Home|Blog | Message from Ann Smith Regarding the MOU Contract Extension and Retiree Health Negotiations

Message from Ann Smith Regarding the MOU Contract Extension and Retiree Health Negotiations


On Monday, April 25, 2011, the City Council approved MEA’s contract extension for FY 2012.  The City’s Salary Ordinance for FY 2012 was also introduced on Monday and the required second reading will follow.  This Ordinance memorializes the economic concessions contained in this MOU extension.

As you may know, there was a short delay in the Council’s adoption of MEA’s contract extension when the City Attorney’s Office identified a potential tax issue related to the fact that MEA-represented employees currently have an option to waive the City’s mandatory SPSP match in lieu of taking a 3% pay reduction, and for FY 2012, most MEA-represented employees will continue to have the option to waive this 3% mandatory match instead of taking 52 hours of unpaid furlough (the exceptions are those employees hired after 7/1/09 who do not have SPSP and must take the unpaid furlough, and hourly employees who must take a 3% pay reduction).  Unrepresented and unclassified employees have had the same options for FY10-11 and will also have the SPSP waiver option for FY 2012.  The City Attorney’s Office needed time to work through this potential tax issue with the City’s outside tax counsel.  This has now been done and MEA’s one-year extension of its MOU is now ready for approval without any change to the options agreed upon and ratified by MEA’s membership on March 22, 2011.

Although the Negotiating Team and the Board were fully briefed on the status of the communications from Labor Relations and the City Attorney’s Office on this issue, we did not want to create unnecessary alarm or confusion by disseminating any message to you about this issue until we understood exactly what the final ramifications, if any, would be.  The wisdom of our decision to delay any broad announcement to you about this has now been underscored because the City Attorney’s Office has worked through the issue with outside tax counsel to its/their satisfaction and no change in the agreed-upon terms of our contract extension will be needed.  This is, of course, very welcome news to your elected Negotiating Team Members who fully appreciate the value this SPSP waiver option continues to have for those of you who cannot bear any further reduction in your net take-home pay.

Finally, while it is good news that this contract extension has now been approved, your Negotiating Team has emphasized to the City that the economic sacrifices you continue to make under this extension will hurt you and your families as prices rise at the pump and in the stores, rates increase on utilities, water and sewer services, and health insurance costs skyrocket.  While it is small consolation, be assured that we will not let the City forget these sacrifices or take them for granted.



As you know, MEA’s Negotiating Team continues to meet and confer with the City over the retiree health benefit as required by our current MOU.  The date for reaching agreement or being at an impasse has been moved ahead to allow the parties more time to determine if there is any solution to this challenging problem short of an impasse, an imposition of the Mayor’s “last, best, and final” offer, and protracted litigation leaving you and the City in limbo regarding this crucial benefit.

While our agreement to “keep talking” and thus delay the scheduling of any impasse hearing is a prudent decision under all the circumstances, we are well aware that many of you who would be eligible to retire before July 1, 2011, may wish to do so to avoid the adverse affects of any unilaterally-imposed reduced benefit which would take effect on July 1, 2011.  Some of you spoke with an MEA representative about this issue and the relevant time-line when you attended the ratification vote related to the MOU extension back on March 22nd.

We assure you that we are doing everything in our power to achieve the best possible outcome for you on this crucial benefit.  However, those of you who would be eligible to retire on or before June 30, 2011, may wish to keep your option to do so open by reserving a timely appointment with SDCERS.  In requesting an appointment, be sure to do so in writing (not merely by a telephone request) in order to document your request — and also be sure to inform SDCERS in writing of the potential adverse affect on your rights as a retiree-health-eligible employee if SDCERS does not accommodate your request for an appointment in time to assure your retirement on or before any implementation of a change in retiree health benefits after June 30, 2011.

Best regards, Ann Smith