CC - 2014-14 - Establishing Annual Salary Ranges and Benefits for City CouncilROSEMEAD CITY COUNCIL
TO: MAYOR AND CITY COUNCIL
FROM: JEFF ALLRED, CITY MANAGER
DATE: MAY 27, 2014
STAFF REPORT
SUBJECT: MEMORANDUM OF UNDERSTANDING WITH ROSEMEAD
EMPLOYEES ASSOCIATION AND ANNUAL SALARY AND BENEFITS
RESOLUTIONS
SUMMARY
The City Council will consider approval of a two -year Memorandum of Understanding
(MOU) with the Rosemead Employees Association covering all General Service
employees, and annual Resolutions that detail the terms and conditions of employment
for other full -time employees and members of the City Council. The purpose of the
annual salary and benefits resolutions is to ensure transparency and to implement
modifications to the City's compensation system. Amendments to the MOU and the
resolutions for full -time employees include: implementation of the employee
contributions to CaIPERS towards retirement benefits, salary range adjustments to
maintain competitive compensation levels, eligibility for merit salary increases up to 3 %;
an increase to the cafeteria benefit allowance, and clarification of MOU language.
Staff Recommendation for City Council Action
Staff recommends that the City Council approve a Memorandum of Understanding with
the Rosemead Employees Association; adopt Resolution No. 2014 -12 for Middle
Management, Professional, and Confidential Service; adopt Resolution No. 2014 -13 for
Management Service, and adopt Resolution No. 2014 -14 for City Council.
BACKGROUND
The existing MOU with the Rosemead Employee Association (REA) will expire on June
30, 2014. Over the past several months, representatives of the REA and the City have
negotiated in good faith on the terms of a successor MOU. Some main features of the
new two -year MOU and salary and benefits resolutions include the following:
Employee Contribution to CaIPERS:
Effective July 1, 2014 all employees enrolled in CaIPERS will begin paying 2% of salary
to CaIPERS toward retiree benefits. Effective July 1, 2015 all employees enrolled in
CalPERS will begin paying an additional 2% for a total of 4 %.
ITEM NUMBER: 2
City Council Meeting
May 27, 2014
Pace 2 of 3
In consideration of the employee's 2% contribution towards CaIPERS, all full -time and
% time employees will be provided with a 2% increase in pay on July 1, 2014 to make
them 'Whole." Employees will also be provided with a 2% increase on July 1, 2015.
Elected officials will not be eligible to receive the salary increases as all City Council pay
increases, by state law, must be approved by resolution and cannot take effect until
after the next election cycle.
Merit Salary Increases:
Employees eligible for a merit increase may receive a merit salary adjustment of up to
3% annually instead of the previous 5 %.
Salary Range Adjustments: -
Salary range adjustments will be made to maintain competitive compensation levels
with the labor market. These adjustments to the salary ranges are the result of surveys
of comparable agencies according to established policies and procedures. There will
be no automatic salary increases as a result of the salary range adjustments.
Cafeteria Benefit Allowance:
The cafeteria benefit allowance will be increased from $1,600 per month to $1,650 per
month. The City will consider increasing the cafeteria benefit allowance from $1,650
per month to S1,700 per month during FY 2015 -2016 based on availability of funding
and ability to pay.
Bilingual Pay
Language was modified to reflect the City's ability to suspend bilingual pay if an
employee is out on an extended leave of absence and is not physically present at work
to provide bilingual services.
Christmas Closure:
The holiday closure from Christmas to New Year's Day will now begin at noon on
Christmas Eve. Employees will be required to utilize their own leave time for the half
day on Christmas Eve.
Salary Survey:
The annual salary survey will be amended so that only classifications that have
employees at the top of the range will be surveyed annually and all other classifications
will be surveyed bi- annually.
Sick and Vacation Leave Accrual
Language modified to reflect that vacation and sick leave accruals will be based on
hours in paid status during each pay period. Therefore, employees using leave without
pay will not accrue leave hours.
City Council Meemg
May 27, 2014
Page 3 of 3
Administrative Leave
Any administrative leave hours on the books for a terminating employee will be paid out
at the employee's hourly rate at a prorated unit of administrative leave available by pay
period.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
FISCAL IMPACT
The total estimated net cost to implement the terms and conditions of the MOU and
Resolutions has been factored into the City's proposed budget for the 2014 -2015 fiscal
year.
Submitted by:
—1
Su Tan
Human Resources Manager
Attachment. Rosemead Employee Association Memorandum of Understanding 2014 -2016
Resolution 2014 -12 Middle Management, Professional, and Confidential Service
Resolution 2014 -13 Management Service
Resolution 2014 -14 City Council
RESOLUTION NO. 2014 -14
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ROSEMEAD, CALIFORNIA, ESTABLISHING ANNUAL
SALARY RANGES AND BENEFITS FOR
THE CITY COUNCIL OF THE CITY OF ROSEMEAD
WHEREAS, THE FOLLOWING City Council Members are critical to the efficient
and effective operations of the City, due to the policy- making nature and responsibilities
of the position; and
NOW THEREFORE, BE IT RESOLVED that effective beginning July 1, 2014, the
salary ranges and benefits for the affected classification will be as follows:
SECTION 1: COMPENSATION
Members of the City Council will receive $1,118.63 per month for attendance of two City
Council meetings pursuant to Ordinance No. 841.
SECTION 2: HEALTH INSURANCE PROVIDER
The City shall contract with CalPERS to serve as the health insurance provider for the
City of Rosemead.
SECTION 3: CAFETERIA -STYLE HEALTH. WELFARE, & SAVINGS BENEFIT
Beginning July 1, 2008, the City will provide members of the Council with $1,650 per
month for use towards enrolling in any of the City offered health plans, dental plans, and
vision plans. Any unused remainder must be applied to a deferred compensation plan.
Members can also choose to take the entire benefit as deferred compensation, but must
first show proof of health insurance through another source.
The City will consider increasing the cafeteria benefit allowance from $1650 per month
to $1700 per month during FY 2015 -2016 based on the availability of funding and ability
to pay.
SECTION 4: RETIREMENT HEALTH PLAN
Members of the City Council elected on or before July 1, 2007, who have 20 years or
more of service with the City of Rosemead, and who retire from the City, an allocation of
up to $1,000 /month will be given to pay for health care benefits for the duration of their
retirement. If the health insurance program selected by the Member costs more than
$1,000 /month, the City will only cover the first $1,000 /month of the cost of the selected
program. Once the Member reaches age 65 or becomes eligible for Medicare
coverage, the Member will transition to Medicare coverage, with the City picking up the
remaining cost of health insurance coverage up to a maximum of $1,000 /month.
For members elected on or before July 1, 2007, who have 12 -19 years of service with
the City of Rosemead, and who retire from the City, an allocation of up to $500 /month
will be given to pay for health care benefits for the duration of their retirement. If the
health insurance program selected by the Member costs more than $500 /month, the
City will only cover the first $500 /month of the cost of the selected program
The above retirement health contributions will only be in effect for Members employed
with the City as of July 1, 2007. When Member reaches 65 years of age, or becomes
eligible for Medicare, said Members will transition to Medicare coverage and the City will
continue to contribute towards the cost of health care coverage during the duration of
the Members' retirement. Furthermore, it is expressly noted that the retirement health
contribution can be used towards health coverage for the Member, their spouse, and /or
any eligible dependent.
SECTION 5: RETIREMENT PROGRAM (CALPERS)
Members will be enrolled in the City's retirement program through CalPERS. Effective
July 1, 2007, the City began providing the 2.7 % @55 benefit with one -year final
compensation option with no cap.
On July 1, 2010, the City implemented a 2 -tier system with changes for newly elected
members. All elected members who are hired on or after July 1, 2010, are subject to
the 2 % @55 formula with one -year final compensation option. All existing members of
the council hired prior to July 1, 2010 will remain at the 2.7 @55 formula.
Under the Public Employees' Pension Reform Act of 2013 ( PEPRA), effective January
1, 2013, all "new members' will be subject to the 2.0% @ age 62 benefit formula which
also requires a three year final compensation (the highest average annual pensionable
compensation earned by a member during a period of at least 36 months) with an early
retirement age of 52.
A "New Member" is defined as
1. A new hire that is brought into CalPERS membership for the first time on or
after January 1, 2013, and who has no prior membership in any other
California public retirement system.
2. A new hire who is brought into CalPERS membership for the first time on or
after January 1, 2013, and who is not eligible for reciprocity with another
California public retirement system.
3. A member who established CalPERS membership prior to January 1, 2013,
and who is hired by a different CalPERS employer after January 1, 2013,
after a break in service of greater than six months.
On January 1, 2013, PEPRA prohibited employers from paying any portion of a "new
member's" member contribution rate. All new members must pay 50% of total normal
cost as employee contribution rate.
CaIPERS refers to all members that do not fit within the definition of a new member as
"classic members". All existing CAPERS members as of December 31, 2012, will retain
the existing benefit levels for future service with the same employer.
By January 1, 2018, all "classic members' will be required to contribute their full share
up to 8% of the employee contribution of the CalPERS rate. In order to minimize the
impact of this change, the City is implementing a 2% contribution rate for the next 4
years.
Effective July 1, 2014, all classic members enrolled in CalPERS will begin paying 2% of
salary to CalPERS towards retiree benefits. Effective July 1, 2015, classic members
enrolled in CaIPERS will begin to paying an additional 2% to CaIPERS for a total of 4 %.
SECTION 8' ENHANCED RETIREMENT PROGRAM (PARS)
The City offers an enhanced retirement package through PARS for all members hired
prior to July 1, 2010. Such members who retire from Rosemead after working 20 years
for the City will have their pension formula enhanced to 3 % @55, with the provision that
the maximum pension allowance that members can accrue through PARS is 90% of
their final pay. The PARS retirement pension is limited to 90% of their final pay.
Members must be at least 55 years of age to qualify for PARS.
All newly elected members hired on or after July 1, 2010 are ineligible for the Enhanced
Retirement Program through PARS. PARS has been eliminated for all newly elected
members.
SECTION 7: DEFERRED COMPENSATION PROGRAM
Members of the City Council receive $500 per month. Income may be deferred through
the 457 Plan which allows members to make contributions through a supplemental
retirement savings program.
On July 1, 2010, the employer funded deferred compensation program was eliminated
for all newly elected members of the City Council
SECTION 8: LIFE INSURANCE
Members of the City Council receive an accidental death & dismemberment and life
insurance policy of $100,000.
SECTION 8: TUITION REIMBURSEMENT
The City will suspend the tuition reimbursement program for FY 2014 -2016,
SECTION 10: WELLNESS PROGRAM
The City provides the Wellness Program at $300 per year for FY 2014 -2016.
SECTION 11: COMPUTER PURCHASE PROGRAM
The City provides a computer purchase program for members of the City Council as
outlined in the Administrative Policy No. 30 -09 approved by the City Manager.
SECTION 12: EMPLOYEE ASSISTANCE PROGRAM
The City provides access to the Employee Assistance Program (EAP).
SECTION 13: DIRECT DEPOSIT
Members of the City Council are provided with an option to authorize the automatic
deposit of each paycheck into an individual's checking, savings or credit union account.
Payroll checks will not be issued in advance.
SECTION 14: MILEAGE REIMBURSEMENT
The City will provide mileage reimbursement for conducting City business based on the
standard miles rates of the Internal Revenue Service (IRS).
SECTION 15: UNEMPLOYMENT INSURANCE BENEFITS
Members of the City Council are not eligible for unemployment insurance benefits.
PASSED, APPROVED ANgADOPTED at a Regular Meeting of the City Council
of the City of Rosemead on the 27 day of May 2014. n�����
)k GA wn -'
William Alarcon
Mayor
ATTEST:
oria Molleda
City Clerk
APPROVE AS TO FORM:
Rachel Richman
City Attorney
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS.
CITY OF ROSEMEAD )
I, Gloria Molleda, City Clerk of the City of Rosemead, do hereby certify that the foregoing
Resolution No. 2014 -14 being:
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ROSEMEAD, CALIFORNIA,
ESTABLISHING ANNUAL SALARY RANGES
AND BENEFITS FOR THE CITY COUNCIL OF
THE CITY OF ROSEMEAD
was duly and regularly approved and adopted by the Rosemead City Council on the 27th of May,
2014, by the following vote to wit:
Yes: Alarcon, Armenta, Clark, Hall, Low,
No: None
Abstain: None
Absent: None
oria MDlleda
City Clerk