SR - - CIVIC OPENNESS IN NEGOTIATIONS ORDINANCE �
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LABOR NEGOTIAT/ON STRATEGIES AND PR/NCIPLES
I. Introduction
The Association of California Cities — Orange County (ACC-OC) serves as the regional
advocate for local control, both regionally and in Sacramento. The ACC-OC accomplishes
this by adhering to a member-driven model for creating good public policy from the
ground up. As such, the ACC-OC has responded to member requests to provide model
guidelines to cities when negotiating with bargaining units, with commitment to
transparency and accountability.
II. Background
Existing California law, known as the Meyers-Milias-Brown Act (MMBA),1 seeks to provide
a uniform and orderly process for communication between public agencies and
employees regarding the changes in wages, hours, or any other terms or conditions of
employment of county or city employees. All policies and ordinances must comply with
the MMBA.
The ACC-OC seeks to provide a guideline for bringing transparency and accountability to
the collective bargaining process, while wishing to respect the autonomy and inherent
practices of each city.
III. General Approach
It is important for all parties involved that the rules of engagement be set forth in
advance.
Including staff subject matter experts in closed session meetings can provide council
members with greater confidence and understanding of issues. In addition, ongoing
discussion and disclosure of budget and financial information can assist in facilitating the
negotiation process.
1 To access the Meyers-Milias-Brown Act,6overnment Code Section 3500-3511,please click the following link:
http://www.leginfo.ca.�ov/cgi-bi n/d isplavcode?section=gov&Qroup=03001-04000&file=3500-3511
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The following strategies are offered as a menu of suggestions that can be adopted by
cities in whole or in part and should be customized by cities for each specific application.
1. Use of Outside Negotiators
Utilization of an outside negotiator as the principal negotiator for the city is an example of good
governance and a general good practice to avoid actual or perceived conflicts of interest.
FACTORS TO CONSIDER:
A. Expertise
An outside negotiator may provide greater expertise in subject matter,
negotiation strategies, contract language, and a valuable independent,third-party
perspective.
B. Complexity
While requiring an outside negotiator is a good practice, the necessity may be
considered on a case-by-case basis, based on the complexity and value of the
issues at hand.
C. Costs
Costs of the negotiation should be evaluated based on the value of the contracts
negotiated. Cities should balance the costs of the contract over the costs of an
outside negotiator, with the understanding that the labor contract may go to
arbitration.
D. Evaluate Existing Code
Make sure that proposed policy and language does not violate current municipal
code.
SAMPLE LANGUAGE:
The use of an outside negotiator shall apply to all forma/ meet and confer processes undertaken
pursuant to the Meyers-Milias-Brown Act, where either a recognized employee organization or the
city, through their respective representatives propose 1J significant changes to contract terms, 2)
extensions, or 3) when the employee association negotiates with third party negotiators or legal
counsel. In an effort to avoid inherent conflicts of interest, if an outside negotia[or is deemed
necessary, the principal representative negotiating on behalf of the city sha111)not be an employee
of the city,2)not be a member of any public pension plan under the ciry, and 3)have a demonstrated
expertise in negotiating /abor and employmenr agreemenrs on behalf of municipalities. The city
council shall designate one or more management level employees to be present during negotiations
and to assist the principal negotiator as the city council and/or principa/ negotiator deem
appropriate.
2. Fiscal Impact of Public Disclosure
Clear and factual information is the starting point for an effective economic analysis of the fiscal
impacts of the contract, and can be utilized to justify the action taken. There are various
methods for acquiring this information and for communicating it with the public.
FACTORS TO CONSIDER:
A. Actuarial Analysis
Preparing and providing an actual and specific economic analysis of the short and
long term costs of every term and condition of employment in the contract is the
first way to ensure that 1) City council members have the best data available in
front of them to negotiate and make a decision, and 2) the public has the
appropriate data to vet the contract and the Council's proceedings.
The economic analysis may include both the funded and unfunded actuarial
liability that would or may ensue from adoption of the contract.
B. Confidence from Analysis
The use of an independent auditor will allow city council members, staff, and the
public to benefit from the general level of confidence provided by a thorough and
reliable economic analysis by an external professional.
Information from outside auditors should be used in conjunction with information
from staff whenever practical.
C. Tangible Comparisons
The economic analysis of each term and condition of the contract can be viewed
in the framework of how it will affect the citizens.
Utilize tangible examples of comparisons with other programs. For instance, if a
contract will cost the city X amount of dollars, contextualize it to show that X
amount of dollars is equal to a specific city service or program.
D. Staff Training
In addition to the use of an independent auditor, city human resources
professionals need the proper resources and training to provide and analyze an
economic analysis.
E. Public Review
The City may consider making the fiscal impacts of the contract available to the
public and the City Council at least two (2) City Council meetings prior to
consideration by the City Council of an initial meet and confer proposal.
F. Council Acknowledgement
Consider requiring City Council members to acknowledge receipt and review of
the economic analysis in writing.
SAMPLE LANGUAGE:
An independent auditor, a certified public accountant, or an actuarial accountant shall prepare o
study and supplementa/ data upon which the study is based, that identifies the fiscal impacts
attributed to each term and condition of employment made availab/e to the members of all
recognized employee organizations.
The first analysis shall be of existing contract costs and of each thereafter.
The above report and findings of the independent auditor shall be comp/eted and made available for
review by the city council and the public at least two (2)City Council meetings before consideration
by the city council of an initia/meet and confer process.
The above report shall be regularly updated by the independent auditor to itemize the cost and the
funded and unfunded actuarial liability which wou/d or may result from adoption or acceptance of
each meet and confer proposal. These measurements shall display the fiscal impacts of the employee
association and or/city proposals. The report shall be prepared to include all benefit and pay aspects
of each MOU, and shall include written council member acknow/edgement that the report has been
read and considered by the signing councilmember.
3. Discussion of Offers and Counteroffers
California's current open meeting laws provide that a City Council can meet in closed session to
provide its bargaining unit representatives with instructions and parameters for negotiation in
the meet and confer process. Closed sessions allow City Councils to speak privately regarding
their bargaining parameters without disclosing these parameters to labor representatives.z
Z Institute for Local Government,A Local Official's Guide to Labor Relations Terminology,Version 2:September 1,
2011.
Additionally,the meet and confer process provides the opportunity for city representatives and
labor representatives to bargain in good faith in order to reach an agreement on the proposed
labor contract.
FACTORS TO CONSIDER:
A. Report the Facts
Transparency may result in more realistic counters or counteroffers.
Broad dissemination of offers and counteroffers provides a progress report and
clearer understanding for both the public and bargaining unit members.
B. Discretion
Disclosure of offers and counteroffers may result in additional public posturing
and increased politicization, which can affect negotiations.
All parties involved in negotiations should use caution and clear communication
when reporting out of closed session.
SAMPLE LANGUAGE:
The city council shall report out the details of all formal offers that have been rejected at the time of
the counteroffer rejecting each proposed term.
City council labor negotiators shall have the duty to advise the city council during any closed session
of all offers, counteroffers, information, and/or statements of position discussed by the labor
negotiators taking place in the meet and confer process since the last such closed session.
4. Disclosures of Private Communications
Having city council members disclose communication contacts that were had with any labor
representative is another way to bring transparency to the negotiation process and to build
faith with the public. A careful value judgment can be made to what type of conversation is
appropriate to report to the public.
FACTORS TO CONSIDER:
A. Disclose Communications
While this principle may be contentious for some city council members, it can be
viewed as a disclosure requirement, not a "no-deal" requirement.
The communication that is disclosed may simply be that the conversation
occurred.
B. Impact on the Process
There is some historical context that private meetings,without the disclosure of
names, have been the environment needed to reach an agreement. However, a
balance can be found to reconcile transparency with private communications.
If a council member is going to meet with the employee group they should
remember their closed session obligations and just listen.
Council members that talk to employee groups outside of formal negotiations may
undermine the negotiation process.
C. Ongoing Relationship
All parties should approach the process in a respectful and sensitive way that will
assist in building long-term working relationships that survive the sometimes
difficult negotiation process.
SAMPLE LANGUAGE:
Each city council member shall disclose both publicly and during closed sessions, the identity of any
and all employee association representatives with whom the city council member has had any verbal,
written, electronic or other communication(sJ regarding a subject matter of a pending meet and
confer process.
5. Ordinance Model Process
Disclosing the MOU and making it subject to more than one (1) city council meeting provides
the opportunity for the public to effectively weigh in on the matter.
FACTORS TO CONSIDER:
A. Consistency
15t and 2"d readings at City Council meetings is standard practice for normal
ordinances, and this seeks to put labor negotiations under that standard.
THE FOLLOWING ORDINANCE WHICH AMENDS
THE FULLERTON MUNICIPAL CODE HAS BEEN
AD4PTED BY THE CITY COUNCIL BUT !S NOT
YET 1NCLUDED IN THE ON-LlNE MUNICIPAL CODE
ORDINANCE NO. 3213
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
FULLERTON, CALIFORNIA, AMENDING CHAPTER 2.33 OF TITLE 2
OF THE FULLERTON MUNICIPAL CODE TO ADD A NEW SECTION
2.33.440 REGARDING TRANSPARENCY AND ACCOUNTABILITY IN
LABOR NEGOTIATIONS
ORDINANCE NO. 3213
AN ORDINANCE OF THE ClTY COUNCIL OF THE CITY OF
FULLERTON, CALiFORNIA AMENDING CHAPTER 2.33 �F TITLE
2 OF THE FULLERTON MUNICIPAL CODE TO ADD A NEW
SECTION 2.33.040 REGARDING TRANSPARENCY AND
ACCOUNTABILITY IN LABOR NEGOTIATIONS
WHEREAS, the City Council of the City of �ullerton finds that transparency
and accountability during labor negotiations is essential to good government; and
WHEREAS, Government Code section 3500 et seq. is known as the
"Meyers-Milias-Brown Act" {"the Act"); and
WHEREAS, Government Code section 3500 provides in pertinent part that
the purpose and intent of the Act is "to strengthen merit, civil service and other
methods of administering emplayer-employee relations through the establishment
of uniform and orderly methods of communication between employees and the
public agencies by which they are empEoyed"; and
WHEREAS, the City Council finds that public understanding of the
negotiation process and its impacts is enhanced by ensuring the various aspects of
the negotiation process are reported on in an open and transparent manner; and
WHEREAS, the City Council finds that the negotiation process between the
City and its employees required by the Ac#, regarding changes in wages, hours and
other terms and conditions of employment, woulcf benefit from the opinions of an
informed and knowledgeable public; and
WHEREAS, it is the determination of the City Council that negotiations
occurring under the Act will be facilitated when undertaken in the presence of an
informed public.
WHEREF4RE, the City Council of the City of Fullerton does hereby ordain
as follows:
Section 1. Section 2.33.040 is hereby added to Chapter 2.33 Personnel
System of Title 2 of the Fullerton Municipal Code read as follows:
Section 2.33.040 TRANSPARENCY AND ACCOUNTABILTY IN LABOR
NEGOTIATIONS
This section shall apply to certain meet and confer processes, as specified
herein, undertaken pursuant to the Meyers-Milias-Brown Act, where either
a recognized employee organization or the City, through their respective
representatives, propose certain changes in wages, hours, or any other
terms or conditions of employment.
A. Annual Fiscal Analysis
1. Annual Analysis of Cost and Liabilities
Staff shall prepare an annual analysis of costs and liabilities related
to each Memorandum of Understanding {hereinafter MOU)
between a recognized employee association and the City of
Fullerton as well as each group of employees for whom pay and
benefits are set by resolution or employment agreement. The
analysis shall detail the cost of every form of compensation and
benefit provided under each MOU, resolution or employment
agreement as well as the funded and unfunded liabilities arising
therefrom.
The annual fiscaf analysis shall be submitted to the City's
independent auditor during the course of the annual City financial
audit.
2. Public Disclosure
The annual analysis report shall be reviewed and approved by City
Council at a regular City Council meeting and thereafter posted for
public review on the City of Fullerton website for a period of no less
than twelve months.
B. Designation of Negotiators
1. Principa! Negotiator
An outside negotiator shall be appointed by the City Council to lead
negotiations on behalf of the City in all formaf ineet and confer
processes undertaken pursuant to the Meyers-Milias-Brown Act,
where 1) either a recognized employee organization or the City
proposes significant changes, as defined herein, to wages, hours
or other terms and conditions of employment and 2) the employee
association is represented by third party negotiators or legal
counsel, or 3) otherwise deemed appropriate by Council.
The requirement for an outside negotiator may be waived by a
majority vote of City Council.
For purposes of this Ordinance, significant changes are defined as
changes to:
a. Base salary, in conjunction with at least one other significant
change;
b. Other pay representing one half percent (.5%) or greater of
total base salary for the employee association, in conjunction
with at least one other significant change;
c. City contributions to medical insurance; .
d. CaIPERS retirement benefits or formulas;
e. City or employee contributions for CaIPERS retirement
benefits, in conjunction with at least one other significant
change;
f. City contributions to or structure of other post employment
benefit;
g. Extensions to the terms af an MOU in excess of 12 months.
If an outside negotiato� is required or deemed appropriate, he or
she shall 1} not be an employee of the City, 2) not be a member of
the public pension plan that covers City employees, and 3) have a
demonstrated expertise in negotiating labor and employment
agreements on behalf of municipalities.
2. City Negotiating Team
The City Council shall designate one or more Executive or
Management level employees to assist the principal negotiator as
the City Council and/or principal negotiator deem appropriate.
3. Public Disclosure
The City Council shall repo�t out the designated principal negotiator
for each negotiation process upon appointment.
Waiver of the requirement to appoint an outside negotiato� requires
a majority vote of City Council at a regular City Council meeting.
C. Closed Session Rules for Labor Negotiations
1. City Council disclosures
Each City Council member shall disclose during closed sessions,
the identity of any and all employee association representatives
with whom the member has had any verbal, written, electronic or
other communication(s) since the last City Council closed session
discussion regarding a subject matter af a pending meet and confer
process.
2. City Negotiator responsibilities
City appointed labor negotiators shall have the duty to advise the
City Council during any clased session of all offers, counteroffers,
information, and/or statements of position discussed by the labor
negotiators taking place in the meet and confer process since the
last such closed session.
3. Fiscal analysis of proposals
a. Staff shall prepare updated fiscal analysis reflecting the
impact of changes under consideration by City Council. The
fiscal impact of significant changes as defined herein shall
be reviewed by an outside auditor prior to City Council
review.
b. Analysis of impacts to long term and short term liabilities and
funding status shall be completeci by an independent actuary
for proposed changes to any of the following: 1) City or
employee medical contribution formulas, 2} CaIPERS
retirement benefits or formulas, or 3) other post employment
benefits.
c. Council members shall review and consider the fiscal o�
actuarial analysis required in this section prior to authorizing
negotiation parameters. Further, each Council member shall
sign the required analysis in acknowfedgement that it was
read and considered.
4. Public Disclosure
The City Council shall report out after closed session notification of
written offers rejected by either the City or an employee
association. A written offer shall be deemed rejected at such time
as a written counteroffer is macfe by fhe other party.
Each City Council member shall publically identify, at the time of
the closed session report, any and a11 employee association
representatives with whom he or she had any verbal, written,
electronic or other communication(s} since the last City Council
meeting regarding a subject matter of a pending meet and confer
process.
The following shall be posted on the City of Fullerton website
subsequent to the reporting out after closed session:
a. Rejected written offers by an employee association in their
entirety.
b. Rejected written offers by the City in their entirety along with
the fiscal analysis considered by City Council in approving
the negotiating parameters authorizing the offer and a
summary of the significant changes proposed in the offer.
D. Adoption of Memorandum of Understanding
1. Tentative Agreement
A tentative agreement reached through the labor negotiation
process shall be introduced for first consideration at a regular City
Council meeting and presented for approva( at the next regular City
Council meeting. The updated fiscal analysis reflecting all changes
proposed in the tentative agreement shall be included in the
agenda material for both meetings.
2. Public Disclosure
Tentative agreements and the updated fiscal analysis shall be
available for public review no less than seven (7) days prior to the
first consideration by City Council and during the time period
between the first consideration and final approval by City Council.
Section 2. Applicability. The provisions of this Ordinance shall apply to labor
negotiations for which exchange of initial written proposals by the City and an
employee association occurs after August 15, 2014.
Section 3. Inconsistencies. Any provision of the Fullerton Municipal Code or
appendices thereto inconsistent with the provisions of this Ordinance, to the extent
of such inconsistencies and or further, is hereby repealed or modified to the extent
necessary to affect the provisions of this Ordinance.
Section 4. Severability. If any provision or clause of this Ordinance or the
application thereof to any person or circumstances is held to be unconstitutiona! or
otherwise invalid by any court of competent jurisdiction, such invalidity shall not
affect other provisions or clauses or applications of this Ordinance which can be
implemented without the invalid provision, clause or application; and to this end,
the provisions of this Ordinance are declared to be severable.
Section 5. Publication. This Ordinance shall take effect and be in full force thirty
(30) days from and after the passage thereof, and prior to the expiration of fifteen
(15) days from its passage shall be published once in the Fulle�tan News Tribune,
a newspaper af general circulation, printed and published in the City of Fullerton or,
in the alternative, the City C[erk may cause to be published a summary of this
Ordinance and a certified copy of the text of this Ordinance shall be posted in the
office of the City Clerk five (5) days prior to the date of adoption of this Ordinance,
and within fifteen (15) days after adoption, the City Clerk shall cause to be
published the aforementioned summary and shall post in the office of the City Clerk
a certified copy of this Ordinance together with the names and members of the City
Council voting for and against the same.
ADOPTED AND APPROVED BY THE FULLERTON CITY COUNCIL ON
JULY 15, 2014.
�
Dougl B. Chaffee, Mayor
Attest:
. -
illiams, City Clerk
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Date
City of Fullerton
ORDINANCE CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF FULLERTON )
ORDINANCE NO. 3213
I, Lucinda Williams, City Clerlc and ex-officio Clerk of the City Council of the City of Fullerton, California,
hereby certifies that the whole number of the members of the City Council of the City of Fullerton is five;
and that the above and foregoing Ordinance No. 3213 had first reading by title only, introduction, and
further reacling waived at the June 17, 2014 City Council regular meeting and was adopted at the July
15, 2014 City Council regular meeting by the following vote:
COUNCIL MEMBER AYES: Chaffee, Flory, Fitzgerald
COUNCIL MEMBER NOES: Sebou�n, Whitaker
COUNCiL MEMBER ABSTAINED: None
COUNCIL MEMBER ABSENT: None
� ,
cinda Williams, City Clerk
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�N727.1�1239256.DOCX;1�
CITY COiJNCIL MINUTES August 12, 2014
4. REPORTS FROM MAYOR SMITH—None
5. REPORTS FROM COUNCILMEMBERS
5.1 Mayor pro tem Whitaker - Request that the Council consider the adoption of a Civic
Openness in Negotiations (COIN) Ordinance. (C2500.D)
PUBLIC SPEAKER- Matthew Cunningham spoke in favor of a COIN Ordinance.
DISCUSSION — Mayor pro tem Whitaker explained this would create more transparency in
employee negotiations, possibly providing more information to the public on offers, counter
offers, financial aspects and discussions.
Council discussed concerns including the fact that there are already laws that govern
negotiations and this could prolong the process and increase costs. It was also discussed that
there are several versions of a COIN ordinance throughout Orange County, and that a matrix
would be helpful to see the various options available, including what has been done in other
cities, an analysis of pros and cons, financial aspects, and timelines.
Council directed the City Attorney to return with a matrix of options for the September 9,
2014, City Council meeting.
6. REPORTS FROM BOARDS, COMMITTEES,AND COMMISSIONS—None
7. ADMINISTRATIVE REPORTS—None
8. REPORTS FROM CITY MANAGER
S.1 City Manager recommendation to establish a two member Council subcommittee to
meet with the Washington/Hamlin neighborhood and the applicant to discuss issues related to
a potential development project in this area.
NOTE: The City Manager withdrew his request for the establishment of a subcommittee at
this time.
PUBLIC SPEAKERS: Rubin Garnica spoke against any development. Kimberley Johnson
spoke in favor of allowing the community to be part of the process.
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