Item 6-M
Council Meeting: 3/24/98 Santa Monica, CA
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Adoption of Resolution Authorizing City Manager to
Execute a Modification of the Memorandum of
Understanding between the City of Santa Monica and the
Santa Monica Firefighters, Local 1109
INTRODUCTION
This report requests that City Council adopt the attached
Resolution authorizing the City Manager to execute a modification
of the Memorandum of Understanding (MOU) between the City of
Santa Monica and the Santa Monica Firefighters, Local 1109 IAFF,
(Local 1109), to implement Government Code Section 20636(c)(4)
pursuant to Section 20691. Under the proposed modification, the
City would report to PERS as compensation earnable the monetary
value of normal contributions paid by the City on behalf of each
employee, hereinafter referred to as the EPMC. In return, there
shall be deducted from the net income of each employee the added
cost to the City resulting from paying employer and employee
retirement contributions on the EPMC.
BACKGROUND
The current Memorandum of Understanding (MOU) between the City
and Local 1109 has been in effect since July 1, 1996. Under the
terms of the MOU, Local 1109 had the option of implementing a
retirement enhancement option provided by the MOU. When it was
discovered that this option would result in an additional cost to
the City by increasing the overtime rate of pay, it was
discontinued. Local 1109 then requested that an alternate
retirement enhancement be implemented.
Implementation of Government Code Section 20636(c)(4) pursuant to
Section 20691 would result in a retirement enhancement which
would have no impact on the employee's rate of pay. Local 1109
agreed to have deducted from the net income of each employee the
added cost to the City resulting in the implementation of this
section of the Government Code.
BUDGET/FINANCIAL IMPACT
There will be no financial impact for the City as a result of the
proposed modification of the agreement between the City and Local
1109.
RECOMMENDATION
It is recommended that City Council authorize the City Manager to
execute the attached modification of the MOU between the City and
Local 1109.
RESOLUTION NO.
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA AUTHORIZING THE CITY MANAGER
TO EXECUTE A MODIFICATION OF THE MEMORANDUM OF UNDERSTANDING WITH
SANTA MONICA FIREFIGHTERS LOCAL 1109 IAFF
WHEREAS, the City administration and representatives of
the Santa Monica Firefighters Local 1109 IAFF have met and
conferred under the terms of Ordinance No. 801 (CCS) and have
reached agreement on wages, hours and other terms and conditions
of employment; and
WHEREAS, Section 2.06 of Ordinance No. 801 (CCS) of the
City of Santa Monica requires preparation of a written agreement
between the administration and employees if an agreement can be
reached; and
WHEREAS, Section 2.06 of Ordinance No. 801 (CCS)
further provides that any such agreement shall not be binding
unless and until presented to the governing body for
determination; and
WHEREAS, the purpose of the Memorandum of Understanding
is to promote and provide harmonious relations, cooperation, and
understanding between the City and the Santa Monica Firefighters
Local 1109 IAFF;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
Section 1. The City Council of the City of Santa
Monica does hereby approve and authorize the City Manager to
execute a modification of the Memorandum of Understanding
ratified by the Santa Monica Firefighters Local 1109 IAFF, a copy
of which is attached hereto.
Section 2. The City Clerk shall certify to the
adoption of this Resolution, and thenceforth and thereafter the
same shall be in full force and effect.
APPROVED AS TO FORM:
_________________________
MARSHA JONES MOUTRIE
City Attorney
MODIFICATION OF THE
MEMORANDUM OF UNDERSTANDING
BETWEEN
CITY OF SANTA MONICA, CALIFORNIA
AND
SANTA MONICA FIREFIGHTERS, LOCAL 1109 IAFF
WHEREAS, the Memorandum of Understanding between the City of
Santa Monica and the Santa Monica Firefighters, Local 1109 IAFF
(Local 1109) has been in effect since July 1, 1996; and
WHEREAS, Section 3.02 (Retirement) provides for membership
in the California Public Employees' Retirement System (PERS) for
employees represented by the Santa Monica Firefighters Local 1109
IAFF (Local 1109) and provides for the payment of the employee's
contribution to PERS by the City (referred to as Employer Paid
Member Contribution, or EPMC); and
WHEREAS, the City of Santa Monica and the Santa Monica
Firefighters, Local 1109 IAFF wish to modify Section 3.02 of the
existing Memorandum of Understanding to change the manner in
which the EPMC is reported to PERS;
NOW, THEREFORE, both parties to the Memorandum of
Understanding between the City of Santa Monica and the Santa
Monica Firefighters, Local 1109 IAFF, agree to modify the
existing Memorandum of Understanding by deleting paragraph #2 and
paragraph #3 of Section 3.02 (Retirement) and replacing them with
the following language:
Effective July 1, 1997, as allowed by Government Code
Section 20636(c)(4), the City of Santa Monica shall report to the
Public Employees' Retirement System (PERS) as compensation
earnable the monetary value of normal contributions paid by the
City on behalf of each employee covered by this MOU pursuant to
the provisions of Section 20691 of the California Government Code
(hereinafter referred to as the EPMC), as described above in this
Section. In return, there shall be deducted from the net income
of each employee the added cost to the City resulting from paying
employer and employee retirement contributions on the EPMC, which
is an amount equal to the product obtained by multiplying the
value of the EPMC by a percentage equal to 9% plus the City's
prescribed contribution rate to PERS (which is subject to annual
adjustment). For example, assume that the employee's
compensation earnable without including the EPMC is $4,000.00 per
month and the City's contribution rate to PERS is 11%. The EPMC
on $4,000.00 would be 9% of $4,000.00, or $360.00. The EPMC
would then be reported to PERS as compensation earnable. The
additional PERS contribution on the EPMC, which would be deducted
from the employee's net income, would be $72.00 per month, which
represents 20% (i.e., 9% + 11%) of the additional compensation
earnable (i.e., the EPMC) reported to PERS.
Local 1109 shall have the option to discontinue this
arrangement at any time. Immediately following the exercise of
this option, the City shall cease reporting to PERS as
compensation earnable the value of the EPMC and shall cease
withholding from the employees' net income the cost of the
additional retirement contributions, as described in the
preceding paragraph. Accordingly, the right to any future
pension increase that could result from this arrangement by
including in the employee's final compensation the value of the
EPMC is not vested and may be extinguished by Local 1109
exercising this option. Thus, the only benefit earned by an
employee for services rendered while this arrangement is in force
and effect is the right to have the value of the EPMC included in
compensation earnable reported to PERS during that particular
time period.
Except as expressly modified herein, all other terms and
conditions set forth in the Memorandum of Understanding (MOU)
between the City of Santa Monica and the Santa Monica
Firefighters, Local 1109, IAFF, as well as any other amendments
to that MOU, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this
Modification to the Memorandum of Understanding between the City
of Santa Monica and the Santa Monica Firefighters, Local 1109,
IAFF, as of the date of the adoption of this modification by City
Council.
SANTA MONICA FIREFIGHTERS CITY OF SANTA
MONICA
LOCAL NO. 1109, IAFF
By: ________________________
__________________________ John Jalili
George Menta, President City Manager
______________________
Dan Matthies, Vice President
_______________________________
Richard Kramer, Board of Directors
_________________________________
Steve Wells, Board of Directors
_____________________________
Dirk Bailey, Board of Directors
___________________________
Ken Pohill, Board of Directors
APPROVED AS TO FORM: Attest:
________________________ ____________________________
Marsha Jones Moutrie City Clerk
City Attorney