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 Santa Clara Firefighters, International Association of Firefighters, Local 1171 (Unit 1), Approve a Corresponding Update to the Unit 1 Classified Salary Plan, and Approve Related Budget Amendment
Report
BACKGROUND
The Santa Clara Firefighters, International Association of Firefighters, Local 1171 (Unit 1) Memorandum of Understanding (MOU) expired on or about December 31, 2025. The City and Unit 1 began negotiations on a successor MOU in June 2025 and met approximately eleven (11) times, including pre-impasse mediation. On or about April 9, 2026, the City and Unit 1 reached a Mediation Joint Recommendation on terms for a successor MOU. Prior to the Council meeting, Unit 1 will notify the City whether the Mediation Joint Recommendation was ratified by Unit 1 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 1 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 1 shall be increased by approximately 6.0%.
Effective the first pay period after January 1, 2027, all salary ranges for employees holding positions in classifications assigned to Unit 1 shall be increased by approximately 4.5%.
Effective the first pay period after January 1, 2028, all salary ranges for employees holding positions in classifications assigned to Unit 1 shall be increased by approximately 3.5%.
Effective the first pay period after January 1, 2029, all salary ranges for employees holding positions in classifications assigned to Unit 1 shall be increased by approximately 3.5%.
One-Time Non-Pensionable Discretionary Cash Payment:
In recognition of, and to help secure the employees' speedy ratification of this MOU, the City has exercised its discretion to provide a one-time discretionary cash payment of $4,000 for regular employees (pro-rated for part-time employees) in the bargaining unit following Council approval of this MOU. The Parties intend and understand that this lump sum payment is non-pensionable and will not be reported to CalPERS. An employee must be employed in a classification assigned to Unit 1 at the time the one-time discretionary cash payment is made to receive the payment.
Firefighter I/II:
Effective the first pay period of calendar year 2028, the Firefighter I (Job Code 487) classification will be retitled to Recruit Firefighter with an annual base salary of approximately $100,000, and the Firefighter II (Job Code 480) shall be retitled to Firefighter. The Recruit Firefighter shall be an unclassified, non-sworn employee. Upon successful completion of the Fire Academy, an employee in the Recruit Firefighter classification shall be promoted to the sworn Firefighter classification the first full pay period after successful completion of the Fire Academy.
Paramedic Premium Pay:
Effective the first pay period after Council adoption, the Paramedic Premium Pay shall be increased from approximately ten and two-thirds percent (10.32%) currently to approximately twelve percent (12%) of the biweekly rate of Step 5 of Firefighter II (Job Code 480S).
40-Hour Assignment Pay:
Effective the first pay period after Council adoption, the special assignment pay for eligible employees on a 40-hour schedule will be increased from approximately twelve and one-half percent (12.5%) currently to approximately fifteen percent (15%).
Life Insurance:
Effective January 1, 2027, the City will provide life insurance coverage in the amount of $50,000 for each full-time employee who is eligible for and a subscriber to life insurance benefits in accordance with the City’s group life insurance policy. This reflects an increase from the current coverage amount of $10,000.
Vision Insurance:
Effective January 1, 2027, the City will pay towards the vision insurance premium an amount equal to the lowest cost employee only vision premium for those employees enrolled in the City’s vision plan.
Personal Leave:
Effective the first pay period after Council adoption, shift personnel shall be entitled to use a maximum of seventy-two (72) hours of accrued sick leave as personal leave, reflecting an increase from the current maximum of sixty hours (60).
Compensatory Time Off (CTO) Cashout:
Effective the first pay period after Council adoption, employees in classifications assigned to Unit 1 shall no longer be able to cash out any earned but unused Compensatory Time Off.
Overtime:
Effective the first pay period after Council adoption, Unit 1 employees who work overtime for NFL games at Levi’s Stadium will be paid at time and one half (1.5) of their base pay instead of the double time rate.
Vacation:
Effective the first pay period after Council adoption, the Maximum Vacation Accrual limit shall be increased from four hundred hours (400) to four hundred and eighty (480) hours for 40-hour employees. Employees will no longer be able to accrue vacation hours above the Maximum Vacation Accrual limit.
Grievances:
The Mediation Joint Recommendation also settles two (2) outstanding grievances involving the Assistant Training Officer (ATO) and Super Bowl LX.
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 6.0% salary range increase for classifications assigned to Unit 1.
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 General Fund 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 General Fund as well as all funds over the term of the MOU.
Estimated Costs
|
Item |
Description |
Estimated Cost |
|
Wages |
|
|
|
Wages (2026) |
6% wage increase |
$2.4 M |
|
Wages (January 2027) |
4.5% wage increase |
$1.9 M |
|
Wages (January 2028) |
3.5% wage increase |
$1.6 M |
|
Wages (January 2029) |
3.5% wage increase |
$1.6 M |
|
Total Wages |
|
$7.5 M |
|
Paramedic Premium Pay (2026) |
12% of Step 5 Firefighter II |
$145 K (1st year cost) |
|
40-Hour Assignment Pay (2026) |
15% |
$41 K (1st year cost) |
|
Life Insurance (2027) |
$50K per employee |
$13 K (1st year cost) |
|
Vision Insurance (2027) |
Lowest cost employee only premium |
$7 K (1st year cost) |
|
Firefighter I/II (2028) |
Consolidation of classification |
$291 K (1st year cost) |
|
Total Ongoing Costs |
|
$8.0 M |
|
One-Time Costs |
|
|
|
One-time Non-pensionable Discretionary Cash Payment (2026) |
$4,000 (one-time) |
$576 K |
|
Total One-Time Costs |
|
$576 K |
In FY 2025/26, the costs associated with the negotiated agreement are approximately $1.0 million for the last two months of the fiscal year, including the one-time lump sum payment of $576,000. In future years, the costs for this contract will be factored into the annual budgets.
A budget adjustment is recommended in the General Fund to add $576,000 to the Fire Department budget to cover the one-time lump sum payment, funded by the unrestricted ending fund balance.
Budget Amendment
FY 2025/26
|
|
Current |
Increase/ (Decrease) |
Revised |
|
General Fund |
|
|
|
|
Expenditures |
|
|
|
|
Fire Department |
$70,452,267 |
$576,000 |
$71,028,267 |
|
|
|
|
|
|
Fund Balance |
|
|
|
|
Unrestricted Fund Balance |
$2,698,207 |
($576,000) |
$2,122,207 |
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 any related Side Letter Agreements Between the City of Santa Clara and the Santa Clara Firefighters, International Association of Firefighters, Local 1171 (Unit 1) on the terms presented, as reflected in the Mediation Joint Recommendation, in a final form approved by the City Attorney;
2. Adopt a Resolution Updating the Salary Plan for various Unit 1 classified positions to satisfy the requirements of California Code of Regulations Section 570.5; and
3. Approve the FY 2025/26 budget amendment in the General Fund to increase the Fire Department appropriation by $576,000 and decrease the unrestricted ending fund balance by $576,000 (five affirmative Council votes required for the use of unused balances).
Staff
Reviewed by: Marco Mercado, Acting Director of Human Resources
Approved by: Jōvan D. Grogan, City Manager
ATTACHMENTS
1. City-IAFF Local 1171 (Unit 1) Mediation Joint Recommendation
2. Classified Salary Plan (Effective April 26, 2026) and Approved April 21, 2026
3. Resolution Approving Updated Classified Salary Plan Effective April 26, 2026