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6.1.13. - Page 2 <br />The labor groups have reached agreements with the City that achieve the established <br />goal. <br />The City will amend its contract with CalPERS to provide a second tier retirement <br />benefit for all new hires. The retirement formulas will be reduced as follows: <br />• Miscellaneous - from 2.7% at 55, single- highest year to 2% at 60, 3 -year final - <br />average -pay; and <br />• Safety — from 3% at 50, single- highest -year to 3% at 55, 3 -year final- average- <br />pay. <br />Executive Management, POA, PSA, and SEIU employees will also now be contributing <br />up to 3.8 - 7% over the term of the agreements, into the pension funds by paying a <br />share of the City's required contribution. <br />The agreements also include reductions to the employee health benefit programs, <br />whereby there is increased cost sharing with employees, and existing cash -back <br />provisions are reduced or eliminated altogether. Annual salary adjustments, either fixed <br />or based on survey data will occur during the term of the agreements. <br />Together, Redwood City's labor groups - SEIU, International Association of Fire <br />Fighters, Police Officers Association, Police Sergeants Association, and Executive <br />Management Group - have agreed to long -term structural changes that will help provide <br />a more stable, sustainable financial foundation for the City. Redwood City is a service <br />organization and the vast majority, approximately 80 %, of Redwood City's expenses is <br />personnel costs. By making fundamental changes in how these expenses are funded, <br />both short and long -term savings are achieved, while maintaining a fiscally- sound, <br />equitable, and sustainable compensation program for employees. <br />ALTERNATIVES <br />Direct staff to continue negotiations with the POA, PSA, IAFF and SEIU bargaining <br />units. Direct staff to prepare alternative changes to Executive Management Summary of <br />Benefits. <br />FISCAL IMPACT <br />The proposed changes are within the parameters established by the City Council. The <br />new contracts (including RCMEA and Chief Officers' Association which are forthcoming) <br />are expected to result in FY 2011 -12 savings of $1,990,357 and FY 2012 -13 savings of <br />$2,536,891. Cumulative new savings in the two -year budget cycle are $4,527,248. In <br />FY 2013 -14 there will be additional savings that will be calculated and presented in next <br />