REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution to Authorize the City Manager to Execute the 2025-2028 Memorandum of Understanding Between the City of Santa Clara and the Unclassified Miscellaneous Management (hereafter, “Unit 9”), Which Incorporates the Terms of the Tentative Agreement; Adopt a Resolution Updating the Unclassified Salary Plan; Approve the Creation and Modification of Unclassified Class Specifications; and Add 1.0 Assistant Fleet Manager and Delete 1.0 Public Works Supervisor
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
Execute the 2025-2028 Memorandum of Understanding Between the City of Santa Clara and the Unclassified Miscellaneous Management
The Unclassified Miscellaneous Management (hereafter, “Unit 9”) Memorandum of Understanding (hereafter, “MOU”) is set to expire on December 31, 2024.
The City and Unit 9 began formal negotiations on a successor MOU on approximately February 15, 2024, and the parties had multiple meetings to discuss terms that may be included in an overall agreement on a successor MOU. On or about October 24, 2024, the parties reached an overall Tentative Agreement on the terms to be contained in a successor MOU. Unit 9 notified the City on or about October 30, 2024, that the Tentative Agreement was ratified by Unit 9 membership.
Adoption of a Resolution Approving and Adopting the Updated Unclassified Salary Plan
Section 9 of the Personnel and Salary Resolution requires City Council approval of compensation plans for unclassified positions. California Code Regulations Section 570.5 requires the adoption of updated publicly available salary schedules by the governing body. The attached Resolution approves the updated salary plan for all classifications represented by Unit 9 consistent with the terms of the subject Tentative Agreement.
The City of Santa Clara contracts with the California Public Employees’ Retirement System (CalPERS) to provide retirement benefits for employees in both classified and unclassified positions. When the City makes modifications to the salary schedules for its unclassified positions, the City Council must approve and adopt the publicly available salary schedules to comply with California Code of Regulations (CCR) section 570. 5. If the City Council does not approve these resolutions, the City will be non-compliant with CalPERS record keeping and reporting requirements. The proposed Council action satisfies these applicable requirements.
The unclassified salary plan is being updated to reflect the terms agreed to with Unit 9 on a successor MOU, as discussed herein. In addition, the updates to the unclassified salary plan reflects the negotiated and Council approved Cost of Living Adjustments (COLA) for the Unclassified Police Management (hereafter, “Unit 9A”) and the Unclassified Fire Management (hereafter, “Unit 9B”).
• Unclassified Miscellaneous Management (Unit 9): The Chief Operating Officer, Chief Electric Utility Officer, and Assistant City Managers salary will remain status quo. Director level salary ranges shall be increased by approximately 3.0%. All other classifications assigned to Unit 9 shall be increased by approximately 5.0%. The wage adjustments are effective December 22, 2024 (first pay period of 2025).
• Unclassified Police Management (Unit 9A): A wage increase of approximately 4.0% effective December 22, 2024. Previously approved by City Council in open session as part of an agreement on a successor MOU on or about December 5, 2023.
• Unclassified Fire Management (Unit 9B): A wage increase of approximately 2.5% effective December 22, 2024. Previously approved by City Council in open session as part of an agreement on a successor MOU on or about November 1, 2022.
Approve the Creation of and Modifications to Unclassified Class Specifications
Creation of the Assistant Fleet Manager (Job Code 046) Class Specification: In coordination with the Department of Public Works, the Human Resources Department created an Assistant Fleet Manager (Job Code 046) classification to address staffing in the fleet division. The intent of this classification is to create additional promotional opportunities and succession planning opportunities in the division. The salary range is $126,422.28 - $163,590.48.
Merge the Deputy Director of Public Works (Job Code 176) and Deputy Director of Parks and Recreation (Job Code 175) to a General Deputy Director (Job Code 176) Class Specification: Pursuant to the Tentative Agreement on a successor MOU with Unit 9 described herein, the City is consolidating the Deputy Public Works Director (Job Code 176) and Deputy Parks and Recreation Director (Job Code 175) to a general Deputy Director (Job Code 176) class specification. The intent of this classification is to allow other Departments to utilize the Deputy Director classification to improve operations, create additional promotional opportunities and provide an avenue for succession planning in Departments. The salary range will be at the former Deputy Public Works Director (Job Code 176).
Revise the Senior Electric Division Manager Class Specification (Job Code 173): The Human Resources Department coordinated with the Electric Utility Department to revise the class specification for Senior Electric Division Manager (Job Code 173) to clarify and broaden the types of qualifying experience needed to meet the minimum qualifications for the classification.
Sections 4 and 6 of the Personnel and Salary Resolution require City Council approval of new or revised classifications. The proposed Council action satisfies these applicable requirements.
Add 1.0 Assistant Fleet Manager and Delete 1.0 Public Works Supervisor
The Department of Public Works is requesting to add a 1.0 Assistant Fleet Manager and delete 1.0 Public Works Supervisor. This action will better describe the work required to be performed in the work group by the creation of this classification.
DISCUSSION
Execute the 2025-2028 Memorandum of Understanding Between the City of Santa Clara and the Unclassified Miscellaneous Management (Unit 9)
The recommended action authorizes the City Manager to execute a successor Memorandum of Understanding with a term of January 1, 2025, through and including December 31, 2028, that incorporates the terms of the Tentative Agreement reached between both parties.
The following is a summary of the notable provisions of the Tentative Agreement, and a complete copy of the Tentative Agreement is attached:
Term
January 1, 2025 - December 31, 2028
Wages
Effective December 22, 2024 (the first pay period of calendar year 2025), the
Chief Operating Officer, Chief Electric Utility Officer, and Assistant City Managers salary will remain status quo. Director level salary ranges shall be increased by approximately 3.0%. All other classifications assigned to Unit 9 shall be increased by approximately 5.0%.
Effective the first pay period of calendar year 2026, all salary ranges for employees holding positions in classifications assigned to Unit 9 shall be increased by 3.0%.
Effective the first pay period of calendar year 2027, all salary ranges for employees holding positions in classifications assigned to Unit 9 shall be increased by 3.0%.
Effective the first pay period of calendar year 2028, all salary ranges for employees holding positions in classifications assigned to Unit 9 shall be increased by 3.0%.
Other Adjustments
The City will adjust the salary ranges for the classifications of City Librarian (Job Code 066), Director of Human Resources (Job Code 088), Director of Information Technology/CIO (Job Code 089), Director of Water & Sewer Utilities (Job Code 102), and Parks & Recreation Director (Job Code 132) to align with the Director of Finance (Job Code 087) salary range. There will be no automatic change in pay for incumbents.
The City will consolidate the classifications of Deputy Parks & Recreation Director (Job Code 175) and Deputy Public Works Director (Job Code 176) into single Deputy Director classification with the salary range of the Deputy Public Works Director. There will be no automatic change in pay for incumbents.
The City will increase the salary range for Assistant City Clerk (Job Code 010) by approximately 13.81% to align with the market rate and to reflect the duties of the position. There will be no automatic change in pay for the incumbent.
One-Time Non-Pensionable Discretionary Payment
The City shall make a one-time discretionary cash payment equivalent to approximately $3,000 for regular employees in Unit 9 who were subject to two (2) years of merit freezes. The Parties intend and understand that this lump sum payment is non-pensionable and will not be reported to CalPERS. The one-time discretionary cash payment shall be paid on or about November 29, 2024.
Additionally, effective the first full pay period of July 2028, the City shall make a one-time discretionary cash payment equivalent to approximately $3,000 for regular employees employed in classifications represented by Unit 9 at the time of payment. The Parties intend and understand that this lump sum payment is non-pensionable and will not be reported to CalPERS.
Deferred Compensation
On the pay date associated with the first pay period of calendar year 2025, the City shall make a monthly contribution equivalent to $300 on behalf of each represented employee in the City’s deferred compensation plan. An employee must be enrolled in the deferred compensation plan in order to receive the City’s contribution and there is no retroactivity of payment. It is anticipated that the City’s contribution will be deposited into a new Internal Revenue Code Section 401(a) deferred compensation account for each participating employee and that the City will need to enter into administration and record-keeping agreements for such accounts. This new plan would mirror the terms of the City existing section 457(b) deferred compensation plan. Since the fees associated with those retirement accounts are assessed against the individual accounts (and not against the City), staff recommends authorizing the City Manager to execute any such necessary agreements, in a final form to be approved by the City Attorney.
Healthcare
Effective January 1, 2025, the City will increase contribution towards Family Medical to 90% of the Kaiser rate for Employee plus two or more. City Council approved a side letter agreement to these terms on or about September 10, 2024, and the terms of the side letter agreement will be incorporated into the successor MOU.
Compaction
Annually, not later than March 31 of each year covered by the 2025-2028 MOU, Unit 9 may identify any classifications where it believes there is compaction (defined as a differential of less than five percent (5%) between the Unit 9 classification and a direct report). The Department of Human Resources will review any submitted issues of compaction and will recommend that the City Council amend the salary range for any Unit 9 classification where there is less than five percent (5%) differential with a direct report (measured top of salary range to top of salary range) to create a differential of five percent (5%) (measured top of salary range to top of salary range). Salary range adjustments will occur by July 1 of the following fiscal year and will not result in an automatic change in pay for the incumbent.
At any time, Unit 9 may identify compaction issues between bargaining unit employees and employees whom they directly supervise which do not require modification of the salary range by sending a written notice to the Department of Human Resources. Within fourteen (14) working days of receipt of the required information, the Department of Human Resources shall notify the City Manager of the compaction issue. Upon receipt, the City Manager will review the issue and may make a determination on an appropriate adjustment, if any, no later than thirty (30) working days after receipt from Human Resources). In determining the appropriate adjustment, the City Manager will consider all relevant facts including but not limited to: whether the employee is expected to be permanently supervised by the Unit 9 member (i.e., if the supervision is expected to last six months or less); any COLA or Merit increases applicable to the Unit 9 member; and the performance of the Unit 9 employee.
Adoption of a Resolution Approving and Adopting the Updated Unclassified Salary Plan
The Unclassified Salary Plan has been updated to reflect the terms of the Tentative Agreement on a successor MOU as described above, specifically the negotiated wage increases and other salary changes noted above for Unit 9. The Unclassified Salary Plan has also been updated to reflect the previously approved negotiated wage increases for Unit 9A and Unit 9B and additions/modifications to classification titles as set forth in this report.
Approve the Creation of and Modifications to Unclassified Class Specifications
Creation of Assistant Fleet Manager (Job Code 046) Class Specification:
In coordination with the Department of Public Works, the Human Resources Department created an Assistant Fleet Manager (Job Code 046) classification to address staffing in the fleet division and create additional promotional opportunities.
Assistant Fleet Manager (Job Code 046) - with an annual salary range of $126,422.28 - $163,590.48. The Assistant Fleet Manager (Job Code 046) assists in coordination, planning, organizing and improvement of fleet programs and activities, including but not limited to acquisition, maintenance, repair, replacement, utilization, disposal, fueling, safety, service contracts, database management, and regulatory compliance.
Consolidate the Deputy Public Works Director (Job Code 176) and Deputy Parks and Recreation Director (Job Code 175) to a general Deputy Director (Job Code 176) Class Specification:
Pursuant to the Tentative Agreement on a successor MOU with Unit 9, the City consolidated the Deputy Public Works Director (Job Code 176) and Deputy Parks and Recreation Director (Job Code 175) to a general Deputy Director (Job Code 176) class specification. The intent of this classification is to allow other Departments to utilize the Deputy Director classification to improve operations, create additional promotional opportunities and provide an avenue for succession planning in Departments.
Deputy Director (Job Code 176) - with an annual salary range of $183,067.44 - $236,912.52. The Deputy Director (Job Code 176) performs planning, organizing, and managing multiple operations functions within a Department. There is no proposed change to incumbents’ salary.
Revisions to Senior Electric Division Manager (Job Code 173) Class Specification
In coordination with the Electric Utility Department, the Human Resources Department revised the Senior Electric Division Manager (Job Code 173) class specification to make administrative updates to add the Distinguishing Characteristics section, add clarifying language to the Minimum Qualifications/Experience section, and to move existing language regarding experience in an electric utility industry from the Minimum Qualifications section to the Desirable Qualifications section.
Senior Electric Division Manager (Job Code 173) - with an annual salary range of $228,759.12 - $296,068.80. The Senior Electric Division Manager (Job Code 173) is a leadership position in the unclassified service with assigned responsibility of a sizeable number of employees, a major process, one or more divisions, and a significant financial role with debt, rate setting, trading or contracts within the Electric Utility Department.
Add 1.0 Assistant Fleet Manager and Delete 1.0 Public Works Supervisor
The Department of Public Works is requesting to add 1.0 Assistant Fleet Manager and delete 1.0 Public Works Supervisor; both classifications have the same salary range. The Department has a need for an Assistant Fleet Manager in the division. The creation of this classification is intended to provide additional support under fleet services and assist with succession planning within the workgroup. The Assistant Fleet Manager classification will better align with the work expected to be performed by the position.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
The City regularly budgets the total compensation cost for its current employees and integrates known and projected cost increases from MOUs in the City’s annual budget. The costs of the Unit 9 MOU are within budget authority approved by the City Council through the negotiation process. In FY 2024/25, the costs associated with the negotiated agreement are approximately $1.67 million, of which $764,000 are in the General Fund. It is anticipated that this amount will be covered within the existing departmental budgets in FY 2024/25. Expenditures will be monitored throughout the year, and budget actions will be brought forward to Council as necessary. In future years, the costs for this contract will be factored into future forecasts and annual budgets.
The chart below reflects the estimated changes in costs in the General Fund as well as all funds over the term of the Unit 9 MOU.
Estimated Costs
|
Item |
Description |
Estimated General Fund Cost |
Estimated All Funds Cost |
|
Ongoing Items |
|
|
|
|
Wages and Associated Benefits (CY 2025) |
5.0% increase (3% director level) |
$0.9M |
$2.1M |
|
Wages and Associated Benefits (CY 2026) |
3.0% increase |
$0.6M |
$1.4M |
|
Wages and Associated Benefits (CY 2027) |
3.0% increase |
$0.7M |
$1.4M |
|
Wages and Associated Benefits (CY 2028) |
3.0% increase |
$0.7M |
$1.5M |
|
Deferred Compensation (annual contribution) |
$300/month |
$0.3M |
$0.7 M |
|
Total Ongoing Items |
|
$3.2M |
$7.1M |
|
One-Time Items |
|
|
|
|
One-Time Non-Pensionable Discretionary Payment (CY 2024) |
$3,000 for employees with two-year merit freeze |
$132K |
$283K |
|
One-Time Non-Pensionable Discretionary Payment (CY 2028) |
$3,000 for employees employed in Unit 9 |
$262K |
$543K |
|
Total One-Time Items |
|
$394K |
$826K |
The Department of Public Works is requesting to delete 1.0 Public Works Supervisor and add a 1.0 Assistant Fleet Manager. The salary range for these positions are the same; therefore, there is no additional cost.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov, or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to Execute the 2025-2028 Memorandum of Understanding Between the City of Santa Clara and the Unclassified Miscellaneous Management (hereafter, “Unit 9”), Which Incorporates the Terms of the Tentative Agreement;
2. Adopt a Resolution to approve the revised salary plans for unclassified positions to satisfy the requirements of California Code of Regulations Section 570.5, effective December 22, 2024;
3. Authorize the City Manager to negotiate and execute all necessary agreements and other documents, in final form(s) approved by the City Attorney, for the establishment and operation of a section 401(a) deferred compensation plan in accordance with the terms of the Unit 9 MOU;
4. Approve the Creation of the Assistant Fleet Manager Class Specification (Job Code 046);
5. Approve the consolidation of the Deputy Public Works Director (Job Code 176) and Deputy Parks and Recreation Director (Job Code 175) to a general Deputy Director (Job Code 176) Class Specification;
6. Approve Revisions to Senior Electric Division Manager (Job Code 173) Class Specification; and
7. Approve the addition of 1.0 Assistant Fleet Manager and deletion of 1.0 Public Works Supervisor in the Public Works Department.
Staff
Reviewed by: Aracely Azevedo, Director of Human Resources
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Tentative Agreement between the City and Unit 9
2. Unclassified Salary Plan Eff 12-22-2024 (for Council 11-19-2024)
3. Resolution for Updated Unclassified Salary Plan (for 11-19-2024)
4. Assistant Fleet Manager Class Specification (Job Code 046)
5. Deputy Director Class Specification (Job Code 176)
6. Class Specification (clean) Senior Electric Division Manager (Job Code 173)
7. Class Specification (track changes version) Senior Electric Division Manager (Job Code 173)