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SR - RES-11023 - LETTER OF UNDERSTANDING JULY 1 2017 THROUGH DECEMBER 31 20191. SUBJECT Resolution No. 11023 — A Resolution of the City Council of the City of Orange Establishing a Letter of Understanding between the City of Orange and the Orange Municipal Employees' Association (OMEA) Effective July 1, 2017 to December 31, 2019. 2. SUMMARY Resolution No. 11023 establishes a Letter of Understanding between the City of Orange and the Orange Municipal Employees' Association effective July 1, 2017 to December 31, 2019. Details of this agreement are provided under Section 7, "Discussion and Background" below. 1 3. RECOMMENDATION Approve Resolution No. 11023. 4. FISCAL IMPACT Costing Summar : Fiscal Year 2017 -18 Cost Description General Fund All Other Funds Cost of One -Time Lump Sum Payments $134,200 $33,500 Cost for Negotiated Benefits $37,000 $9,200 Total Annual Cost $171,200 $42,700 Fiscal Year 2018 -19 Cost Description General Fund All Other Funds Cost of One -Time Lump Sum Payments $134,200 $33,500 Cost for Negotiated Benefits $90,300 $22,600 Total Annual Cost $224,500 $56,100 Fiscal Year 2019 -20 Cost Description General Fund All Other Funds Cost of One -Time Lump Sum Payments $67,100 $16,800 Cost for Negotiated Benefits $106,400 $26,600 Total Annual Cost $173,500 $43,400 5. STRATEGIC PLAN GOAL(S) 1. Provide for a safe community. a. Provide staffing and resources to deliver services that ensure public safety. 2. Be a fiscally healthy community. a. Expend fiscal resources responsibly. 6. DISCUSSION and BACKGROUND In February 2017, the City began the collective bargaining process with the Orange Municipal Employees' Association. The prior contract between the parties expired on June 30, 2017. On August 1, 2017, the parties reached agreement on the terms and conditions of a new two and a half -year labor contract that includes the following: Term of Agreement Effective July 1, 2017 through December 31, 2019 Salary • Effective the pay period ending August 19, 2017, the first full pay period in July 2018, and the first full pay period in July 2019, employees shall receive lump -sum payments in accordance with the Schedule attached as Appendix "A ". • Only employees that are active (employed by the City) during the pay period that a lump -sum payment is to be made are eligible for such payments. Payments will be according to the classification the member is in at the time the lump -sum payment is made. Members in an acting position at the time of the lump -sum payment will receive the amount for their acting classification, regardless of whether their acting classification is within OMEA. Part-time, benefitted employees will receive a pro -rata share equivalent to their FTE classification in payroll at the time of the payment (e.g., a 25 -hour employee will receive 62.5% of the lump sum amount — 25 -hour employees are a 0.625 FTE). ITEM 3 08/08/17 8246957.1 OR020 -066 • If OMA, OMCEA, and /or WDEA receive any increase in salary, including base salary, lump sum payments, and /or step increases, and /or medical insurance greater than this unit in the fiscal years covered by the New MOU, then this unit shall receive the same. Medical Insurance Increase the City's contribution toward medical insurance benefits per employee as follows: • Effective the first pay period starting in January 2018, the City's contribution toward medical insurance benefits per employee shall increase by $50. • Effective the first pay period starting in January 2019, the City's contribution toward medical insurance benefits per employee shall increase by $50. Vacation Conversion Employees shall be allowed to convert up to 50% of current annual vacation accrual into cash in lieu of time off with pay for the 17/18, 18/19, and 19/20 Fiscal Years. Employees may convert annual vacation accrual twice each applicable year (and no more than 50% total each applicable year). Educational/Wellness Reimbursement Effective July 1, 2017, the parties agree to amend Article XVII, to add a new Section 4 to provide as follows: The City agrees to allow reimbursement to employees of up to $375 of the $1,250.00 allotted per fiscal year towards reimbursement for items 1, 2 and /or 3 below. Requests must be approved, prior to purchase or participation, by the Human Resources Director. 1) Membership in a health/fitness club. 2) Participation in a weight loss /stop smoking /wellness /fitness program. 3) Fitness equipment (home gym equipment). The City will not reimburse employees for any of the above listed activities for family/dependent health related expenses. ITEM 3 08/08/17 8246957.1 OR020 -066 Vacation Accrual Unit employees shall accrue vacation hours according to the following table: Years of Service Hours Years of Service Hours Years of Service Hours Years of Service Hours 1 80 8 120 15 160 22 188 2 96 9 120 16 164 23 192 3 104 10 120 17 168 24 200 4 112 11 128 18 172 25< 200 5 120 12 136 19 176 6 120 13 144 20 180 7 120 1 14 152 21 184 Language Changes The parties have agreed to incorporate several language changes in the new Memorandum of Understanding (MOU) to further clarify existing MOU provisions. There is no additional fiscal impact for these language changes. Said changes are noted in the attached Letter of Understanding (LOU). 7. ATTACHMENTS • Resolution No. 11023 (Letter of Understanding) — Exhibit "A" • Lump Sum Allocation Table — By Classification — Appendix "A" ITEM 4 08/08/17 8246957.1 OR020 -066 RESOLUTION NO. 11023 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE ESTABLISHING A LETTER OF UNDERSTANDING BETWEEN THE CITY OF ORANGE AND THE ORANGE MUNICIPAL EMPLOYEES' ASSOCIATION EFFECTIVE JULY 1, 2017 THROUGH DECEMBER 31, 2019 WHEREAS, the City of Orange, hereinafter referred to as "City," and the Orange Municipal Employees' Association have met and conferred in accordance with the requirements of the Meyers - Milias -Brown Act; and WHEREAS, the City and the Orange Municipal Employees' Association have reached agreement on wages, salaries, and other terms and conditions of employment effective July 1, 2017 through December 31, 2019; and WHEREAS, the City Council of the City of Orange has consulted with its Chief Negotiator concerning the proposed employment terms contained in the attached Letter of Understanding; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange that the attached Letter of Understanding is approved and incorporated by reference as Exhibit "A." ADOPTED this 8 day of August 2017. Teresa E. Smith, Mayor of the City of Orange ATTEST: Mary E. Murphy, City Clerk of the City of Orange