Agenda Item   



                                                                                                                        ASR Control  12-001709




legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

Human Resource Services   (Approved)

Department contact person(s):

Steve Danley, (714) 834-2836 






Subject:  Approve 2011 - 2014 OCMA MOU and Settlement Agreement


      ceo Concur

County Counsel Review

Clerk of the Board


Approved Agreement to Form




3 Votes Board Majority




    Budgeted: N/A

Current Year Cost: $623,000

Annual Cost: Savings: $4.7 Million




    Staffing Impact: No

# of Positions:

Sole Source: N/A

    Current Fiscal Year Revenue: N/A

    Funding Source: General Fund - 17%, Other Funding Sources - 83%


    Prior Board Action: N/A




Approve and adopt the 2011-2014 Memorandum of Understanding (MOU) between the County of Orange and the Orange County Managers Association as detailed in Exhibit 1 and the Settlement Agreement as detailed in Exhibit 2.






On December 3, 2012, the membership of the Orange County Managers Association (OCMA) ratified a proposed agreement with the County of Orange regarding terms and conditions of employment for the term January 4, 2011 to January 9, 2014.  The Human Resource Services (HRS) department requests your Honorable Board’s approval and adoption of the 2011-2014 Memorandum of Understanding (MOU) and the Settlement Agreement for Administrative Management employees.





The previous contract term of the MOU between the County of Orange and OCMA was 2007-2010.  The contract was then extended through January 3, 2011 while contract negotiations proceeded.  After lengthy discussions, the parties reached impasse on August 24, 2012.  According to new state regulations regarding impasse proceedings, the parties participated in mediation but were unable to resolve their differences.  OCMA subsequently requested Fact Finding on September 25, 2012.  As a result of Fact Finding proceedings, the chair of the Fact Finding Panel proposed a compromise to ascertain if the parties could resolve their differences.  Your Board authorized the County’s negotiator to offer this compromise proposal to OCMA which was ratified by OCMA on December 3, 2012.


A summary of the more significant deal points in the attached MOU include:




Term: January 4, 2011 to January 9, 2014




OCMA unit members’ contribution to retirement:




General employees – effective the first pay period in January 2013, general employees will pay one-half of the member’s contribution (pickup 1); effective the first pay period in July 2013, employees will pay the full employee contribution (pickup 2).  The elimination of the employer pickups represents an average payroll reduction to general employees of 7.29% of pay and an associated compounded savings of approximately $5.9 million over the term of the contract.



Safety employees (Probation) – effective the first pay period in January 2013, safety employees in OCMA will pay 5% of applicable compensation for the employee contribution to retirement; OCMA safety employees will then pay a higher amount of contribution when AOCDS unit members pay such a higher amount.  The 5% amount will result in an expected $137,100 cost savings over the term of the contract.




Pay for Performance (P4P) --  in settlement of the lawsuit and grievance filed by OCMA against the County on this matter:



The County will, effective the first pay period in January 2013, provide a 2.5% compensation pool for the 2011 calendar year P4P, for employees rated “Exceeds Expectations” or higher.  One-half of any payment to an employee will be base-building, the other half will be a one-time lump sum amount.  The approximate cost of this payment is $3.6 million.



There will be no P4P pool for the 2012 calendar evaluation period.  The estimated cost avoidance (based on a 2.5% performance pool) of this action is approximately $3.7 million.



The parties will meet and confer in 2013 regarding modifications to the P4P plan.




Health Insurance – OCMA will make a concerted, good faith effort to encourage unit members in the PPO plan to avoid using out-of-network services.  The County will also implement its employee benefits consultant’s (Mercer) recommended changes to health insurance plans (or such other modifications as may be implemented for County employees) once such recommendations/modifications are implemented for a majority of County employees.  Once implemented for OCMA, this action is estimated to save approximately $348,000 per year.




Confidential Pay (401a) – eliminate this benefit for current eligible employees.  This action will save $90,700.




Market/Equity Adjustments – increase the allocation pool for market/equity adjustments from 0.5% to 0.6% of payroll.  This action will cost $111,100.




Annual Leave Payout – clarify the intent of MOU language to limit the applicability of an Annual Leave payout immediately preceding retirement.




Workers’ Compensation Supplemental Pay – eliminate the County subsidy of 80% of pay during an employee’s absence.  This action is estimated to save $38,100.






Over the term of 2011-2014 MOU, the total gross savings to the County is $2.6 million with an estimated Net County Cost (NCC) savings of $442,500.  These savings do not include the $3.7 million cost avoidance associated with no P4P payment in 2012.  When all elements of the contract are fully implemented (e.g., full twelve months of retirement and medical insurance savings) the annual total gross savings and NCC savings will be approximately $4.7 million and $813,000 respectively.


On a more immediate basis (i.e., for the remainder of FY 12/13), the agreement will have a cost to the County of $623,000.  This is due to the immediate payment of the 2011 P4P of $1.8 million less the six-month savings resulting from the employee payment for retirement "pickup 1," the 5% pickup from Probation safety employees and other costs savings elements included in the agreement.










Exhibit 1 - 2011 - 2014 Orange County Managers Association (OCMA) MOU
Exhibit 2 - Settlement Agreement