25C - AMENDMENT TO POA MOU - Laserfiche WebLink

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Santa Ana Police Management Association MOU Amendment August 18, 2020 Page 2 The CaIPERS' Office of Audit Services (OAS) conducted and provided an Employer Compliance Review (ECR) to the City of Santa Ana on June 25, 2020. The ECR issued a Notification of Compliance and Resolution on July 2, 2020 identifying areas of special compensation where the performance based adjustments language in the SAPMA MOU Section 4.8 was not in compliance with the definition of special compensation in the California Code of Regulations (CCR) section 571(b) and Government (Gov.) Code section 20636, contained within the Public Employees' Retirement Law (PERL). It is the City's responsibility to comply with all terms and conditions of resolution and compliance set forth in the Employer's Contract with CalPERS. The City and SAPMA met and conferred over the findings and agreed to modify Article 4.0 section 4.8 Performance Based Adjustments language to comply with CalPERS and to honor the intent of the negotiated compensation back to its inception of July 1, 2014. The implications of not correcting the language would affect the employees' and some retired members' retirement benefits. The CalPERS Notification of Compliance and Resolution issued on July 2, 2020 mentioned above in item #2, also identified another type of special compensation not in compliance. Holiday pay is to be reported as earned and not when paid. In order to avoid an administrative burden on the Payroll Division to implement the corrective action by CalPERS, the City met and conferred with the SAPMA over the impacts and agreed to modify the language in Article 9.0, section 9.6.A. Holiday Leave. Effective January 1, 2021, members will receive holiday pay in pay -period in which the holiday occurs, if the holiday falls on their regular day off or if the member is scheduled to work on the holiday unless the member completes an irrevocable election request form prior to the calendar year earned requesting a "bank" to use their holiday hours anytime during the calendar year earned. FISCAL IMPACT If the City Council approves the amendment to the PMA MOU, the City will realize FY20-21 cost savings for the PMA members temporarily increased contribution to the employee pension plan. The estimated one-time savings totaling approximately $104,301 (4% contribution from August 18 through December 31, 2020, and 2% contribution from January 1 through June 30, 2021) will be realized entirely within the City's General Fund. The savings would increase slightly if any members receive an annual bonus for superior work performance, or elect to cash -out their holiday hours; as the members would make additional pension contributions on those amounts. Fiscal Impact Verified By: Kathryn Downs, CPA, Executive Director — Finance and Management Services Agency Submitted By: Steven V. Pham, Executive Director — Human Resources Department Exhibit: 1. First Amendment SAPMA MOU 2018-2021 25C-2