TITLE
Recommendation to adopt resolution approving the Amendment to the 2009-2014 Memoranda of Understanding with the Long Beach Police Officer's Association; and
DISCUSSION
City management representatives and representatives of the Long Beach Police Officer's Association (LBPOA) have had a number of meet and confer sessions regarding the financial impacts of the Fiscal Year 2012 (FY 12) budget. Meetings have been concluded and an amendment to the Memorandum of Understanding (MOU) has been jointly executed with representatives of the employee organization.
The major provisions of the Amendment ( attached) are agreement to an additional seven percent (7%) CalPERS pick-up in FY 12, representing one hundred percent (100%) of the employee's share; agreement to full CalPERS pick-up for new City employees; and agreement to a lower retirement formula of two percent (2%) at fifty (50) and three-year average final compensation for new employees represented by the Association.
Pursuant to the Amendment and pending approval of the Resolutions, effective October 8, 2011, employees represented by the LBPOA shall contribute an amount equal to nine percent (9%) of their annual salary towards their individual employee contribution. The Resolutions also provide that new City employees represented by this Association hired on or after October 8,2011, shall pay one hundred percent (100%) of the normal member contri bution.
In order for the City to make changes to the employer paid member contribution, it is necessary for the City Council to adopt the attached Resolutions as prepared by the City Attorney.
This matter was reviewed by Senior Deputy City Attorney Christina L. Checel and Budget Management Officer Victoria Bell on September 12, 2011.
TIMING CONSIDERATIONS
City Council action is requested on September 20, 2011 to implement the MOU Amendment provisions and to ensure that CalPERS receives the EPMC Resolution for processing consistent with the effective date of the action.
FISCAL IMPACT
Over the term, this amendment will save the city $16.6 million, not including the savings related to the changes to the pension plan for new POA members. In the last year of the contract, the savings is expected to be $6.1 million and is expected to continue annually at that amount thereafter. These savings do not include the long-term savings due to changes to the pension plan for new employees.
Through FY 22, the agreement is projected to save the City's General Fund at least $69 million including $16 million from pension plan reductions for new POA members. Depending on the level of salary increases and hiring through FY 22, as previously reported through actuarial analysis, the savings could exceed $100 million.
The total one-time cost of this agreement is $2.575 million - $1.575 million for advancement of pay increase and $1 million for a requirement that the City potentially use up to that amount in FY 12 (only) to provide additional funding to the Police Department, if needed, to avoid police officer layoffs. Attrition is anticipated to accomplish the FY 12 budgeted reductions in police staffing so the $1 million is not currently anticipated to be used to avoid layoffs. If not needed to prevent layoffs in FY 12, $1 million would be used as an early pension payment to reduce future city pension payments. Due to the one-time nature of this funding, the City Manager recommends the use of $2.575 million in Upland Oil fund balance.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH APPROVING AN AMENDMENT TO THE 2009-2014 MEMORANDUM OF UNDERSTANDING WITH THE LONG BEACH POLICE OFFICERS' ASSOCIATION; AND AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE SUCH AMENDMENT; AND DIRECTING CERTAIN IMPLEMENTING AND RELATED ACTIONS
Respectfully Submitted,
DEBORAH MILLS
DIRECTOR OF HUMAN RESOURCES
APPROVED:
PATRICK H. WEST
CITY MANAGER