ITEM:		ACTION ITEM
11.	CONSIDER ADOPTION OF MEMORANDUM OF UNDERSTANDING WITH THE DISTRICT BARGAINING UNITS
Meeting Date:			July 15, 2024	Budgeted:	Yes
From:			David J. Stoldt	Program/	N/A
			General Manager	Line Item:	N/A
Prepared By:			David J. Stoldt	Cost Estimate:	Approx $439,000
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: The General Staff Bargaining Unit and the Management Staff Bargaining Unit, represented by Laborers’ International Union of North America (LiUNA), Local 792, as well as the unrepresented Confidential Staff Bargaining Unit and the Board’s negotiating representatives have agreed to terms for new 3-year Memoranda of Understanding (MOUs), an example of which is attached as Exhibit 11-A in redline format. The proposed Agreement is consistent in financial terms as that presented to the District Board in closed session on July 1, 2024 and in non-financial terms as presented to the Board May 20, 2024 and June 17, 2024 closed sessions. This agreement achieves the District goals of remaining cost conscious while also sending the signal that the District compensates fairly and commensurately with the market. 

RECOMMENDATION:  1) The General Manager recommends that the Board adopt all three of the MOUs based on the salary survey results discussed on July 1, 2024 and the redline of the General Staff Memorandum of Agreement as it appears in Exhibit 11-A and which will be similar for all three units; and by separate motion 2) decide whether to award the General Manager a cost of living adjustment effective at the same time as the other units, as has occurred the past two years, and review his performance and base compensation at the end of the calendar year.

BACKGROUND:  Bargaining points incorporated into the agreement, as a result of this year’s negotiations, are as follows:

Salary Survey

One of the key issues in the negotiations with the District’s General and Management bargaining units was the union-initiated salary survey. The union, LiUNA (Laborers' International Union of North America) commissioned its own salary survey by the firm of Mastagni Holstedt to determine if District personnel are presently compensated at a reasonable market rate. A salary survey is a position-by-position evaluation of how the salary and benefits of the District compare to other similar public agencies. LiUNA performed two such analyses in order to capture all job descriptions covered by the union. Both parties have, during these negotiations, agreed to only look at salary levels, because other benefits are variable and difficult to analyze on a comparative basis. The District last performed a salary survey in 2016.

The manner in which the LiUNA salary survey was undertaken was to identify comparative other agencies (first identified by the District in 2016 or earlier), find similar job titles and descriptions, determine the salary rate at the highest step for the position (a “step” is the highest salary in the pay range for the job title), compute the average salary and the median salary, and then compare it to the District’s highest salary step for the similar position.

The General Manager has previously stated that geographically dispersed public agencies need to have their data “normalized” for differences in cost-of-living and labor costs. The union agreed, but admitted that they did not have the access to such data to do so. District staff has such access and did include it in its analysis, as shown below.

The General Manager’s analysis of the two LiUNA memoranda was as follows:

1. Evaluate whether comparative agencies are appropriate for the District;

2. Ensure data is representative of FY 2023-24 year end data. Spot check salary data represented by LiUNA consultant for other comparative agencies are year 2023-24 data;

3. Review job titles utilized for each comparative agency. Where incorrect, revise job title and comparable salary;

4. Adjust each agency/city position salary by a geographic cost of labor factor provided through District’s subscription with Economic Research Institute (ERI);

5. Ensure median and average calculation are consistent with number of agencies for each job description (denominator check);

6. Determine what, if any, adjustment in salary might be warranted for each position;

7. Round prospective adjustment to District’s existing salary tables to match typical District “Range” changes (i.e. moving up a “Range” is approximately a 2.5% increase for a job position; Once in a Range, a “Step” increase is 5%; there are 5 Steps per Range); and

8. Make a recommendation based on the data.

Following analysis of the represented union positions, the General Manager applied the same methodology to the three Confidential unrepresented employees.

The District’s (GM’s) review of the salary survey results made the following observations and conclusions:

• “Market” should be defined by median, rather than average, to minimize the impact of high-cost Bay-Area comparators.
• There are 24 employee positions under review – 18 General unit, 3 Management unit, and 3 Confidential unit. The General Manager position and the proposed Assistant General Manager position were not reviewed.

• Two District positions were not below market. Of the remaining 22 positions, they were below the median for comparators ranging from 2.54% to 34.19%.

• There are nine unfilled District job positions that are also below market. However, two are recommended to be discontinued, one is recommended to be filled through immediate promotion, leaving six vacant positions targeted to be filled through future promotion, those 5 positions should be considered for adjustment on the salary tables.

Board direction was provided at the July 1, 2024 closed session was, if the District wants to remain competitive and keep its reputation for fair compensation, it should adjust the salaries by the results of the salary survey. The annual cost to the District is estimated at $380,733 for the General and Management units, as discussed with the Board on July 1, 2024 (slightly changed due to minor errors in data found after the meeting.) Subsequent to the July 1 Board meeting, the non-represented Confidential unit impact was calculated at $45,753. These amounts do not include the impact of the proposed immediate promotion of one position.

It was further agreed that the salary adjustment be effective the second pay period after the Memorandum of Understanding is adopted.

The parties also agreed to no future full-staff salary survey for at least 5 years.

Cost of Living Adjustment (COLA)

Previously, the union initially requested the following:

a. July 1, 2024: 10 %

b. July 1, 2025: 10 %

c. July 1, 2026: Most recently available bay area CPI-U 12-mo average.

The District suggested that the union was combining the concept of the salary survey and inflation into the COLA and they must remain separate. Further, based on the recommendation to adjust salaries pursuant to the salary survey, then all base 2023-24 salaries have been adjusted “to market” and therefore there is no reason to offer a “catch-up” for lost earning power due to inflation.

The District and the negotiating units have agreed to the following:

a. July 1, 2024: 3.0 %

b. July 1, 2025: 3.0 %

c. July 1, 2026: 3.0 %

Other Issues Subject to Negotiation

There were ten other issues raised for negotiation by the union and two by the District that were resolved as follows:

Union Request	Settlement
1. Vacation Accrual Rates: LiUNA Proposal 4/12/24 a. The Union proposes the removal of tiers by bringing all tier 2 employees up to match tier 1 accrual rates for vacation. b. The Union proposes to increase the maximum vacation accrual cap to 480 for all employees to match tier 1 max.	MPWMD Final Offer 7-2-24 The District agrees with the proposal to match vacation accrual rates. A cap of 400 hours with buy-out of current employees over that amount down to 384 hours. Buy-out occurs second pay period after adoption.
2. Vacation Cash Out: LiUNA Proposal 4/12/24 a. The Union proposes to provide all employees with the option to cash out up to 40 hours of vacation per calendar year.	MPWMD Final Offer 7-2-24 Up to 40 hours of vacation time buy-back per year at employee’s request, to occur after June 1 of any fiscal year.
3. Sick Leave Accrual Rates: LiUNA Proposal 4/12/24 a. The Union proposes to eliminate tier 2 and provide the tier one accrual rates for sick time to all employees. b. The Union proposes to eliminate tier 2 for sick leave cash out by allowing all employees the same rights to cash out sick time as tier 1 employees.	MPWMD Final Offer 7-2-24 The District proposes no change to the existing cap, citing that the difference between Tier 1 and Tier 2 is too large a gap to close. The District proposes a minimum eligibility requirement of five years employment for the District’s medical plan benefits for retirees, applied to future hires after the date of adoption.

5. Term: LiUNA Proposal 4/12/24 a. The Union proposes a 3-year term for a successor MOU, running July 1, 2024 – June 30, 2027.	MPWMD Final Offer 7-2-24 Agreed to in settlement.
7. General Unit Only Proposal: a. Flexible Work Schedules: LiUNA Proposal 4/12/24 i. The Union proposes to negotiate a policy overseeing the working conditions of employees when it comes to scheduling. The Union is interested in maximizing opportunities for employees to have alternative work schedules such as 9/80’s with every other Friday off. ii. The Union further proposes revisions to Article 16 of the MOU. For example, all employees do not require a 1-hour lunch. These revisions will be geared at creating more flexibility for employees when it comes to work scheduling while also accommodating the business needs of the District. iii. The union proposes that requests for alternative work schedules shall be promptly responded to in writing by an employee’s Manager. If denied, the denial shall be in writing and include a specific business reason why the request of being denied. Denials of alternate work schedules shall be appealable to the District General Manager. iv.	MPWMD Final Offer 7-2-24 The 7.a.i and 7.c.iii proposals are not subject to negotiation. This is a District “management right” under Article 4 of the MOU and the District is in no position to concede any further discussion. In settlement the issue was dropped. Item 7.a.ii will be considered favorably if the bargaining unit can demonstrate consistency with FLSA requirements. In settlement, agreed to subject to approval of supervisor.
8. General Unit Only Proposal: a. Telework Policy: LiUNA Proposal 4/12/24 i. The Union proposes to create a new policy governing working conditions around employees ability to work remotely. A previous policy governing telework was unilaterally removed from the handbook. ii. The Union is interested in maximizing potential opportunities for employees to telework, with a focus on fairness between similarly situation employees. Similar to the work schedule proposal, employees shall request teleworking / remote working to their Manager, who shall respond promptly in writing. Denials shall cite a specific business reason for the denial and be appealable to the District General Manager. Current policy is arbitrary. Need black and white.	MPWMD Final Offer 7-2-24 The Item 8 proposals are not subject to negotiation. This is a District “management right” under Article 4 of the MOU and the District is in no position to concede any further discussion. The District contends that the bargaining unit is incorrect that the previous policy governing telework was unilaterally removed from the handbook – it was removed because of irrelevance to current conditions post-COVID-19. The District also disagrees that the current policy is arbitrary, rather it is nuanced to differences in roles of different employee positions. In settlement the issue was dropped.
9. Call-back Min: LiUNA Proposal 4/12/24 a. The Union proposes to increase the call-back minimum for responding to after-hours emergencies from 2 to 3 hours.	In settlement the issue was dropped.
10. Longevity Pay: LiUNA Proposal 4/12/24 a. The Union proposes to implement a new longevity pay plan that encourages retention and recruitment. This new longevity pay plan would make the District more in line with comparable agencies, who already offer longevity pay (such as Marina Coast Water District, City of Monterey, City of Seaside, City of Carmel, etc…) b. The Union proposes to create the same longevity benefit as what is offered to employees at Marina Coast Water District: i. 5% at 10 years of service ii. 5% at 15 years of service iii. 5% at 20 years of service iv. 2.5% at 25 years of service v. 2.5% at 30 years of service	MPWMD Final Offer 7-2-24 No change to existing policy. In settlement the issue was dropped.
In settlement the proposal was agreed to.	11. MPWMD #1 NEW ADDITIONAL Proposal 5-14-24 The following employees are proposed to be made Exempt. Classification Meter Program Coordinator Accounting/Office Specialist Senior Office Specialist/Office Specialist Assistant Fisheries Biologist Conservation Representative II Conservation Analyst
In settlement the proposal was agreed to.	12. MPWMD #2 NEW ADDITIONAL Proposal 5-14-24 District is willing to add a vacation day to benefits for Juneteenth if necessary to settle financial issues. Agreed to in settlement.

EXHIBIT

11-A Redline of General Staff Bargaining Unit MOU

U:\staff\Boardpacket\2024\07152024\Action Items\11\Item-11.docx