DATE: August 20, 2024
TO: Mayor and City Council
FROM: Director of Human Resources
SUBJECT: Adopt a Resolution Approving the Memorandum of Understanding between the City of Hayward and the Hayward Association of Management Employees and Authorizing Staff to Execute the Agreement
RECOMMENDATION
That Council adopts the attached resolution (Attachment II) approving the Memorandum of Understanding (“MOU”) between the City of Hayward and the Hayward Association of Management Employees (“HAME”) bargaining unit for July 1, 2024, through June 30, 2027.
SUMMARY
The current HAME MOU expired on June 30, 2024. The attached resolution will allow staff to execute a successor agreement with HAME for the term of July 1, 2024, through June 30, 2027. The new agreement will grant cost of living (COLA) salary adjustments totaling thirteen percent (13%) over the three-year contract term, as well as equity salary adjustments for all HAME members who remain three percent (3%) or more under the market median based on a total compensation study completed in December 2023, the addition of continuous service pay (CSP), addition of Juneteenth holiday, and increase the alternate benefits by one hundred dollars ($100.00) per tier. The new contract also includes operational, administrative, and legal language updates.
BACKGROUND AND DISCUSSION
During the term of its prior contract with HAME, the City worked hard to achieve and maintain fiscal sustainability. Though the City continues to face the challenges of growing pension and retiree health liabilities, the City also recognizes the need to provide competitive salary increases as part of any successor contract to maintain the ability to recruit and retain employees. To do so, and to help mitigate growing costs, the City sought to maintain its cost-sharing structure for major employee benefits including health and retirement. As detailed below, the City was able to achieve both goals in the proposed contract.
As part of the previous contract, the City and HAME conducted a total compensation study for benchmark classifications during the last contract term. The parties recognized that to improve the City’s position in the labor market, it would be beneficial to implement equity adjustments based on the total compensation study. The parties agreed that positions which are three percent (3%) or more under the total compensation market median shall receive an equity adjustment bringing them to median.
All equity adjustments are scheduled to be implemented during the pay period including July 1, 2024. In addition to these equity adjustments, the City and HAME also agreed to the following COLA salary adjustments during the contract term:
Six percent (6%) salary adjustment effective July 1, 2024.
Four percent (4%) salary adjustment effective July 1, 2025.
Three percent (3%) salary adjustment effective July 1, 2026.
This structure provides the City with a period of fiscal stability as it continues to navigate the impacts of the COVID-19 pandemic. It also provides employees with significant, competitive salary increases over the full contract term.
Importantly, the proposed contract maintains existing employee contributions toward the employer’s share of retirement costs, medical benefits, dental and vision plans.
Additionally, the City agreed to complete a total compensation survey in advance of the next round of contract negotiations. The parties also agreed that before February 2026, the City will meet with HAME to identify benchmark classifications and internal relationships for those benchmarks for use in the parties’ next salary survey, which will be completed on or about December 1, 2026.
The parties also agreed on several operational, administrative, and legal updates to the contract. Of note, is (i) the City addition of Reproductive Loss Leave as mandated by State law, (ii) an increase in bereavement leave benefit to five (5) paid days, and (iii) an update to the list of classifications eligible to receive safety shoe allowance.
The table below summarizes the key proposed changes in the new MOU.
Table 1: Key Proposed Changes
MOU Section
Updated Language
Effective Date
Contract Duration
3-year term:
July 1, 2024 – June 30, 2027
July 1, 2024
MOU Clean-up Language
MOU Clean-up language throughout.
July 1, 2024
6.03 Alternate Benefit
Increase Alternate Benefits by one hundred dollars ($100.00) per tier as follows:
Employee only - $310.00/month
Employee plus one (1) dependent - $480.00/month
Employee plus two (2+) dependents - $600.00/month
July 1, 2024
7.17 Cost of Living Adjustments
FY2024 – six percent (6%) COLA
July 1, 2024
FY 2025 – four percent (4%) COLA
July 1, 2025
FY 2026 – three percent (3%) COLA
July 1, 2026
7.18 Salary Surveys (Equity Adjustments)
Positions that are three percent (3%) or more under the market median (based on total compensation) shall receive an equity adjustment that brings them to the total compensation median.
July 1, 2024
7.18 Salary Surveys (Equity Study)
The City and the Union shall begin the bidding and selection process for a survey provider no later than February 1, 2026.
This survey must be completed on or about December 1, 2026, and a final survey report provided to both parties.
Before February 2026, the City will meet with HAME to identify benchmark classifications and internal relationships for those benchmarks for use in the survey.
Begin the bidding and selection process by February 1, 2026, and complete by December 1, 2026.
NEW 7.19 Continuous Service Pay
Continuous Service Pay Tiers:
15 years – 2.5%
20 years – 2.5%
25 years – 2.5%
Maximum premium of 7.5%
July 1, 2024
8.01 Holidays Observed by the City
Add Juneteenth to the list of existing City observed holidays.
July 1, 2024
11.01 Bereavement and Reproductive Loss Leave
Increase bereavement leave from 3 paid days to 5 paid days.
Add Reproductive Loss Leave. Reproductive loss events include failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction.
Full-time Employees are allowed a maximum of twenty (20) days for reproductive loss in a twelve (12) month period if multiple events of reproductive loss occur. Full-time employees may utilize the initial five (5) paid workdays for an initial event. The remaining fifteen (15) allowable reproductive loss days are unpaid.
Part-time employees who work a continuous schedule of twenty (20) or more hours per week shall be granted bereavement or reproductive loss leave with pay as necessary on the same basis as full-time employees, except that the leave shall be prorated based on the number of hours worked July 1, 2024
16.00 Safety
Update the list of classifications eligible to receive safety shoe reimbursement.
July 1, 2024
FISCAL IMPACT
The total proposed changes will result in an estimated fiscal impact of $4,547,037 across all funds, over the three-year contract period (FY 2025-FY 2027). Of this amount, the fiscal impact to the General Fund is approximately $1,612,274 over the contract period when compared to projections in the City's General Fund budget model for the same three-year period (FY 2025-FY 2027). FY 2025 budget adjustments will be reflected in the mid-year review.
STRATEGIC ROADMAP
This agenda item is a routine operational item and does not relate to one of the Council’s Strategic Roadmap.
NEXT STEPS
If adopted, Human Resources staff will finalize the agreement, the City Manager will execute the agreement, and the Finance Department will implement the above changes in coordination with Human Resources.
Prepared by: Marisa Guerrero, Human Resources Manager
Recommended by: Brittney Frye, Director of Human Resources Approved by:
____________________________________________
Dustin Claussen, Interim City Manager