HomeMy WebLinkAboutSupplemental - Questions from Robert Goldberg (Closed Session) Dana Engstrom
From: Gloria Harper
Sent: Monday, May 13, 2019 8:24 AM
To: Dana Engstrom
Subject: Fwd: Closed Session: Several Considerations Regarding Labor Contract Negotiations
Attachments: COLA COST 7.1.19 (non police).xls;ATT00001.htm; Holiday pay goes up with longer
work day.pdf;ATT00002.htm; Financial model.Mid Year.GF Rev vs Expenses.3.11.19.doc;
ATT00003.htm
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Begin forwarded message:
From: "Robert Goldberg" <rgoldberg@1ive,com>
To: "Schelly Sustarsic" <ssustarsic@sealbeachca.gov>, "Thomas Moore"
< moore@sealbeachca.gov>, "Sandra Massa-Lavitt" <SMassaLavitt@sealbeachca.gov>, "Mike
Varipapa" <MVaripapa@sealbeachca.gov>, "Joe Kalmick" <ikalmick@sealbeachca.gov>
Cc: "Jill Ingram" <jingram@sealbeachca.gov>, "Gloria Harper" <gharper@sealbeachca.gov>,
"Bruce Bennett" <bruce.bennettl @verizon.net>, "Community Media Corporation"
<editor2@sunnews,org>, "Jeannette Andruss" <ieannetteandruss@gmail.com>, "'johnny waller"'
<iohnny.walicr@ icloud.com>
Subject: Closed Session: Several Considerations Regarding Labor Contract Negotiations
Dear Council Members,
Labor negotiations are always a difficult balancing act between the goals of attracting/retaining
good employees and fiscal responsibility to the taxpayers. To perhaps help with your
deliberations, I would like to offer the following considerations:
1) Cost of COLA's (Cost of Living Adjustments): Since consideration of these is always "on the
table," I think it is important for the Council to be aware of the actual dollar cost of granting
various percent increases to match inflation. Using the staffing levels and costs from the FY
2018-19 budget, my analysis (see attached 2-page spreadsheet for calculations) estimates the
following cost impacts in FY 2019-20 to the General Fund and the combined Sewer and Water
Operations Funds of granting various COLA's to the Executive Managers and non-police
bargaining units:
Sewer and
FY 2019-20 General Fund Water Funds
Cost of 1% COLA $45,393 $16,998
Cost of 2% COLA $90,787 $33,996
1
Cost of 3% COLA $136,180 $50,994
Cost of 3.3% COLA $149,798 $56,093
A possible COLA of 3.3% is included in the table because this was the actual increase in the local
CPI index from April '18 to April '19. Sewer and Water Operation Fund impacts are included
since increased costs will need to be factored into the upcoming water and sewer rate
increases. The above table is just for one year, FY 19-20. Increases in future years will depend
on the expansion of staffing and future inflation.
2) Our Finance Department's Dismal 5-Year Budget Forecasts: At the mid-year budget update
on 3/11/19, staff presented their revised graphic of projected General Fund revenues and
Expenditures (see below and attachment).
This graph is notable for predicting that our Measure BB budget surplus will dwindle to nothing
(i.e., revenue = expenditures) in three years (FY 2021-22). I would expect that the labor
contracts that you are negotiating extend at least this long. The expenditures in the graph do
include annual COLA's of 3%. Thus, limiting COLA's to less than 3% (either every year in the
contracts, or just in FY 2021-22) could potentially create a modicum of a surplus in FY 2021-22.
For example, limiting the COLA in FY 2021-22 to say, 1%, would potentially create a surplus of
$90,000 (see my COLA table above) in that year. Be aware that as a negotiating strategy, the
Council could severely limit or eliminate COLA's now, but agree in writing to "reopen" the
negotiations at a future time if our financial predictions improve significantly.
Speaking of financial predictions, please also be aware that the graph above shows an
approximate $1 million deficit in FY 2023-24.
3) Possible Granting of 10-Hour Workdays: In considering this option, please be aware of the
following:
a) Per our current labor contracts, the number of hours that employees are paid per holiday is
based on the number of hours they would have otherwise worked on that day. So
consequently, our current "9/80" employees get 9 hours of holiday pay for holidays that fall on
Mondays-Thursdays. However, those on a 4/10 schedule will get 10 hours of holiday pay
regardless which day of the week the holiday falls. This provision is already incorporated into at
least one contract that you are considering (see attached Section 8 Holidays from SBSPA MOU).
With 12 holidays per year, granting a 10-hour workday will guarantee employees at least 12
more paid hours of leave per year. What is the dollar value of this benefit?
b) I would expect that longer days may be associated with decreased productivity per hour.
What is the research on this issue? Do our employees currently have an unpaid half or full-hour
lunch period? If so, consider the impacts of not just a 10-hour day, but rather an 10.5 or 11
hour day.
2
As always, thank you for your service and consideration,
Robert Goldberg
3
FY 19-20 Cost Analysis of Possible COLA's for Non-SBPOA/PMA
(Police) Employees
Sewer and Water
Costs Impacted by COLA's General Fund Funds
Full-Time Salary^ $ 3,947,967 $ 1,500,600
Comptime Buy/Payout $ 9,600 $ -
Vacation Buy/Payout $ 48,200 $ 12,000
Total Salary & Pensionable Other Pay $ 4,005,767 $ 1,512,600
CaIPERS (Employer Normal Cost Only)* $ 486,576 $ 164,389
Overtime $ 47,000 $ 22,800
Total Costs Impacted by COLA's $ 4,539,343 $ 1,699,789
Cost of 1% COLA $ 45,393 $ 16,998
Cost of 2% COLA $ 90,787 $ 33,996
Cost of 3% COLA $ 136,180 $ 50,994
Cost of 3.3% COLA $ 149,798 $ 56,093
^Includes City Manager's salary assuming the Council will grant her raises that will at least equal to staff.
*Assuming all employees are "Classic" CalPers members, Employer Normal Cost for FY 19-20 for
Miscellaneous Plan employess is 10.868%of Pensionable Pay, and 23.654%for Marine Safety. Respective
PEPRA rates, which are not used here, are 7.072%and 13.786%, respectively.
Resolution Number 6702 SBSPA
E. Employees covered by this agreement who are on leaves of absence,
without pay, shall not accrue vacation leave hours during said leaves of absence.
F. Employees covered by this agreement shall only be allowed to accrue a
maximum of 240 hours of vacation. Once this maximum is reached, all further
accruals will cease. Vacation accruals will recommence after the employee has
taken vacation and the employee's accrued hours drop below the maximum. The
maximum can only be exceeded with the approval of the City Manager in writing.
G. Employees are encouraged to use at least the amount of vacation hours
earned each fiscal year. Those employees who have been credited with
preexisting leave hours are expected to use a portion of the excess as leave
time, in addition to the new vacation hours, each year until the maximum accrual
is met. The City recognizes that a number of long-term employees have accrued
substantially more leave time than shorter-term employees, and that it will likely
take them significantly longer to achieve this goal. It is the intent of this section
to balance the personal interests of the employee with the financial concerns of
the City; as such, significant progress toward reaching the maximum accrual
amounts may be deemed a success.
H. Vacation leave time shall not be approved until such time as it has been
earned, unless prior, special arrangements have been made with the City
Manager. Vacation leave shall be requested by the employee prior to the start
of the vacation leave period. Such vacation leave to be taken shall be subject to
the prior approval of the Department Head, or designee, subsequent to
consideration of the departmental workload and other staffing considerations,
such as but not limited to, the previously approved vacation schedule of other
employees, sick leave and position vacancies.
I. Not more than once in each fiscal year, an employee who has completed
at least 1 year of continuous service shall, upon request, receive compensation
for up to 50 hours of accrued vacation time provided that the employee has taken
an equal amount of time off within that fiscal year.
SECTION 8: HOLIDAYS
A. The City agrees to grant all full-time employees a full shift pay for each
holiday recognized by City. Every full-time employee of the City shall be granted
the following holidays with pay:
Holiday Date
New Year's Day January 1st
Martin Luther King Day 3rd Monday in January
Presidents' Day 3rd Monday in February
Memorial Day Last Monday in May
Independence Day July 4th
12 of 25
Resolution Number 6702 SBSPA
Labor Day First Monday in September
Veteran's Day November 11th
Thanksgiving Day Fourth Thursday in November
Calendar day following Thanksgiving Day
Christmas Eve December 24th
Christmas Day December 25th
*Floating Holiday (discretion of employee)
Total of 12 holidays annually
"Floating Holiday must be taken during each fiscal year(July 1st through June 30th).
Floating holidays must be approved in advance by the Department Head.
B. When a holiday falls on a Sunday, the next day (Monday) shall be observed
as a holiday. When a holiday falls on a Saturday, the preceding day (Friday) shall
be observed as a holiday.
C. When a holiday falls on a full-time employee's regularly scheduled day off,
the employee shall receive compensatory time off for a full shift in lieu of holiday
pay, in keeping with other provisions of this MOU.
Example #1: Employee A normally works a 9/80 schedule, and a
holiday falls on the employee's Friday off, Employee A
would receive 8 hours of compensatory time off.
Example #2: Employee B normally works a 9/80 schedule, and a
holiday falls on a Monday, Tuesday, Wednesday, or
Thursday, Employee B would receive 9 hours of
compensatory time off.
Example #3: Employee C normally works a 4/10 schedule, and a
holiday falls on a Monday, Tuesday, Wednesday,
Thursday, or Friday, Employee C would receive 10
hours of compensatory time off.
D. An employee who is required to work on a holiday shall receive pay
computed at 11/2 times the employees' basic hourly rate for the number of hours
actually worked.
Example: Employee A works 6 hours on Christmas Day. Employee A
would earn pay computed as follows:
Hours Pay Rate
Full-shift holiday pay base hourly rate
6 hours work pay regular hourly rate or overtime
hourly rate, as applicable under MOU
13 of 25
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