DATE: June 17, 2025
TO: Mayor and City Council
FROM: Assistant City Manager
SUBJECT: Adopt a Resolution Approving the Memorandum of Understanding between the City of Hayward and the Hayward Police Management Unit and Authorizing Staff to Execute the Agreement
RECOMMENDATION
That the Council adopts a resolution (Attachment II) approving the Memorandum of Understanding (“MOU”) between the City of Hayward and the Hayward Police Management Unit (“HPMU”) for the period beginning July 1, 2025, through June 30, 2030.
SUMMARY
The current HPMU MOU expires on June 30, 2025. The attached resolution will allow staff to execute a successor agreement with HPMU for the term of July 1, 2025, through June 30, 2030. The City entered negotiations with HPMU on February 25, 2025, the parties reached a tentative agreement on May 29, 2025, and the agreement was ratified by the bargaining unit members on May 30, 2025. The new agreement will grant salary and benefit adjustments; and employees will continue to contribute fifteen percent (15%) toward their Public Employees’ Retirement System (PERS) costs and a one percent (1%) contribution towards Other Post-Employment Benefits (OPEB) costs. The amendments allow for administrative and legal language updates and salary benefit adjustments, resulting in additional General Fund expenditures of approximately $1.5 million dollars for a five (5) year period.
BACKGROUND AND DISCUSSION
During the term of its prior contract with HPMU, 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 fair 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 of these goals in the proposed contract.
The tentative agreement includes a salary adjustment in the first contract year of eleven and eighty-two hundredths percent (11.82%) to maintain internal alignment and equity, and salary adjustments based on the MOU’s outlined salary survey for the last three years of the contract; an update from one calendar year to a 12-month rolling period for calculating unused sick leave; the addition of special assignment pay (SAP) to certain cash out provisions; changes to continuous service pay tiers; addition of allowing deferral of certain payments upon retirement; and incorporating the Voluntary Employee Beneficiary Association (VEBA) Plan from a side letter into the contract with updates to payouts.
In support of the City’s current financial structural deficit, HPMU has agreed to no salary increases in the second year of the contract and will continue to contribute fifteen percent (15%) to the City’s cost share of PERS and one percent (1%) towards OPEB. The new contract also includes operational, administrative, and legal language updates.
Key provisions of the amended agreement are summarized in Table 1 below.
Table 1: Key Proposed Changes
MOU Section Summary of Update Effective Date
5.09 B Cost Sharing Continue 6% additional PERS Cost Sharing (15% total)
July 1, 2025
5.11 OPEB Continue current 1% base pay to OPEB July 1, 2025
6.13 Salary
Adjustments
11.82% Salary Increase
July 1, 2025
No Increase July 1, 2026
Increase based on survey, between 5% and 7% July 1, 2027 Increase based on survey, between 5% and 7% July 1, 2028 Increase based on survey July 1, 2029
9.05 Payment for
Unused Sick Leave
Change calculation timeframe used to determine
percentage of payment to a rolling 12-month period
versus one calendar year.
July 1, 2025
12.10 Duration 5-year term
July 1, 2025 – June 30, 2030
July 1, 2025
Multiple Sections –
Include SAP in
Cashout
Add Special Assignment Pay, restricted to one
assignment as second-in-command when assigned
for at least 13 contiguous pay periods, to the
following provisions:
Payment for unused sick leave
Conversion of compensatory time
Leave Cash Out (vacation and management leave)
July 1, 2025
MOU Section Summary of Update Effective Date
11.03 Continuous
Service Pay
Update section to “Longevity Pay” and update tiers to
the following:
12 years – 5%
16 years – 8%
20 years – 11%
21 years – 12%
22 years – 13%
23 years – 14%
24 years – 15%
Maintain CSP cap of 15%
Maintain combined CSP/EIP of 27.5%
July 1, 2025
New Section Allow members to request deferral of certain payments upon retirement
July 1, 2025
New Section – VEBA Update and incorporate language into MOU 50% of vacation leave balances at retirement paid
to employee
Remaining 50% to VEBA or deferred
compensation account, or combination of the two
July 1, 2025
FISCAL IMPACT
The total proposed changes will result in an estimated fiscal impact of $1,509,698 to the General Fund over the five (5) year contract period (FY 2026-FY 2030).
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: Ian Tecson, Deputy Director of Human Resources
Recommended by: Regina Youngblood, Assistant City Manager
Approved by:
_________________________________________________
Michael Lawson, J.D., Acting City Manager