Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Rocio Kiryczun, Human Resources Director
Michelle Kuka, Deputy Director, Human Resources
Subject: Successor agreement to the Memorandum of Understanding with the Probation and Detention Association (PDA)
RECOMMENDATION:
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Adopt a resolution approving the Tentative Agreement establishing the terms and conditions of a successor agreement to the Memorandum of Understanding with the Probation and Detention Association, for the term of May 29, 2022 through May 17, 2025.
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BACKGROUND:
The current Memorandum of Understanding (MOU) with the Probation and Detention Association (PDA) expired on May 28, 2022, and the County has concluded negotiations with PDA. The County and PDA have met and conferred in good faith and agreed to the terms as described in the Tentative Agreement. The membership has ratified the County’s offer set forth in the Tentative Agreement.
DISCUSSION:
This agreement covers all of the staff in classifications represented by PDA. The following is a high-level summary of the major changes, but is not a substitute for the attached successor MOU and the detailed terms contained therein.
Term
May 29, 2022 through May 17, 2025
Salary Adjustment
Classifications in this bargaining unit will receive salary increases as follows: 3% effective the pay period in which the Board of Supervisors approves this successor MOU in 2022, 3% effective May 28, 2023 and 4% effective May 19, 2024.
Retiree Health changes
The new agreement makes significant changes to retiree health benefits.
1) Effective January 8, 2023, current sick leave hours will be frozen, except that 192 hours will remain in each employee’s sick leave balances and new sick leave hours will continue to be earned at 3.7 hours per pay period (96.2 hours per year) with a cap of 960 hours.
2) Retiree Health Benefits will be based on hire date and years of service at time of retirement
a. Employees hired before the transition date with less than fifteen years of service at the time of retirement will have frozen sick leave hours plus any of the unused 192 hours of old sick leave at time of retirement deposited into the employee’s Retiree Health Reimbursement Account (RHRA) at a rate of $440 or $400 for each 8 hours of sick leave, depending on the employee’s time with the County.
b. Employees hired before the transition date with between fifteen and twenty years of service at the time of retirement to age 65 will receive a County contribution up to $500 per month for purchase of medical, dental and vision through the County health plans. When the retiree reaches the age of 65, the County contribution will cease. In addition, 50% of frozen sick leave hours plus any of the unused 192 hours of old sick leave at time of retirement will be deposited into the employee’s RHRA at the employee’s base hourly rate of pay at time of retirement.
c. Employees hired before the transition date with twenty or more years of service at the time of retirement to age 65 will receive a County contribution up to $1000 per month for purchase of medical, dental and vision through the County health plans. When the retiree reaches the age of 65, the County contribution will cease. In addition, 50% of frozen sick leave hours plus any of the unused 192 hours of old sick leave at time of retirement will be deposited into the employee’s RHRA at the employee’s base hourly rate of pay at time of retirement
d. New employees hired after the transition date, the County will contribute $50.00 per month to a Retiree Health Savings Account and the employee will contribute $50.00 per month to a RHRA.
Other economic changes
Employees in an active paid status in this bargaining unit will receive a one-time, lump sum payment of two thousand dollars ($2,000) as a ratification bonus.
Employees represented by PDA will receive three days of Winter Recess in December 2022, December 2023 and December 2024.
The County Attorney has reviewed and approved the resolution as to form.
Financial Impact on County’s Future Annual Costs
Government Code 7507 requires the County to provide the estimated financial impact that proposed changes in retirement benefits or other postemployment benefits would have on the future annual costs including but not limited to the annual dollar changes, or the total dollar changes involved as well as normal cost and any change to accrued liability.
As reflected in the attached letter from the County’s actuary, Milliman, the retiree health benefit reflected in this analysis is projected to increase the actuarial present value of benefits from $25,080,000 to $25,810,000, which is an increase of $730,000. The service cost represents the value of benefits earned during the year on an on-going basis and will decrease over time as new hires will only receive the $50.00 monthly contribution toward a RHSA and not incur service costs.
Active existing employees covered by this MOU, will contribute 0.5% of salary, which will offset the increase in the actuarial present value of benefits, meaning that increased employee contributions will be equal to the change in the actuarial present value of benefits associated with the retiree health benefit.
Financial Impact on County’s Retirement System
Government Code Section 31515.5 requires the County to provide the estimated financial impact that proposed benefit changes or salary increases would have on the funding status of SamCERA ‘s retirement fund, the County’s retirement system. As reflected in the attached letter from SamCERA’s actuary, Milliman, the proposed salary and benefit increases for the PDA employees is estimated to be an increase in the Unfunded Actuarial Accrued Liability (UAAL) of $21,000. Note that this is the impact on SamCERA funding only and it does not reflect the cost to the County of providing the lump-sum payments. While the UAAL of SamCERA will be higher by this amount, the funded ratio, rounded to the nearest 0.01%, will be unchanged.
FISCAL IMPACT:
The cost of the salary and other changes will result in a net increase of approximately $5.6 Million for the term of this agreement.