2018/19 Recommended Budget will include the negotiated salary and special pay increases.
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
Approve and authorize the City Manager to execute the Memorandum of Understanding between the City of Santa Clara and AFSCME Local 101 (Unit 6) 2017-2020.
Staff
Prepared by: Julia Hill, Interim Director of Human Resources
Reviewed by: Angela Kraetsch, Director of Finance
Reviewed by: Walter C. Rossmann, Chief Operating Officer
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. MOU AFSCME Local 101 (Unit 6) 2017-2020 - final version
2. MOU AFSCME Local 101 (Unit 6) 2017-2020 - redline version