CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report

SR 2016-1210
December 6, 2016
Consent Agenda
TO:

Honorable Mayor and City Council Members

SUBMITTED BY:

Maxine Gullo, Human Resources Manager

APPROVED BY:

Chip Rerig, City Administrator

SUBJECT:

Adoption of the Letter Agreement between the City of Carmel-by-the-Sea and Carmel
Fire Ambulance Association and authorization of the City Administrator to execute
Letter Agreement on behalf of City.

RECOMMENDATION
Adopt the Letter Agreement between the City of Carmel-by-the-Sea and Carmel Fire Ambulance Association
and authorize City Administrator to execute letter agreement on behalf of City.
BACKGROUND / SUMMARY
The City of Carmel-by-the-Sea and the Carmel Fire Ambulance Association are in the midst of negotiating a
Memorandum of Understanding (MOU) regarding all terms and conditions of employment, with the goal of
implementing a complete MOU by January 1, 2017. In the meantime, the parties wish to implement the same
wage increase, along with the increased employee contribution to CalPERS that have been agreed upon with all
other employee associations in the city. The parties are entering into this Letter Agreement to memorialize their
limited agreement on the following two terms:
Wage Increases
A. Effective the first pay period following adoption of this Agreement by the Carmel-by-the-Sea City
Council, all members shall receive a 3.0% salary increase. The increase shall be retroactive to
January 1, 2015.
B. Effective the first pay period following adoption of this Agreement by the Carmel-by-the-Sea City
Council, all members shall receive an additional salary increase of 3.0%. The increase shall be
retroactive to January 1, 2016.
Retirement Contributions
Effective January 1, 2017, the employees described in Paragraphs 3A and 3B in the Letter Agreement, shall pay their
required member contribution rate of 9% for their respective benefit formula, plus an additional 3% of pensionable
compensation towards the employers contribution.
For the duration of this Agreement, these employees shall contribute no more than 12% of pensionable compensation
towards retirement.
Effective January 1, 2017, the employees, described in Paragraph 3C of the Letter Agreement shall pay their
required member contribution rate of 50% of the total normal cost of their pension benefit, plus an additional 3% of
pensionable compensation towards the employers contribution.

ATTACHMENTS
1. Resolution of the City of Carmel-by-the Sea approving a Letter Agreement between the City of Carmelby-the-Sea and the Carmel Fire Ambulance Association and authorize City Administrator to execute
Letter Agreement on behalf of City.

CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION NO. 2016-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA APPROVING A LETTER
AGREEMENT BETWEEN CITY OF CARMEL-BY-THE-SEA AND THE CARMEL FIRE AMBULANCE
ASSOCIATION AND AUTHORIZE CITY ADMINISTRATOR TO EXECUTE THE LETTER AGREEMENT ON
BEHALF OF CITY.
WHEREAS, the City of Carmel-by-the-Sea and the Carmel Fire Ambulance Association are in the midst
of negotiating a Memorandum of Understanding (MOU) regarding all terms and conditions of employment, with
the goal of implementing a complete MOU by January 1, 2017.
WHEREAS, the parties wish to implement the same wage increase, along with the increased employee
contribution to CalPERS that have been agreed upon with all other employee associations in the city.
WHEREAS, the parties are entering into this Letter Agreement to memorialize their limited agreement
on these two terms and will continue negotiations on all remaining terms.
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA DOES HEREBY:
1. Approve the Letter agreement for the Carmel Fire Ambulance Association as specified in Exhibit
A.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this
6th day of December, by the following roll call vote:
AYES:

COUNCILMEMBERS:

NOES:

COUNCILMEMBERS:

ABSENT:

COUNCILMEMBERS:

ABSTAIN:

COUNCILMEMBERS:

SIGNED:

ATTEST:

_______________________
Steve G. Dallas, Mayor

___________________________
Ashlee Wright, City Clerk

LETTER AGREEMENT
BETWEEN THE CITY OF CARMEL-BY-THE-SEA
AND THE
CARMEL FIRE AMBULANCE ASSOCIATION

Pursuant to the provisions of the Meyers-Milias-Brown Act (MMBA), this Letter Agreement
(Agreement) is entered into on December___, 2016, by and between the CITY OF CARMELBY-THE-SEA, a municipal corporation of the State of California, hereinafter called "CITY" and
the CARMEL FIRE AMBULANCE ASSOCIATION, an unincorporated public employee
organization, hereinafter called "ASSOCIATION." The ASSOCIATION and the CITY are
collectively referred to herein as the parties. It is understood and agreed that the specific
provisions contained in this Letter Agreement shall supersede any previous agreements, whether
oral and written, regarding the matters contained herein.
The parties have met and conferred in good faith concerning the terms and conditions of this
Letter Agreement and its implementation and agree to the following:
1.

Continuing Negotiations
The ASSOCIATION was certified on August 10, 2011. The parties are in the midst of
negotiating a Memorandum of Understanding (MOU) regarding all terms and conditions of
employment, with the goal of implementing a complete MOU by January 1, 2017. In the
meantime, the parties wish to implement the same wage increase, along with the increased
employee contribution to CalPERS, that have been agreed upon with all other employee
associations in the CITY. The parties are entering into this Letter Agreement to memorialize
their limited agreement on those two terms, and will continue negotiations on all remaining
terms.

2.

Wage Increase
A. Effective the first pay period following adoption of this Agreement by the Carmelby-the-Sea City Council, all members shall receive a 3.0% salary increase. The
increase shall be retroactive to January 1, 2015.
B. Effective the first pay period following adoption of this Agreement by the Carmel-bythe-Sea City Council, all members shall receive an additional salary increase of 3.0%.
The increase shall be retroactive to January 1, 2016.

3.

Retirement Contributions
Retirement Benefits
This Section (including subsections) applies to Safety members who are contributing
members of CalPERS.

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LETTER AGREEMENT
November 15, 2016

A.

Retirement Benefits for Members Before April 15, 2012.

Employees hired before April 15, 2012 shall be eligible to receive the 3% @ 50
retirement benefit formula, the formula that was in place at the time they began
employment at Carmel-by-the-Sea. For purposes of determining a retirement benefit,
final compensation for employees covered by this section shall mean the single highest
year of service. Employees covered by this section shall pay 100% of the required
member contribution, which is 9%. In addition, these employees shall pay a percentage
of their compensation towards the employers contribution, as described in subsection
D. below.

B.

Retirement Benefits for Members Hired After April 15, 2012 but Before January
1, 2013, and Classic Members, as Determined by CalPERS
Employees hired after April 15, 2012 but before January 1, 2013, and for
classic employees within the meaning of the Public Employees Pension
Reform Act of 2013 (PEPRA), as determined by CalPERS, who are hired on or
after January 1, 2013, shall be eligible to receive the 2% @ 50 retirement benefit
formula, the formula that was in place at the time they began employment at
Carmel-by-the-Sea. For purposes of determining a retirement benefit, final
compensation for employees covered by this section shall mean the highest
average compensation earnable earned during 3 consecutive years of
service. Employees covered by this section shall pay 100% of the required
member contribution, which is 9%. In addition, these employees shall pay a
percentage of their compensation towards the employers contribution, as
described in subsection D. below.

C.

Retirement Benefits for Members Hired On or After January 1, 2013

Employees hired on or after January 1, 2013, shall be eligible to receive the 2.7% @ 57
retirement benefit formula. For purposes of determining a retirement benefit, final
compensation for employees covered by this section shall mean the pensionable
compensation earned during the 3 consecutive years of service immediately preceding
the members retirement. Employees covered by this section shall pay 100% of the
required member contribution, which is 50% of the normal cost established by
CalPERS. In addition, these employees shall pay a percentage of their compensation
towards the employers contribution, as described in subsection D. below.

D.

Cost Sharing of Employers Cost Under Section 20516

The CITY shall pay the employer rate prescribed by the Public Employees Retirement
System (CalPERS) in accordance with the rules and regulations governing such
employer contributions.
Effective January 1, 2017, employees will pay a portion of the employer rate, as
described below.
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LETTER AGREEMENT
November 15, 2016

Effective January 1, 2017, the employees described in Paragraphs 3A and 3B above,

shall pay their required member contribution rate of 9% for their respective benefit
formula, plus an additional 3% of pensionable compensation towards the employers
contribution.
For the duration of this Agreement, these employees shall contribute no more than 12%
of pensionable compensation towards retirement.
Effective January 1, 2017, the employees, described in Paragraph 3C above shall pay
their required member contribution rate of 50% of the total normal cost of their pension
benefit, plus an additional 3% of pensionable compensation towards the employers
contribution.
The parties acknowledge that CalPERS mandates an election of unit members, separate
from ratification of this Agreement, to provide for this cost sharing pursuant to Government
Code Section 20516. As soon as practicable after the effective date of this Agreement, the
City will initiate the contract amendment process. Upon approval and agreement from the
bargaining unit and completion of the Citys amendment to the CalPERS contract,
employee contributions will be made pursuant to Government Code Section 20516,
Employee Cost Sharing of Additional Benefits. Notwithstanding the above, the cost
sharing described in this subsection D. shall be implemented outside of a PERS contract
amendment as authorized by Government Code Section 20516(f) and shall extend beyond
the expiration of this Agreement. The Association and the City will take all actions
necessary to implement the pension cost sharing agreement described in this subsection D.
4.

Additional Retirement Options

The CITY shall continue to maintain the following, contracted retirement options:
A.

Single Highest Year (only for employees hired on or before April 15, 2012.

B.

Fourth level of 1959 Survivors Benefit ($2.00 per month cost to the employee)
1.

The City and the Association agree to monitor the funding of this option.
When only two years of funding remain in this account the City and the
Association agree to reopen negotiations on this issue to discuss future
funding of this benefit.

C.

The City agrees to permit members, if they choose, to purchase military service
credit as public service to the extent permitted by PERS, solely at the members
expense.

D.

Pursuant to Resolution No. 96-116 qualified members shall have the option to
elect the pre-tax payroll deduction plan for their service credit purchases (i.e.,
redeposit, service prior to membership, military service, etc.).
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LETTER AGREEMENT
November 15, 2016

E.

In accordance with Government Code Section 20965, upon retirement, members

may elect to convert unused accumulated sick leave toward additional CalPERS
service credit.

The parties agree that all of the terms in this Agreement shall be incorporated into the MOU currently
being negotiated between the parties.

DATED: November 15, 2016

_______________________________
Chip Rerig
City Administrator

________________________________
David Jedinak
Carmel Fire Ambulance Association President

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