Consent Item 3o
STAFF REPORT
City Council Consent Item
DATE: May 19, 2025
TO: Honorable Mayor and Council Members
FROM: Amy Nilsen, City Manager
SUBJECT: Approval of the June 29, 2025 to June 30, 2027 Memorandum of Understanding (MOU) Concerning Working Conditions, Wages and Benefits with the Fortuna Employee Association (FEA)
STAFF RECOMMENDATION:
Staff recommend the Council approve an MOU with the FPEA for the term, June 29, 2025, to June 30, 2027.
EXECUTIVE SUMMARY:
Staff are presenting the complete MOU between the City and the FEA, for City Council approval.
The attached MOU incorporates the changes agreed upon between the City and the FEA during recent negotiations. Below is a summary of the changes. • Section VII: Wages, 1. Wage Adjustments
Summary of changes: For Fiscal Years 2025-26 and 2026-27, the City will provide a onetime $6,000 retention stipend to be paid in two equal lump sum installment payments of $3,000 – the first payment in the last pay period of July and the second payment in the first pay period of December . In order to receive the installment payment, an employee must be currently employed by the City and either scheduled for active shifts or be on paid leave as of the beginning of the applicable pay period referenced above.
Effective June 29, 2025, for a 24-month trial period, the normal, full-time workweek shall consist of thirty-four (34) hours with offices closed on Fridays. Upon the schedule change, a full-time equivalent (FTE) of 1.0 is equivalent to an employee who normally works thirty-four hours per week.
During the 24-month trial period of the 34-hour work week hourly pay will be adjusted by 17.65% to ensure employees are earning the same weekly amount. • Section VIII: Insurance, 2. Opting Out of Medical Coverage For FEA members that are opting out of medical coverage the opt out payment option has been adjusted from a flat $500.00 per month to 75% of the employee-only medical premium, prorated and paid bi-monthly.
Consent Item 3o
• Section IX: Holiday Benefits and Paid Leaves, 1. Vacation The City will transition to a thirty-four (34) hour workweek with offices closed on Fridays. Therefore, vacation accrual has been reduced from 80 hours of accrued vacation in a year to 68 hours. This adjustment still allows for two weeks of accrued time with Friday office closures. The chart below represents the changes for all years of service.
Full Years of Service
Completed by Employee
Number of Working Days of
Vacation Earned
Maximum Accumulated
Leave in Bank Allowed
1 through 5 years 68 Hours annually 160 Hours
6 through 10 years 102 Hours annually 240 Hours
11 years and Over 136 Hours annually 320 Hours
• Section IX: Holiday Benefits and Paid Leaves, 4. Holidays Summary of changes: The number of holidays has been reduced because of the 34-hour work week, and if the holidays shown below fall on a Friday the FEA will not receive the holiday. The below provides greater detail on the changes to holidays in the FEA MOU.
Holidays Provided Effective June 29, 2025:
To ensure consistent services and continued operations while providing a 34-hour workweek, the City agrees to pay all full-time regular employees in the bargaining unit for the following eight (8) holidays per year:
• New Year's Day,
• The day observed as President’s Day,
• Memorial Day,
• Independence Day,
• Labor Day,
• Thanksgiving,
• Christmas Eve,
• Christmas Day.
However, if one of the eight (8) holidays referenced above is on a Friday, Saturday, or Sunday, employees will not receive the holiday.
Employees shall receive eight and a half (8.5) hours of pay for a holiday.
The Friday after Thanksgiving is now an additional floating holiday, for a total of three (3) floating holidays that will be available by July 1 each year.
At the completion of the 24-month trial period, unless otherwise extended by the City and the Association, holidays provided to full-time Association employees will revert back to the policies that existed prior to the trial period.
Consent Item 3o
• Section X: Hours of Work and Overtime, 2. Work Schedule Trial Period: Effective June 29, 2025, as part of a 24-month trial period, the normal, fulltime workweek shall consist of thirty-four (34) hours. Upon the schedule change, a fulltime equivalent (FTE) of 1.0 is equivalent to an employee who normally works thirtyfour hours per week. During this time, the Employer and Employees will evaluate the effectiveness of the schedule, including any impacts on productivity, morale, and worklife balance. • Section X: Hours of Work and Overtime, 3. Overtime Definition For a trial period of 24-months, overtime is defined as hours worked in excess of thirtyfour (34) hours per week. Overtime shall be paid at one (1) times the employee’s base rate of pay for hours worked between 34 and 40 per workweek and one and one-half (1- 1/2) times the employee's base rate of pay for hours worked over 40 hours per workweek.
It is understood and agreed upon that during the transition to the 34-hour work week, the Utilities Crew and Wastewater Crew will incur overtime due to the nature of the job and up until the time it takes to train qualified employees. • Section X: Hours of Work and Overtime, 4. FLSA 7(b) Work Period Overtime Exemption
For the Wastewater Treatment Plant operations employees, during the 24-month 34-hour work week trial period the City and association agree to modify the ‘10-8’ shift to be 8 consecutive 8.5 hour days with 6 consecutive days off. At the completion of the 24- month trial period, unless otherwise extended by the City and the Association, this modification will revert back to 10 consecutive 8-hour days with 4 consecutive days off. • Section X: Hours of Work and Overtime, 5. Rate of Overtime Overtime shall be paid at the rate of one (1) times the employee’s base rate of pay for hours worked between 34 and 40 per week and one and one-half (1-1/2) times the employee's base rate of pay for hours worked over 40 hours per week. • Section XI: Other Pay/Incentives, 4. Special Event Pay Parks and General Service employees scheduled to work the entire week during the annual Rodeo and AutoExpo events, shall receive double-time pay for any hours worked over 40 hours.
FISCAL IMPACT
Fiscal impacts associated with the terms of the MOU’s have been reviewed by Council during the negotiations process, in the budget workshop on May 1, and will be included in the Fiscal Year 2025-26 budget.
The May 1 budget workshop reviewed the impacts of negotiations with FEA and Fortuna Police Employment Association by implementing costs into the proposed budget for FY 2025-26 and Consent Item 3o
further discussing the 34-hour work week, closure of City offices on Fridays, and $331,400 in stipend costs for two fiscal years.
RECOMMENDED ACTION:
Approve an MOU with the FPEA for the term, June 29, 2025, to June 30, 2027. Consent Agenda Vote.
ATTACHMENTS:
• June 29, 2025 to June 30, 2027 Memorandum of Understanding with the FPEA