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BACKGROUND The International Association of Firefighters, Local 1974 (IAFF) covers a total of 103 sworn fire personnel, which includes 99 suppression and 4 prevention employees. (The ranks of Battalion Chief, Deputy Chief and Fire Chief are designated management employees and not represented by the IAFF.) The recently expired Memorandum of Understanding (MOU) with this group covered the period August 1, 2007 through December 31, 2011.In accordance with the agreement between Livermore and Pleasanton creating the Livermore-Pleasanton Fire Department (LPFD), the Joint Powers Authority Board and the City Councils of Livermore and Pleasanton are the appropriate agencies to approve labor agreements with represented employees. Representatives of the partner cities met and conferred with representatives of IAFF and developed a successor agreement with term ending June 30, 2014. 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. The significant results of the negotiations include: Term of agreement: The expiration date of the proposed MOU is June 30, 2014, just under two (2) years from the date the document becomes operationally effective. This shorter contract allows for greater flexibility to make adjustments should the economic environment or the City's financial situation change significantly. Wage adjustments: Historically, the parties have engaged in wage adjustment discussions centered on two primary factors: market data obtained from neighboring agencies that are similar in size and perform municipal fire services, and the consumer price index (CPI), which reflects the general cost-of-living increases in the San Francisco-Oakland-San Jose area (approximately 2.7% in June 2012). The proposed contract does not include any wage adjustments. Benefits: Pension — Member Contributions: The cost to fund the CaIPERS pension program is comprised of two parts. The first is a variable employer rate which is expressed as a percentage of salary for covered employees On FY 2012/2013, this rate is 33.3%). The second is a fixed 9% contribution for which members are responsible. When the City pays the member contribution on behalf of the employee, it is known as the "employer paid member contribution" or EPMC. The City has been paying EPMC on behalf of its fire employees, an agreement reached in previous years in lieu of the employees receiving salary adjustments. Since September 2010, IAFF employees began paying 2% of the member contribution and, as a result of the current contract discussions, agreement was reached for the employees to pay the full 9% member contribution by July 2013, in less than one year. Once the contract has been ratified and approved, employees will pay an additional 4% for a total of 6%, followed by an increase to 9% in July 2013. The cost savings to the LPFD as a result of employees paying the member contributions for the FY Page 2 of 4