SR-08-14-1979-6G 603-002/603-007Santa Monica, Ca! ornia, August 3, 1979
TO: Mayor and City Council AUG 1 4 1979
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FROM: City Staff
SUBJECT: Ratification of Agreement on Wages and Benefits with the
Supervisory Team Associates /Municipal Employees Association (STA)
Introduction
This report outlines the cost of additional wages and benefits contained in the
tentative agreement with STA.
Background
The City staff has participated in nine (9) meet and confer sessions with repre-
sentatives of STA since April. On Tuesday, July 31st the tentative agreement
was approved by the STA membership. The agreement covers 45 supervisory classi-
fications and the incumbents of 64 budgeted positions. The basic elements of
the agreement are as follows:
1. TERM
Three year agreement from July 1, 1979 through June 30, 1982.
2. COMPENSATION
A. Effective July 1, 1979, a salary increase of 5 %.
B. Effective January 1, 1980, a salary increase of 3 %.
C. Effective July 1, 1980 a salary adjustment equal to the percentage
increase in the Consumer Price Index subject to a 4% minimum and a 7%
maximum.
D. Effective January 1, 1981, payment of an additional 2% of salary, only
in the event of double -digit inflation as determined by the Consumer
Price Index.
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AUG 1 4 1979
Mayor and City Council -2- August 3, 1979
E. Effective June 1, 1981, a salary adjustment equal to the percentage
increase in the Consumer Price Index subject to a 4% minimum and a
7% maximum.
F. Effective January 1, 1982, payment of an additional 2% of salary,
only in the event of double -digit inflation as determined by the
Consumer Price Index.
3. BENEFITS
A. Medical
Increase in coverage from full City -paid coverage for the employee only
to full City -paid coverage for employees and dependents.
B. Dental
Full City payment of dental insurance for employees and dependents.
4. OTHER ITEMS
A. Holidays
Substitution of the day after Thanksgiving for Veterans Day and sub-
stitution of a floating holiday for Admission Day. No change in the
number of holidays.
B. Motor Coach Supervisor Differential
Agreement that the salary of Motor Coach Supervisor shall not be less
than 20% above that of Motor Coach Operator.
C. Step Increases
Change in step increases for employees hired or promoted after ratification
of the agreement: the addition of one more year before Step E is reached
(i.e., Step E reached after four years instead of three).
Mayor and City Council, -3- August 3, 1979
D. Reduction in Workers' Compensation Salary Continuation Benefit
During the first two days of absence due to industrial injury, elimi-
nation of City- payment of the difference between disability payments
under the Workers' Compensation Act and the employee's full salary.
E. Tuition Reimbursement Limitation
Agreement to limit existing unlimited tuition reimbursement to $500
per employee annually. No change in the total amount budgeted.
F. Uniform Allowance
Increase in uniform allowance from $12.50 per month to $15.00 per
month. This benefit affects two classifications: Senior Animal
Control Officer and Parking Supervisor.
G. Safety Clause Language
Inclusion of language in the safety clause which emphasizes the role
of the first line supervisor in promoting safety.
Additional costs according to terms of agreement.
This agreement represents an additional cost of $143,000 during the first year.
This is a 9.66% increase over the cost of the current agreement. During the
second year, the proposed additional salary increase and associated add -on costs
amount to an additional $178,878 over benefits conferred during the first year,
a 10.96% increase. The additional salary increase and add -on costs payable during
the third year amount to $190,116 over and above the salary and benefits negotiated
for the first and second years of the agreement. The percentage increase for the
third year is 10.50 %.
The above figures illustrate the cost of additional benefits negotiated in each
of the three years of the agreement. The total cost of the agreement, however,
Mayor and City Council -4- i August 3, 1979
must include an accumulation of costs as follows:
Cost of lst year benefits payable during first year
Cost of lst year benefits payable during second year
Cost of 1st year benefits payable during third year
Cost of 2nd year benefits payable during second year
Cost of 2nd year benefits payable during third year
Cost of 3rd year benefits payable during third year
Total 3 year cost of package
$143,000
143,000
143,000
178,878
178,878
190,116
$976;872
The above figures are based upon assumed double -digit inflation which means that
staff has calculated the effect of a full 7% salary increase and a 2% mid -year
adjustment during the second and third years of the agreement. A 20% increase
in medical insurance premiums has also been assumed on January 1 of each year.
Staff believes this figure will be very close to the City's future premium in-
creases.
Presidential Guidelines
Using the method of calculating contract compliance with the Presidential Guide-
lines, the yearly percentage increases for the proposed agreement are: 9.43%
during the first year; 7.59% during the second year; and 6.12% during the third
year. The Guidelines, which permit no more than an 8% increase during any year
of a multi -year agreement, are exceeded only during the first year of the proposed
agreement. This is entirely due to the adjustment necessary to bring the medical
coverage for this unit in line with other City employee groups. Without this
adjustment, the first year figure would be 7.21 %.
Mayor and City Council; -5- August 3, 1979
Over the three year term of the agreement, the percentage increase is 24.94 %.
This exceeds the allowable figure for a three year agreement of 22.50 %. Thus,
over the three year period, the proposed contract exceeds the Guidelines by
only 2.44 percentage points. Again, this is primarily due to the increase in
medical coverage.
The difference between staff's estimate of the true cost to the City and the
numbers generated using the Presidential Guidelines result from differences in
assumptions. For example, staff assumed the maximum potential salary increases
(i.e., 7% + 2 %) in the second and third years and the Guidelines require us to
assume only 6% during these years. Furthermore, where staff has projected a
20% increase in medical costs, the Guidelines mandate an assumed one -time in-
crease of 7 %.
Recommendation
It is recommended that the City Council approve the terms of the proposed
agreement and ratify the Memorandum of Understanding with the Supervisory
Team Associates /Municipal Employees Association representing the City's
supervisory personnel.
Prepared by: RICHARD ARONOFF
Director of Administrative Services
JEANNE L. KENNEDY
Administrative Assistant
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