City of Mountain View

R1

All of the cities in the County need to implement measures that will control employee costs. As a starting point, each city should determine the percentage of savings required from the total compensation package to reach budget stability and provide choices of wages and benefits in collective bargaining sessions for the unions to choose to achieve that percentage goal. The recommendation has been implemented. The City takes its responsibility for ensuring fiscal responsibility seriously, and the City Council has been proactive in implementing measures that control employee costs. An example of one measure includes negotiating the unique practice of employees cost sharing the City's rate for pension benefits, which was implemented for safety employees more than 10years ago, and has since been agreed to with all employee organizations. The City's current financial condition is likely more sound based on its policies and actions. The City has achieved a structurally balanced budget this fiscal year through a multi-prong approach that included reductions in personnel costs. Employees agreed to cost-containment measures that contributed to the City's structurally balanced budget, and the City will continue to fulfill its obligations to "meet-and-confer" in good faith while keeping the City's budget financially sustainable.

R2

Cities should not increase salaries and wages that are not supported by planned reve nue increases. Cities should tie COLA increases to clear indicators and retain the ability to adjust or withhold based on current economic data. The recommendation is being implemented. Increases in compensation need to be more directly tied to a variety of factors, including the City's ability to pay. These factors should be part of compensation policy development and employee group nego tiations. The ability to fully achieve these goals will be determined through future negotiations processes.

R3

Cities should negotiate step progressions from the current 3-1/2 years to 7years. Employees should not receive COLA increases while in step progression. The recommendation requires further analysis. The City agrees that the combined impact of steps/merit increases can be substantial. The City also agrees that this should be the subject of further review and discussion with employee organizations. Changing the salary plan and compensation policies is a comprehensive undertaking that will require professional consultation and negotiations with employee organizations. The City is not prepared to commit to a specific method or time frame to implement potential modifications.

R4

Cities should negotiate that employees assume some of these increased costs for their medical benefits. To contain medical costs, cities should consider the following: A. Split monthly premiums between the city and the employee and increase the employee's share, if already cost splitting, and remove any employee caps. B. Establish reasonable copays for doctors' visits, prescription drugs and in-patient and out-patient hospital care. C. Prohibit an employee from being covered by both city-provided medical benefits and as a dependent of another city employee. D. Reduce cash-in-lieu payments. E. Introduce a new lower premium, high-deductible medical plan. These recommendations are being implemented. Currently, employees are responsible for a portion of medical premium costs. However, the City's cost is growing rapidly and stresses the City's fiscal balance. The City has previously negotiated health insur ance cost containment provisions, but additional action is necessary. The recommenda tions noted are all potential ways to address this challenge. The City will be engaging in a Request for Proposal for an insurance broker service. A part of the requested service will be assessing the City's current medical benefits and to provide recommendations to contain costs. This effort will take place in the coming fiscal year. Any changes will need to be negotiated with employee organizations over the next two years.

R5

a Cities should: 1. Renegotiate and make provisions for increasing the employees' contribution for current pension plans. The recommendation has been implemented. Employees fully pay the employee share of pension costs. Additionally, the City ofMountain View had agreements with its employee organizations to make additional cost-sharing contributions for enhanced retirement benefits with employees paying for a portion of the City's share of the costs. For example, the Police Officers Association cost shares up to an additional 4percent of their salary to the 3percent 50 PERSpension plan. This @ contribution is above and beyond the employees' contribution of 9percent. These contributions were unique in the industry at the time they were negotiated over 10years ago. 2. Renegotiate to stop paying the employees' contribution amount to pension plans. This recommendation is not warranted in the case of the City ofMountain View. As noted above, the City of Mountain View does not pay for the employees' contribution to PERS. 3. Renegotiate to implement a contribution amount for employees to OPEB;this contribution should provide for a reasonable split of costs between a city and the employee for retiree medical and dental benefits. This recommendation is being implemented. OPEB cost-saving measures are required. The City has already negotiated a number of such measures with employee organizations, such as an option for a defined contribution plan for retirees' medical coverage. Additional measures, including potential additional employee contributions, should be explored. Recommendation S.b Cities should thoroughly investigate reverting to prior pension formulas that were less costly. The recommendation is being implemented. The City ofMountain View is considering the potential of a two-tier retirement formula. This process will include a review of the Santa Clara County / Cities Managers Association Policy Statement on Retirement Benefits by the City Council and discussions with employee organizations. See

R6

a Cities should renegotiate with the bargaining units to (1)reduce vacation time; (2)reduce the number of holidays and/ or personal days; (3)cap sick leave and elimi nate the practice of converting accumulated sick leave to cash or adding into their years of service for inclusion in their retirement benefit. The recommendation has been partially implemented. This recommendation covers a variety of topics and these issues are appropriate to reexamine. What, if any, changes should come out of this reexamination are premature to conclude. The City already caps vacation accrual, and both vacation and sick leave accrual payouts. The City is very careful in examining employee organization requests for adding vacation time and holidays, and the City Council has taken a position to discuss additional potential modifications in future negotiations with employee organizations.

R7

a Cities should research competitive hiring practices and alter the approach to determine fair wages and benefits for each city by using public- and private-sector data. Recommendation requires further analysis. Where feasible, market data beyond public employees should be examined for similar positions. This topic will be subject to discussions with employee organizations in future negotiations.

R9

Cities should analyze the functions performed by all job classifications and make adjustments in the work force. Consolidate functions within the same group or a similar group. Reassign appropriate work to lower paid job classifications. Eliminate unnecessary functions. This recommendation has been implemented. The City routinely reviews its job classi fications and departments perform assessments to ensure efficiencies with its work force. For example, the Police Department consolidated functions and eliminated a mid-level supervisor classification. There are a number of other examples, including work group and even departmental consolidations. Most recently, the Employee Services Department was combined with the City Manager's Office, eliminating a department head position. The City is providing more services with fewer employees than 20years ago.

R11

Cities should consider holding well-publicized public hearings about the cities' goal of negotiations before negotiations begin, and again at the end of negotiations to report to citizens clearly what changes have been made in contracts. The recommendation has been partially implemented. The City agrees that there should be adequate disclosure and transparency regarding compensation issues and their financial impact. The City does not agree that there can be a "one-size-fits-all" approach to achieving this goal among all issues and agencies. The City does hold Study Sessions and public hearings for budget development. Labor agreements, including salary and benefit information, are made available to the public on-line and they are detailed in City Council meeting reports. Results of negotiations are made public and are provided to the media.

R12

a City council members and mayors should become better informed about the fiscal realities in their cities, long-term costs and commitments, and be cognizant of potential issues in labor agreements. This recommendation has been implemented. The City Council has a long-standing practice of staying informed about the City's financial condition. The City Council has studied detailed information on the financial condition of the City via budget workshops, Study Sessions and public hearing reports and presentations. The Council also reviews and analyzes information regarding employee cost containment and labor negotiations via Closed Sessions.