For City Council Meeting April 9, 2024
TO: Honorable Mayor and City Council
FROM: David N. Carmany, City Manager
AUTHOR: Shama Curian, Director of Human Resources and Risk Management
Title
Consideration of a Memorandum of Understanding Establishing Compensation and Related Benefits for those Employees Represented by The Rialto City Employees’ Association (RCEA) and Corresponding Salary Schedule for the Cost-of-Living Adjustments effective July 1, 2023.
RECOMMENDATION
Staff recommends that the City Council:
Approve Resolution No. 8197 Approving the Memorandum of Understanding Establishing Compensation and Related Benefits for Employees Represented by the Rialto City Employees’ Association for July 1, 2023, through June 30, 2025; and
Approve Resolution No. 8198 Updating the Citywide Classification and Compensation Schedule for Full-Time and Part-Time Employees to Amend the Salaries for those Classifications Represented by the Rialto City Employees’ Association effective July 1, 2023.
Approve Resolution No. 8199 Amending the 2023-2024 Fiscal Year Budget for a Budget Appropriation of $346,004.
Body
BACKGROUND
The Meyers-Milias-Brown Act (MMBA) is a California state law that governs collective bargaining between local government agencies and their employees. Enacted in 1968, the MMBA provides a framework for negotiations, including procedures for selecting employee representatives, conducting negotiations, and resolving disputes. It also establishes rules for meeting and conferring with employee organizations, ensuring transparency and fairness in the collective bargaining process. The MMBA aims to promote harmonious labor relations while recognizing the rights of both public employees and government agencies.
Resolution No. 8197 establishes terms of employment and compensation for City employees represented by the Rialto City Employees’ Association (“RCEA”). Pursuant to the Meyers-Milias-Brown Act, the City met and conferred in good faith concerning wages, benefits, and working conditions with this Employee Association. The total projected cost of the agreement is $771,642 over a contract term of 2 years: Fiscal Years 2023-24 through 2024-25.
The RCEA’s previous Memorandum of Understanding (“MOU”) was in effect from July 1, 2021, through June 30, 2023.
The proposed contract is a culmination of these negotiations.
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. 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.
RCEA and City management representatives have since held a series of collaborative and productive meetings to discuss the MOU and issues raised by both parties regarding hours, wages, working conditions, and personnel policies. City representatives and the RCEA made conscious efforts to discuss terms and conditions to ensure fair compensation while working towards a common goal of long-term fiscal sustainability.
The RCEA Membership ratified the tentative agreement on March 20, 2024.
During the course of negotiations, management representatives met with the City Council to discuss the status and progress and received direction of specific items under consideration.
ANALYSIS/DISCUSSION
The most recent MOU between the City and RCEA was in effect beginning July 1, 2021, through June 30, 2023. Balancing the understanding that the City continues to compete with surrounding municipalities to attract and retain talent with the possibility of increasing costs and future economic uncertainty, the RCEA held true to their commitment to the process and worked closely with the city management representatives to reach agreements. Resolution No. 8197 reflects this commitment; the Memorandum of Understanding is a 2-year term, retroactive to July 1, 2023, through June 30, 2025. Detailed information on the most notable revisions for the MOU are included below.
Wages and Other Compensation
The proposed MOU provide for unit employees in the RCEA bargaining group to receive cost of living adjustments in each year of the contract as follows:
• July 1, 2023: 6% COLA
• July 1, 2024: 5% COLA
Only those employees who are on City payrolls at the time of ratification of this contract by the City Council will receive the retro Cost of Living Adjustment.
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.
Discussions at the table centered around those employees who use all of the available medical benefit allowance and then have additional monies coming out of their paycheck to cover the remaining balance of medical coverage. Both parties understood that any additional monies put towards medical allowance benefit will solely be used to purchase health coverage through the City’s provided plans. Employees who currently utilize the entire medical benefit allowance will have an additional $250/month medical benefit allowance to keep pace with increasing costs of health care premiums. Monies that are not used from this $250, will not go back to the employee as taxable income.
MOU Clean-Up
The proposed MOU also contains 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, RCEA and City Management had asks specific to the bargaining group such as:
• Uniform and Boot Allowance: Add EMS Coordinator and Construction Inspector to those classifications that receive uniform and boot allowance.
• Bilingual Pay: Those employees who currently receive bilingual pay will be retested one time after the ratification of the MOU. If they fail the City’s new test, the employee will have the opportunity to retest within 6 months. Bilingual Pay will cease upon failure of the test but will be reinstated should the employee pass a second time.
• Certification Pay: Employees will only receive certification pay if their certificate is related to their current position.
• 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 agreement strives 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 agreement helps 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
The proposed actions do not constitute a “project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(b), 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 resolution and approved it as to form.
FINANCIAL IMPACT
Operating Budget Impact
The agreement with the RCEA is projected to cost $771,642 for the two-year agreement, including CalPERS retirement costs and all associated costs that are tied to salary and benefit increases.
Staff is recommending that the City Council adopt a budget resolution to appropriate $346,004 from general fund reserves to cover the costs of the FY 2023 retro 6% increase. The 5% increase that will be effective July 1, 2024 will be incorporated into the upcoming Fiscal Year 2025 budget.
Capital Improvement Budget Impact
There is no impact to the Capital Improvement Budget through this action.