| ITEM #: 12. DATE: 06/23/2025 AI #:2719 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | AMENDMENT TO THE FY2026 - FY2027 MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE CITY OF GOODYEAR AND UNITED GOODYEAR FIREFIGHTERS LOCAL 4005 |
| STAFF PRESENTER(S): | Lyman Locket, Human Resources Director |
SUMMARY
This first amendment to the Memorandum of Understanding (MOU) between the City of Goodyear and the United Goodyear Firefighters Local 4005 addresses corrections to the administration of deferred compensation and vacation cash in.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
ADOPT RESOLUTION NO. 2025-2479 APPROVING AMENDMENT NO. 1 TO THE JULY 1, 2025 – JUNE 30, 2027 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF GOODYEAR AND THE UNITED GOODYEAR FIREFIGHTERS LOCAL 4005. (Lyman Locket, Human Resources Director)
FISCAL IMPACT
There is no additional fiscal impact associated with this amendment. All anticipated costs have been included as a part of the fiscal year 2026 budget.
BACKGROUND AND PREVIOUS ACTIONS
On April 7, 2025, the Memorandum of Understanding between the United Goodyear Firefighters Local 4005 and the City of Goodyear for FY26 and FY27 was approved by Council. Options were included in the MOU regarding elected deferrals to a 401(a) account. In accordance with IRS Guidelines, contributions to a 401(a) plan must be non-elective.
STAFF ANALYSIS
The city’s Deferred Compensation Committee has been working to implement a 401(a) plan to enhance the city’s overall retirement program. Early in the planning process, we engaged with the recordkeeper and third-party administrator to discuss plan design and implementation. Based on those initial conversations, we included certain provisions in the MOU with the understanding that the information provided at the time was accurate. Through additional discussion with our recordkeeper we identified discrepancies in how the plan was to be administered in relation to the MOU. This discrepancy requires that we amend the Fire MOU to be in compliance with IRS guidelines.
The MOU has since been revised to reflect the corrected understanding of the 401(a) plan provisions. The revisions to the MOU remove all elective language with regard to payouts and rollovers to the 401a plan and replace with non-elective language. Automatic contributions to the 401a would include:
The Resolution No. 2025-2479 with Exhibit A is included as Attachment A to the Council Action Report. The redlined version of the Fire MOU is included as Attachment B.
The MOU has since been revised to reflect the corrected understanding of the 401(a) plan provisions. The revisions to the MOU remove all elective language with regard to payouts and rollovers to the 401a plan and replace with non-elective language. Automatic contributions to the 401a would include:
- Sick leave separation pay outs over 10 years of service and sick leave conversion
- Vacation separation pay outs
- Vacation over maximum carryover at the end of the calendar year
- Removal of annual vacation cash-in option
The Resolution No. 2025-2479 with Exhibit A is included as Attachment A to the Council Action Report. The redlined version of the Fire MOU is included as Attachment B.