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SARATOGA CITY COUNCIL
MEETING DATE: November 2, 2011 AGENDA ITEM:
DEPARTMENT: City Attorney CITY MANAGER: Dave Anderson
PREPARED BY: D. Mouser and M. LaBossiere DIRECTOR: Catherine Engberg Labor Negotiating Team Acting City Attorney
SUBJECT: Council Resolution to Adopt Memorandum of Understanding for the
Saratoga Management Organization (SMO)
RECOMMENDED ACTION:
Adopt the Memorandum of Understanding between the City of Saratoga and Saratoga
Management Organization (SMO) July 1, 2011 to June 30, 2015. BACKGROUND:
SMO is the labor organization or exclusive representative of the directors employed by the City.
SMO and the City’s labor negotiations team have met on numerous occasions regarding the terms and conditions of employment for the bargaining unit. The results of these negotiations
are contained in the attached Memorandum of Understanding (MOU).
The previous Memorandum of Understanding (MOU) with SMO expired on September 30,
2011. Preceding the expiration of the MOU on September 30, 2011, the City and SMO agreed to changes to the MOU on July 6, 2011 in Side Letters of Agreement to reduce personnel related
expenditures to address the budget shortfall resulting in Fiscal Year 2011-2012 savings of
approximately $51,000 in total compensation and benefits.
The following is a summary of short and long-term key issues that the City and SMO have reached agreement on:
• Retirement: Effective July 1, 2011, each SMO unit member will contribute 7% of his/her
compensation on a pre-tax basis for the employee’s seven (7) percent fixed share of the
CalPERS defined benefit retirement program. Pension reform includes a 2-tier retirement plan for employees hired after the City completes the PERS-required process. These
employees will be provided a 2%@60 defined benefit retirement formula with a three (3)
year average of salary as part of the retirement calculation.
• Car Allowance Reduction: Effective July 1, 2011, each SMO unit member receives an allowance of $275 per month (a reduction of $125 per month).
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• Medical Insurance Premiums: Medical insurance premium costs for employees continue to
grow year after year at rates that exceed the city’s revenue growth. For employees hired after
July 1, 2011, the City’s contribution for medical insurance will be a specific amount set for each tier of coverage, with the employee paying the amount above the City’s contribution level. ($600 for employee only, $1200 for employee and one dependent, and $1500 for
employee and two or more dependents).
• Elimination of Longevity Pay: In support of utilizing market-oriented and performance compensation practices only, the performance incentive compensation program rewarding longevity will be eliminated.
• Paid Time Off (PTO) Cap: The City will enforce its PTO cap.
• Public Accountability: Administrative Leave and PTO will be taken by exempt (salaried) employees and tracked in increments of one hour or more in a workday.
FISCAL IMPACTS:
In Fiscal Year 2011-2012, the savings is approximately $51,000 in total compensation and benefits. Additional savings will be realized in future years. CONSEQUENCES OF NOT FOLLOWING THE RECOMMENDED ACTIONS:
SMO unit members would continue to receive benefits as per SMO’s Memorandum of Understanding which expired on September 30, 2011 and per the City and SMO agreement to changes to the MOU on July 6, 2011 in Side Letters of Agreement.
ALTERNATIVE ACTION(S):
N/A
FOLLOW UP ACTION(S):
Payroll schedule will be adjusted to deduct the employee portion of the CalPERS contribution from the gross salary of each SMO unit member and will register a $125 per month reduction in
the amount of auto allowance granted. In addition, payroll and human resource divisions will
remove the SMO positions as eligible positions for Performance Incentive Compensation
(Longevity) effective July 1, 2011. The future scheduled longevity pay for SMO positions will
be cancelled.
ADVERTISING, NOTICING AND PUBLIC CONTACT:
Pursuant to Government Code 54954.2, this item was properly posted as a City Council agenda
item and was included in the packet made available on the City’s website in advance of the meeting. A copy of the agenda packet is also made available at the Saratoga Branch Library each
Monday in advance of the Council meeting.
ATTACHMENTS:
1. Resolution 2. MOU TA dated 10-24-11