CMCEA proposes pay freeze and more pension reforms

Costa Mesa City employees continued their efforts to collaborate with the City during another bargaining meeting this morning, submitting a new comprehensive proposal that both reduces employer costs and promotes transparency, accountability and efficiency in government.

Although the City has reported record sales tax revenues this year, CMCEA understands the reality of the City Council’s desire to achieve some limits on the cost of employees. So in addition to proposing that the City and its employees consider the collaborative government efficiency model LEAN, which has saved other public entities millions of dollars, CMCEA also proposed increasing employees’ contributions to their retirement plans, eliminating any potential wage increases, and freezing all merit pay for CMCEA members.

With respect to pension contributions, we made proposals that continue to demonstrate CMCEA’s leadership in pension reform. CMCEA members were the first employee group to collaboratively lead with reforms in 2008. Today, we proposed further concessions, including:

  • Paying the maximum employee contribution share toward pensions, and
  • Paying one-half (1/2) of the increase in 2013-14 employer contribution rates from the date of the agreement through the balance of the proposed term.

This proposal represents a significant sacrifice for Costa Mesa employees, who would see their take-home pay reduced by approximately 3 ½%.

“CMCEA employees have historically stepped up and made sacrifices to help the City through its challenges. City revenues are strong, but we have always respected and supported reasonable measures that promote both a strong workforce and economic stability. We know it’s so much better for the community if the Council, City executives, and City employees are focused and working together to deliver first rate services and value to residents,” CMCEA President Helen Nenadal said. She added, “So with this proposal, we are extending a huge olive branch as an investment towards that objective.”

The proposal also reiterates CMCEA’s commitment to transparency in government by requiring the disclosure of potential conflicts with certain private contractors. And it proposes partnering with the City to reduce health care costs by working together on a wellness program and other potential cost saving initiatives. The full bargaining proposal is listed below: 

 OCTOBER 28, 2013






  1. TERM – Commencing on the date of adoption by the City Council and ending October 4, 2014.


  1. STEP INCREASES – Freeze step increases for all CMCEA bargaining unit employees during the term of the agreement.




(a)   CMCEA bargaining unit employees shall pay the full normal rate of employee PERS contribution set by statute, which is currently as follows:


Employees hired prior to 3/11/12 (2.5%@55 benefit):  10.469% of compensation earnable.


Employees hired between 3/11/12 and 12/31/12 (2.0%@60 benefit): 8.0% of compensation earnable.


Employees hired 1/1/13 and thereafter (2.0%@62 benefit): 7.75% of compensation earnable.

(b)   In addition, CMCEA bargaining unit employees shall pay one-half (1/2) of any increase in the employer contribution rate for the CalPERS miscellaneous plan, using FY 2012-2013 as the baseline year. For example, commencing on the first pay period following adoption of this agreement by the City Council, CMCEA bargaining unit employees shall pay 1.555% of the 3.111% employer contribution rate increase for FY 2013-14.


(c)    The City shall take all necessary steps to ensure that all employee retirement contributions hereunder (towards both employee and employer contributions) will be treated, if legally permissible, as pre-tax contributions by employees.   


  1. SICK LEAVE – (1) Eliminate future accruals to the current secondary leave bank; (2) require employees to exhaust any current secondary leave bank balance before utilizing normal sick leave; (3) reduce maximum sick leave accumulation from 480 hours to 432 hours; (4) reduce sick accrual from 3.6 hours per pay period to 3.2 hours per pay period.



  1. LEAN – Establish a City/CMCEA working group to evaluate the feasibility and advisability of applying LEAN process analysis and improvement methods to City government. 


  1. HEALTH CARE, WELLNESS AND THE AFFORDABLE CARE ACT – Establish a CITY/CMCEA working group to: (a) evaluate the feasibility and advisability of developing a jointly sponsored wellness program; (b) determine the ramifications of, and possible opportunities created by, the Affordable Care Act; and (c) make appropriate recommendations.


  1. ALTERNATE WORK SCHEDULES – Where operationally feasible, reinstate 9/80 and/or 4/10 work schedules.


  1. RETIREE MEDICAL PROGRAM – Continue the suspension of the employees’ Retirement Health Savings Plan (RHS) during the term of the agreement with no contributions by the City or employees during that period.


  1. HOLIDAY CLOSURE – Close City Hall and all non-essential City facilities and functions from December 24, 2013 through January 1, 2014. Eligible employees may elect to use accrued leave time or leave time without pay for time off.


  1. TRANSPARENCY AND DISCLOSURE – Add the previously proposed Article XXVII (Transparency, Accountability and Full Disclosure) to the MOU.




  1. MOU PROVISIONS – Except as provided in this offer, all remaining terms and conditions of the September 1, 2004 – August 31, 2009 Memorandum of Understanding between the parties, including side letters where applicable, shall remain in full force and effect through the term of this agreement.