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025-2010 Reorganization of Classifications in the Fire Department® MIAMIBEACH OFFICE OF THE CITY MANAGER TO: Commissioner Edward L. Tobin FROM: Jor e M. Gonzalez, Cit M na er 9 Y 9 a~ DATE: July 9, 201`0 MEMORANDUM Memo // 025-20ct-0 ~ c_. err -, ~ ~-f ~ j h ..f'' ""...` ~~~:~ c: ; ~ SUBJECT: Reorganization of Classifications in the Fire Department -~~ ~, .~, This memorandum is in response to your request for information and further clarifi~tion regarding the reorganization of classifications in the Fire Department which were the subject of negotiations with the International Association of Fire Fighters (IAFF) during the recently completed contract negotiations. By way of background,. there are a number of ".public safety" classifications currently in the Fire Department including: Firefighter I, Firefighter II, Lieutenant, Captain, Battalion Chief, Division Chief, Assistant Fire Chief and the Fire Chief. In the FY 2009/2010 Adopted Budget, the following are the number of budgeted positions in the Fire Department that make up the current staffing levels: POSITION # Fire Fi hter I 120 Fire Fi hter II 50 Lieutenants 20 Ca tains 8 Battalion Chiefs 3 Division Chiefs 4 Assistant Fire Chief 1 Fire Chief 1 Proposed Staffing Changes The IAFF proposed that on September 30, 2012, all Firefighter II employees (anticipated to be 35 employees on September 30, 2010) would become Fire Lieutenants. However, through attrition over a two (2) to four (4) year period, the final number of Fire Lieutenants would be reduced to 29 (therefore, ultimately, there will be a total of 29 Lieutenants versus the 20 Lieutenants currently in place today). Also on September 30, 2012, all Fire Lieutenants (anticipated to be 22 employees at the time) would become Fire Captains. There will be six (6) Fire Captains on that date, so the total number of Fire Captains would become 28. As is the case with Lieutenants, however, through attrition over a two (2) to four (4) year period, the final number of Fire Captains would be 22 (therefore, ultimately, there will be a total of 22 Captains versus the eight Captains currently in place today). It should be noted. that any Firefighter II or Fire Lieutenant can decline the reorganization promotion and remain in their current classification if they wish to do so. In order to effectuate this reorganization, the current Fire Lieutenant and Fire Captain promotional lists will have to be extended for one (1) year, making each list a three (3) year promotional list instead of a two (2) year promotional list. This extension yields a cost savings to We are committed to providing excellent public service and safety to all who live, work, and play in our vibrant, tropical, historic community Page 2 of 3 Fire Reorganization Memorandum the City of approximately $60,000 (the costs associated with developing and administering the promotional exam). In an effort to minimize the cost of this reorganization, the IAFF has also proposed that all newly created Fire Lieutenants and Fire Captains must proceed through all of the already established pay steps of the classification they would be in at the time of the reorganization instead of jumping to the step of the higher rank. As a result, even in those cases where a Firefighter II 'receives a promotion to Lieutenant prior to the change that would result in a new promotion to Captain, those employees would have to complete the pay steps for a Lieutenant before moving into the Captain's pay step range. In addition, after May 26, 2011, the date the current. Firefighter ll promotional list expires, the City would cease promoting employees from the Firefighter I classification to the Firefighter II classification. Instead, at that point the City would create 27 assignments for "Driver Engineers" (DE), for, the respective Firefighter I employees who would drive the apparatus in the Suppression Division, and provide those employees certified and assigned as DEs with a five ..percent (5%) incentive pay, (instead of the five (5%) increase the Firefighter I would have received if promoted to a Firefighter II classification). Given that the Firefighter tl classification will. be eliminated once all Firefighter II employees have been promoted to Fire Lieutenant on September 30, 2012, or once they attrition out from the City if they choose not to be promoted as part of the reorganization, there will be a cost savings of approximately $11,000 during the term of this Agreement (October 1, 2009 through September 30, 2012). This $11,000 would be in addition to the approximately $60,000 cost savings from extending the promotional lists as well as the extension of the new hire list (which the IAFF agreed to) which saves the City an additional approximately $43,000. Therefore, the total savings for the term of the Agreement is approximately $414,000. Estimated Costs Effective October 1, 2012 The cost of the implementation of the reorganization is calculated to be approximately $725,000 for the three (3) year period from October 1, 2012 through September 30, 2015 (the term of the next Agreement), not including any pension implications. The City's average pension contribution forthe Fire and Police Pension Plan, using the actual contribution rates forthe past two (2) years and the projected contribution for next fiscal year, is approximately 66% of payroll. Using that methodology as a basis to calculate the pension impact, the increase to the City's pension contribution attributed to reorganization is calculated to be approximately $480,000, resulting in a total reorganization cost of approximately $1.2_ million. It should be noted that these calculations do not factor in any Cost of Living Adjustment (COLA) increases for FY 2012/2013 through FY 2014/2015 (the term of the next Agreement). If any COLA increases were to be given during the term of the next Agreement, the estimated payroll and pension costs would also increase accordingly. These calculations also do not include any overtime impacts. The projected on-going cost of reorganization. after FY 2014/2015 is anticipated to be approximately $300,000 to $350,000 annually, not including any impact to pension, and. assuming that all other factors remain the same. As with any projections, the further away from current day the projection is, the lower the level of confidence in the .projection, as all other factors are not likely to remain constant. Estimated Savinps/Offsets In addition to the previously noted savings resulting from the reorganization (the $114,000 from the extension of the promotional lists and new hire list, and from the new DE incentive pay), another mechanism was proposed to offset the cost of the reorganization. Specifically, IAFF has agreed to decrease the Holiday Pay hours from twelve (12) hours per employee/per holiday, to .nine (9) hours per employee/per holiday. Every member of IAFF currently receives Holiday Pay We are committed to providing excellent public service and safety fio all wha live, work, and play in our vibrant, tragical, historic community Page 3 of 3 Fire Reorganization Memorandum for ten (10) holidays per year. While reorganization will not take place until September 30, 2012, IAFF has agreed to change the Holiday Pay section of their Agreement effective immediately. The decrease in Holiday Pay hours per employee/per holiday generates a savings to the City of approximately $330,000 in the combined FY 2009/2010 and FY 2010/2011, and an additional $275,000 in FY 2011/2012, for a total of approximately $605,000 in savings to the City for the term of this Agreement. Again, this is in addition to the $114,000 savings referenced earlier. However, the reduction in the hours of Holiday Pay will continue into the future and will result in a recurring cost savings beyond the current agreement. During the three (3) year period of the proposed reorganization that begins on September 30, 2012, there will continue to be annual savings of approximately $275,000, or a total of $825,000 over the three (3) year period ending FY 2014/2015. As such, if the costs associated with the reorganization (not including pension) are $725,000 for the three (3) year period beginning September 30, 2012, and the savings resulting from the Holiday Pay hour reduction are $825,000 over the same period, the net effect is a savings to the City of approximately $100,000. The chart below reflects the net costs/(savings): Reorganization Implementation Costs/Savings from FY 2012/2013 - FY 2014/2015 (Excludes Pension) Estimated Savin s from Holida Pa excludin ension $ 825,000 Estimated Cost of Reor anization excludin ension $ 725,000 NET Estimated Cost/ Savin s of Reor anization: $ 100,000 It should also be noted that Holiday Pay is pensionable, so pension savings would be realized, in addition to the savings noted above resulting from the decrease of Holiday Pay. As is the case when any employee in the Fire Department assumes a new role or position, the Administration will work with all individuals who are impacted by the reorganization to ensure that they are properly trained, equipped and prepared for any new assignments, duties or responsibilities. In addition, you had inquired about what the impact would be of the FOP's "Me-Too" with the IAFF on this "reorganization". The City's Labor Relations team is currently working with the FOP on contract language for the 2009-2012 FOP Collective Bargaining Agreement and the respective parties have already discussed the exclusion of the "reorganization" language from any "Me-Too" provision in the FOP contract. If you are interested in more details regarding the reorganization of classifications in the Fire Department, please let me know and I can arrange for staff from Human Resources/Labor Relations to meet with you personally to discuss further. J MG/H M F/ri cc: Mayor and City Commission F:\CMGR\JorgelMemos\Memo to Commissioner Tobin Regarding Reorganization of Classifications in Fire (3).doc We are committed to providing excellent public service and safety to all wha live, work, and ploy in our vibrant, tropical, historic community.