Fremont City Council Meeting: 09/16/25 07:00 PM
3300 Capitol Avenue Div/Dept: Human Resources
Fremont, CA 94538 Category: Labor Relations
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5538) DOC ID: 5538
Updated: 9/12/2025 9:28 AM by Dina Lewis Page 1
OPERATING ENGINEERS, LOCAL UNION NO. 3 MOU - Consideration of a Resolution Approving a Successor Memorandum of Understanding with the Operating Engineers, Local Union No. 3 (OE3)
Contact Persons:
Name: Tina Gallegos Brian Stott
Title: Human Resources Director Assistant City Manager
Div/Dept: Human Resources City Manager's Office
Phone: 510-494-4652 510-494-4660
E-Mail: [email protected] [email protected]
Executive Summary: In September 2025, the City of Fremont (City) reached a tentative agreement with the Operating Engineers Local Union No. 3 (OE3) for a successor Memorandum of Understanding (MOU). The bargaining unit is made up of 111 members.
The proposed MOU contains the following changes from the prior agreement term: modest compensation increase (inclusive of a parity clause) and health-benefit allowance increases.
The remaining substantive provisions of the MOU are unchanged. The effective dates of the successor MOU are September 21, 2025 (the start of the first full pay period following notification of OE3 ratification), through June 30, 2026.
BACKGROUND: The City’s current MOU with OE3 expired on June 30, 2025. The City’s negotiating team met and conferred with OE3 representatives regarding a successor agreement and signed a tentative agreement on September 10, 2025. The City received notice that OE3 members ratified the tentative agreement on September 8, 2025. California Government Code Section 3505.1 requires the City Council to vote on the proposed successor MOU at a duly noticed public meeting.
DISCUSSION/ANALYSIS: The significant changes in the proposed successor MOU include:
1. Employee Compensation:
a) Effective the start of the first full pay period following OE3 ratification of the tentative agreement, OE3 members will receive a base wage increase of
1.3%.
2. Health Benefit Allowance:
a) Effective the first of the month following OE3 ratification of the tentative agreement, the unit’s health benefit allowance will be increased by $100 per month (new health benefit allowance totals will be: $1,771 per month for employee only coverage, $2,595 per month for two-party coverage, and $3,107 per month for family coverage).
b) Effective January 1, 2026, the unit’s health benefit allowance will be increased by an additional $100 per month (new health benefit allowance totals will be:
$1,871 per month for employee only coverage, $2,695 per month for two-party coverage, and $3,207 per month for family coverage).
Council Staff Report (ID # 5538) Meeting of September 16, 2025 Updated: 9/12/2025 9:28 AM by Dina Lewis Page 2
3. Parity or “Me Too”:
a) If during the term of this Memorandum of Understanding, the City grants a general, across-the-board wage increase to another bargaining unit greater than 1.3%, the City agrees to extend the equivalent general wage increase to all OE3 classifications listed in Appendix A. This provision does not apply to increases as a result of any market equity increases or increases based on internal relationships. This provision will sunset at 11:59pm on June 30, 2026.
FISCAL IMPACT:
1. Compensation Increase:
a) Fiscal Year 2025/26 Anticipated Fiscal Impact: $168,695
2. Health Benefit Allowance
a) Fiscal Year 2025/26 Anticipated Fiscal Impact: $110,100
Staff will return to the City Council with recommended adjustments to the FY 2025/26 Adopted Budget reflecting the terms of the approved MOU.
ENVIRONMENTAL REVIEW: The proposed approval of a successor MOU is exempt from and not subject to review under the California Environmental Quality Act (CEQA) because, without limitation, it is not a “project” as defined in CEQA Guidelines Section 15378(b)(2) and/or 15378(b)(5), and it has no possibility of having a significant effect on the environment, as specified in CEQA Guidelines Section 15061(b)(3), each as a separate and independent basis for CEQA compliance.
ATTACHMENTS: None
LINKS: None
ATTACHMENTS:
• Draft Resolution- OE3 MOU Adoption
RECOMMENDATION: Adopt a resolution approving the tentative agreement with the Operating Engineers, Local Union No. 3 (OE3) and authorizing the City Manager to execute a Memorandum of Understanding (MOU) for the period of September 21, 2025, through June 30, 2026, between the City of Fremont and OE3.