The City of Sparks, Nevada, enters into labor agreements with its various collective bargaining units.  The Sparks Police Protective Association - Lieutenants Unit contract expired June 30, 2017. The parties began meeting in the Spring of 2017, and continued to meet on a regular basis to discuss the terms and conditions of the agreement. The collective bargaining agreement proposed today is the result of those meetings. The City and the Unit believe the attached agreement fairly represents a good faith effort to reach an agreement involving wage rates and benefits. The Unit ratified the agreement.  Now both negotiating teams recommend ratification/approval of the proposed agreement by Council.

Following is a Summary of Tentative Agreement reached between the parties.  This summary outlines the contract changes.  Also attached to this report are a strike-out version and the final version of the proposed agreement, and a financial impact statement.

Summary of Tentative Agreements:

Section 1: Administration, Article D: Duration of the Agreement.   This section was changed to reflect the new contract period of July 1, 2017 thru June 30, 2020.  There is no direct cost related to this contract change.

Section 1: Administration, Article L: Hours of Work.  Contract clarification language was added to better define the workday.  This has no fiscal impact and is clarifying current pay practices.

Section 2: Pay, Article A: Pay Rates

The parties have agreed to the following pay increases:

Cost of Living Adjustment (COLA).

Effective the first full pay period following July 1, 2017, employees shall receive a cost of living adjustment (COLA) of 1.8% above the base salary rate in effect June 30, 2017.

Effective the first full pay period after July 1, 2018, a COLA will be calculated as follows.  The parties agreed to use the Consumer Price Index (CPI) to determine the COLA amount.  The parameters for the calculation are that regardless of the CPI value, the COLA shall be no less than 1.0% and no greater than 3.0%.  The specific CPI agreed to by the parties is published by the Bureau of Labor Statistics.  It is the inflation rate for all urban consumers in the selected area of Western Urban Size B/C - 50,000 to 1,500,000.  The all items index is used.  This CPI is a non-seasonally adjusted, annual index and will be rounded to the nearest tenth decimal point of the value in December of 2017 (CPI Series ID: CUURX400SA0).

Effective the first full pay period after July 1, 2019, a COLA will be calculated as follows.  The parties agreed to use the Consumer Price Index (CPI) to determine the COLA amount.  The parameters for the calculation are that regardless of the CPI value, the COLA shall be no less than 1.0% and no greater than 3.0%.  The specific CPI agreed to by the parties is published by the Bureau of Labor Statistics.  It is the inflation rate for all urban consumers in the selected area of Western Urban Size B/C - 50,000 to 1,500,000.  The all items index is used.  This CPI is a non-seasonally adjusted, annual index and will be rounded to the nearest tenth decimal point of the value in December of 2017 (CPI Series ID: CUURX400SA0).

A new Appendix A will be issued each year after the CPI has been calculated.

The FY18 COLA finical impact is an estimated $16,000 per year to the General Fund.  The fiscal impact of COLAs in FY19 will range from a minimum of $9,000 and a maximum of $26,000 to the General Fund depending upon the CPI. The fiscal impact of COLAs in FY20 will range from an estimated minimum of $9,000 and a maximum of $27,000 from the General Fund depending upon the CPI for each respective year.

Range Adjustment.   A market range adjustment increasing the minimum and maximum rates of pay of the range will be applied each year based on the July 11, 2016 base pay rates.  The range adjustments will be the following:

The FY18 market range adjustment finical impact is an estimated $13,000 per year fiscal impact. The market range adjustment in FY19 is an estimated $18,000 per year fiscal impact. The FY20 market range adjustment is an estimated $20,000 per year fiscal impact.  All three of these impacts are to the General Fund.

The COLA and Range Adjustment financial impact figures above do not include variable pay.  Additional analysis has been done to estimate the fiscal year impact of overtime, callback and standby.  These are not guaranteed hours.  A projection of likely financial impact was calculated using historical usage from FY17, and applying the increased base pay rates.  In FY18, the estimated cost is $3,000 to the General Fund.  By FY19, the estimated financial impact is a range of $6,000 to $9,000 to the General Fund.  And for FY20, the estimated cost is a range of $11,000 to $17,000 to the General Fund.  As explained above, the range exists because the exact COLA to be used in FY19 and FY20 will not be known until the corresponding CPI figures are released.

Section 2: Pay, Article C: Overtime Pay.  Contract clarification language was added to better define the callback overtime.  This has no fiscal impact and is clarifying current pay practices.

Section 2: Pay, Article G: Night Differential Pay.The parties agreed to new language fixing the hours in which Night Differential is paid.  Prior contract language assigned the differential to a shift.  Night Differential will be applied to hours worked between 5:00 pm and 6:00 am and will be increased from $3.04 per hour to $3.89 per hour.  The financial impact of this change is estimated to be a savings of $1,000 per fiscal year in the General Fund.

Section 2: Pay, Article I: Employee Longevity.  Contract clarification language was added to better define the proration of longevity at termination or death.  The estimated fiscal impact to the General Fund is $5,000 per fiscal year.

Section 3: Benefits, Article B: Health Care Upon Retirement & Sick Leave Conversion. There were three contract changes in this Article during negotiations.   First, a new option for sick leave cash out has been added to the contract.  Employees will have the option to cash-out sick leave to their deferred compensation after 20 years of Public Employee Retiree System Service (PERS) credit subject to a schedule.  The estimated fiscal impact of this change is $10,000 per fiscal year from the General Fund.

Second, upon nonservice related death of an employee, a section was added that allows the employees’ estate to receive a one-time payment of the employee’s sick leave balance subject to the cash-out schedule.  There is no estimated fiscal impact of this change due to the number of employees in the collective bargaining unit and a low citywide occurrence rate.

Finally, language was added in the cash-out section that allows the Financial Services Director the discretion to pay out the remaining balance if it is nominally over the $15,000 or $25,000 cap.  This has no fiscal impact.  It does not increase the cash value already owed to the employee.

Section 4: Leave Benefits, Article B: Annual Leave.  Contract clarification language was added to better define the holiday schedule.  This has no fiscal impact and is clarifying current pay practices.

Section 4: Leave Benefits, Article K: Personal Days.  Contract clarification language was added to better define Personal Days as that are equivalent to the shift assignment at the time the days are granted each fiscal year.  This has no fiscal impact and is clarifying the Contract to reflect current pay practices.

1. The Council may choose to approve the proposed collective bargaining agreement.
2. The Council may choose not to approve the proposed collective bargaining agreement.
3. The Council may choose not to approve the proposed collective bargaining agreement and direct the City Manager toward another alternative.

I move to approve the collective bargaining agreement between the City of Sparks and the Sparks Police Protective Association – Lieutenants Unit for July 1, 2017 through June 30, 2020.