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HomeMy WebLinkAboutItem 2a: Possible Action to Resolve Impasse In Negotiations with Police Civilian Employees OF �9��f (.7 111111/1114', co; : Inr.:7ad Awtw.l S.1901 iftwo ,n.ty oto STAFF REPORT Administrative Services Department DATE: August 16, 2011 TO: Mayor and City Council FROM: Hue C. Quach, Administrative Services Director '/ Michael A. Casalou, Human Resources Administrator SUBJECT: Consideration of and possible action to resolve an impasse in negotiations between the City and the Arcadia Police Civilian Employees Association SUMMARY The City's labor negotiators and representatives from the Arcadia Police Civilian Employees Association (APCEA) have reached an impasse in contract negotiations. An impasse, as defined in the City's Employer-Employee Relations Resolution (Resolution No. 6235), occurs when representatives of the City and the Exclusively Recognized Employee Organization have reached a point in the meet and confer process where differences on matters to be included in a Memorandum of Understanding remain so substantial and prolonged that further meeting and conferring would be futile. As outlined in Resolution No. 6235, an Impasse Meeting is scheduled for August 12, 2011 to identify and specify the issue or issues that remain in dispute; and to review the position of the parties in a final effort to resolve such disputed issue or issues; and if the dispute is not resolved, to discuss utilization of the impasse procedures provided herein. As of the writing of this staff report, the impasse meeting has yet to take place. Should agreement be reached, this item will be pulled from the agenda and a separate report will be presented adopting a new MOU via a resolution. If an agreement is not reached, the item(s) in dispute will be presented to the City Council. If presented to the City Council, the impasse procedures require "the City Council shall take such action regarding the impasse as it, in its discretion, deems to be in the public interest. Any action by the City Council on the impasse shall be final and binding." BACKGROUND In March of this year, the City contacted the APCEA requesting dates to begin contract negotiations. The first meeting between the parties took place on April 19, 2011. The City again met on May 10 and then scheduled a meeting for May 31. Prior to the May 31, 2011 meeting, the City's Chief Negotiator, William Floyd, emailed (May 26, 2011) the APCEA's Chief Negotiator, Wendell Phillips, and provided sixteen (16) dates for the month of June the City was willing to meet, primarily in an effort to ensure that both Mayor and City Council August 16, 2011 Page 2 of 4 parties would have enough negotiation sessions scheduled to secure a new MOU before the end of the fiscal year. Mr. Phillips only agreed to three meeting dates: June 22, 23 (all day) & 24. At the conclusion of the meeting on June 24, Mr. Floyd again conveyed the City's interest in finalizing the negotiations as soon as possible and proposed some dates the following week. Mr. Phillips conveyed (at the table and via email) the APCEA team would not be available to meet until July 18, 2011. Mr. Floyd responded by saying the fact that Mr. Phillips was not available for three weeks and/or a member of his team is not available is not acceptable to the City. Mr. Floyd further stated that perhaps Mr. Phillips legal partner take his place and the same should apply to the team members who are unavailable the following couple of weeks. Mr. Phillips did not change his position, so the City agreed to meet on July 18, 2011 under protest. On July 17, Mr. Phillips notified Mr. Floyd that he must cancel the meeting scheduled for the following day (July 18, 2011) as he had a death in his family, but offered to meet July 28. Mr. Floyd responded that the City could meet all day on July 28 and forwarded the City's Last Best Offer for a three year MOU. Mr. Floyd also conveyed that if they were not agreeable to a three year term the City would provide a one year proposal that would not be as good as the three year offer proposed as the City is willing to pay more for a three year term. Mr. Phillips agreed to meet at 10:30 on July 28. On July 28, 2011, Mr. Phillips and his team showed up late (11:15) and only negotiated for 30 minutes before stating they would take the City's offer back to their membership. Mr. Phillips further stated that he was unavailable the following week and proposed the parties meet in two weeks. Mr. Floyd objected and provided a one year offer for the APCEA to also consider. Mr. Floyd again communicated the City is unwilling to wait several weeks for a decision. Mr. Floyd further communicated that prior to that meeting, the City had given the APCEA its final three (3) year offer and now has provided a one (1) year offer and the three year offer was fundamentally the same offer provided to all the other groups. He further stated the City has agreed to many of the APCEA's proposed changes to the MOU. Mr. Floyd again conveyed the City is willing to pay more for a three (3) year MOU, and the one (1) year MOU is not as good, as it has one- time money and the COLA is not equal to the amount of the CaIPERS cost share, and it does not contain overtime language proposed in the three year offer. Mr. Floyd explained that one of the primary reasons that time is of the essence is the City has agreements in place with all the other units and the process to amend the CaIPERS contract by adding a second tier for new hires takes several months. Additionally, the process to amend the PERS contract cannot begin for the Miscellaneous employees until negotiations with the APCEA are resolved with an agreement or by the impasse procedure. Mr. Floyd concluded by pointing out the primary reason negotiations have take so long are directly related to Mr. Phillips unwillingness to make himself available to negotiate. On August 2, 2011, Mr. Phillips (via email) communicated the APCEA membership would be voting on both offers the City provided in one hour and forty five minutes after the email was sent. Mr. Phillips also alleged (for the third time) the City was not providing the same financial package to the APCEA as was being offered to other groups in that the APOA would be getting salary increases and not contributing an equivalent amount to the City's retirement costs. That statement was again rejected by the City and once again the City explained to Mr. Phillips each proposal to each group Mayor and City Council August 16, 2011 Page 3 of 4 provides for salary increases to offset contributions paid by employees to the City's retirement costs. Later that day (August 2, 2011), Mr. Phillips conveyed the APCEA had rejected both of the City's offers. On August 3, 2011, the City sent Mr. Phillips a notice of impasse based on the number of differences in the proposed MOU being discussed (Attached/27 separate issues) and how those differences remain so substantial that further meetings would be futile. In the letter, the City provided dates for an impasse meeting that were ultimately deemed unacceptable to Mr. Phillips. Mr. Phillips said his team is only available Friday, August 12 or Saturday, August 13, 2011. Though City Hall is closed August 12 (dark Friday), staff has agreed to meet with Mr. Phillips and his team in a final attempt to resolve the differences. DISCUSSION As the City headed into negotiations, the economic outlook forecasted was a continuing slow recovery. The City had completed its Five-Year financial forecast where projections of deficits would occur throughout the 5 years analyzed. The state of the economy continued to be precarious and was still a concern as the City prepared for the FY 2011-12 budget process. The General Fund was facing a deficit of $1,574,816 that was primarily attributed to the Public Employee Retirement System (PERS) increase of approximately $1.4 million in comparison to the previous fiscal year. This deficit was more challenging to reduce as many cuts have already been implemented over the last three fiscal years. The FY 2011-12 budget was adopted on time largely by rolling over the FY 2010-11 estimated surplus of $1,125,625, as well as additional cuts to operating expenditures. Although the FY 2010-11 budget surplus is expected to be achieved, it is important to note that most of that surplus came from personnel expenditure savings. Personnel expenditures are normally expended close to full budget, however, in FY 2010-11, personnel savings were due to retirements, vacancies, and overtime budgets that were not necessary because of the frequencies of natural disasters and emergencies. As retirement costs have dramatically increased over the_past several years, the goal of the City Council during these negotiations was to seek pension reform. As a result, the City has asked all employees to pay an amount equivalent to the employee's share of the retirement costs. For existing APCEA members, this amount would equal 8% (members already contribute 1%). Additionally, the City has proposed 2nd Tiers for Retirement and has also proposed changes to retiree health for both existing and new members. The City has also proposed salary increases to offset the amount required of employees to pay. For three-year terms, the City is willing to provide a 100% offset. However, as previously mentioned, the City is not proposing 100% offset for a one-year agreement as a three-year agreement is more coveted by the City. City representatives have concluded negotiations with the four (4) other bargaining groups and have fundamentally the same agreements with each of them as was proposed to the APCEA for a three-year term. Since the APCEA rejected the City's three-year offer, the City's proposed one-year offer differs primarily by not providing a 100% offset of salary (2.5% salary increase and 2.5% one-time lump sum payment); Mayor and City Council August 16, 2011 Page 4 of 4 effective July 1, 2011, members would pay 7% of the employer's retirement cost (this is equivalent to the amount of the employee's share currently being paid by the City) rather than phasing the 7% in over three years; and one section regarding overtime would not be changed as proposed in the City's three year offer. If no agreement is reached and the City Council imposes the City's Last Best Offer, the 7% retirement contribution required of APCEA members would be applied toward the employees portion of their retirement cost and thus eliminate their EPMC benefit. During these negotiations (as well as last year's), both City representatives and the APCEA negotiators made concessions to reach this point. However, since most of the items in dispute are economic (the City believes 19 of 27 items will have economic consequences), and the other issues deemed to be non-economic are items the City's representatives are not recommending changing because they encroach on management rights, staff recommends the City Council impose the City's Last Best and Final one year offer. Contract negotiations require significant resources and can be time consuming and costly to the City. Additionally, the proposed pension reform items will take time to affect and further delay could inhibit the City from realizing the savings projected from these reforms. As such, the City representatives believe they have met and conferred in good faith, do not believe that additional meetings or the use of any alternative dispute resolution techniques will resolve this impasse, and believe the proposal before the City Council represents a fair proposal. FISCAL IMPACT The aforementioned pension reform items will provide significant long term savings to the City. Sufficient funds are available in the FY 2011-12 General and Non-General Funds Budgets to implement these changes. RECOMMENDATION It is recommended that the City Council approve the following motion: Effective July 1, 2011, the employees in the bargaining unit represented by the Arcadia Police Civilian Employees' Association shall be subject to the wages, hours, and terms and conditions of employment set forth in the City's Last, Best, and Final Offer, dated July 28, 2011, which is attached hereto and incorporated herein by this reference, except that the eight percent (8%) employee PERS contribution provided for in Article V, Section B shall be made as a Member Contribution rather than a Cost Sharing contribution pursuant to Government Code Section 20516(f) and shall not be reported as additional compensation pursuant to Government Code Section 20636(c)(4). APPROVED: Donald Penman, City Manager '' 1 It pn ° v E• v ro t °� v a, c E > a a, >. 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