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SARATOGA CITY COUNCIL
MEETING DATE: August 17, 2011 AGENDA ITEM:
DEPARTMENT: City Attorney CITY MANAGER: Dave Anderson
PREPARED BY: D. Mouser and M. LaBossiere DIRECTOR: Richard Taylor Labor Negotiating Team City Attorney
SUBJECT: Saratoga Employee Association (SEA) Side Letter of Agreement for Reductions
RECOMMENDED ACTION: Adopt resolution approving the side letter of agreement with SEA agreeing to both long term and
short term reductions in compensation and/or benefits currently provided to the SEA-represented
employees.
BACKGROUND:
SEA is the City’s largest labor organization and represents employees from each of the City’s
departments. SEA and the City’s labor negotiations team have met several times to bargain new
economic terms and conditions effective July 1, 2011 (except as otherwise specifically stated), to
support the City’s concern of declining revenue.
Recognizing that the City is still enduring a period of difficult economic conditions and
recognizing that significant structural changes to employee benefits are necessary for the long-
term fiscal health of the City, SEA and the City’s negotiations team reached an agreement that
will continue to provide SEA incumbents with competitive total compensation benefits; at the
same time, support the City’s short and long term objectives of obtaining a sustainable fiscal
position.
SEA and the City’s negotiations team reached agreement via side letter that contains the
following items for long-term and short-term savings:
Long-term:
• 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).
• For employees hired after the City completes the PERS-required process, the retirement plan
will be a second tier plan of 2% at age 60 plan using a three-year average compensation to
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determine retirement benefits, and such employees will contribute the employee share of the
CalPERS retirement program.
• Effective January 1, 2012, an employee who completes and submits required documents (1)
to prove that the employee has other health insurance coverage and (2) to waive City-
provided health insurance coverage will receive a payment per month of $350.00 as
additional taxable wages.
• Effective July 1, 2011, Article III. Salary Administration A. Salary Ranges (Bi-Annual Salary
Survey) will be eliminated from the MOU (despite the bi-annual salary survey being included
in the City’s Personnel Rules, the language will not apply to SEA as this provision in the
MOU makes it inapplicable.) Article III. Salary Administration B. Cost of Living
Adjustment, C. Performance Incentive Compensation (or Longevity Pay), and D. Annual
Performance Review will be maintained (although either side can propose language
clarification changes).
Short-term:
• Effective July 1, 2011, each SEA unit member eligible for a uniform and clothing allowance
will receive an allowance of $200.00 for the purpose of safety boots, protective clothing, and
laundering of uniform shirts. In addition, three shirts per eligible employee per year will be
purchased directly by the City in the colors designated by the City.
• Effective September 1, 2011, each SEA unit member will forego payment for 2 days of
furlough on days that would otherwise be work days between September 1, 2011 and June
30, 2012. The employee is not to perform any work on the furlough day. The two days of
the furloughs will be approved by the City Manager after receiving SEA unit member input.
• Effective September 1, 2011, each SEA unit member will contribute 7% of his/her
compensation on a pre-tax basis for the employee share of the CalPERS retirement program.
• Effective September 1, 2011, non-exempt employees who are assigned to stand by duty will
be compensated $25.00 (reduced from $37.50) per weeknight assignment and $50.00
(reduced from $75.00) per day for each weekend assignment (unless an employee’s regularly
scheduled work day includes an off-Friday, Saturday, or Sunday such an employee receives
only $25.00 for standby after the employee’s regularly scheduled shift ends and the stand by
duty assignment begins).
• Effective September 1, 2011, non-exempt employees who are called out to perform work of
an emergency nature after their regularly scheduled workday will be compensated for a
minimum of one hour for each occurrence (reduced from 3 hours for each occurrence) at one
and one-half times (1.5) the employee’s regular rate of pay.
• Effective September 1, 2011, the City will offer one-time cash out opportunities to each
employee with over 400 hours of accrued PTO as of August 31, 2011 to cash down to 400
hours.
• Effective September 1, 2011, the PTO accrual cap will be 600 hours and maximum accrual of
600 hours will be enforced. An employee may accrue up to a maximum of 600 PTO hours
(equivalent to 15 weeks). Earned PTO will not be paid out other than at the time of employee
separation.
• These items will remain in place for 4 years and will continue thereafter unless negotiated
otherwise.
• Council ratification of the side letter is an agreement that this agreement is sufficient to
address SEA’s portion of the budget shortfall and further reductions will not be sought from
SEA.
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• The parties will continue to meet to discuss contract language issues.
FISCAL IMPACTS:
The monetary savings on a yearly basis is cumulative. In Fiscal Year 2011-2012, the savings will
be approximately $229,000 in total compensation and benefits.
CONSEQUENCES OF NOT FOLLOWING THE RECOMMENDED ACTIONS:
SEA unit members would continue to receive compensation and benefits as stated in SEA’s
Memorandum of Understanding.
ALTERNATIVE ACTION(S):
N/A
FOLLOW UP ACTION(S):
Human Resources and Payroll Divisions will process uniform and clothing allowances in the
amount of $200.00 per eligible employee retroactive to July 1, 2011. Payroll schedule will be
adjusted to deduct the employee portion of the CalPERS contribution from the gross salary of
each SEA unit member effective September 1, 2011. In addition, the divisions will prepare for
the City’s one-time cash out opportunity for each SEA unit member with over 400 hours of
accrued PTO as of August 31, 2011 to cash down to 400 hours. The future scheduled
Performance Incentive Compensation (Longevity Pay) for SEA positions will continue as
planned.
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. Side Letter of Agreement dated June 11, 2011