For City Council Meeting May 28, 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 1) Adopt Resolution No. 8231, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Rialto Fire Management Association; and
2) Adopt Resolution No. 8232, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Rialto Police Benefits Association - Management Employees; and
3) Adopt Resolution No. 8233, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Rialto Professional Firefighters’ Association Local 3688; and
4) Adopt Resolution No. 8234, Approving Compensation and Related Benefits for Executive Management and Unrepresented Employees; and
5) Adopt Resolution No. 8235, Approving Side Letter Agreements with Rialto City Employees’ Association; and
6) Adopt Resolution No. 8236, Updating the Citywide Classification and Compensation Plan for Full-time and Part-time Employees; to Amend the Salaries for those Classifications Represented by the Rialto Fire Management Association, the Rialto Police Benefits Association- Management Unit, the Rialto Professional Firefighters’ Association Local 3688, the Executive and the Unrepresented Management Employees
7) Approve Resolution No. 8237, Amending the 2023-24 Fiscal Year Budget for a Budget Appropriation of $1,190,270
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council:
1) Adopt Resolution No. 8231, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Rialto Fire Management Association; and
2) Adopt Resolution No. 8232, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Rialto Police Benefits Association - Management Employees; and
3) Adopt Resolution No. 8233, Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Rialto Professional Firefighters’ Association Local 3688; and
4) Adopt Resolution No. 8234, Approving Compensation and Related Benefits for Executive Management and Unrepresented Employees; and
5) Adopt Resolution No. 8235, Approving Side Letter Agreements with Rialto City Employees’ Association; and
6) Adopt Resolution No. 8236, Updating the Citywide Classification and Compensation Plan for Full-time and Part-time Employees; to Amend the Salaries for those Classifications Represented by the Rialto Fire Management Association, the Rialto Police Benefits Association- Management Unit, the Rialto Professional Firefighters’ Association Local 3688, the Executive and the Unrepresented Management Employees
7) Approve Resolution No. 8237, Amending the 2023-24 Fiscal Year Budget for a Budget Appropriation of $1,190,270
SUMMARY
Resolution Nos. 8232, 8233, 8234, 8235, 8236, 8237, establish terms of employment and compensation for City employees represented by the Rialto Fire Management Association (“RFMA”), the Rialto Police Benefit Association- Management Unit (“RPBA-M”), and the Rialto Professional Firefighters’ Association Local 3688 (“Local 3688”) respectively. Additionally, the City Council establishes by Resolution the salaries and benefits for classifications that are not represented by an employee association or union. Similar to adjustments to these Memoranda of Understanding, this action seeks City Council authorization to implement adjustments the Unrepresented and Executive groups as outlined in Resolution No.____.
It is recommended that the City Council adopt these resolutions, adopt the resolution to update the Classification and Compensation Plan for full-time and part-time employees, adopt the resolution approving the side letter agreements for RCEA, and adopt the resolution that amends the FY 2023-24 budget for a budget appropriation of $1,190,270.00
BACKGROUND
The RFMA, RPBA-M, and the Local 3688 Associations’ previous Memoranda of Understanding expired on June 30, 2023. Negotiations began later than expected due to the Salary and Compensation Survey; discussions with the 5 Associations and 1 Union on the Survey took longer than expected. Both City representatives and the Associations then initiated a focused negotiation process which called for commitment from both sides to have as many meetings as possible in an attempt to reach an agreement. City representatives and the Association groups partnered together to ensure fair compensation while working towards a common goal of long-term fiscal sustainability.
The City continues to take necessary steps to meet current and future challenges, including continually shifting economic factors, increases to retirement costs, and changing demographics. These issues, along with the ability to provide competitive, fair-market wages, was the tenor of the negotiation meetings that began in earnest in late September/early October 2023. The Associations and City management representatives have since held a number of collaborative and productive meetings to discuss the MOUs 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
Balancing the understanding that the City continues to compete with surrounding municipalities to attract and retain talent with the possibility of future economic uncertainty, the respective negotiation members held true to their commitment to the process and worked closely with the city management representatives to reach agreements. The resolutions ratified the attached MOUS reflect this commitment. The Memoranda of Understanding are 2-year terms commencing retroactively to July 1, 2023, and expiring on June 30, 2025. The memberships of each association have since voted to accept the City’s offer to their respective group. Detailed information on the most notable revisions for the MOUs and unrepresented groups are included below.
Wages, and Other Compensation
The proposed MOUs provide for members in the RFMA, RPBA-M, Local 3688, and Unrepresented/Exec group to receive cost-of-living adjustments in each year of the contracts as well as a one-time bonus of $1,610.00 for each member in each of the units. The cost-of-living adjustment percentages and the additional employee bonuses are outlined below:
Executive management and unrepresented management employees receive compensation and benefit adjustments through a City Council adopted resolution. Historically these compensation and benefit adjustments are in concert with other employee association agreements.
Additionally, The Rialto City Employees’ Association recently ratified their successor MOU on April 9, 2024. The City Council recognized that the one-time bonus was not discussed with this bargaining group, and as such, wanted to provide the same bonus amount of $1,610.00 to all unit members this will total $162,610.
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 Labor representatives prioritized this as a significant part of MOU negotiations. After much discussion, the RFMA, RPBA-M, and Local 3688 agreed to the following terms for their respective MOUs. The proposed MOUs allow for a $250 increase to the medical benefit allowance to keep pace with increasing costs of health care premiums. The MOUs currently have 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 respective MOUs and do not utilize the entire benefit allowance are not eligible to receive unused portions back as taxable income. Additionally, the Side Letter agreement with RCEA will modify their current language for cafeteria cash allowance similar to these agreements.
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.
Miscellaneous/ Incidental Items
As part of the negotiation process, RFMA, RPBA-M, and Local 3688 each had asks specific to their bargaining groups. These monetary items are listed below.
• Local 3688: The Association has non-sworn unit members that haven’t received similar benefits to that of their sworn counterparts in the group. The representatives for the group strived to change this by providing similar deferred compensation benefits across the group. Non- sworn unit members who have 5-9 years with the City of Rialto will now receive $100/month placed into their deferred compensation. Those with 10+ years will receive $500/month into their deferred compensation. The association also requested similar levels of employee life insurance and long-term disability coverage that other groups receive. The City will continue to pay the premiums towards these coverages.
• RPBA-M: Those sworn and non-sworn unit employees will receive a 5% fitness incentive for passing an annual fitness test with requirements based on the Cooper Standard Test. The testing will be conducted annually, and the employees will have to pass the test each year to continue to receive the benefit. Additionally, those Sergeants who are affected by the Standby provisions will now receive compensations specific to the days on standby, subject to the terms and limitations stated in the MOU.
• Unrepresented Management: Those employees in the Management Unrepresented group (not the executive) will receive Longevity pay on a sliding scale dependent upon years of service. Those employees with 5-9 years of cumulative service will receive 3% of base salary. Those with 10+ years of service will receive 6% of base salary.
• Vacation and Sick Leave Cash-out: limit employee’s cash-out of sick and vacation leaves 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.
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 Agreements with RFMA, RPBA-M, Local 3688, and Unrepresented/Executive Management are projected to cost $1,760,499 for the two-year agreement, including CalPERS retirement costs and all associated costs that are tied to salary and benefit increases.
The 2-year cost detail by associations are as follows:
|
ASSOCIATIONS |
TOTAL COST OF 2-YEAR AGREEMENT |
|
RFMA |
$ 161,681 |
|
RPBA-M |
$484,169 |
|
Local 3688 |
$707,340 |
|
Unrep. and Exec. |
$407,309 |
|
TOTAL |
$1,760,499 |
A budget appropriation of $1,190,270.00 is needed to cover the costs of the 2023 FY. This is for the 6% COLA to equal $829,630 for the groups mentioned above, plus $360,640 for the one-time bonus for the groups above including RCEA.
The costs for FY 2024-25 will be incorporated into the budget.
Capital Improvement Budget Impact
There is no impact to the Capital Improvement Budget through this action.