Recognition of Human Resources Administrator Susan Nichols Recipient

Recognition of Human Resources Administrator Susan Nichols Recipient of the California Public Employees’ Labor Relations Association (CALPELRA) "Moving Forward Award"

2012 CALPELRA “Moving Forward” Award – The CALPELRA Board of Directors established the "Moving Forward Award" to recognize innovative leadership. The award is presented at the November Conference and is designed to honor organizations or individuals who have had an impact on their organizations by improving labor relations, resolving disputes, addressing new challenges, or by assisting others in their growth in the profession. Recipients of this award are models and mentors to others.

2012 CALPELRA “Moving Forward” Award – Demonstrated commitment and leadership in the field of California public sector labor and employee relations. – Emphasis on a series of accomplishments within the last 12 months that provided a unique approaches to labor problems.

Accomplishment • The “Cost of Labor - Reform Strategy” is a result of research and analyses that looked at the components of labor costs: – historically (7 years of data was researched analyzed); – examined current government sector compensation locally, regionally, state-wide and nationally; and, – forecasted three to five years of labor cost scenarios. • The City’s strategy development consisted of the following exercises managed by Ms. Nichols: – MOU Analysis (what salaries and benefits are we providing and at what management cost) – Classification Study (do we have the right job descriptions for our employees) – Total Compensation Study (are our compensation policies able to attract, retain competent and enthusiastic staff while keeping our labor costs sustainable) – Defined Contribution and Defined Benefit Pension and OPEB studies (are we providing the right pension benefit at the most efficient cost) – Budget Analysis – Labor Analysis • • The City then set sustainability targets for the component and aggregate costs of labor to develop a Comprehensive Negotiating Strategy. Subsequently, the City negotiated three year agreements with both its Police and non-safety employee groups that implement the significant and comprehensive “cost of labor” reform.

Accomplishment (visualized)

Impacts of Sausalito’s Cost of Labor Reform • • Pension Reform OPEB Reform Health Care Cost Reform Wage and Salary Cost Reform

Impact on Pensions • Pension Reform – Current employees start paying FAC 1 (one year average compensation premium) portion of Employer Share of pension costs • (Employees already pay 100% of Employee share) – Future Police employees in new Pension Tier – 2% @ 50, three year average compensation – Future non-safety employees in new Pension Tier – 2% @ 55, three year average compensation – Pay off existing Cal. PERS Pension Side Funds that were bearing interest at 7. 75% with cash reserves • IMPACTS – – Eliminated City annual pension expense for FAC 1 in the amount of over $50 thousand – New Police Employees pension costs at 20%of salaries vs current employees pension costs at 36% of salaries – New Non-Safety Employees pension costs at 10% of salaries vs current employees at 14% of salaries. – Reduced annual pension expenses for cost of debt service on Side Funds by $170 thousand – Finally, the state legislature enacted the Public Employee Pension Reform Act that creates a third pension tier with even lower benefits and lower employer costs than Tier 1 and Tier 2.

Impact on OPEB • OPEB (Other [than pensions] Post-Employment Benefits) Reform – Replace Defined Benefit (DB)-OPEB for current employees with 3 years or less service with Defined Contribution (DC)-OPEB – One-time offer to all employees with > 3 years services to opt out of DB-OPEB and replace with DC-OPEB – Eliminate all OPEB for all future employees • IMPACTS – – Eliminated DB OPEB for 14 employees with < 3 years service – Eliminated DB OPEB for 19 employees with > 3 years service – Created a closed pool of OPEB beneficiaries and accordingly justified to continue with a Pay-As-You-Go approach for OPEB funding. Specifically, • the annual OPEB normal cost was cut in half and now declines incrementally each year and should be entirely eliminated within 30 years; • Unfunded Actuarial Accrued Liabilities (UAAL) will be completely eliminated with 75 years

Impact on Health Care Costs • Health Care Reform – Eliminate health care benefits for City Council members – Cap Employers Share of Medical Health Care premiums @ 90% of Kaiser Health Plan • IMPACT – – Eliminated exposure to City Council Members potential $10, 000 in annual health care costs – New employees cafeteria plan is 90% of current employees Impact on Wages and Salaries Wage Reform – Lower starting wages 10% by adding two lower steps to former five step salary range IMPACT – – Potential 35% savings in wages for each new employee if terminating employee is at top of pay grade.

Recognition • Significant milestone • Noteworthy accomplishment • Measurable impacts • Exemplary work ethic – Positive mental attitude – Self-motivated – Goal directed