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BACKGROUND The PCEA includes approximately 215 employees, comprised of numerous classifications. The classifications include but are not limited to clerical positions, police dispatchers, recreation employees, planners, engineers and maintenance employees in the streets, parks, support services and utilities divisions. The recently expired MOU with this group covered the period April 1, 2016 through March 31, 2019. Representatives of the City met and conferred with representatives of the PCEA and developed a successor agreement with term ending March 31, 2022. 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 March 31, 2022, a three-year term. The term of this contract, the same as the recently expired agreement, allows for flexibility as well as stability for both employees and employers as the successor agreement will not necessitate negotiations until 2022. Wage adjustments: Historically, the two primary factors considered in wage adjustment discussions are: market data obtained from certain agreed upon neighboring agencies that are similar in size and services, the consumer price index (CPI), which reflects the general cost-of-living increase in the San Francisco-Oakland-San Jose area (an average of 3.88% in 2018), financial forecasts and internal parity with other bargaining units and employees. The proposed contract includes 3% increases in April 2019, April 2020 and April 2021. One-time Stipend: A one-time payment of $900 per employee will be granted upon adoption of the proposed contract. This payment will not be used in the calculation of other earnings afforded in the MOU and will not be subject to CaIPERS payments. Benefits: Modifications to benefits include the following: Medical Contributions for Active Employees: Currently active employees pay a minimum of$25 per month towards medical premiums. Effective in January of 2020 all active employees will pay a minimum contribution of $50 per month for family coverage. Deferred Compensation: All PCEA employees considered "Classic Members" by CaIPERS have a 2.7%@55/single highest year retirement formula with the City. All PCEA employees under PEPRA reform receive a benefit formula of 2% @62, based on the average of the highest three years' earnings. In an effort to provide employees with more post retirement saving options, the MOU includes an additional 0.5% City contribution to PCEA employees' deferred compensation program for a total of 1% City Contribution effective April 2021. The City Page 2 of 3