DATE: October 27, 2015
TO: Mayor and City Council
FROM: Director of Human Resources
SUBJECT
Title
Resolution Approving the Memorandum of Understanding between the City of Hayward and the International Federation of Technical Engineers, Local 21
End
RECOMMENDATION
Recommendation
That the City Council adopts the attached Resolution approving the Memorandum of Understanding (MOU) between the City of Hayward and International Federation of Technical Engineers, Local 21 (collectively, "Local 21").
Body
BACKGROUND
In 2012, the City of Hayward projected a $14.9 million shortfall in the General Fund for FY 2013 and further projected that this structural gap would grow to $19.4 million in FY 2014 unless significant changes were made. At that time, the City also projected an annual deficit of $20-$30 million annually over the next ten years absent the implementation of on-going structural budget changes. In FY 2015, the projected structural deficit was $4.5 million. Although the City's revenues are improving, expenses are rising faster than even our most optimistic revenue projections. Employee salaries and benefits comprise approximately eighty percent (80%) of the City's expenses.
Over the last five years, CalPERS rates have increased substantially. In 2010, the employer contribution rate for miscellaneous employees, which includes Local 21 was 11.947% and the current rate for FY2016 is more than double that amount at 24.467%. For the same period, medical premium costs have increased more than 34%. Despite the financial challenges, the City remains committed to providing fair and competitive employee salary and benefits packages in a fiscally responsible manner that also addresses the structural deficit in a way that provides long-term financial stability. This task is extremely challenging because any reasonable solution to achieve financial stability must include increased emplo...
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