PURPOSE:

The purpose of this report is to request City Council approval of the proposed resolutions which would adopt the Fiscal Year (FY) 2004-2005 Memorandum of Understanding (MOU) between the City and the Burbank Police Officers� Association (BPOA), as well as related equity adjustments for the classifications of Police Captain and Police Chief.

BACKGROUND:

Beginning in March 2004, the City began the FY 2004-2005 negotiations with the various bargaining groups.  The City reached agreement with the International Brotherhood of Electrical Workers (IBEW) in June, 2004; the Burbank City Employees Association (BCEA) in August, 2004; the Burbank Fire Fighters (BFF) in November, 2004; and the Burbank Management Association (BMA) in January, 2005. The BPOA members ratified their agreement on February 23, 2005, and are now requesting City Council approval.  The approval of this agreement, as well as the related equity adjustments for the classifications of Police Captain and Police Chief, will conclude the negotiation process for FY 2004-2005.

For many years, it has been the City�s policy to look at four basic cornerstones when considering compensation issues for its employees:

• The condition of the economy as reflected by the Consumer Price Index (CPI) for the Los Angeles-Riverside-Orange County Urban Wage Earners and Clerical Workers from April to April, 2004.  This year that CPI was 2.40%.

• The capacity in the City�s approved budget is another criterion utilized in setting compensation for employees.  In FY 2004-2005, the City projected deficits and each department implemented two to four percent budget reductions to mitigate this situation.  As such, the City�s tight fiscal restraints were a determining factor in the compensation packages proposed for this Fiscal Year.

• Commitment to pay for performance is an on-going philosophy for the City.  In order to recruit and maintain quality employees to serve the needs of the community and citizens it is vital that we maintain this commitment even in the face of fiscal adversity.

• Equity in the marketplace as determined by market survey is the fourth criteria the City utilizes in setting compensation for employees.  In addition to the City�s own fiscal issues as cited above, the State is still grappling with a huge budget deficit which will continue to impact local governments.  As such, the ability to pay market wages is and continues to be hampered by these budgetary considerations.  

ANALYSIS AND CONCLUSION:

It is within this difficult financial framework, staff is proposing City Council approval of a one year economic package for the BPOA that does not exceed 3.75% of the General Fund.  While this increase of 3.75% is somewhat above the increase that the Council contemplated at the beginning of the negotiation process, the City was compelled to consider the significant recruitment and retention problems for sworn Police personnel.

Currently, there are seven vacant Police Officer positions.  Furthermore, a total of eight Police Officer positions have been frozen during the last two fiscal years due to budgetary constraints.  The Police Department has been attempting to fill these vacant positions for several months.  However, market competitiveness in a dwindling applicant pool has made this a difficult task. 

To address this situation, the City has expanded its marketing efforts and testing periods.  Further, on February 1, 2005, the City Council approved restoring two Police Cadet positions to assist the department with their long term recruiting strategy.  In addition, they approved offering monetary incentives to new recruits, lateral transfers as well as a finders fee to City employees who recruit a successful applicant.

In addition to the 3.75% salary increase, the City has agreed to relieve BPOA members of their share in the cost of the BPOA retirement plan.  Since the majority of the survey cities now provide the 3% @ 50 retirement benefit at no cost to sworn police employees, this cost sharing arrangement was contributing to the recruitment and retention problems at the Police Department.

To address some of the recruitment and retention issues, the union and the City agreed to a number of factors to be considered in the 2005-2006 negotiations.  One of these factors is an expanded compensation survey that will include a total of ten (10) Southern California cities.  This expanded survey, as well as the agreement on the elements to be surveyed and the methodology to be used will result in a more stable survey comparison and avoid the fluctuations that were inherent in the previous five (5) city survey. 

When the City Council approved the Unrepresented Managers and Executive compensation packages on August 31, 2004, it was understood that once agreement had been reached with the BPOA, the Police Captain and Police Chief salary ranges may have to be re-examined for an equity adjustment.  At that time, the Police Captain received a 0.83% range adjustment and the Police Chief received a 2.42% range adjustment.  As the BPOA classifications received a 3.75% salary adjustment, this creates a compaction among the ranks that does not encourage promotion or the development of qualified candidates for future upper management roles.  In addition, the Police Captain and Police Chief have historically received salary range adjustments that are at least equal to what the BPOA negotiated. 

As such, staff is proposing City Council approval of an additional 2.89% equity adjustment for Police Captain bringing the range from $8,171 � $9,928 to $8,407 � $10,215; and an additional 1.30% equity adjustment for Police Chief bringing the range from $10,625 - $12,909 to $10,763 - $13,077.  These equity adjustments will maintain the internal alignment between ranks.    

FISCAL IMPACT:

The compensation package of 3.75% for the BPOA is a total cost to the General Fund of $610,154.  The 2.89% and 1.30% equity adjustments for Police Captain and Police Chief respectively are a total cost to the General Fund of $15,792.  However, it should be noted that these equity adjustments are in range only, and therefore will not negatively impact the General Fund for this total cost.  The proposed salary increases and equity adjustments were anticipated in the FY 2004-05 budget preparation.  However, the funds were not appropriated at the time of the budget adoption.  As such, budget amendments are required to appropriate the necessary funds from the Un-appropriated Fund balance.

 RECOMMENDATION:

Staff recommends City Council adoption of the proposed resolutions approving the Fiscal Year 2004-2005 Memorandum of Understanding with the Burbank Police Officers Association and the equity adjustments to the salary ranges of Police Captain and Police Chief to maintain internal alignment between ranks.

Respectfully submitted,

Judie Sarquiz

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