DATE: December 15, 2015
TO: Mayor and City Council
FROM: Director of Human Resources
SUBJECT
Title
Resolution Approving a Memorandum of Understanding between the City of Hayward and the Hayward Police Management Unit
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RECOMMENDATION
Recommendation
That the City Council adopts the attached Resolution approving the Memorandum of Understanding (MOU) between the City of Hayward and the City of Hayward Police Management Unit (“HPMU”)
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BACKGROUND
Employee salaries and benefits comprise approximately eighty percent (80%) of the City’s expenses. Over the last five years, the City of Hayward has worked hard to close a growing structural General Fund gap each fiscal year. Significant changes to employee salary and benefit packages are a key element in closing this gap. For FY 2016, the City Council was able to balance the General Fund with minimal use of the General Fund Reserves. This was accomplished through difficult decisions made by City Council and increased sharing of compensation costs by most of the City’s bargaining units. Unfortunately, it is projected that the structural gap in the General Fund will continue in FY 2017; and absent additional cost reduction efforts (or significant increases in revenues), it will continue to grow in future years.
Despite many financial challenges, the City remains committed to providing fair and competitive benefits packages in a manner that is both fiscally responsible and addresses the structural gap. This task is extremely challenging because any reasonable solution to achieve long-term financial stability must include an increase in employee contributions toward the growing cost of benefits
DISCUSSION
The City entered into negotiations with HPMU in May 2015. Consistent with its approach with other City bargaining units, the discussions were structured to provide appropriate salary adjustments for employees, maintain employee cost sharing, and assure market competitiveness. This tentative agreement achieves internal and external equity; continues employee cost sharing; achieves market competitiveness and internal equity, and recognizes the executive level role of Captains in the Police Department.
Accordingly, HPMU members will receive a 13% market adjustment paid in two equal installments of 6.5% in FY 2016 and FY 2017. In addition, they will continue to pay 15% to PERS, 6% of which is the employee paid share of the employers cost. Currently, the members receive salary increases and benefits equal to those of the Hayward Police Officers Association (“HPOA”).
Recognizing that their role is executive in nature within the Police Department, the members have agreed that compensation discussions will, in the future (i.e., after FY 2019), be more directly based on equity, (i.e., external market and internal compaction and compensation philosophies), rather than mirror the terms negotiated by HPOA. The tentative agreement reached with this group consists of on-going structural changes to wages and benefits, effective November 16, 2015. The new contract term is November 16, 2015 through June 30, 2019. Table 1 summarizes the key changes to the agreement:
Table 1: Summary of Key Differences
Other changes are generally administrative in nature and reflect updated language that is more concise and consistent with recent legal changes such as the Affordable Care Act and AB1522.
FISCAL IMPACT
The estimated cost of additional salary and benefits for the proposed MOU is approximately $477,681 over the three-year period.
NEXT STEPS
Human Resources in partnership with the Finance Department will work with HPMU to implement the terms of the Memorandum of Understanding.
Staff contact
Prepared and Recommended by: Nina S. Collins, Director of Human Resources
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Approved by:
Fran David, City Manager
Attachments:
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Attachment I |
Resolution Approving Memorandum of Understanding |
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Attachment II |
Exhibit 1: Memorandum of Understanding |
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