DATE: November 19, 2024
TO: Mayor and City Council
FROM: Director of Human Resources
SUBJECT
Title
Adopt a Resolution to Execute a Side Letter of Agreement Amending the Memoranda of Understanding (MOU), Section 5.13 C - Retiree Medical Trust between the City of Hayward ("City") and the Hayward Fire Chief's Association (HFCA), to Amend Employee Contributions
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RECOMMENDATION
Recommendation
That the Council adopts the resolution (Attachment II) for the side letter of agreement amending the HFCA MOU, Section 5.13 C - Retiree Medical Trust provision between the City and HFCA, to set the employee contribution amount for HCFA employees at one percent (1%) of Step E Fire Captain to align with International Association of Firefighters (IAFF) - Local 1909 and Hayward Fire Officers Association (HFOA).
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SUMMARY
The City negotiated with IAFF and HFOA and established a MOU effective July 1, 2024, through June 30, 2029, regarding the Medical Expense Reimbursement Plan (MERP). The IAFF and HFOA MERP mandatory employee contribution rate was set at one percent (1%) of the monthly base pay of Step E Deputy Fire Chief [fifty-six (56) hours], plus an additional contribution based on years of service. This contractual agreement has created an unintentional impact for HFCA employees. As such, HFCA mandatory employee contribution rate was set higher than the IAFF and HFOA whose contributions are based on one percent (1%) of Step E Fire Captain which is not allowable per Internal Revenue Service (IRS) non-discrimination rules for Highly Compensated Employees.
As a result, the City and the HFCA have met and conferred on the matter and entered into this Side Letter of Agreement to amend MOU language with respect to the MERP to ensure compliance with IRS guidelines. This side letter will set the employee contribution rate for HCFA employees at one percent (1%) of Step E Fire Captain to align with the other two bargaining units...
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