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6 DATE: April 7, 2025
TO: Mayor and Members of the City Council President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
FROM: Diane Pitman, Administrative Services Director
DEPARTMENT: ADMINISTRATIVE SERVICES
SUBJECT: AMERICAN FEDERATION OF STATE, COUNTY & MUNICIPAL
EMPLOYEES (AFSCME) MEMORANDUM OF UNDERSTANDING
EFFECTIVE APRIL 1, 2025 THROUGH JUNE 30, 2029
RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors (hereinafter referred to as “City Council”) adopt the attached resolutions (Attachments 1 and 2) approving the Memorandum of Understanding (MOU), effective April 1, 2025, through June 30, 2029, for the American Federation of State, County and Municipal Employees (AFSCME).
EXECUTIVE SUMMARY
The current MOU for employees represented by AFSCME is set to expire on September 8, 2027. In the MOU, there is an agreement to meet and confer on a few items and pursuant to that language Management and AFSCME representatives had a series of meetings during the months of February and March and reached a tentative agreement on March 24, 2025. Members of the AFSCME unit ratified the tentative agreement on March 26, 2025. The good faith efforts of the bargaining teams resulted in the attached four-year and two-month agreement that includes increases to compensation (wages and health benefit contributions), a commitment to discuss sick leave payout and VEBA in the first quarter of 2026, the addition of the Juneteenth (June 19) holiday, and a pilot salary continuation program for qualifying leaves called Foster City CARE Leave.
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6 BACKGROUND/ANALYSIS
The current MOU with AFSCME is set to expire on September 8, 2027. In the MOU, there is an agreement to meet and confer on a few items and pursuant to that language Management and AFSCME representatives had a series of negotiation meetings in good faith during the months of February and March, and a tentative agreement was reached within the parameters provided by the City Council. AFSCME brought forward the tentative agreement to their membership, and it was ratified by the group on March 26, 2025. The tentatively agreed upon changes to the MOU are:
Term: Four years, two months, effective April 1, 2025, through June 30, 2029 Wages: Effective September 9, 2025, an across-the-board increase based on the April-to-April CPI movement for the Bay Area with a minimum of 3% and a maximum of 5%.
Effective September 9, 2026, an across-the-board increase based on the April- to-April CPI movement for the Bay Area with a minimum of 3% and a maximum of 5%.
Effective September 9, 2027, an across-the-board increase based on the April- to-April CPI movement for the Bay Area with a minimum of 3% and a maximum of 5%.
Effective September 9, 2028, an across-the-board increase based on the April- to-April CPI movement for the Bay Area with a minimum of 3% and a maximum of 5%.
A revision to the salary schedule for one classification identified in the Koff & Associates classification and compensation study. Job descriptions will be revised, and management will meet and confer with AFSCME outside of contract negotiations. This finalizes any discussions or implementation of the Koff & Associates compensation study.
Flexible Benefit Plan (Medical, Dental, Vision): Effective January 1, 2026, the Employer’s contribution towards the Flexible Benefit Plan will be increased by the percentage increase in the CalPERS Kaiser HMO Basic Premium Region 1 rate for Public Agencies. The contract also states that the Employer’s contribution will be adjusted January 1, 2027, January 1, 2028, and January 1, 2029, using the same Kaiser plan increase.
Additional holiday: Juneteenth will be an observed holiday starting with June 19, 2025
Pilot Salary Continuation Program: Foster City CARE leave is a two-year pilot program to provide salary continuation for employees with qualifying FMLA/CFRA leaves. Examples include parental leave, or baby-bonding, employees with a serious health condition or employees with a family member 4 5
6 with a serious health condition. This leave pilot does not provide any accrued leave and therefore does not create a liability. This program can be extended or modified by mutual agreement of the parties. Parties agree to meet at least annually to discuss the effectiveness of the program.
Items to Discuss in first quarter 2026:
•Review the VEBA contract language after guidance with an expert in Internal Revenue Code Section 501(c)(9), including the possibility of employees who retire from the City putting 50% of their sick leave payout into their VEBA account.
Staff is recommending the City Council approve the MOU with an effective date of April 1, 2025 (Attachment 3). Upon adoption, negotiation team members will sign the attached MOU and staff will implement the provisions of the MOU.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
The provisions negotiated in this agreement that impact FY 2024-2025 can be absorbed in the current FY 2024-2025 budget. The cost of living adjustments for FY 2025-26 through 2026-27 were previously agreed to and have no fiscal impact. The impact of future wage adjustments will be reflected in the budgets of their respective fiscal years. No additional appropriation is needed at this time.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 – City Resolution
Attachment 2 – EMID Resolution
Attachment 3 – American Federation of State, County & Municipal Employees (AFSCME) Council 57, Local 829, Memorandum of Understanding, effective April 1, 2025 through June 30, 2029
Attachment 4 – AFSCME Council 57, Local 829, MOU, effective April 1, 2025 through June 30, 2029 with red-lined edits