For City Council Meeting July 23, 2024
TO: Honorable Mayor and City Council
FROM: G. Michael Milhiser, Interim City Manager
BY: Shama Curian, Director of Human Resources and Risk Management
Title
Request City Council to Adopt Resolution No. 8273, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Teamsters Mid-Management and Confidential Employee Union; and
Adopt Resolution No. 8274 Updating the Citywide Classification and Compensation Plan for Full-time and Part-time Employees; to Amend the Salaries for those Classifications Represented by the Teamsters Mid-Management and Confidential Union; and
Adopt Budget Resolution No. 8275 Amending the 2024-25 Fiscal Year Budget for a Budget Appropriation of $291,520.
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council:
Adopt Resolution No. 8273, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Teamsters Mid-Management and Confidential Employee Union; and
Adopt Resolution No. 8274 Updating the Citywide Classification and Compensation Plan for Full-time and Part-time Employees; to Amend the Salaries for those Classifications Represented by the Teamsters Mid-Management and Confidential Union; and
Adopt Budget Resolution No. 8275 Amending the 2024-25 Fiscal Year Budget for a Budget Appropriation of $291,520.
SUMMARY
The recommended resolutions establish terms of employment and compensation for City employees represented by the Teamsters Mid-Management and Confidential Union (“TMMU”). Pursuant to the Meyers-Milias-Brown Act, the City has met and conferred in good faith concerning wages, benefits, and working conditions with the TMMU. The total projected cost of the agreement is $588,520.
It is recommended that the City Council adopt the resolution to approve the successor Memorandum of Understanding with the TMMU, adopt the resolution to update the Classification and Compensation Plan for full-time and part-time employees, and adopt the resolution that amends the FY 2024-25 budget and accounts for the FY 2023-24 budget for a budget appropriation of $291,520.
BACKGROUND
The TMMU is a recognized employee union that currently includes a total membership of 32 mid-management and confidential personnel who work within various departments in the City. The previous TMMU Memorandum of Understanding was in effect from July 1, 2021, through June 30, 2023.
At the onset of bargaining, the City’s negotiating team made its intentions understood that the City must continue to meet current and future challenges, including continually shifting economic factors, increases to retirement costs, and changing demographics. Negotiations centered around these issues, along with the ability to provide competitive, fair-market wages commensurate to Rialto’s relevant market. The Union and City management representatives have since held a number of meetings to discuss the MOU and issues raised by both parties regarding hours, wages, working conditions and personnel policies.
During the course of negotiations, management representatives met with the City Council to discuss the status and progress and received direction on specific items under consideration.
ANALYSIS/DISCUSSION
Negotiations with TMMU began in earnest in April of this year. While there were 3 meetings in November 2023, TMMU requested to hold off further negotiations until they had all their proposals ready. Since April, the City’s negotiating team and the TMMU held a number of meetings in an attempt to reach a tentative agreement that would be beneficial to both the TMMU members and the City. The resolutions attached reflect the culmination of these meetings. The Memorandum of Understanding is based on a 2-year term, commencing retroactively to July 1, 2023, and expiring on June 30, 2025. The TMMU membership have since voted to accept the proposed terms and conditions for their successor MOU.
Detailed information on the most notable revisions for the MOU are included below.
Wages, and Other Compensation
The proposed MOUs provide for members in the TMMU group to receive cost-of-living adjustments in each year of the contract as well as a one-time bonus of $1,610.00, subject to federal and state taxes, for each member in their unit. The cost-of-living adjustment percentages and the additional employee bonuses are outlined below:
Medical Benefit Allowance and Cash-In-Lieu
The City of Rialto is among other public agencies in Southern California who contract with CalPERS to provide medical insurance to its employees. These Cities also provide employees with a medical benefit allowance to purchase medical, dental, and/or vision insurance through City provided carriers such as CalPERS. Recognizing that CalPERS medical plan costs continue to increase (2024 plan year saw an average of 11% increase from the last year), and that there are available group coverages outside City-provided plans, many agencies have also commonly offered cash-in-lieu options as an available alternative for employees who take group health coverage outside their place of work. This option also includes taking cash as taxable income for those or do not entirely use their health benefit allowance.
City management representatives and the TMMU representatives prioritized this as a significant part of MOU negotiations. After much discussion, the TMMU agreed to the following terms for their successor MOU. The proposed MOU allows for a $250 increase to the medical benefit allowance to keep pace with increasing costs of health care premiums. The MOU currently has provisions in place to ensure on-going efforts to reduce the Total Plan Payments of the cash-in-lieu. Those employees hired after dates established in their MOU and do not utilize the entire benefit allowance are not eligible to receive unused portions back as taxable income.
MOU Clean-Up
The proposed MOUs also contain a few revisions to comply with updated laws and clean-up language to accurately reflect current practices and procedures. These MOU items were proposed by City Management to streamline, simplify, and modernize the document.
The City also worked with TMMU to limit the vacation and sick leave cash-out to only twice a year and only up to what they can accrue in that year. Employees will have to sign an irrevocable designation in the preceding tax calendar year electing the amount that they will cash out.
With the Annual 2023 Consumer Price Index increase for Urban Wage Earners and Clerical Workers in the Riverside/San Bernardino/Ontario region being about 5%, along with the annual average increase in medical premiums of 11%, the proposed agreements strive to provide a compensation package that keeps up with expected inflation, allows the City to remain competitive in the current labor market pool, but also preserves the City’s financial position to react to potential future budget challenges.
The proposed agreements help align the City’s workforce strategies with its business and service goals and represent a fair and equitable contract for the employees and the City.
Reclassifications through the FY 2025 Budget Process
Additionally, as part of the 2024-25 Budget process, there were a few reclassifications that need to be added to the updated Classification and Compensation Plan effective July 1, 2024. The reclassifications are as follows:
• Reclassified the Director of Maintenance and Facilities to the Director of Public Works
• Reclassified the Director of Engineering to City Engineer
• Creation of one Full-time Day Care Site Supervisor.
The attached Resolution and Classification and Compensation Plan reflect these reclassified positions.
ENVIRONMENTAL IMPACT
This request is not a Project as defined by Section 15378 of the California Environmental Quality Act (CEQA) Guidelines. A “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Pursuant to Section 15378 (b)(5), a project does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
This action is consistent with Guiding Principle 3A in the General Plan:
“Our City government will lead by example, and will operate in an open, transparent, and responsible manner that meets the needs of the citizens and is a good place to do business.”
LEGAL REVIEW
The City Attorney has reviewed the resolutions and approved them as to form.
FINANCIAL IMPACT
Operating Budget Impact
The 2-year Agreement with the Teamsters Mid-Management and Confidential Union is projected to cost $588,520 including CalPERS retirement costs and all associated costs that are tied to salary and benefit increases.
A budget appropriation of $291,520 is needed to cover the retro increase from the previous year in addition to the one-time Bonus Pay.
Capital Improvement Budget Impact
There is no impact to the Capital Improvement Budget through this action.