AgdaPkt 2011-08-22 - Laserfiche WebLink

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6.1. C. - Page 2 The City will amend its contract with CaIPERS to provide a second tier retirement benefit for all new hires. The COA retirement formula will be reduced as follows: • Safety - from 3% at 50, single-highest year to 3% at 55, 3-year final-average- pay; and COA employees will now be contributing 2.5% of salary on 1/1/2012 and an additional 2.5% of salary (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 of 3% effective October 1, 2011 and 3% effective October 1, 2012 will occur during the term of the agreement. There are also provisions similar to those provided to the Firefighters unit — IAFF, including an exit incentive plan (up to two years of service credit through June 30, 2012; and an equal vacation accrual schedule. The COA, 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. Redwood City is a service organization and the vast majority, approximately 80%, of Redwood City's expenses is personnel costs. By making fundamental changes in how these expenses are funded, both short and long-term savings are achieved, while maintaining a fiscally-sound, equitable, and sustainable compensation program for employees. ALTERNATIVES Direct staff to continue negotiations with the COA. FISCAL IMPACT The proposed changes are within the parameters established by the City Council. The new contracts with all the bargaining units (including COA) are expected to result in FY 2011-12 savings of $1,990,357 and FY 2012-13 savings of $2,536,891. Cumulative new savings in the two-year budget cycle are $4,527,248. In FY 2013-14 there will be additional savings that will be calculated and presented in next year's budget. Further ongoing savings to the City will accrue as new employees are hired under the second- tier retirement formulas. ENVIRONMENTAL REVIEW The proposed MOU is not a"project" pursuant to the California Environmental Quality Act. (CEQA Guidelines §21065)