REPORT TO THE CITY COUNCIL June 19, 2014 FROM: JEFF CARDELL, Director Personnel Services Department] BY: KEN PHILLIPS, Labor Relations Manager Personnel Services Department] SUBJECT ..Title Adopt a Side Letter of Agreement between the City of Fresno and Unit 14, Represented by the City of Fresno Management Employees Association (CFMEA) Implementing an MOU provision on Payment of Health Care Premiums ..Body RECOMMENDATION It is recommended that Council approve the attached Side Letter of Agreement between the City and Unit 14, represented by CFMEA. The Side Letter implements an MOU provision which provides for a change in City payment of health and welfare premiums from a flat rate of $800 per month to 75%, or $813 per month, with future increases shared equally between the City and the employees. EXECUTIVE SUMMARY The MOU between the City and CFMEA contains a provision that allows renegotiation of the health and welfare benefit if a more favorable benefit is provided to another bargaining unit. In May 2014, a successor MOU with Unit 1, represented by the International Union of Operating Engineers, Stationary Engineers, Local 39, contained a more favorable benefit. The City's share of the health and welfare premium in the MOU with CFMEA is currently a flat rate of $800 per month, with employees contributing $284 per month. The MOU with Local 39 provides a City payment of 75% of the premium, or $813 per month, with employees contributing $271 per month. Any future increases are to be shared equally with the City paying 50% and employees paying the other 50%. The Side Letter of Agreement with CFMEA changes the City's payment of health and welfare premiums to match those with Unit 1 effective July 1, 2014. BACKGROUND In 2013, the City paid 80% of the monthly health and welfare premium set by the City of Fresno Health and Welfare Trust for the majority of employees. However, the City health and welfare premium contribution rate for new employees in a few units is 70% of the monthly premium. Through negotiations of successor Memoranda of Understanding, the City has been pursuing other cost sharing approaches of the health and welfare premiums. In the current MOU CFMEA agreed to a flat payment by the City of $800 per month; however, the MOU included a provision indicating that if another bargaining unit negotiated a greater City contribution towards health benefits that the City and the Association will meet and confer with the goal of providing the equivalent benefit. In May 2014, Council approved a successor MOU with Local 39 which included a City contribution of 75% of the health and welfare premiums with future increases to be shared equally with 50% paid by the City and 50% paid by the employee. The attached Side Letter of Agreement makes the change in payment of health and welfare premiums for employees in Unit 14 effective July 1, 2014. ENVIRONMENTAL FINDINGS Not applicable, LOCAL PREFERENCE Not applicable, FISCAL IMPACT Approval of this Side Letter of Agreement results in an additional cost in FY 2015 of approximately $10,452. The General Fund share is approximately $3,588. Attachment: Side Letter of Agreement between the City and CFMEA