(May 2, 2008) -- LB city management has negotiated and is proposing for voted City Council approval on May 6 a five year -- not the usual three year -- contract with the Int'l Ass'n of Machinists (IAM) representing non-public safety city employees.
Management indicates that if the Council approves the agreement, the Gen'l Fund taxpayer cost over five years will total approximately $15 million. Management says it expects the increased cost in FY 08 (current year) will be paid for in "budget savings"...but cites no additional source for funding the remainder of this continuing expenditure.
The contract appears on the same City Council agenda alongside a separate five year contract for the LB Firefighters Association (separate coverage click here)...with a General Fund taxpayer cost over five years totaling $11.5 million proposed to be funded in the current years with "budget savings"...and no additional source for funding this expenditure cited in additional years.
For non-Public Safety city employees, the proposed contract includes a 12% cost of living increase over five years (averaging 2.4% per year) plus 2% of salaries set aside during last three years "to help address classifications that fall significantly below market based compensation data..." (verbiage of city management transmittal memo, full text below).
The IAM is the public employee union that received the 2002 "pension spike" -- a Council action criticized by candidate Bob Foster in his 2006 Mayoral run. In addition to boosting salaries, the proposed raises would also effectively boost the ultimate continuing taxpayer-paid pension payouts for many of the employees who received the 2002 pension spike.
City management's transmittal memo says its estimated General Fund cost for the current FY 08 is $1.7 million ($2.9 for other funds like Harbor, Airport, Water, etc.) PLUS $2.6 million for the coming (starts Oct. 08) FY 09 ($4.3 million for all other funds). There's no management stated estimate in the transmittal memo for continuing taxpayer costs in further out years.
These sums are in addition to the 2002 "pension spike" increases.
However, the city management transmittal memo (text below) says the union has "agreed to pursue a new retirement approach, lowering the retirement formula for new employees, while providing an incentive to those employees who stay with the City through retirement. In addition, the proposed agreement provides incentives to improve workforce productivity and lower City costs . The long-term approach agreed to by the IAM will assist the City in making adjustments in a fiscally sound manner and insure adjustments are made to classifications furthest below market. The goal will be to get as many classifications to the middle of our comparable agencies in the region by the end of the agreement in September 2012."
The 2002 pension spike was agendized under former Mayor Beverly O'Neill as the final item for an outgoing Council and the first action for an incoming Council. Vice Mayor Bonnie Lowenthal is the only remaining Council incumbent to have voted for the pension spike twice. Councilwoman Tonia Reyes Uranga (competing against Vice Mayor Lowenthal in the June 2006 Dem primary for Assembly) and Councilman Val Lerch voted for it once, confronting it on their entering day in Council office.
As part of its newly proposed agreement, city management also says that the "MOU provisions pertaining to matters of compensation shall also apply to all unrepresented non-management employees as approved by the City Manager and other applicable appointing authorities."
LBReport.com has separate coverage coming of the proposed agreement with the LB Firefighters union.
Below is the transmittal memo for city management's proposed contract for non-public safety city employees:
Since September of 2007, City management representatives and representative of the
International Association of Machinists and Aerospace Workers (IAM) have had numerous
meet and confer sessions regarding changes in wages, hours and working conditions .
Meetings have been concluded and a Memorandum of Understanding (MOU) has been
jointly executed with the IAM . City Council approval is now necessary to adopt the MOU
that covers wages, benefits and other terms and conditions of employment from October
1, 2007 through September 30, 2012 .
The MOU provisions pertaining to matters of
compensation shall also apply to all unrepresented non-management employees as
approved by the City Manager and other applicable appointing authorities .
In order to
implement all of the compensation matters as provided in the MOU and as approved by
the applicable authorities for unrepresented non-management employees, it is necessary
for the City Council to adopt the attached Resolution prepared by the City Attorney . The
Salary Resolution and any other documents as may be necessary to conform to the MOU
provisions will be transmitted for approval at a later date .
The proposed long-term agreement attempts to address compensation challenges in hard
to fill positions, currently well below market, over a five year period, with the goal of
retaining and attracting a well qualified work force to deliver critical City services . Data
collection conducted in conjunction with negotiations indicated that salary freezes taken
over the last five years, when combined with increased employee contributions towards
benefits and retirement, has impacted the City's ability to attract individuals to many critical
positions. 93% of the benchmark classifications surveyed in conjunction with negotiations
were below the market median, with 67% significantly below the market median .
IAM represents over 4,000 City employees that provide Long Beach residents with core
city services, including trash collection, library services, water and gas utilities, public
health services and many more .
The proposed agreement provides cost-of-living
increases totaling 12% over the term of the five-year agreement (averaging 2 .4% per
year), with an additional 2% of salaries per year set aside during the last three years of the
contract to help address specific classifications that fall significantly below market based
upon compensation data to be collected during the first two years of the agreement . The
IAM has also agreed to pursue a new retirement approach, lowering the retirement
formula for new employees, while providing an incentive to those employees who stay with
the City through retirement .
In addition, the proposed agreement provides incentives to
improve workforce productivity and lower City costs . The long-term approach agreed to by
the IAM will assist the City in making adjustments in a fiscally sound manner and insure
adjustments are made to classifications furthest below market . The goal will be to get as
many classifications to the middle of our comparable agencies in the region by the end of
the agreement in September 2012...
The estimated cost of this MOU to the General Fund for Fiscal Year 2008 is $1.7 million,
and $2.9 million to all other funds, which will be supported by current year budget savings .
The estimated cost for Fiscal Year 2009 is $2.6 million to the General Fund and $ 4.3
million to all other funds, which will be included in the Fiscal Year 2009 Budget.
Approximately 36% of IAM salaries and associated costs accrue to the General Fund . The
average incremental cost for each year of the MOU is $3 million to the General Fund and
$5 million to all other funds .
SUGGESTED ACTION :
Approve recommendation .
Reaction is pending. Watch for it coming shortly on LBReport.com.