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SR-032508-1LCity Council Meeting: March 25, 2008 Agenda Item: ~ '~ ~-- To: Mayor and City Council From: Karen Bancroft, Director of Human Resources Subject: Resolution Implementing an Equity Adjustment Required by Memorandum of Understanding between the City and the Santa Monica Police Officers Association and a Resolution Authorizing the City Manager to Execute an Amendment to the Memorandum of Understanding Recommended Action This report requests that Council adopt the attached Resolutions: 1) Resolution to implement an equity adjustment to satisfy the current Memorandum of Understanding (MOU) between the City.. and the Santa Monica Police. Officers Association (SMPOA) 2) Resolution to authorize the City Manager to execute an amendment to the SMPOA MOU to provide SMPOA parity with the City's other bargaining units by allowing the same percentage increase to the cap on the City's .contribution towards medical insurance effective January 1, 2009. All other provisions of the MOU are being rolled over for FY2008-2009. Executive Summary The current MOU between the City and SMPOA requires that the total compensation, as defined in the MOU, of a Police Officer must be maintained at a level that will place SMPOA at the #2 rank among the comparison cities. As of January 1, 2008, an equity adjustment of 1.74% will satisfy this provision. The total increase will be approximately $276,155 for FY2007-2008. Sufficient funds are available in the Non-departmental budget to cover the additional cost. The SMPOA agreement expires as of June 30, 2008. The association has agreed to rollover their current MOU for another fiscal year (FY2008-2009). One issue that needs to be addressed now because of the timing of increases to medical insurance premiums is the City's contribution towards medical insurance premiums, which are effective January 1, 2009. To give SMPOA parity with the City's other bargaining units, the proposed amendment would provide for an adjustment in the City's contribution cap up to a maximum of twelve percent (12.0%). The maximum additional cost would be $169,362 for FY2008-2009. This report requests that an appropriation for this additional cost be included in the FY2008-2009 budget. 1 Discussion SMPOA's current MOU is scheduled to expire on June 30, 2008. SMPOA has agreed to rollover their MOU for fiscal year (FY2008-2009j. Per the terms of the MOU roll-over provision, SMPOA will receive a cost of living adjustment (COLA) based on the January 2007 to January 2008 Consumer Price Index (CPI) for all Urban Wage Earners. and Clerical Workers in Los Angeles-Riverside-Orange County, with the COLA not to exceed four percent (4.0%). Since the CPI was 4.6%, SMPOA will receive a 4.0% cost of living adjustment for FY2008-2009. This will be incorporated into the FY2008-2009 budget. The terms of the City's MOU's correspond to the City's fiscal year whereas the cost of medical insurance is adjusted by the medical insurance providers each calendar year. The terms and conditions of medical insurance coverage for SM.POA are set forth in their MOU. The terms and conditions of medical insurance coverage for all of the City's other bargaining units (non-sworn and Firefighters) is set forth in a separate Umbrella Agreement (MOU). Since SMPOA is rolling over their current MOU for another fiscal year (FY2008-2009), an amendment to their MOU will be required in order to adjust the City's contribution towards medical insurance premiums as of January 1, 2009 to give SMPOA parity with the City's other bargaining units. The proposed amendment would provide for an increase in the City's contribution cap up to a maximum of twelve percent (12.0%), which is the same percentage increase that will be implemented for all of the City's other bargaining units as of January 1, 2009. Financial Impacts & Budget Actions The total cost of the 1.74% equity adjustment will be $276,155 for FY2007-2008.. This additional cost will be transferred from the Non-departmental set aside funds (account 01274.511010) to the Police Department. Assuming that there are no changes in the number and. the current enrollment of active SMPOA employees, the total cost of the increase in the City's contribution towards medical insurance premiums will not exceed 2 $169,362 for FY2008-2009. This additional cost will need to be included in the FY2008- 2009 budget. Prepared by: Karen Bancroft, Director of Human Resources Forwarded to Council: P. L;e(nydnt Ewelli ~ City anager 3 Approved: Reference Resolution Nos. 10278 (CCS) and 10279 (CCS).