A Labor-Management Commission will be created to identify potential cost savings in connection with the maintenance of high quality health care for City employees, including the potential of pooled purchasing and/or consolidation of the existing health benefits administration structure. The Commission shall complete its report no later than March 1, 1997 and the City and the Union will meet and discuss potential changes to the current system of health benefits delivery.

1. The City and the Union agree to initiate a two-year pilot program to foster greater labor-management cooperation, to improve the delivery of public services, to achieve economies in the cost of such services and to empower City workers to participate in decision making concerning their jobs. This program shall be known as the Redesigning Government Initiative (RGI).

2. To encourage full participation in this major initiative, the City agrees that there will be no layoffs or demotions as a result of contracting out during the first two years of this collective bargaining agreement.

3. The RGI program shall be directed by a three member coordination group (the "RGI Committee"). One member will be named by the City and one member named by the Union. The two representatives of the parties shall select the third member of the RGI Committee, who will be an independent authority on public service and labor management cooperation.

4. The RGI committee shall select five to ten specific functions or processes as the initial subjects of the program. These subjects may include both specific City units that had been considered for competitive contracting and/or more general labor-management concerns related to the overall goals of the RGI (such as City training programs). In each targeted area, the RGI committee will determine the appropriate structure and composition of a labor management team that will serve as the primary agent of change. This team will evaluate the targeted work area or subject to identify areas where change can improve the competitiveness of the City workforce.

5. Before the end of the two-year pilot program, the City and the Union shall meet and discuss the possible continuation of the RGI program. If no agreement is reached, on July 1, 1998, the following requirements for contracting out from the 1992-96 Agreement shall become effective:
   The City may contract out City functions, services, locations, or sites at or in which work is presently performed by employees in the bargaining unit represented by District Council 33, only if: (i) the work can be performed more economically by a union contractor (or other contractor in the event no union contractor is available) as opposed to employees represented by the Union; and (ii) the City shall give the District Council no less than thirty (30) days prior written notice before issuing a formal Request for Proposal or a formal Bid Solicitation Package, in order to afford the Union an opportunity to meet and discuss whether the work can be performed more economically by a union contractor (or other contractor in the event no union contractor is available) as opposed to employees represented by the Union.

   The above shall not apply if the total value of a contract is less than $10,000 in a fiscal year, is funded by any source other than operating budget funds, or involves an emergency or temporary situation. The City shall not sever any contract in order to take advantage of the $10,000 exemption.

6. During the two year RGI pilot program, the City agreement that there will be no layoffs or demotions as a result of contracting out shall apply instead of the requirements set forth in paragraph 5 above. During this period, the City may contract out City functions, services, locations, or sites at or in which work is currently performed by employees in the bargaining unit represented by District Council 33 without resort to the requirements of paragraph 5 only if contracting out does not result in layoffs or demotions. It is agreed and understood, however, that a goal of the RGI program is to minimize the use of contracting out by making government service more effective and economical.

7. In implementing the RGI program, both the City and the Union shall retain all rights provided by law, regulation, and this collective bargaining agreement. No matter addressed by the RGI Committee shall be subject to the grievance and arbitration procedure contained in this collective bargaining agreement. Any disputes which arise over the implementation or administration of the RGI program shall be referred to the RGI Committee to develop mutually acceptable resolutions.

8. The No Layoff Clause in the 1992-1996 Agreement shall continue in full force until June 30, 2000. On June 30, 2000, this clause shall expire and can be extended only by agreement of the parties whether or not the other terms and conditions of this agreement continue in effect.

When privately owned passenger vehicles are used for official business under proper authorization, the rate of reimbursement shall be thirty-one cents (31›) per mile. The Department will process reimbursement requests in a timely manner.

The City will add, effective January 1, 1997, a pre-Federal income tax Dependent Care Reimbursement Account for bargaining unit members in accordance with Section 125 of the Internal Revenue Code and applicable federal regulations. Participation in the Dependent Care Reimbursement Account will be governed by Sections 129 and 125 of the Internal Revenue Code and the applicable regulations thereunder, and by the administrative rules currently in place for the City Administered Plan. Generally, participants may make, prior to each plan year, an irrevocable election to place money in this account through payroll deduction to pay for eligible dependent care expenses. Any money not used to pay for eligible dependent care expenses incurred during the plan year will be forfeited. Employees who experience a change in family status within the meaning of the applicable Federal regulations applying to this pre-tax account may in certain circumstances enroll after the start of a plan year, or stop further deductions during the year.

Except as modified by this Memorandum of Agreement, all terms and conditions of the collective bargaining agreement between the City and the Union covering the period July 1, 1992 through June 30, 1996 which do not contain a specific expiration date shall remain in full force and effect for the term of this agreement, July 1, 1996 through June 30, 2000.

(signatures)

for the Union:

• James Sutton
• Ronald Mauldin
• Joseph Squadroni

for the City:

• David L. Cohen
• Michael Nadol
• William B. Grab