AgdaPkt 2009-04-27 - Laserfiche WebLink

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:REPORT 7A1 Page 1 To the Honorable Mayor and City Council From ttl, CL , 1\I~rt.a' .,r April 27, 2009 SUBJECT Approval of Side Letter of Agreements between the City, bargaining units that represent City employees and the Executive Group. RECOMMENDATION By motion authorize the City Manager and Human Resources Director to execute the Side Letter of Agreements allowing for a one-year salary freeze for all bargaining units and the executive group and extending existing Memoranda of Understanding (MOU) for one year with all the City's bargaining units except for the International Associations of Fire Firefighters (IAFF). BACKGROUND The City has five bargaining units that represent employees in all departments of the City. Additionally, the City has an Executive Group Salary and Benefit plan that provides for salary increases and benefits for members of the department head team and division level managers. Over the course of the last two months, these groups have been meeting with City officials to examine the City's current financial deficit and identify short and long term approaches in balancing the City's budget. These meetings have generated a lot of cooperation and a strong desire to help the City reconcile the structural gap projected over the next several fiscal years. Although many of the City's labor groups have current contracts that provide for salary increases in the next fiscal year and other groups would be negotiating new contracts for increases in the next year, the City's five labor groups have all agreed to a one-year salary freeze. This means that no general wage increase will be granted to the City's labor groups and the current salary ranges for represented classifications will not be adjusted in Fiscal Year 2009/10. It was projected that in the next fiscal year units would receive salary increases in the range of 2% - 4010 depending on the survey market. The agreement to suspend salary increase is projected to save the City $2.9 million dollars over the course of the next two fiscal years. In exchange for the salary freeze, the City will develop a retirement incentive plan for eligible employees in classifications scheduled for staff reductions. The goal of the incentive plan will be to facilitate voluntary separations so involuntary layoffs will be mitigated. Staff will be working with labor on details and costs of the plan and present that to Council at a later date. In addition to the salary freeze, all groups were given the option to extend their contracts or retain the current expiration dates of their contracts. With the exception of IAFF, all the labor groups expressed a desire to have their contracts extended for one year. IAFF's contract is scheduled to expire at the end of this calendar year and they would like to retain their right to negotiate in good faith with the City at that time. The labor groups will continue to meet with the City at least once quarterly to be updated on the City's finances and to explore additional opportunities to work together to balance the City's budget over the long term. To staff's knowledge, Redwood City