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 American Federation of State County and Municipal Employees (AFSCME), Local 101 (“Unit 6”), Which Incorporates the Terms of the Tentative Agreement, and Adopt a Resolution Updating the Classified Salary Plan
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
The American Federation of State County and Municipal Employees (AFSCME), Local 101 (“Unit 6”) Memorandum of Understanding (“MOU”) expired on December 31, 2024.
The City and Unit 6 began formal negotiations on a successor MOU on approximately July 25, 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 December 11, 2024, the parties reached an overall Tentative Agreement on the terms to be contained in a successor MOU. Unit 6 notified the City on or about December 17, 2024, that the Tentative Agreement was ratified by Unit 6membership.
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 6 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 classified 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 classified salary plan is being updated to reflect the terms agreed to with Unit 6 on a successor MOU, as discussed herein.
DISCUSSION
Action to Approve City Manager’s Execution of the 2025-2028 Memorandum of Understanding Between the City of Santa Clara and the American Federation of State County and Municipal Employees, Local 101 (Unit 6)
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. 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),
all salary ranges for employees holding positions in classifications assigned to Unit 6 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 6 shall be increased by 3.5%.
Effective the first pay period of calendar year 2027, all salary ranges for employees holding positions in classifications assigned to Unit 6 shall be increased by 3.5%.
Effective the first pay period of calendar year 2028, all salary ranges for employees holding positions in classifications assigned to Unit 6 shall be increased by 3.0%.
One-Time Non-Pensionable Discretionary Payment
Effective the first pay period upon approval by City Council, the City shall make a one-time discretionary cash payment equivalent to approximately $2,000 for regular employees in Unit 6 who are in paid status on the date of payment. 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 is anticipated to occur on or about February 7, 2025.
Additionally, effective the first full pay period of January 2027, the City shall make a one-time discretionary cash payment equivalent to approximately $2,000 for regular employees employed in classifications represented by Unit 6 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.
Longevity Incentive
Effective January 5, 2025, the City will credit Unit 6 employees with twenty (20) years or more of City service, with a one-time payment of forty (40) hours of additional paid leave (hereafter, “APL”).
Thereafter, Unit 6 employees will be credited with forty (40) hours of APL the first full pay period following their completion of twenty (20) years of service with the City of Santa Clara.
APL must be used by the given year's pay period twenty-five (“PP25”). Any APL not used by PP25 will be paid out at the employee's base pay rate in pay period twenty-six. It should be noted that employees may individually elect to contribute all or a portion of this payment to their deferred compensation plan using the Nationwide website.
Tools
Effective December 22, 2024 (the first pay period of calendar year 2025), the City will increase the Automotive Technician Tools Reimbursement for eligible Unit 6 employees in specified classifications to $750 (from $500) each fiscal year, such funds to be available for the purchase, repair, or maintenance of the tools required to perform their duties.
Certification Premium Pay
Effective the first full pay period after City Council approval, the City will provide eligible Unit 6 employees in designated classifications Certificate Premium Pay of $100 per month for one qualified certification which the employee achieves and maintains, up to a maximum of $200 per month if the employee has two or more qualified certifications. Qualified certifications will be classification and department specific.
Adoption of a Resolution Approving and Adopting the Updated Classified Salary Plan
The Classified Salary Plan has been updated to reflect the terms of the Tentative Agreement on a successor MOU with Unit 6 as described above, including but not limited to a wage increase of approximately 5.0% effective December 22, 2024 (the first pay period of calendar year 2025).
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 6 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 $0.7 million, of which $0.5 million 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 6 MOU.
Estimated Costs
Item |
Description |
Estimated General Fund Cost |
Estimated All Funds Cost |
Ongoing Items |
|
|
|
Wages and Associated Benefits (CY 2025) |
5.0% increase |
$507K |
$824K |
Wages and Associated Benefits (CY 2026) |
3.5% increase |
$373K |
$605K |
Wages and Associated Benefits (CY 2027) |
3.5% increase |
$386K |
$627K |
Wages and Associated Benefits (CY 2028) |
3.0% increase |
$342K |
$556K |
Tool Allowance |
$750/Fiscal Year |
|
$2K/year |
Certification Premium Pay |
$200/Month for Eligible Employees |
$96K/year |
$161K/year |
Total Ongoing |
|
$1.7M |
$2.8M |
One-Time Items |
|
|
|
Non-Pensionable Discretionary Payment (2025) |
$2,000 for employees in paid status on date of payment (January 24, 2024) |
$166K |
$268K |
Non-Pensionable Discretionary Payment (2027) |
$2,000 for employees in paid status on date of payment |
$166K |
$268K |
Total One-Time |
|
$332K |
$536K |
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 American Federation of State County and Municipal Employees (AFSCME), Local 101 (“Unit 6”, Which Incorporates the Terms of the Tentative Agreement; and
2. Adopt a Resolution to approve the revised salary plan for classified positions to satisfy the requirements of California Code of Regulations Section 570.5, effective December 22, 2024.
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 6
2. Classified Salary Plan Effective 12-22-2024