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MOU NEGOTIATIONS – NOW AND IN THE FUTURE

The City’s positions expressed in each LOI apply towards ALL employees and ALL unions, both sworn and civilian.  We examine the LOI in the order presented as part of the actual MOU language mailed with your ratification ballots and provide an analysis of the City and EAA positions that resulted in these LOI.

GENERAL LETTERS OF INTENT:

Acknowledgement of Shared Sacrifice:

FY 2010-11: In this LOI, the City states it is committed to ensuring ALL City employees share in the collective sacrifice.  This means that no employees or unions will be exempt from the City’s demands.  As assurance of their seriousness, the City commits to a “me to” or “favored nations” clause (second paragraph) ensuring that NO union or group of employees (except DWP whose MOU’s are ongoing) will be given any COLA whatsoever in FY 2010-11.

Future:  The City will continue to insist that sacrifices be shared between ALL employees and the City and that any extra gains in COLA or benefits contained in any proposed MOU be offset by compensatory savings in other benefits.  If and when the City makes significant and permanent changes in its structural budget, employee organizations may bargain for recapture of shared sacrifices, an effort the City is certain to resist.

Shared Sacrifice / Work Hour Reductions:

FY 2010-11:  Savings elsewhere in the TA allowed a reduction from the 26 days contained in the City 2010-11 Furlough Plan to 10 days, renamed “unpaid floating holidays” due to their scheduling flexibility.  The result is over 3 weeks more pay during FY 2010-11 than in FY 2009-10 for any member who was placed on furloughs last year.  EAA’s negotiating team regarded reduction in furloughs as the highest priority in their negotiating sessions. The City agreed to this as part of the entire package that results in EAA attaining the savings goals.

Future:  The threat and/or reality of furloughs will continue to be a weapon in the City’s arsenal, just as in other jurisdictions.  Full elimination of furloughs will continue to be EAA’s priority.  As noted above, permanent changes which eliminate the structural deficit are needed to mute the threat of furloughs.

Wage Parity:

FY 2010-11:  The City recognizes that the wage disparity between Council-controlled departments and DWP is an on-going issue adversely affecting employee morale and retention.  Given their current stated budget problems, the City refused to entertain any proposals to address this issue in the short one year MOU.

Future:  The City committed to address the issue in future negotiations when the budget is projected to be in better shape without the severe deficit problems of last year and this.  Note that no other union has ever received that commitment.  An example of one possible means of partial resolution (6^th step of equal magnitude [5.5%, not 2.75%] to the existing 5 steps) is included in the LOI. 

City Civilian Healthcare Benefits Program:

FY 2010-11:  EAA and the City recognize that exponentially increasing health care premiums are a major unpredictable cost.  We need only read the media to see the magnitude of the Anthem Blue Cross proposal and those of other insurers.  The City has established officially, as a policy target, for ALL City employees to pay 10% of their health care premium and to share with management, on a 50/50 basis, future increases in premiums.  This target is considered necessary to retain the high level of benefits currently available to City employees and the City indicates that the only other alternative is a reduction in benefits or coverage.  For this year, EAA negotiated the City’s proposal down to 5% with no loss of benefits, and the deduction will not be implemented until January 1, 2011.

Future:  The City will continue to push for their preferred 10% and 50/50 for ALL MOU’s of all unions or demand comparable savings in some other area of each MOU.  Alternatives such as different plans or changes in coverage and co-pay will need to be investigated so that informed decisions can be made at the bargaining table.

LACERS and Retiree Health Benefits:

FY 2010-11:  LACERS is severely underfunded.  We all agree on that fact, whether it was caused by a larger number of retirees, the ERIP, longer lives, increased retiree health care costs, severe investment losses, City contributions of less than formula during the boom years, or some combination thereof.  In fact, a large portion of this year’s TRAN sales was to cover the LACERS payment.  The City has officially established a target for ALL employees, both civilian and sworn, to contribute 9% of their salary to their retirement plan, to establish a “Tier 2” for new hires, and to require current and future retirees to fund a portion of their retiree health care.  EAA negotiated for a uniform contribution of 6% for all its represented employees and retains the right to pursue its UERP on the unilateral change made by the City for some employees last year.

Future:  The City will continue to pursue its adopted targets with ALL unions.  Given the push for pension reform nationwide, some portion of the City’s goals will very likely be realized unless an individual union elects to reduce other benefits in order to preserve the pension system without change.

UNIT LETTERS OF INTENT:

FY 2010-11: EAA offered many proposals for inequity adjustments to achieve deserved pay rates and to assist departments in retention of valued employees.  The only ones agreed to by the City were those adjustments specifically endorsed by the departments involved.  In general, those departments were either proprietary (POLA, LAWA) or funded in some way other (Sanitation, Rec. & Parks) than the General Fund.  General Funded inequity improvements were simply not affordable in the view of departments faced with large decreases in their budgets.

Future:  As with many other aspects of negotiations, achieving deserved pay scales that are endorsed by various departments depend on the City solving its long-term financial problems.  EAA is committed to continuing to provide the best possible MOU’s for its members while remembering that a financially healthy City of Los Angeles means financially healthy employees.