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CITY COUNCIL AGENDA ITEM NO. 14

Meeting Date: May 27, 2008

Subject/Title: Adopt a Resolution approving and authorizing the City Manager to sign the extension and revision to the 2003/2008 Memoranda of Understanding (“MOU”) for the Brentwood Employee Associations – Public Works and Miscellaneous Office Divisions, as well as the Mid-Managers Group for one year with the option to extend by one additional year, and Adopt a Resolution to comply with the Internal Revenue Code Section 414(h)(2) regarding continued employer payment of the employee retirement contribution.

Prepared by: Patti Standley, Human Resources Manager

Submitted by: Karen L. Chew, Assistant City Manager

RECOMMENDATION
Adopt a Resolution approving and authorizing the City Manager to sign the extension and revision of the 2003/2008 MOU documents for the Brentwood Employee Associations – Public Works and Miscellaneous Office Divisions, as well as the Mid-Managers Group for one year with the option to extend by one additional year.

Adopt a Resolution to comply with the Internal Revenue Code Section 414(h)(2) regarding continued employer payment of the employee retirement contribution.

PREVIOUS ACTION
On May 27, 2003, the City Council adopted Resolution No. 2877 approving the 2003/2008 MOU documents for the Brentwood Employee Associations – Public Works and Miscellaneous Office Divisions, as well as the Mid-Managers Group.

BACKGROUND
The five-year contracts approved in 2003, expire on June 30, 2008. Due to uncertain economic conditions the three bargaining units/employee groups listed above approached the City with a request to extend the 2003/2008 MOUs. The City negotiating team and the bargaining unit representatives have reached agreement to the following items detailed in Exhibits A, B, and C of the attached resolution to extend and revise the 2003/2008 MOUs for the groups listed above:

1. Extend the 2003-2008 Memorandum of Understanding through June 30, 2009 with a re-opener to extend one additional year, through June 30, 2010, depending on the economic status of the City’s Budget. The bargaining group representatives and the City negotiators will meet during March 2009 to assess the economic climate and the impact on the City’s budget. At this time a determination will be made whether to extend the existing agreement or begin negotiating a successor agreement.

2. Provide annual cost of living adjustments to the bargaining unit, effective July 1, 2008, equal to the CPI for April or 3%, whichever is less.

3. Effective July 1, 2008, downtown City Offices including City Hall, Public Works Engineering Office, Community Development Office, and Parks/Recreation Office, will open to serve the public at 8:00 a.m. Monday through Friday. The 8-hour schedule will continue to be flexible in nature with approval of the Department Director and consistent with wage and hour legal requirements.

a. Due to the 24-hour nature of police operations, Miscellaneous Office employees who are Police personnel, agree to continue working nontraditional work schedules that may include weekend and night shifts as assigned by the Chief of Police.

The Consumer Price Index (CPI) amount for April has been determined by the Bureau of Labor Statistics to be 3.2%. As described in number 2 above, the annual cost of living adjustment for the bargaining units listed above will be 3%.

The Internal Revenue Service issued Revenue Ruling 2006-43 providing guidance on how state and local governments must document arrangements under which they make or “pick-up” contributions on behalf of their employees to a pension plan qualified under Section 401(a) of the Internal Revenue Code of 1986. The City began paying for these contributions in April, 1981. This Ruling requires the City to adopt a formal resolution identifying that the contributions, although designated as employee contributions, are being paid by the employer in lieu of employee contributions. The City is required to adopt a formal written action prior to January 1, 2009. A Resolution is attached for City Council review and approval to satisfy the requirement of the Internal Revenue Service, Revenue Ruling 2006-43.

FISCAL IMPACT
The 3% cost of living adjustment equals $629,600. Of this amount, $357,478 is from the General Fund. The funds to cover the cost of living adjustments are included in the City’s 2008/09 approved budget.

Attachment:
Resolutions (2)

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AND AUTHORIZING THE CITY MANAGER TO SIGN THE EXTENSION AND REVISION OF THE 2003/2008 MEMORANDA OF UNDERSTANDING (“MOU”) FOR THE BRENTWOOD EMPLOYEE ASSOCIATIONS – PUBLIC WORKS AND MISCELLANEOUS OFFICE DIVISIONS, AS WELL AS THE MID-MANAGERS GROUP FOR ONE YEAR WITH THE OPTION TO EXTEND BY ONE ADDITIONAL YEAR

WHEREAS, the Brentwood Employee Associations – Public Works and Miscellaneous Office Divisions as well as the Mid-Managers Group have met with the City’s Negotiator and conferred in good faith regarding wages, hours and other terms and conditions of employment, and

WHEREAS, the bargaining units and the employee group listed above approached the City with the request to extend the 2003/2008 MOU documents, and

WHEREAS, the MOU extension and revision documents attached as Exhibits A, B, and C, include the agreement between the aforementioned entities, and

WHEREAS, as described in the Exhibits listed above, the City’s Negotiator engaged the bargaining units and employee group with respect to discussions related to downtown City Offices including City Hall, Public Works Engineering Office, Community Development Office, and Parks/Recreation Office for those offices to open to serve the public at 8:00 a.m. Monday through Friday, and all parties agreed to the new term, and

WHEREAS, these documents are entered into pursuant to the Meyers-Milias-Brown Act (California Government Code Sections 3500-3510) and have been jointly prepared by the aforementioned entities, and

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood approves and authorizes the City Manager to sign the agreement to amend and extend the MOUs as described above and in Exhibits A, B, and C, for the bargaining units and employee group listed above.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the May 27, 2008 by the following vote:

Attachment:
Exhibit A
Exhibit B
Exhibit C

EXHIBIT A

BRENTWOOD MID-MANAGEMENT GROUP

Agreement to Amend and Extend the Memorandum of Understanding between the City of Brentwood and the Mid-Management bargaining group for July 1, 2003 through June 30, 2008

The following items have been reviewed and accepted by both the City Council and the employees of the Mid-Management bargaining group. All benefits in place and received through prior Memoranda of Understanding and in effect June 30, 2008 will continue unless amended or deleted by this Agreement to Extend the Memorandum of Understanding for July 1, 2003 through June 30, 2008.

4. Extend the 2003-2008 Memorandum of Understanding through June 30, 2009 with a re-opener to extend one additional year, through June 30, 2010, depending on the economic status of the City’s Budget. The bargaining group representatives and the City negotiators will meet during March 2009 to assess the economic climate and the impact on the City’s budget. At this time a determination will be made whether to extend the existing agreement or begin negotiating a successor agreement.

5. Provide annual cost of living adjustments to the bargaining unit, effective July 1, 2008, equal to the CPI for April or 3%, whichever is less.

6. Effective July 1, 2008, downtown City Offices including City Hall, Public Works Engineering Office, Community Development Office, and Parks/Recreation Office, will open to serve the public at 8:00 a.m. Monday through Friday. The 8-hour schedule will continue to be flexible in nature with approval of the Department Director and consistent with wage and hour legal requirements.

a. Due to the 24-hour nature of police operations, Miscellaneous Office employees who are Police personnel, agree to continue working nontraditional work schedules that may include weekend and night shifts as assigned by the Chief of Police.

The parties hereto have executed the Agreement to Extend the Memorandum of Understanding as defined above, this ____ day of May, 2008.

BRENTWOOD MID-MANAGEMENT
BARGAINING GROUP CITY OF BRENTWOOD

Sue Barry, President Donna Landeros, City Manager

Jeff Zilm, Vice-President

EXHIBIT B

BRENTWOOD EMPLOYEE ASSOCIATION - MISCELLANEOUS OFFICE

Agreement to Amend and Extend the Memorandum of Understanding between the City of Brentwood and the Miscellaneous Office bargaining unit for July 1, 2003 through June 30, 2008

The following items have been reviewed and accepted by both the City Council and the employees of the Miscellaneous Office bargaining unit. All benefits in place and received through prior Memoranda of Understanding and in effect June 30, 2008 will continue unless amended or deleted by this Agreement to Extend the Memorandum of Understanding for July 1, 2003 through June 30, 2008.

7. Extend the 2003-2008 Memorandum of Understanding through June 30, 2009 with a re-opener to extend one additional year, through June 30, 2010, depending on the economic status of the City’s Budget. The bargaining group representatives and the City negotiators will meet during March 2009 to assess the economic climate and the impact on the City’s budget. At this time a determination will be made whether to extend the existing agreement or begin negotiating a successor agreement.

8. Provide annual cost of living adjustments to the bargaining unit, effective July 1, 2008, equal to the CPI for April or 3%, whichever is less.

9. Effective July 1, 2008, downtown City Offices including City Hall, Public Works Engineering Office, Community Development Office, and Parks/Recreation Office, will open to serve the public at 8:00 a.m. Monday through Friday. The 8-hour schedule will continue to be flexible in nature with approval of the Department Director and consistent with wage and hour legal requirements.

a. Due to the 24-hour nature of police operations, Miscellaneous Office employees who are Police personnel, agree to continue working nontraditional work schedules that may include weekend and night shifts as assigned by the Chief of Police.

The parties hereto have executed the Agreement to Extend the Memorandum of Understanding as defined above, this ____ day of May, 2008.

BRENTWOOD EMPLOYEES’ ASSOCIATION
MISCELLANEOUS OFFICE DIVISION CITY OF BRENTWOOD

Larry Edge, President Donna Landeros, City Manager

Catherine Mullen, Vice-President

EXHIBIT C

BRENTWOOD EMPLOYEE ASSOCIATION – PUBLIC WORKS DIVISION

Agreement to Amend and Extend the Memorandum of Understanding between the City of Brentwood and the Public Works bargaining unit for July 1, 2003 through June 30, 2008

The following items have been reviewed and accepted by both the City Council and the employees of the Public Works bargaining unit. All benefits in place and received through prior Memoranda of Understanding and in effect June 30, 2008 will continue unless amended or deleted by this Agreement to Extend the Memorandum of Understanding for July 1, 2003 through June 30, 2008.

10. Extend the 2003-2008 Memorandum of Understanding through June 30, 2009 with a re-opener to extend one additional year, through June 30, 2010, depending on the economic status of the City’s Budget. The bargaining group representatives and the City negotiators will meet during March 2009 to assess the economic climate and the impact on the City’s budget. At this time a determination will be made whether to extend the existing agreement or begin negotiating a successor agreement.

11. Provide annual cost of living adjustments to the bargaining unit, effective July 1, 2008, equal to the CPI for April or 3%, whichever is less.

12. Effective July 1, 2008, downtown City Offices including City Hall, Public Works Engineering Office, Community Development Office, and Parks/Recreation Office, will open to serve the public at 8:00 a.m. Monday through Friday. The 8-hour schedule will continue to be flexible in nature with approval of the Department Director and consistent with wage and hour legal requirements.

The parties hereto have executed the Agreement to Extend the Memorandum of Understanding as defined above, this ____ day of May, 2008.

BRENTWOOD EMPLOYEES’ ASSOCIATION
PUBLIC WORKS DIVISION CITY OF BRENTWOOD

Christopher Ziemann, President Donna Landeros, City Manager

Paul Senick, Vice-President

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AN INTERNAL REVENUE CODE SECTION 414 (h)(2) EMPLOYER PICK-UP AGREEMENT BETWEEN THE CITY OF BRENTWOOD AND THE CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM

WHEREAS, the City of Brentwood (“City”) has the authority to implement the provisions of section 414 (h)(2) of the Internal Revenue Code (IRC), and

WHEREAS, the Board of Administration of the Public Employees’ Retirement System adopted its resolution regarding section 414 (h)(2) IRC on September 18, 1985, and

WHEREAS, the Internal Revenue Service has stated in December 1985, that the implementation of the provisions of section 414(h)(2) IRC pursuant to the Resolution of the City Council would satisfy the legal requirements of section 414(h)(2) IRC, and

WHEREAS, the City Council has determined that even though the implementation of the provisions of section 414(h)(2) IRC is not required by law, the tax benefit offered by section 414(h)(2) IRC should continue to be provided to its employees who are members of the Public Employees’ Retirement System (“CalPERS”), and

NOW, THEREFORE BE IT RESOLVED
1. That the City Council will implement the provisions of section 414(h)(2) IRC Internal Revenue Code by continuing to make employee contributions pursuant to California Government Code section 20691 to CalPERS on behalf of its employees who are members of CalPERS. “Employee contributions” shall mean those contributions to CalPERS, which are deducted from salary of employees and are credited to individual employee’s accounts pursuant to California Government Code section 20691.
2. That the contributions made by the City to CalPERS, although designated as employee contributions are being paid by the City in lieu of contributions by the employees who are members of CalPERS.
3. That employees shall not have the option of choosing to receive contributed amounts instead of having them paid by the City to CalPERS.
4. That the City shall pay to CalPERS the contributions designated as employee contributions from the same source of funds as used in paying salary.
5. That the amount of the contributions designated as employee contributions are paid by the City to CalPERS on behalf of an employee shall be the entire contribution required of the employee by Public Employee’s Retirement Law (California government Code section 20000, et seq.).
6. That the contributions designated as employee contributions made by the City to CalPERS shall be treated for all purposes, other than taxation, in the same way that member contributions are treated by CalPERS.
7. That the City Council of the City of Brentwood hereby gives approval for this Internal Revenue Code section 414 (h)(2) employer pick-up agreement between the City and CalPERS.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the May 27, 2008 by the following vote:
 
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