Business of the City Council Sterling Heights, Michigan. AGENDA STATEMENT OMB AS03 Rev. 11/04. - Contract X Other

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1 Business of the City Council Sterling Heights, Michigan City Clerk's Use ~tem NO: 1-1, Meeting: AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve a Memorandum of Understanding with the Department of Public Works Field Unit, Teamsters Local 214 Submitted BY: Office of City Management Contact Person/Teleuhone: Dawn Demick, Human Resources Director, Administration (initial as auulicable) L&@ City Clrrk Finance & Budget Director City Attorney (as to legal form) City Manager Attachments - Resolution - Minutes - Ordinance - PlanIMap - - Contract X Other Check box if this agenda item requires billing\revenne collection (fees, etc.) by Treasury Ofice Executive Summarv: As part of the City's multi-year comprehensive financial strategy, City Administration has been in negotiations with the City's 12 labor unions in an attempt to achieve $1,200,000 in cost savings through employee wage concessions in the upcoming fiscal year. Because all 12 of the labor unions have collective bargaining agreements with terms extending beyond July 1,2010, there are no open contracts. As detailed below, City Administration has reached a tentative agreement with the DPW Field Unit. This tentative agreement will enable the City to achieve labor cost savings and avoid lay-offs in the DPW Field Unit in the fiscal year. The City will need to achieve $3,700,000 in cumulative labor savings over the following two fiscal years (201 1/12 and ). The labor cost savings realized to date are presented in the back-up material for City Council consideration. The collective bargaining agreement between the City and the DPW Field Unit expires on June 30, The DPW Field Unit represents 67 full-time employees. Responding to the statewide fmancial crisis, the DPW Field Unit voluntarily opened the collective bargaining agreement mid-term and has agreed to concessions for fiscal year which will assist City Administration in maintaining essential services. The tentative agreement with the DPW Field Unit provides that members will take four unpaid furlough days and four unpaid holidays during the fiscal year (July 1,2010 to June 30,201 I), which equates to a 3% wage reduction for that year. In exchange for these unpaid days, the Memorandum of Understanding provides that union members will not be laid off from the date of signing this agreement through June 30, The City retains the right to reduce the number of employees through attrition. The union membership has ratified the tentative agreement.

2 For the fiscal year beginning July 1, 2010, the membership will not be paid for the following holidays: Independence Day, Christmas Eve, Day after Thanksgiving, and Good Friday. Due to the emergency nature of the DPW operations, the four unpaid furlough days will be established per member on a seniority basis with the approval of the DPW Director. These days will be dispersed equally throughout the year as to maintain essential DPW services. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to approve the Memorandum of Understanding with the Department of Public Works Field Unit, Teamsters Local 214 for the fiscal year and authorize the Mayor and City Clerk to sign it on behalf of the City.

3 EMPLOYEE COST SAVINGS MEASURES As a result of declining revenues, the City developed a proactive multi-faceted financial strategy to successfully navigate through the current financial storm. As part of this strategy, the City is seeking significant labor concessions from its employees. The employee concession savings to date are as follows: Implementation of a wage and benefit reduction equivalent to 3 %: 1. Four (4) unpaid furlough days and four (4) unpaid holidays for general employees 2. Negotiating similar 3% equivalent wage and benefit savings from public safety employees Elimiination of 70 vacant full-time positions reducing staffing to 1970's levels saving $5 million annually Employee health care concessions saving $1 million annually Reduction in retiree health care benefits saving $20 million over a number of years Elimination of fixed pensions for general employees saving millions of dollars Reduced overtime saving $420,000 Service sharing programs, including sharing employees, have been implemented with surrounding cities Outsourcing select city services saving $1.9 million annually Reduced professional memberships, training, cell phones, and take home vehicles The City will continue to seek $3.7 million in additional employee concessions over the next two years.

4 MEMOElANDUM OF UNDERSTANDING BETMEN THE CITY OF STERLING HEIGHTS AND DPW FIELD UNIT TEAMSTERS LOCAL 21 4 It is hereby agreed and understood by the parties that the collective bargaining agreement between the parties shall be amended to incorporate the following terms and conditions: 1) Scope. All members of the collective bargaining union shall participate in furloughs. Scheduled furlough days may not be cancelled or rescheduled except in the event of an emergency with the approval of the City Manager. If this occurs, the employee shall schedule a different furlough day in the same or subsequent pay period in which the furlough occurs. 2) lcataceu. Employees shall take four (4) unpaid furlough days in fiscal year 2011 (July 1, June 30, 2011). Furlough days shall be established per employee withim each respective division on a seniority basis. Beginning April 5, 2010, each employee will be given 48 hours in which to select fixlough days. Selection will be made in order of seniority. If an employee fails to select the four furlough days during his assigned 48 hour period, then he or she will be moved to the bottom of the list at which time the Division Supervisor will select the furlough days on the employee's behalf. To the extent possible, furlough days must be dispersed equally throughout the year as determined by the Division Supervisor. 3) rinn;lirl. In addition to the four (4) unpaid furlough days, employees will not be paid for the following four (4) holidays during fiscal year 2011 (July 1, June 30, 201 1): 1. 4' of July (observed) 2. Day after Thanksgiving 3. Christmas Eve 4. Good Friday 4) Lwcdamd. Furlough days will accrue sick leave and vacation time. 5) J&dhgs. Furlough days will not affect employee holiday pay or benefits. 6) -. Employees' pension contributions will continue to be based on pensionable employee earnings. Service time will not be affected due to the furlough days or unpaid hoiidays.

5 7) Hd&hmma and. - Medical, dental, vision, and any other insured benefits coverage shall not be impacted by the furloughs. 8). - Furloughs will not count as a break in service and shall not impact seniority, longevity, step placement, and probationary periods. 9) morary Ernpiqees ~ nvdmkers. d Temporary employees and volunteers shall not be assigned to perform work to cover the time loss associated with furloughs. 11. nther.. - e T 1) Any dispute regarding the interpretation and/or application of this MOU shall be addressed pursuant to the terms of the grievance procedure. 2) During the week of a furlough and/or unpaid holiday, employees will not work beyond 32 hours except in cases of emergencies. All requests for overtime must be pre-approved by both the employee's immediate supervisor and department director. If overtime is approved for an emergency call-in situation, the overtime language provided in the collective bargaining agreement will be followed. Employees may not substitute paid leave, such as sick leave or vacation time, for unpaid furlough days. 3) The intent of this Agreement is to mitigate layoffs of Union members subject to this Agreement. In exchange for this Agreement, the City acknowledges that it will not exercise its right under the collective bargaining agreement to layoff any members of this collective bargaining association from the date of final execution of this Agreement through June 30, ) With this Agreement, the City will not seek any additional employee concessions from this labor group regardless of the outcome of negotiations with the remaining labor associations from the date of fmal execution of this Agreement through June 30, ) It shall be understood and agreed to by the parties that during the term of this Agreement (July 1, June 30, 201 I), if any other city employee bargaining unit receives any additional years of service applied to their service time banks, the members of this bargaining unit shall receive the same benefit improvements. This action does not establish any past practice or precedence for any future related situation, for either party, nor shall it be used as evidence in any grievance arbitration, interest arbitration, or other proceeding.

6 CITY OF STERLING HEIGHTS DPW FIELD UNIT, TEAMSTERS LOCAL 2 14 Richard J. Notte Mayor Michael Landsiedel Business Representative Walter C. Blessed Assistant City ManagerICity Clerk Frank Gorlitz Chief Steward Joshua Cole Steward Michael McManemy Steward Bryan Geldhof Steward