APPROVAL OF SIDE LETTER AGREEMENTS AND RESOLUTIONS REDUCING EMPLOYEE COMPENSATION AND BENEFITS June 25, 2020
BACKGROUND On March 12, pursuant to Government Code Section 8558 (c) and Chapter 1 of Title 6 of the City of Costa Mesa Municipal Code, the City Manager and Director of Emergency Services issued an Emergency Declaration due to the unanticipated and deadly COVID-19 worldwide outbreak. • Devastating impacts on public health and mortality • Severe impact to the American economy • Numerous General Fund sources declining significantly including tax revenues (e.g. sales tax, hotel tax, and business license tax, etc.), fees, fines and charges.
BACKGROUND • FY 2019-20 General Fund Estimated Scenario 2 Shortfall of $18.5M • Adjusted by $3.0M due to anticipated receipt of Federal, State and County emergency funds • Resulted in a shift of $3.0M from the use of General Fund Reserves • FY 2020-21 General Fund Adopted Budget addresses the budget shortfall in a multi-faceted approach: • Citywide department budget cuts of $10.8M • Use of General Fund Reserves of $10.2M • Temporary staff furloughs totaling $3.0M
ANALYSIS Unrepresented Employees (Executives and Confidential Management Unit) • 104 hour furlough (5% reduction) or equivalent in FY 2020-21 • No vacation cash out in FY 2020-21 • Provision of 100 hours of Executive Leave (Base 40 hours plus 60 hours to be used after July 1, 2021) • Temporary increase vacation cap by 20 hours • Equity adjustment for Fire Chief retirement with Fire Management analysis
ANALYSIS Unrepresented Employees (Confidential Unit) • 104 hour furlough (5%) in FY 2020-21 • Elimination of Tier 2 vacation accrual plan • No vacation cash out in FY 2020-21 • “Me Too” Clause for salary and benefit increases
ANALYSIS Costa Mesa Police Officers Association (CMPA) • Four (4) year contract extension to June 30, 2024 • 104 hour furlough (5% reduction) in FY 2020-21 • Association reopener in FY 2021-22 • Association reopener in FY 2022-23 with minimum 1% increase in base salary • Association reopener in FY 2023-24 with minimum 2% increase in base salary • Retirement Health Savings Plan (RHS) – City employer match of 1% beginning FY 2022-23
ANALYSIS Costa Mesa Police Management Association (CMPMA) • Two (2) year contract extension to June 30, 2024 • 104 hour furlough (5% reduction) in FY 2020-21 • 1% Employee contribution to RHS plan effective 1/1/21 • 1% City contribution to RHS plan effective 7/1/22 • Association reopener in FY 2023-24 with minimum 3% increase in base salary
ANALYSIS Costa Mesa Fire Management Association (CMFMA) • Two (2) year contract extension to June 30, 2024 • 5% reduction equivalent to flexible benefit contribution in FY 2020-21 • “Me Too” clause for salary/benefits adjustments in FY 2022-23 and FY 2023-24 • Adjust sick leave accrual to match CMFA
ANALYSIS Costa Mesa Division Managers Association (CMDMA) • 104 hour furlough (5% reduction) in FY 2020-21 • No vacation cash out in FY 2020-21 • Provision of 100 hours of Executive Leave 2020 (Base 40 hours plus 60 hours to be used after July 1, 2021 • Temporary increase vacation cap by 20 hours • “Me Too” Clause for salary/benefits adjustments in FY 2022-23 and FY 2023-24
ANALYSIS Costa Mesa City Employees Association (CMCEA) • Two (2) year contract extension to June 30, 2022 • 104 hour furlough (5%) in FY 2020-21 • Elimination of Tier 2 vacation accrual plan • No vacation cash out in FY 2020-21 • 2% salary increase in the last pay period in June 2022 • Elimination of Tier 2 salary ranges; Version 1 assumes implementation on June 30, 2022, while Version 2 assumes implementation FY 2020-21 • Increase flex benefit contribution by $100/month as of June 2022 • Safety Shoe cost increase to $225 annually • Update of jury duty language – no cost • Continued discussion and review of other non-monetary MOU items identified by CMCEA
ANALYSIS Costa Mesa City Manager • 104 hour furlough (5% reduction) or equivalent in FY 2020-21 • No vacation cash out in FY 2020-21 • Guarantee of 100 hours of Executive Leave (Base 40 hours plus 60 hours to be used after July 1, 2021) • Temporary increase in vacation cap by 20 hours
ANALYSIS Costa Mesa Firefighters Association (CMFA) • The City of Costa Mesa has been in negotiations since May 4, 2020, and has exchanged numerous proposals regarding a potential 5% furlough or monetary equivalent; however, an agreement has not yet been finalized for City Council consideration.
RECOMMENDATION • Approve streamlined Transparency in Labor Negotiations Fiscal Impact Analysis Report • Approve City Council Resolutions for unrepresented employees: • Executive Employees • Confidential Management Unit • Confidential Employees
RECOMMENDATION • Approve Side Letter Agreements for: • Costa Mesa Police Officers Association • Costa Mesa Police Management Association • Costa Mesa Fire Management Association • Costa Mesa Division Managers Association • Costa Mesa City Employees Association • Approve First Amendment to employment contract between the City of Costa Mesa and the City Manager
RECOMMENDATION • Direct the City Manager to continue negotiations with the Costa Mesa Firefighters Association regarding a 5% furlough or equivalent and return to the City Council on July 21, 2020 with a final proposed agreement or a plan to achieve equivalent savings via department reductions, including potential workforce reductions
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