AgdaPkt 2011-07-11 - Laserfiche WebLink

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�. i.r. - rage .i KLrORT To the Honorable Mayor and City Council From the City Manager July 11, 2011 Subject New tentative agreement with the Redwood City Management Employees Association ( RCMEA). Further, by motion authorize the City Manager to integrate the tentative agreement language and execute the memorandum of understanding. Recommendation New tentative agreement with the Redwood City Management Employees Association ( RCMEA). Further, by motion authorize the City Manager to integrate the tentative agreement language and execute the memorandum of understanding. Background As a result of the declining economy and increasing labor costs, the City has made a number of difficult budget decisions over the past several years, including staffing reductions and programmatic cuts. All employees agreed to a salary freeze that resulted in significant savings to the general fund. This effort provided temporary relief from the fiscal challenge facing the City. In July of 2010 a multi -year approach was formulated to put the City on a sustainable financial foundation, including a goal of $5.6 million in labor concessions. The labor groups were advised that structural changes were needed to the City's benefit programs for long -term fiscal stability. Each bargaining unit was provided a 3 -year target to achieve their savings figure. The target for each group was calculated by determining each bargaining unit's total percentage of the City's payroll and applying that same percentage to the $5.6 million labor concession figure. RCMEA and the other units have reached agreement with the City that achieves the established goal. The City will amend its contract with CaIPERS to provide a second tier retirement benefit for all new hires. The RCMEA retirement formula will be reduced as follows: • Miscellaneous - from 2.7% at 55, single- highest year to 2% at 60, 3 -year final - average -pay; and RCMEA employees will also now be contributing 2.5% on 1 /1 /2012 and an additional 2.5% (for a total of 5 %) on 1/1 /13 into the pension funds by paying a share of the City's required contribution. The agreement also includes reductions to the employee health benefit programs, whereby there is increased cost sharing with employees, and existing cash -back provisions are reduced or eliminated altogether. Fixed salary adjustments will occur during the term of the agreement. RCMEA, together with Redwood City's other labor groups, agreed to long -term structural changes that will help provide a more stable, sustainable financial foundation for the City.