The City negotiates and enters into labor agreements with its various collective bargaining units. Sparks Police Protective Association (SPPA) is the recognized bargaining representative for all Sparks Police Officers. The current agreement between the City and SPPA expired June 30, 2020. While the City and SPPA began negotiations in advance of that expiration date, a tentative agreement was not reached until March of 2021. This delay was due in large part to the parties' desire to change how Sparks Police Officers' base pay rate is determined, as discussed in greater detail below. The City's negotiating team and SPPA believe this agreement represents a fair, good faith effort between both parties. SPPA's membership ratified this agreement, and the City’s negotiating team recommends that City Council approve the agreement.

Both a red-lined version of the agreement and the final version of the agreement are attached to this staff report. A summary of the proposed changes to the prior agreement follows.

Term of Agreement

The agreement is proposed to cover the period between July 1, 2020, and June 30, 2021, or fiscal year 2021.

Cost of Living Adjustment

The agreement proposes a cost of living adjustment (COLA) of two-and-eight-tenths percent (2.8%). This COLA will apply retroactively to July 6, 2020, the beginning of the first full pay period in FY21. This COLA is also consistent with the COLA provided to other bargaining units and employee groups at the City for FY21. As reflected in the fiscal impact assessment attached to this staff report, the estimated cost of the COLA alone is $310,232.00.

Conversion of Sick Leave upon Retirement

Over the past year, Sparks Police Department and Human Resources began directing increased efforts toward recruiting lateral employees, meaning Police Officers who are already certified under the Peace Officer Standards and Training (POST) program and are employed by a different law enforcement agency. Lateral employees are able to begin patrol duties sooner than Police Officer Recruits because they are already POST-certified and do not need to attend the Northern Nevada Law Enforcement Academy. Further, lateral employees often enter Sparks Police Department with fresh ideas for improving processes and procedures. Their experience in other agencies is invaluable. 

Under prior agreements, employees with twenty (20) or more years of City of Sparks service could convert between 75% and 100% of their accrued sick leave to pay for group health insurance premiums after retirement. In recognition of the importance of lateral employees and the fact that such employees are likely to retire with fewer than twenty years of City of Sparks service, SPPA and the City's bargaining team propose to extend the sick leave conversion benefit to employees with fifteen (15) or more years of service with the City of Sparks. The benefits available to employees with twenty or more years of service have not changed, but benefits have been added for those employees with between fifteen and twenty years of service as reflected in the following table.

The agreement also proposes to increase the maximum amount of annual leave Police Officers may accumulate from 480 hours to 560 hours. Due to staffing issues, many Police Officers were not permitted to take annual leave, particularly during the height of the COVID-19 pandemic. Increasing the number of hours of annual leave that Police Officers may accumulate preserves their annual leave rather than forcing them to cash it out. This is also consistent with the agreement reached with Sparks Police Sergeants and Lieutenants for the same reasons. If all employees in the bargaining unit increased their annual leave banks to 560 hours, this change could increase the City's liability for this benefit by approximately $244,000.00. While increasing the maximum annual leave employees may accumulate increases the City's future liabilities, this proposed change has no direct costs.

Pay Step System

Finally, the agreement proposes to change how Sparks Police Officers are paid. Currently, the position of Police Officer is assigned a pay range, and a Police Officer's base pay rate may be anywhere within that range. Over time, adjustments to the pay range have resulted in some Police Officers with similar hire dates being paid significantly different amounts. An example follows.

Officer A was hired on July 20, 2015, and Officer B was hired one week later on July 27, 2015. Both Officers were paid $23.90, the bottom of the pay range, the first year that they worked for the City of Sparks. On July 11, 2016, Officer A received a COLA and a merit increase, bringing his base pay rate to $25.60. Officer B also received a COLA on July 11, 2016. On top of that, the bottom of the pay range was adjusted upward, resulting in Officer B being paid $24.87. Because Officer A's merit increase brought his base pay rate above the bottom of the pay range, Officer A did not benefit from the adjustment of the pay range. 

Two weeks later, during her annual review on July 25, 2016, Officer B received a merit increase, which was applied to her recently increased base pay rate. Officer B's base pay rate was thus increased again to $26.11, $.51 more per hour than Officer A's base pay rate, even though they were hired only one week apart. Over time, this disparity was compounded. As of July 20, 2020, under the existing pay range system, Officer A's base pay rate was $33.47, while Officer B's base pay rate was $34.14, a difference of $.67 per hour. Even if neither Officer works overtime or receives any types of special pay, Officer B would receive $1,393.60 more than Officer A in a single year.

In order to avoid these types of disparities going forward, the bargaining teams agreed upon a system with twelve (12) Pay Steps that accounts for both merit and years of service as a Police Officer. The base pay rate for Pay Step 1 was calculated by adding the 2.8% COLA to the bottom of the existing pay range, $27.95, for a base pay rate of $28.73. The base pay rate for each subsequent Pay Step was then calculated by adding 2.5% to the previous Pay Step. This resulted in the following Pay Steps.

Police Officers who were hired before this fiscal year were assigned to Pay Steps as follows. First, every employee was given the 2.8% COLA. Second, for this fiscal year only and in lieu of a merit increase, each employee's pay was increased by 5%. Both of these changes will be implemented retroactively to July 6, 2020. While merit-based pay increases are the City's preference, implementing this new Pay Step system in a way that is both fair and administratively feasible required selecting a single date on which to assign all current employees to a Pay Step. Staff selected the beginning of the first full pay period of the fiscal year as that start date.

Once each employee's adjusted base pay rate was determined, the employee was assigned to the next highest Pay Step, subject to two exceptions: (1) if the employee's years of service as a peace officer, including with other law enforcement agencies, corresponded to a higher Pay Step, the employee was moved to a higher Pay Step; and (2) if the employee's years of service as a peace officer corresponded to a lower Pay Step and the employee's adjusted base pay rate was within $.20 of the lower Pay Step, the employee was assigned to the lower Pay Step. 

Police Officer Recruits are not assigned to a Pay Step. Rather, they are paid 95% of the rate for Pay Step 1, or $27.29 per hour. Upon promotion from Recruit to Police Officer, an employee would be assigned to Pay Step 1. Lateral employees hired in the future will be assigned to a Pay Step based on their experience as a peace officer. 

As stated previously, the 5% increase to each employee's base pay, effective July 6, 2020, is in lieu of a merit increase for fiscal year 2021. Beginning in fiscal year 2022, the merit increase system will resume, and each Police Officer may receive a merit increase on his or her anniversary date. However, implementing the Pay Step system affects the merit increase system. Specifically, because an officer must be assigned to a Pay Step and paid exactly the corresponding hourly rate, an Officer may receive a merit-based Pay Step increase of 0, 1, or 2 Pay Steps in a year, depending on performance. In other words, instead of a merit increase anywhere between 0% and 5%, an employee may receive a merit increase of 0%, 2.5%, or 5% beginning in fiscal year 2022. 

In addition to the cost of the COLA discussed above ($310,232.00), implementing the Pay Step system as proposed is estimated to cost the City $265,768.00 in this fiscal year as stated in the fiscal impact assessment. The agreement is thus estimated to cost the City $576,000.00 in fiscal year 2021.

NRS 288.153(1) requires that City Council hold a public hearing before approving the agreement. The City's negotiating team recommends that City Council approve the agreement after holding the required public hearing.

I move to approve the Collective Bargaining Agreement (AC-5752) between the City of Sparks and Sparks Police Protective Association for the period of July 1, 2020, through June 30, 2021, for an estimated cost to the City of $576,000.00 in FY21.