REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager to execute the 2022-2025 Memorandum of Understanding Between the City of Santa Clara and the International Brotherhood of Electrical Workers (IBEW), Local 1245 (hereafter, “Unit 3”), that incorporates the terms of the Tentative Agreement, and Adoption of a Resolution to Update the Classified Salary Plan for Classifications represented by IBEW
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency.
BACKGROUND
The International Brotherhood of Electrical Workers (IBEW), Local 1245 (hereafter, “Unit 3”) Memorandum of Understanding (hereafter, “MOU”) expired on December 18, 2021.
While there are ongoing challenges related to the COVID-19 pandemic and the surrounding uncertainty, and its impacts on the City’s ongoing General Fund budget deficit, Unit 3 is exclusively funded through sources other than the General Fund. As of February 2022, the City projects a substantial General Fund ongoing shortfall of $19.6 million in FY 2023/24, which is largely the result of COVID-19 induced impacts on the City’s revenues.
As previously noted, the City of Santa Clara’s collective bargaining agreement with Unit 3 expired on December 18, 2021. The City and Unit 3 began negotiations on a successor MOU in August 2021 and met approximately seventeen (17) times. On or about May 27, 2022, the parties reached a Tentative Agreement on the overall terms of a successor MOU. Unit 3 notified the City on or about June 1, 2022, that the Tentative Agreement 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 IBEW 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 December 19, 2021, through and including December 31, 2025, 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:
December 19, 2021 - December 31, 2025
Wages:
Effective retroactive to December 26, 2021 (the first pay period of calendar year 2022), all salary ranges in classifications assigned to Unit 3 shall be increased by approximately 7.5%.
Effective December 25, 2022 (the first pay period of calendar year 2023), all salary ranges for employees holding positions in classifications assigned to Unit 3 shall be increased by approximately 6.5%.
Effective the first pay period of calendar year 2024, all salary ranges for employees holding positions in classifications assigned to Unit 3 shall be increased by approximately 5.5%.
Effective the first pay period of calendar year 2025, all salary ranges for employees holding positions in classifications assigned to Unit 3 shall be increased by approximately 5.0%.
Overtime
Effective the first full pay period after City Council approval, scheduled (pre-arranged) overtime as defined in the MOU shall be paid at the double time rate for pay; if an employee elects to receive the overtime as compensatory time off (or CTO), it shall remain status quo and be provided at the time and a half rate. It should be noted that non-scheduled (non-pre-arranged) overtime is already paid at the double time rate for both pay and CTO.
Specific to employees subject to Appendix A entitled “Shift Worker Agreement for Generation Division,” where employees are regularly scheduled to work 48 hours in week 1 and 36 hours in week 2, employees shall continue to receive CTO at the time and half rate for the first 3 hours of hours worked above 40 hours in the work week (with 4 hours being deducted to cover the second work week). If an employee elects pay for the remaining 5 hours during week 1, it shall be paid at the double time rate; however, if the employee elects CTO for the remaining 5 hours during week 2, it shall be status quo and provided at the time and a half rate.
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 7.5% wage increase effective December 26, 2021, included in the subject MOU.
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 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. There are no Unit 3 positions currently funded by the General Fund.
Estimated Costs
|
Item |
Description |
Estimated General Fund Cost |
Estimated All Funds Cost |
|
Ongoing Items |
|
|
|
|
Wages (2022) |
7.5% |
N/A |
$1.2 M |
|
Wages (2023) |
6.5% |
N/A |
$1.1 M |
|
Wages (2024) |
5.5% |
N/A |
$1.0 M |
|
Wages (2025) |
5.0% |
N/A |
$1.0 M |
|
Total |
|
|
$4.3 M |
The costs associated with the changes to overtime cannot be determined at this time as the City cannot predict behavior. However, based on the average overtime costs for calendar years 2019-2021, for all overtime earned by Unit 3 at the time and a half rate (either for pay or CTO) may result in increased annual costs of approximately $549,000. As noted above, current employees in Unit 3 are not funded by the General Fund and are exclusively funded through sources other than the General Fund.
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 <mailto: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 Memorandum of Understanding between the City of Santa Clara and the International Brotherhood of Electrical Workers (IBEW), Local 1245 (Unit 3) with effective dates of December 19, 2021 - December 31, 2025, that incorporates the terms of the Tentative Agreement; and
2. Adopt a Resolution to approve the revised salary plan for various classified positions to satisfy the requirements of California Code of Regulations Section 570.5.
Staff
Reviewed by: Aracely Azevedo, Director of Human Resources
Approved by: Rajeev Batra, City Manager
ATTACHMENTS
1. Tentative Agreement between the City and Unit 3 dated May 27, 2022
2. Updated Memorandum of Understanding between the City and Unit 3 in Track Change
3. Updated Memorandum of Understanding between the City and Unit 3
4. Classified Salary Plan (Effective 2021-12-26) and Approved 2022-06-21
5. Resolution