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BACKGROUND The Pleasanton Police Officers' Association (PPOA) covers a total of 83 sworn police employees, 61 police officers and 12 police sergeants. (The ranks of lieutenant and above are designated management employees and not represented by the PPOA.) The current Memorandum of Understanding (MOU) with this group covered the period June 1, 2008 through May 31, 2011. The City is introducing this matter in public session to allow for open discussion prior to the formal initiation of contract discussions. All agreements reached between the parties during the meet and confer process are tentative until the contract, in its entirety, is ratified by members of PPOA and approved by the City Council. DISCUSSION In accordance with the Meyers-Milias-Brown Act, the parties are required to meet and confer in good faith over items covered within the scope of representation, including wages, hours and other terms and conditions of employment. Generally speaking, typical areas for negotiations include: Term of agreement: In light of the recent economy, the trend is for contract terms to be shorter, which allows greater flexibility to make adjustments should the economic environment change significantly. Wage adjustments: In preparation for wage adjustment discussions, staff prepares a salary survey comparing the average wage for the two covered classifications with those of designated survey cities. These cities are neighboring agencies that are similar in size and perform municipal police services. They include Antioch, Concord, Fremont, Hayward, Livermore, Milpitas, San Leandro, Union City and Walnut Creek. In addition, other data taken into consideration include the consumer price index (CPI), which reflects the general cost-of-living increases in the San Francisco-Oakland-San Jose area. Benefits: Other topics that are typically discussed include benefits such as the City's retirement program. Police personnel currently have the 3% @ 50 formula under the CaIPERS pension program. The cost for this program is expressed as a percentage of salary for covered PPOA employees and is included in the attachment to this staff report. (As a side note, CaIPERS require that agencies with less than 100 active members enroll in a risk sharing pool with other agencies in the State having similar benefit packages. The Pleasanton Police Group belongs to such a pool. In June 2011, the rates paid by the City where reduced by 9.241% as a result of prepayment of the side fund, which was established to account for the difference between the funded status of the City's plan and the funded status of the risk pool. The rates in the attachment reflect this reduction. The employee contribution of 9% is currently paid for by the City as employer paid member contribution (EPMC). Mr. John Bartel, President and Chief Actuary of Bartel and Associates, will be present at the City Council meeting to review the performance of the police plan and the suggested focus areas for pension sustainability. Page 2 of 4