REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager to execute the 2026-2029 Memorandum of Understanding Between the City of Santa Clara and the International Brotherhood of Electrical Workers (IBEW), Local Union 1245 (Unit 3) and Approve a Corresponding Update to the Unit 3 Classified Salary Plan
Report
BACKGROUND
The International Brotherhood of Electrical Workers (IBEW), Local Union 1245 (hereafter, “Unit 3”) Memorandum of Understanding (hereafter, “MOU”) expired on December 31, 2025. The City and Unit 3 began negotiations on a successor MOU in September 2025 and met approximately ten (10) times, including pre-impasse mediation. On or about January 23, 2026, the City and Unit 3 reached a Mediation Joint Recommendation on terms for a successor MOU. On or about January 28, 2026, Unit 3 notified the City that the Mediation Joint Recommendation was ratified by Unit 3 membership.
Updated Salary Plan
Section 9 of the Personnel and Salary Resolution requires City Council approval of compensation plans for both classified and 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 3 consistent with the terms of the subject MOU.
DISCUSSION
The recommended action authorizes the City Manager to execute a successor Memorandum of Understanding with a term of January 1, 2026, through and including December 31, 2029, that incorporates the terms of the Mediation Joint Recommendation on a successor MOU.
The following is a summary of the notable provisions of the Mediation Joint Recommendation, and a complete copy of the Mediation Joint Recommendation is attached.
Term:
January 1, 2026 - December 31, 2029
Wages:
Effective the first pay period after Council adoption, all salary ranges for employees holding positions in classifications assigned to Unit 3 shall be increased by approximately 5.0%.
Effective the first pay period after January 1, 2027, all salary ranges for employees holding positions in classifications assigned to Unit 3 shall be increased by approximately 5.0%.
Effective the first pay period after January 1, 2028, all salary ranges for employees holding positions in classifications assigned to Unit 3 shall be increased by approximately 4.0%.
Effective the first pay period after January 1, 2029, all salary ranges for employees holding positions in classifications assigned to Unit 3 shall be increased by approximately 5.0%.
Awarded Compensatory Time Off (CTO):
Effective the first pay period of each calendar year, employees in classifications assigned to Unit 3 must be in paid status the workday immediately preceding the first day of the first pay period of the calendar year in which Awarded CTO is provided, and the workday immediately following the first day of the first the first pay period of the calendar year in which Awarded CTO is provided.
Employees hired after the first pay period in any calendar year shall be credited with a pro-rata share of award CTO based upon the proportion of the calendar year remaining after their hire date.
CTO Cash Out:
Effective the first pay period of calendar year 2028, there shall be no cash out of CTO.
Grievance Process:
Both parties have agreed to modify the current grievance procedure to eliminate the Joint Grievance Committee. Thus, as part of Step 5 of the Grievance process, if the employee continues to dispute the City Manager's decision, the employee shall request that the matter be referred to an arbitrator, who shall render a decision on the grievance to the Union and the City Manager. The decision of the arbitrator shall be final and binding.
Contracting Out:
It is recognized that the City has the right to use outside contractors. In exercising this right, the City shall not use outside contractors if the contract results in the elimination of a position filled by an IBEW bargaining unit employee. Prior to scheduling outside contractors for work that can be performed by an IBEW bargaining unit employee, the City shall offer pre-planned overtime to IBEW bargaining unit employees on a voluntary basis to determine if sufficient employees volunteer for the specific assignment (e.g., a full crew).
Further, the City shall endeavor to maintain an active hire eligibility list or, in the absence of such a list, post a recruitment for vacant Electrician and Journey Lineworker IBEW represented positions within 30 working days of a position being vacated.
Footwear:
Effective Fiscal Year 2026-2027, employees shall receive an annual flat dollar lump sum (non-pensionable) of $500 each fiscal year, up from the current annual amount of $280. This amount is to be paid on the paycheck associated with the first full pay period after July 1. Employees promoted or hired into the bargaining unit after December 31 will receive the flat dollar lump sum (non-pensionable) amount of $250 for that fiscal year.
Standby Pay (Pilot Program):
To minimize the length of any unforeseen power outage and/or reduce the response time for any maintenance services, the following Standby Pilot Program provisions shall be utilized for employees assigned to Transmission & Distribution and Substations.
SVP will normally post a sign-up sheet for employees to sign up for standby duty at least a week prior to the scheduled standby duty, as determined by SVP. SVP will select employees who volunteer for standby based on the lowest standby hours first.
An employee who is working standby duty and is called back shall receive both standby pay and emergency overtime.
During the Pilot period, the parties will meet periodically to evaluate the program. Changes will be by mutual agreement. Unless the City provides written notice on or before November 30, 2028, this Pilot Program shall expire on December 31, 2028.
Updated Salary Plan:
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 or 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. The Classified Salary Plan has been modified to reflect the 5.0% salary range increase for classifications assigned to Unit 3.
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 ten-year forecast also incorporates the projected labor costs. The costs of this MOU are within budget authority approved by the City Council through the negotiation process.
The chart below reflects the estimated changes in costs in the Electric Utility Fund over the term of the MOU. In FY 2025/26, the impact of the January 2026 wage increase is $571,000, which is expected to be covered within the existing budget. Staff will monitor expenditures throughout the year and will bring forward a budget action at a later date if needed.
Estimated Costs
|
Item |
Description |
Estimated Cost |
|
Wages |
|
|
|
Wages (January 2026) |
5% wage increase |
$1.14 M |
|
Wages (January 2027) |
5% wage increase |
$1.20 M |
|
Wages (January 2028) |
4% wage increase |
$1.01 M |
|
Wages (January 2029) |
5% wage increase |
$1.31 M |
|
Total Wages |
|
$4.66 M |
|
Footwear (July 2026) |
$500/year stipend (increase from $280) |
$20K/year |
It should be noted that at this time there it is difficult to determine the cost of the Standby Pay Pilot Program as it is yet to be determined how often the City will need volunteers to be on standby.
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 a 2026-2029 Memorandum of Understanding and related Side Letter Agreements Between the City of Santa Clara and the International Brotherhood of Electrical Workers (IBEW), Local Union 1245 (Unit 3) on the terms presented, as reflected in the Mediation Joint Recommendation, in a final form approved by the City Attorney; and
2. Adopt a Resolution Updating the Salary Plan for various Unit 3 classified positions to satisfy the requirements of California Code of Regulations Section 570.5.
Staff
Reviewed by: Marco Mercado, Acting Director of Human Resources
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. City-IBEW Local 1245 (Unit 3) Mediation Joint Recommendation
2. Classified Salary Plan (Effective February 15, 2026) and Approved February 10, 2026
3. Resolution Approving Update Classified Salary Plan Effective February 15, 2026