07-21-2020 - AGENDA ITEM 08 CONSIDERATION OF A SIDE LETTER OF AGREEMENT BETWEEN THE CITY AND THE WEST COVINA FIREFIGHTERS’ ASSOCIATION, I.A.F.F., LOCAL 322611/30/2020
Print Staff Report
AGENDA ITEM NO. 8
DATE: July 21, 2020
TO: Mayor and City Council
FROM: David Carmany
City Manager
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
SUBJECT: CONSIDERATION OF A SIDE LETTER OF AGREEMENT BETWEEN THE CITY
AND THE WEST COVINA FIREFIGHTERS' ASSOCIATION, LA.F.F., 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, LA.F.F., 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 $8,147,406.
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.
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 WCFFA. 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.
DISCUSSION:
Between May 20, 2020 and July 21, 2020, representatives of the City met with representatives of the West
Covina Firefighters' Association LA.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 LA.F.F. Local 3226 put
forth proposals on reduction of personnel and benefits costs and reached agreement with the City to change the
terms and conditions of their current MOU in order 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.
Fiscal Impact
FISCAL IMPACT:
Anticipated savings is approximately $350,000 of benefits reductions suspension.
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Attachments
Attachment No. 1 - Resolution 2020-75
Attachment No. 1 - Exhibit A - WCFFA Side Letter
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, on May 19, 2020, the City Council declared a fiscal emergency
through the adoption of Resolution No. 2020-46; and
WHEREAS, in declaring the fiscal emergency, the City Council directed the City
Manager to take any and all actions necessary to address the fiscal emergency, including,
but not limited to, measures relating to personnel and benefit costs, operations, and
reductions in service levels, and reviewing and negotiating changes to labor agreements,
service agreements, and franchise agreements, to the extent permitted by law; and
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-Milias-Brown Act and Government Code § 3500 to address
the Citys fiscal emergency, and the appropriate personnel -related costsavings measures
needed to address the fiscal emergency; 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,
CALIFORNIA 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, as provided to the City Council on July 21,
2020, is hereby approved.
SECTION 2. The City Manager is authorized to sign the Side Letter of Agreement.
SECTION 3. The City Clerk shall certify to the adoption of this resolution and shall
enter the same in the book of original resolutions and it shall become effective
immediately.
APPROVED AND ADOPTED this 21 st day of July, 2020.
Tony Wu
Mayor
ATTACHMENT NO. 1
APPROVED AS TO FORM ATTEST
Thomas P. Duarte Lisa Sherrick
City Attorney Assistant City Clerk
I, LISA SHERRICK, 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 21 st day of July, 2020, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk
Attachment No. 1 - Exhibit "A"
SIDE LETTER OF AGREEMENT
TO THE MEMORANDUM OF UNDERSTANDING
BETWEEN THE CITY OF WEST COVINA AND
WEST COVINA FIREFIGHTERS' ASSOCIATION
THIS SIDE LETTER OF AGREEMENT ("Agreement") memorializes an agreement
entered into between the City of West Covina ("City") and the West Covina Firefighters'
Association ("WCFFA") (collectively "Parties") with respect to the following:
WHEREAS, the Parties entered into a Side Letter Agreement to the Memorandum
of Understanding (MOU) with a term of January 1, 2017 to June 30, 2022; and
WHEREAS, the Parties agree that the amendments set forth in this side letter
agreement shall be incorporated into the MOU; and
WHEREAS, all other terms and conditions of the MOU shall remain in full force
and effect.
NOW THEREFORE, the Parties have agreed to amend the MOU as follows:
1. CalPERS Employee's Contribution and Cost Sharing — Upon ratification, all
employees shall pay an additional 10% of compensation earnable towards the
employer contribution pursuant to cost sharing in accordance with Government
Code Section 20516(f) through January 14, 2021.
2. The parties agree that WCFFA may, at its sole discretion, re -open the MOU should
the City decide that the West Covina Fire Department not be absorbed by the Los
Angeles County Fire Department. If the City has not made such decision by
September 1, 2020, the WCFFA may re -open the MOU at any time from
September 1, 2020 through the end of the term of the MOU. WCFFA may
unilaterally decide issues for the limited re -opener including, but not limited to,
adequately funding the Department.
FOR THE WCFFA AND CITY OF WEST COVINA:
I agree on behalf of the WCFFA: I agree on behalf of the City:
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Michael Hambel
WCFFA President
David Carmany
City Manager
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Date Date