07-07-2020 - AGENDA ITEM 09 CONSIDERATION OF A SIDE LETTER OF AGREEMENT BETWEEN THE CITY AND THE WEST COVINA FIREFIGHTERS’ ASSOCIATION, I.A.F.F., LOCAL 3226AGENDA ITEM NO. 9
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: July 7, 2020
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: CONSIDERATION OF A SIDE LETTER OF AGREEMENT BETWEEN THE CITY
AND THE WEST COVINA FIREFIGHTERS' ASSOCIATION, LA.F.E., LOCAL 3226
RECOMMENDATION:
It is recommended that the City Council adopt the following Resolution:
RESOLUTION NO.2020-75 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA ADOPTING THE SIDE LETTER OF AGREEMENT BETWEEN THE
CITY AND THE WEST COVINA FIREFIGHTERS' ASSOCIATION, I.A.RE., LOCAL 3226
BACKGROUND:
West Covina Firefighters' Association (WCFFA) MOU is scheduled to expire on June 30, 2022. However, on
January 30, 2020, the World Health Organization declared the novel coronavirus, COVID-19, outbreak a
"public health emergency of international concern" On March 11, 2020, the World Health Organization
elevated the public health emergency to the status of a pandemic. In California, Governor Gavin Newsom
declared a State of Emergency on March 4, 2020. On the same date, Los Angeles County declared a local
emergency and a local health emergency. The City of West Covina declared a local emergency on March 16,
2020.
On March 19, 2020, Governor Newsom issued Executive Order N-33-20, mandating all individuals living in
the State of California to stay at home or at their place of residence except as needed to maintain the continuity
of operations of the federal critical infrastructure sectors. On the same date, the Los Angeles County Public
Health Officer issued a Safer at Home Order for the Control of COVID-19, ordering, among other things, the
immediate closure of. (1) non -essential retail businesses, (2) indoor malls and shopping centers, including all
stores therein regardless whether they are essential or non -essential businesses, and (3) indoor and outdoor
playgrounds for children, except for those located in childcare centers.
As a result of the State and County stay-at-home orders, the City has experienced a decline in economic
activity, which has impacted the City's revenues. City staff estimates a potential loss of $2.8 million in General
Fund revenues for Fiscal Year (FY) 2019-20 and a continuing loss of $2.1 million in General Fund revenues in
FY 2020-21.
In addition to the economic impacts from the COVID-19 pandemic, over the past five years, the City's General
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Fund reserves have continued to decline — in FY 2014-15, the unassigned fund balance was $20,531,695, in
FY 2015-16, the unassigned fund balance was $15,032,389, in FY 2016-17, the unassigned fund balance was
$14,119,078, in FY 2017-18, the unassigned fund balance was $11,979,653, in FY 2018-19, the unassigned
fund balance was $9,884,913, and for FY 2019-20, the unassigned fund balance is projected to be $1,903,251.
These reserves are insufficient to fully absorb the loss in revenue that will occur due to the COVID-19
pandemic.
The City has also faced challenges in delivering a balanced budget in recent years. For example, to deliver a
balanced budget for FY 2019-20, the City had to make significant cuts in expenditures, including layoffs of
City employees, contracting out Building & Safety and Engineering functions, and not funding vacancies in
City positions. Further, as of May 19, 2020, the City's General Fund deficit was $7,201,514.
Due to the financial condition of the City, which has been exacerbated by the COVID-19 pandemic, the City
Council unanimously declared a fiscal emergency on May 19, 2020. In declaring the fiscal emergency, the City
Council authorized the City Manager to take any and all actions necessary to address the fiscal emergency,
including reviewing and making changes to service agreements.
Unfortunately, as outlined above, the City has faced significant fiscal challenges in recent years, which
challenges were not foreseeable at the time the City entered into the MOU with the WCPOA. The COVID-19
pandemic, which effectively shut down the economy, was also not foreseeable at the time the City entered into
the MOU. Due to this "irresistible, superhuman cause", which is expected to result in a loss to the City of
approximately $2.8 million in General Fund revenues in the current fiscal year alone and which exacerbated
the City's financial condition such that the City declared a fiscal emergency, the City is unable to perform its
contractual obligations pursuant to the MOU. The City must stabilize its cash flow. The City is unable to
determine when it will recover from the financial impacts of the pandemic and be in financial position to
enable it to resume performance.
The City Manager sent an all staff memorandum to City employees on April 29, 2020 and May 19, 2020
summarizing the City's need to address its unforeseen emergency costs and strained financial position.
On May 15, 2020, the Los Angeles County Department of Auditor -Controller ("County Auditor -Controller")
notified the City that due to delayed payments of property taxes due to the COVID-19 pandemic, the City's
May 20, 2020 property tax remittance will be less than expected. On the same date, the County Auditor -
Controller notified the Successor Agency that due to delayed payments of property taxes due to the COVID-19
pandemic, the Successor Agency's June 1, 2020 property tax remittance will be less than expected; and the
City's General Fund reserves are insufficient to fully absorb the anticipated loss in revenue that will occur
from the COVID-19 pandemic.
As of May 19, 2020, the City's General Fund deficit was $7,201,514 and on May 19, 2020, the City Council
declared a fiscal emergency in Resolution No. 2020-46.
DISCUSSION:
Between May 20, 2020 and July 7, 2020, representatives of the City met with representatives of the West
Covina Firefighters' Association I.A.F.F. Local 3226 to discuss the City's unforeseen fiscal emergency and the
need to immediately stabilize the City's cash flow through immediate cost savings measures through the
reduction of personnel and benefits costs. The West Covina Firefighters' Association I.A.F.F. Local 3226 have
put forth proposals on reduction of personnel and benefits costs and reached agreement on proposals to assist
the City during this unprecedented time to assist the City in immediately stabilizing the City's cash flow
through immediate cost savings measures.
Prepared by: Helen Tran, Director Human Resources/Risk Managment
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Fiscal Impact
FISCAL IMPACT:
Anticipated savings is approximately $730,000.00 of benefits reductions suspended for 6 months, through
December 31, 2020.
Attachments
Attachment No. 1 - Resolution 2020-75 (West Covina Firefighters' Association)
CITY Achieve Fiscal Sustainability and Financial Stability
COUNCIL
GOALS &
OBJECTIVES:
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ATTACHMENT NO. 1
RESOLUTION NO.2020-75
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA ADOPTING
THE SIDE LETTER OF AGREEMENT BETWEEN THE CITY AND THE WEST COVINA FIREFIGHTERS'
ASSOCIATION, I.A.F.F., LOCAL 3226 (WCFFA)
WHEREAS, the City of West Covina, hereinafter referred to as the "City," and the West
Covina Firefighters' Association, I.A.F.F. Local 3226 have met and conferred in accordance with
the Meyers -Mi I ias -Brown Act and Government Labor Code §3500; and
WHEREAS, the City and the West Covina Firefighters' Association, I.A.F.F. Local 3226
have memorialized the agreement in a written side letter of agreement.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA HEREBY
RESOLVES AS FOLLOWS:
SECTION 1. The Side Letter of Agreement between the City and the West Covina
Firefighters' Association, I.A.F.F. Local 3226 to be provided at the regular meeting of the City
Council on July 7, 2020 is hereby approved.
SECTION 2. The City Manager is authorized to sign the Side Letter of Agreement.
APPROVED AND ADOPTED by the City Council of the City of West Covina at its regular meeting
on this 7th day of July, 2020.
Tony Wu
Mayor
APPROVED AS FORM ATTEST
Thomas P. Duarte Lisa Sherrick
City Attorney Assistant City Clerk
I, LISA SHE RRICK, ASSISTANT CITY CLERK of the City of West Covina, California, do hereby
certify that the foregoing Resolution No. 2020-75 was duly adopted by the City Council of the
City of West Covina, California, at a regular meeting thereof held on the 7th day of July, 2019,
by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk