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    Scheduled At Mainly Ceremonial Last Council Meeting With Exiting Mayor/Councilmembers/Auditor, Pay Raise MOUs for City Mgmt & Two Other City Employee Groups

    (July 11, 2006) -- Scheduled for the later today -- the last day of an outgoing City Council meeting at which ceremonial events (exiting Mayor O'Neill, Councilmembers Colonna and Kell and Auditor Burroughs) will likely consume public and other media attention -- an item will seek Council approval for Memoranda of Understanding (MOUs) effectively implementing raises for LB City Management employees (whose members unionized themselves), the LB Ass'n of Engineering Employees and LB Ass'n of Confidential Employees (details below)

    The requested action comes on the same night as Councilmembers are scheduled to consider voting themselves a retirement benefit equating to 50 hours of sick leave per year of incumbency...the same formula the Council approved on May 23 for exiting Mayor O'Neill. In O'Neill's case (twelve years as Mayor), the [our term] "golden handshake" will be worth roughly $31,000 in taxpayer paid health insurance benefits.

    Management's request for Council approval of the MOUs, which would pave the way for pay raises and associated pension costs, comes almost exactly four years after city management recommended and Councilmembers voted to approve increased pensions for non-public safety city employees on the last day of an outgoing Council (with Grabinski and Shultz) and the first day of an incoming Council (with Reyes Uranga and Lerch). Both votes were 9-0 (with Councilmembers B. Lowenthal, Baker, Colonna, Carroll, Kell, Richardson & Webb). Mayor O'Neill, who was a beneficiary of the pension increase, presided over both pension votes.

    An agendizing memo for today's (July 11) Council item states in part:

    ...The MOUs [Memoranda of Understanding] with all three Associations cover the period from October 2,2004 through September 30,2008. All MOUs have been executed by City representatives and representatives of the three employee organizations.

    Major provisions of the MOUs with the Confidential Association and the Engineering Association are: across the board cost-of-living increases over the four-year term of the agreement totaling 1 1 percent; a new lower tier of retirement benefits for new employees; a 1 percent increase in the employee contribution payment toward retirement benefits beyond the 1 percent they are currently paying; and increased participation in the cost for health insurance benefits. In addition, representatives of the Engineering Association will receive a market rate adjustment of 8 percent over the term of the agreement to address the City’s inability to attract candidates with these skills. The agreement with the Management Association contains similar provisions for retirement and health insurance. Although it does not provide for any automatic cost-of-living adjustments, the agreement reaffirms the City’s commitment to implement a performance-based compensation plan for management employees.


    City Council action is requested on July 11, 2006 to ensure implementation of the MOU provisions.


    The estimated salary increase cost of the Confidential Association and Engineering Association MOUs to the General Fund for the remainder of Fiscal Year 2006 (FY 06) is approximately $89,028 and approximately $376,162 to all other funds. There are no across-the-board salary increases in the Management Association MOU. The estimated savings or cost avoidance in FY 06 for the Engineering and Management-Safety Associations paying an additional 1 percent of the employee contribution rate to CalPERS is approximately $39,444 for the General Fund, $1 18,264 for Other Funds, or $1 57,708 for all funds. It is anticipated that the balance of the costs, net of CalPERS savings, will be supported by salary savings for the remainder of the current fiscal year. The total estimated cost for associated salary increases net of PERS cost avoidance in the MOUs is approximately $487,452 to the General Fund and $3,898,666 to all funds.


    Kevin Boylan
    Director of Human Resources


    s/ Gerald Miller
    City Manager


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