REPORT. DATE ISSUED: November 19, 2012 REPORT NO: HCR Chair and Members of the San Diego Housing Commission For the Agenda of December 7, 2012
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1 REPORT DATE ISSUED: November 19, 2012 REPORT NO: HCR ATTENTION: SUBJECT: Chair and Members of the San Diego Housing Commission For the Agenda of December 7, 2012 Impasse Hearing, pursuant to San Diego Housing Commission s Employment Relations Policy , VII, Regarding Labor Negotiations with SEIU Local 221 on a successor Memorandum of Understanding COUNCIL DISTRICT: Citywide REQUESTED ACTION: Conduct a public hearing and take action relative to a determination whether the negotiations for a successor Memorandum Of Understanding between the San Diego Housing Commission and the SEIU Local 221 have reached and remained at impasse. STAFF RECOMMENDATION: 1) Conduct a public hearing and take action relative to a determination that in the negotiations for a successor Memorandum Of Understanding ( MOU ) between the San Diego Housing Commission ( Commission or Housing Commission ) and the SEIU Local 221, impasse was reached on or about August 20, 2012, and the Parties have remained at impasse on five (5) disputed MOU Articles [Articles 15, 19, 25, 27 and 50]. 2) If the Housing Commission determines that there is impasse on the stated Articles, impose the Housing Commission Last Best and Final Offer related to the stated Articles. 3) If the Housing Commission determines that there is no impasse on any of the Articles, convene in closed session to provide Housing Commission bargaining team with further instructions concerning negotiations. BACKGROUND: Negotiations between the Commission and SEIU Local 221 ( SEIU or Union, collectively with the Commission as Parties ) for a successor MOU began in earnest on March 29, 2012, well in advance of the June 30, 2012 expiration of the then-current one year MOU. The Housing Commission and Housing Authority of the City of San Diego ( Housing Authority ) provided specific parameters that staff used to conduct negotiations for a new labor agreement. The Parties met a May 1, 2012 deadline for each side to propose Articles for negotiation and held bargaining sessions at approximately 2 week intervals after beginning to negotiate in March. After meeting in good faith over months to fully consider all proposals, the Commission bargaining team recognized both sides had reached the point where each were maintaining previously held positions on all disputed Articles. This was confirmed with the Union bargaining team on or about the August 9, 2012 negotiation session. Therefore, on August 20, 2012, as provided by and in accordance with the
2 November 19, 2012 Impasse over Negotiations for a Successor Memorandum of Understanding with S.E.I.U, Local 221 Page 2 Meyers-Milias Brown Act and the Housing Commission s Employee Relations Policy, the Commission bargaining team made a written request for an impasse meeting pursuant to the Commission s Impasse Procedures set out in its Employment Relations Policy. The Commission bargaining team s written request and Employment Relations Policy is attached hereto as Attachment 1. At the previously scheduled negotiation session on August 21, 2012, the Commission bargaining team verbally inquired whether the Union had received the ed version of its written request for an impasse meeting, and, after checking, the Union confirmed it had received it. Under the terms of the Commission s Impasse Procedures, the parties were required to attend an Impasse Meeting. An Impasse Meeting was held September 27, and continued on October 16, to attempt to find resolution over the disputed Articles and/or to put in place an MOU agreeable to the Parties. During the Impasse Meeting, the Executive Vice President & Chief of Staff of the Housing Commission facilitated the sessions with the Parties. With the assistance of the Executive Vice President & Chief of Staff, the Parties resolved a part of the disputes by withdrawing certain Articles from negotiations and resorting to the status quo. The partial resolution was that the Commission team withdrew its proposal in Article 17, Seniority and Layoffs, in exchange for the Union team agreeing to withdraw newly proposed Article 49, Establishment of Binding Arbitration in Lieu of a Personnel System, and Article 52, Management Rights. At the conclusion of the Impasse Meeting, the Parties remained at impasse and are considerably far apart on Articles 15, Performance Reviews; 19, Pay Plan; 25, Insurance; 27, Retirement System; and 50, Salary Schedule. The Table below summarizes the Commission team s statement about the respective positions at impasse: Article SEIU Proposal SDHC Last Best & Final Offer Article 15 - Performance Reviews The SEIU team s proposal re-submitted on 8/21/12 (from a prior submission) seeks to define a focal performance; proposed that if a performance review is not completed within 60 days of the due date, the employee will receive a solid performer rating incentive payment; deletes language making performance review not subject to the grievance process; extends processing time for employee response to review and expands process by which an employee may dispute The Commission team s position is to delete language that penalizes the Commission for not completing the performance review within a certain time period and to clarify that (1) the review is a focal performance review and (2) that it is performed once in each fiscal year. Submission Dates SDHC ed proposal to SEIU on 04/26/12 SEIU presented counter proposal on 05/29/12 SDHC ed counter proposal on 06/21/12 SEIU presented counter proposal on 07/03/12 SDHC ed counter proposal on 07/05/12 SEIU submitted counter proposal on 08/01/12 SEIU resubmitted counter proposal on 08/21/12 SDHC ed counter proposal on 08/27/12
3 November 19, 2012 Impasse over Negotiations for a Successor Memorandum of Understanding with S.E.I.U, Local 221 Page 3 Article 19 Pay Plan Article 25 - Insurance results of review; requires Commission to annually provide statistical data about review results; and a prohibition from using quotas or percentages for review results. [See Detailed discussion of positions below for each Article.] The SEIU team s proposal re-submitted on 8/21/12 (from a prior submission) seeks to preserve automatic advancement on a seven step salary schedule and to be effective on the employee s anniversary date. The SEIU team s proposal re-submitted on 8/21/12 seeks an increase in flex credits from current $8, to $9652. The Commission team s proposal makes advancement on the salary schedule at the discretion of the President & CEO or designee; deletes step increase language intended to be interim for the first year of the pay for performance system; reduces the percentage award for strong and excellent performer ratings and eliminates an incentive for solid rating who is merely performing his or her duties. The Commission team opposes this increase and seeks to maintain the status quo. SDHC ed proposal to SEIU on 05/01/12 SEIU presented counter proposal on 05/24/12 SDHC ed counter proposal on 06/21/12 SEIU presented counter proposal on 07/03/12 SDHC ed counter proposal on 07/05/12 SEIU submitted counter proposal on 07/19/12 SEIU resubmitted counter proposal on 08/21/12 SDHC ed counter proposal on 08/28/12 SEIU presented proposal on 04/26/12 (increase flex credits to $11,275) SDHC ed counter proposal on 05/30/12 (As is. Updated year to 2012) SEIU presented counter proposal on 06/22/12 SDHC ed counter proposal on 07/05/12 SEIU presented counter proposal on 08/01/12 SEIU resubmitted counter proposal on 08/21/12 SDHC ed counter proposal on 08/27/12
4 November 19, 2012 Impasse over Negotiations for a Successor Memorandum of Understanding with S.E.I.U, Local 221 Page 4 Article 27 - Retirement System Article 50 - Salary Schedule The SEIU team s proposal re-submitted on 8/21/12 (from a prior submission) seeks to make it a mandatory obligation of the Commission to offer any loan programs allowable in any deferred compensation and/or retirement plan available to all represented employees. The SEIU team s proposal re-submitted on 8/21/12 (from a prior submission) seeks a 3.0% salary increase effective July 1, The Commission team opposes this mandatory language which would require the Commission to negotiate over changes in any and all plans offered, and seeks to provide one loan plan for the employees as approved by the Commission. The Commission team opposes this increase and seeks to maintain the status quo. SEIU ed proposal to SDHC on 05/01/12 (add loan program) SDHC ed counter proposal on 05/29/12 (As is) SEIU presented counter proposal on 06/22/12 SDHC ed counter proposal on 07/05/12 SEIU presented counter proposal on 07/19/12 SEIU resubmitted counter proposal on 08/01/12 & 08/21/12 SDHC ed counter proposal on 08/28/12 SEIU presented proposal on 04/26/12 SDHC ed counter proposal on 05/29/12 (As is) SEIU presented counter proposal on 07/03/12 SDHC ed counter proposal on 07/05/12 SEIU presented counter proposal on 07/19/12 SEIU resubmitted counter proposal on 08/21/12 SDHC ed counter proposal on 08/28/12 The Commission bargaining team s positions at impasse are summarized in its written request for an impasse meeting, attached hereto as Attachment 1. The Union s bargaining position is set forth in Attachment 3. SUMMARY DISCUSSION OF POSITIONS ON DISPUTED ARTICLES Article 15: Performance Reviews The Union submitted an Article 15 proposal that would have required that if an employee performance review was not completed by the Commission within a certain time frame specified by the Union in Article 15, that the employee would automatically receive an incentive payment as a
5 November 19, 2012 Impasse over Negotiations for a Successor Memorandum of Understanding with S.E.I.U, Local 221 Page 5 solid performer. In addition, the Union proposed that there be multiple levels of appeal of the performance review results, including the MOU grievance procedures. The Commission team s response was to add language requiring that the focal performance review for each employee must be performed once in each fiscal year. The proposal by the Commission team also gave the right to the employee to seek a review, accompanied by a Union representative or other employee, of any element of the performance review result that was less than a solid performer. Article 19: Pay Plan The Commission team proposed several changes to the Pay Plan Article 19. First, the language indicating that the Pay Plan was a pilot plan was removed from the Article. In addition, language indicating that advancement to any of the next steps can be granted at the discretion of the President & CEO of the Commission. Language guaranteeing a step increase in any calendar year was removed. Performance incentives were proposed for strong performer and excellent performer. The rate of incentive for a strong performer was 2 percent and the rate for an excellent performer was 4 percent. No incentive was proposed for a solid performer. Reference to a payment net of taxes was eliminated. The Union agreed to the removal of the pilot language but otherwise disagreed with each of the proposals made by the Commission team. Article 25: Insurance This Article deals with flex credits. The Union suggested that the flex credits be increased from current $8, to $ The Commission team proposed that the amount remain at $ per year per represented employee. Article 27: Retirement System The Union proposed that the Commission shall take any necessary steps to make any loan program allowable under any employee deferred compensation and/or retirement plan available to all bargaining unit employees. The Commission team offered that the Commission shall take any necessary steps to make a loan program allowable at the Commission s discretion through current provider(s) or any future provider(s) of the Commission under any employee deferred compensation and/or retirement plan available to all bargaining unit employees. The Commission team s position has been that the mandatory nature of offering such a program or programs and the administrative burden of providing multiple loan plans, as required by the Union s proposal, is not warranted, but the Commission is willing to provide and is currently working toward the goal of providing a loan program that will be made available to each and every member of the bargaining unit.
6 November 19, 2012 Impasse over Negotiations for a Successor Memorandum of Understanding with S.E.I.U, Local 221 Page 6 Article 50: Salary The Union originally requested an annual 3.5% increase in salary for each employee of the bargaining unit. That proposal was dropped to 3.0% after the Parties conceded that a multiyear MOU was unlikely. The Commission team is proposing no increase in salary for the current year. A summary of the Commission team s Last Best and Final Offers is included as Attachment 2 and a summary of the Union s post-impasse Meeting bargaining positions is attached as Attachment 3. If the Commission Board determines that the Parties have reached and have remained at impasse, the Commission may impose its Last Best and Final Offers of the five (5) disputed Articles. FISCAL CONSIDERATIONS: The FY 2013Budget, which was approved by the Housing Commission and Housing Authority on June 12, 2012, includes the Commission bargaining team s proposed MOU. No funding for the proposed S.E.I.U MOU changes is included in the FY 2013 Budget. ENVIRONMENTAL REVIEW: This is not a project pursuant to Section (c)(3) of the California Environmental Quality Act Guidelines. This action is exempt from the National Environmental Policy Act as administrative and management activities under the provisions of Section 58.34(a)(3) of Title 24 of the Code of Federal Regulations. Respectfully submitted, Michael McKenna Michael McKenna Director Human Resources Department Approved by, Jennifer Adams-Brooks Jennifer Adams Brooks Executive Vice President & Chief of Staff San Diego Housing Commission Attachments: 1. Commission s August 20, 2012 written request for an impasse meeting with attachment; 2. Commission s Last Best and Final Offers on the disputed MOU Articles; 3. Union s post impasse bargaining position on Articles 15, 19, 25, 27 and 50; and 4. Union s submission of material [At time of printing and distribution of the report on 11/29/12 this material was not available.] Hard copies are available for review during business hours in the main lobby of the San Diego Housing Commission offices at 1122 Broadway, San Diego, CA You may also review complete docket materials on the San Diego Housing Commission website at
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24 SDHC Counter Proposal to the Service Employees International Union Local 221 ARTICLE 15. PERFORMANCE REVIEWS Last, best and final offer as of 10/16/12 16 SDHC Proposal #: 5 Date: 10/16/12 Performance review procedures and forms shall be standardized for all employees. Rating standards may vary based on performance expectations established for each position. Performance reviews shall be performed for each employee in accordance with Introductory Period provisions herein. A focal performance review shall be performed once in each fiscal year (July 1 st June 30 th )., the first one being on or after June 30, Interim performance reviews may be performed at the discretion of the supervisor or at the request of the employee to assist the employee in determining his/her strengths and weaknesses, and to point out areas where improvements can be made, or have been made. Interim reviews shall not substitute for communication and instruction between the supervisor and employee. Performance issues shall be discussed with employees to provide instruction and opportunities for correction prior to interim or annual performance reviews. Employees will participate in the self appraisal and multi rater process in the Pay for Performance System in a process as approved by the President and Chief Executive Officer or the Commission. Performance reviews shall be discussed, in person, with employees and the document signed and dated by the supervisor at that time. The employee shall have five (5) workdays in which to consider the document before signing and returning it. No comments shall be added to the evaluation after the employee's signature. A copy of the performance review shall be given to the employee prior to placement in the Personnel File. If the performance review is not completed within 60 days of the due date, the employee will receive the incentive payment associated with the solid performer rating. Performance reviews and conferences shall be conducted in a confidential manner. Performance reviews are not subject to the grievance procedures. Except during introductory period, an employee may exercise the following procedures in response to a performance review. A. FOR ANY PERFORMANCE REVIEW: 1. If an employee does not respond within five (5) workdays of discussion or refuses to sign the document, the performance review will be forwarded for processing. Employee comments submitted
25 after the five (5) workdays will be forwarded through the appropriate signature approvals for filing in the employee s Personnel File and attached to the appropriate performance review. 2. If an employee disagrees with the supervisor's review, he/she may submit a written statement in response to the review within five (5) workdays of receipt and discussion as documented by supervisor s signature and date, which shall become a part of the official document. 3. If any elements of the performance review are rated less than solid performer, the employee may, within five (5) workdays of the receipt and discussion of the review, request a meeting to discuss the review with the supervisor and next higher supervisor. A Union Steward, Union Representative, or other employee may accompany the employee to this meeting. The next higher supervisor shall notify the employee within five (5) workdays, or reasonable mutually agreed to time frame, of his/her determination of the review. B. FOR A PERFORMANCE REVIEW WHICH IS RATED UNACCEPTABLE OVERALL: If the overall performance review is rated unacceptable, the employee may, within five (5) workdays of the receipt and discussion of the performance review, request a meeting as described in "A" above. If the employee is dissatisfied with the determination, the employee may request a final meeting to discuss the performance review with the Department Vice President or if previously reviewed by the Vice President, the next higher level. The employee may be accompanied by a Union Steward, Union Representative, or another employee at this meeting. Notification to the employee will be within ten (10) workdays of the determination. The Commission will monitor the performance review system to attain a consistent and reliable process. The distribution of ratings will be provided annually per fiscal year for review and discussion at a scheduled Union/Management committee meeting. Individual performance reviews will not be provided but inequities, if they occur, shall be discussed. Last, best and final offer as of 10/16/12 TENTATIVE AGREEMENT SDHC SEIU Local
26 SDHC Counter Proposal to the Service Employees International Union Local 221 ARTICLE 19. PAY PLAN Last, best and final offer as of 10/16/12 22 SDHC Proposal #: 4 Date: 10/16/12 The Basic Pay Plan consists of a 7-step range on the salary schedule which is attached as Attachment B. Employees shall be paid within the ranges assigned to their classifications in accordance with the established salary schedule. and a one year pilot program effective July 1, 2011 through June 30, The pilot program will consist of a Performance Incentive, as set out below, as determined by the results of an employee s performance review, as provided in Article 15. The foregoing does not limit or restrict in any way employees right to overtime compensation, if any, and the following provisions: A. The first step in each range is the minimum rate and shall normally be the hiring rate for the classifications. In cases where it is difficult to secure qualified personnel or a person of unusual qualifications is employed, the President and Chief Executive Officer or designee may approve appointment at a higher rate. B. Advancement within the range can be at the discretion of the President and Chief Executive Officer or designee. to the second, third, fourth, fifth, sixth and seventh steps shall be paid at the completion of twelve (12) months of solid performer service at each preceding step, as reflected by the annual evaluation. C. The differential between steps one to two, and steps two to three, shall be 5% rounded up to the nearest dollar. D. The differential between steps three to four, four to five, five to six, and six to seven, shall be 2.5% rounded up to the nearest dollar. E. Employees eligible for a normal step increase shall automatically receive the normal pay/step increase effective the start of the pay period in which their annual performance review date would have occurred from July 1, 2011 through June 30, FE. Performance Incentives are provided in accordance with a pay for performance plan, to recognize sustained annual performance at the levels of solid performer, strong performer, or excellent performer. Performance iincentives shall not be paid until after the first annual focal performance
27 review, as defined in Article 15, has occurred on or after June 30, 20132, and will recognize performance from the preceding year, July 1, through June 30, The amount of the Performance Incentive is a lump sum., after tax net amount. The Performance Incentive payment, as defined below, will be paid with the first pay check issued in September G. Employees who receive an overall solid performer performance review rating shall receive a Performance Incentive equal to 1.5% of the employee s base salary. HF. IG. Employees who receive an overall strong performer performance review rating shall receive a Performance Incentive equal to 23% of the employee s base salary. Employees who receive an overall excellent performer performance review rating shall receive a Performance Incentive equal to 45% of the employee s base salary. J. Employees at Step 7 who are currently receiving a 2.5% incentive will continue to receive the 2.5% incentive pay increase until the first annual focal performance review, as defined in Article 15, has occurred on or after June 30, KH. LI. Short Term Awards may be granted for $250, $500, $750 or $1,000 as a onetime lump sum per performance recognition. The purpose is to provide employees recognition and reward for specific short term performance less than a full rating period, which is excellent or clearly demonstrates performance exceeding normal job expectations. Short term bonus awards should not be used to encourage unrealistic and/or inappropriate job expectations or work assignments. Determination of short term bonus awards are not subject to appeal or negotiation and are at the discretion of the President and Chief Executive Officer or designee and will adhere to good management practice. All employees are eligible to participate in short term bonus awards. The Union will be provided information about award selection including name, classification and amount. Annually, full disclosure of nominations will be provided to the Union/Management Committee for discussion. Pay Equity Adjustment increase of one, two or three steps may be approved to alleviate salary inequities between incumbents of the same classification or supervisorial/employee salary relationships. The Commission encourages proper salary relationships between Ssupervisors and subordinates and employees in the same classification. Normally, salary relationships are in balance, but in some cases, salary inequities may exist, due to position hiring and advancement or employee/supervisor reassignment. In order to further the goals of fairness and good personnel 23 Last, best and final offer as of 10/16/12
28 practices, the Commission may exercise discretion to award salary increases to alleviate salary inequities. MJ. Equity adjustments require the approval of the President and Chief Executive Officer or designee and are effective on a prospective basis only. Equity adjustments may not exceed 15% and do not supplant the normal performance evaluation and salary administration system or schedule. Equity adjustments are at the sole discretion of the President and Chief Executive Officer or designee. Pay Differentials may be assigned to individual positions within a classification to recognize assignments which though difficult and specialized, do not warrant reclassification to a new or different classification. The Commission maintains a classification system to adhere to proper salary administration practices and recognize appropriate classification for assigned work. Assignments within a classification generally follow classification guidelines but in some cases may require difficult and specialized duties, but do not warrant reclassification to a new or different classification. Such assignments may include: Ongoing responsibilities exceeding those typically required of other incumbents in the class Special projects and assignments of a specified duration which entail added responsibilities and the application of specialized knowledge or skill Temporary exercise of lead or supervisory responsibilities in the absence of a lead or supervisory position, for a maximum of twelve (12) months This policy should not substitute for the use of temporary positions. Pay Differentials are at the sole discretion of the President and Chief Executive Officer or designee and subject to the grievance procedure. TENTATIVE AGREEMENT Last, best and final offer as of 10/16/12 SDHC SEIU Local
29 SDHC Counter Proposal to the Service Employees International Union Local 221 ARTICLE 25. INSURANCE SDHC Proposal #: Last, best and final offer as of 10/16/12 6 Date: 10/16/12 The Commission shall provide eligible employees with a cafeteria-style benefits program in accordance with Section 125 of the Internal Revenue Service Code. The Commission reserves the right to make changes to any and all aspects of the insurance covered by this article during the course of this Memorandum of Understanding; however, prior to implementing any such change, the Commission shall meet and confer with the Union on all such changes. The Commission provides employer-paid "core benefits" which include: Basic Term Life & AD/D Insurance - Equal to the employee's annual salary with a minimum of $15,000. Long Term Disability Plan - Long Term Disability benefits after 60 days of continuous disability of 65% of an employee's basic monthly pay, and when combined with other income, 70% of pay to a maximum of $8,500 per month. Flex Credits - The Commission will contribute Flex Credits effective on July 1 (beginning with the first pay day in July) in the amount of: $8,775 effective July 1, Amounts are per eligible full-time employee, prorated for part-time employees, for allocation by employee for employee and eligible dependent(s) benefit options including: A. Medical Insurance: 1. Major medical insurance providers OR 2 No medical coverage if employee provides written verification of other coverage. B. Dental Insurance C. Voluntary Life and Accidental Death and Dismemberment Insurance for Employee/Spouse/Dependents. 30
30 D. Set-aside for flexible spending accounts: 1. Health expense account 2. Dependent care account If the employee does not allocate the entire contribution, the remaining balance may be received in taxable cash. If the cost of coverage elected exceeds the Flex Credits, the employee may contribute the balance from their paycheck. Note: Coverage for dependent refers to a family member, significant other or same sex partner as defined and when provided by the Plan. Last, best and final offer as of 10/16/12 TENTATIVE AGREEMENT SDHC SEIU Local
31 SDHC Counter Proposal to the Service Employees International Union Local 221 ARTICLE 27. RETIREMENT SYSTEM SDHC Proposal #: Last, best and final offer as of 10/16/12 7 Date: 10/16/12 The Commission shall offer its employees a retirement system, with benefits no less than those outlined by HUD. The Commission agrees to maintain the contribution to the contribution retirement system to a minimum of 14%. The Commission shall take any necessary steps to make a loan program allowable at the Commmission s discretion through current provider(s) or any future provider(s) of the Commission under any employee deferred compensation and/or retirement plan available to all bargaining unit employees. Notwithstanding the language of Article 3, the Commission retains the right to notify the Union at any time of any proposed changes or modifications to its retirement system. Upon ten (10) days written notice given by the Commission to the Union, the Commission and Union agree to meet and confer upon the changes or modifications proposed by the Commission to its retirement system. The meet and confer process shall be conducted in accordance with California law. TENTATIVE AGREEMENT SDHC SEIU Local
32 SDHC Counter Proposal to the Service Employees International Union Local 221 ARTICLE 50. SALARY SCHEDULE SDHC Proposal #: No salary increases proposed during contract period. See Attachment B. Last, best and final offer as of 10/16/12 TENTATIVE AGREEMENT 10 Date: 10/16/12 SDHC SEIU Local
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