2002 AGN NOV 05 I11 - Laserfiche WebLink

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Item #11 CITY OF COLTON AGENDA REPORT FOR THE COUNCIL MEETING OF NOVEMBER 5, 2002 TO: Honorable Mayor and Members of the Ci ouncil FROM: Al Holliman, Assistant City Manage SUBJECT: Approve Agreement to Modify the Respective Memoranda of Understanding (MOU) Between the City of Colton and the General Unit and Mid -Manager Employee Unit, to Incorporate the Employees' Contribution Towards the Cost of the New 2.7% @ 55 Retirement Program Plus the Change to the Term of the Contracts. Approve and Adopt Proposed Resolutions Amending R-82-01 and R-83-01. DATE: October 28, 2002 BACKGROUND: The three-year MOU with the City's General bargaining unit, represented by SBPEA, expires on June 30, 2004 and the Mid -Manager Employee MOU expires June 30, 2003. Both MOU's have a "re -opener" clause solely for purposes of negotiating enhanced California Public Employees Retirement System (CalPERS) benefits for miscellaneous employees such as the new 2.7% @ 55 plan. Because the 2.7% @ 55 plan was authorized by recent legislation, both units entered into negotiations with City Management regarding implementation of the enhanced benefit. ANALYSIS/DISCUSSION: Retirement costs paid to CalPERS are based upon rates in terms of a percentage. These rates consist of an employee share and an employer share. The cost of the 2.7% @ 55 plan is approximately 4% of the employee's base salary. This consists of a fixed 1 % amount applicable to the employee share (an increase from 7% to 8%) and an increase in the employer share estimated at 3% (currently zero %). City Management was firm in its negotiations, requiring that all employees benefiting from the 2.7% @ 55 plan must pay the 4% estimated cost. As a result, the General Unit has agreed to pay 1.5% on January 1, 2003 and an additional 2.5% on July 1, 2003. The Mid -Manager Employee Unit has requested a two-year extension/amendment to their MOU, which, again, presently expires on June 30, 2003. Terms of the proposed extension to June 30, 2005 include salary increases effective July 1, 2003 and July 1, 2004 based upon the change in the consumer price index (CPI) as of April of each year (the most recently published data). In addition, 2% longevity pay will be eliminated as a separate component of pay on July 1, 2003, but will be incorporated into base salary. It is proposed that the monthly health insurance allowance be increased by $50 on July 1, 2003 and another $50 on July 1, 2004.