STAFF REPORT
City of Lancaster
CC 16
6/23/2026
TN
Date:June 23, 2026
To: Mayor Parris and City Council Members
From:Trolis Niebla, City Manager
George N. Harris II, Senior Director/Treasurer – Administrative Services Subject:Approval of Memorandum of Understanding Between the City of Lancaster and California Teamsters Public, Professional and Medical Employees Union, Local 986
Recommendations:
1. Adopt Resolution No. ____, approving the Memorandum of Understanding (MOU) between the City of Lancaster and the California Teamsters Public, Professional and Medical Employees Union, Local 986, for the period of July 1, 2026, through June 30, 2030.
2. Authorize the City Manager or his designee to execute the Memorandum of Understanding on behalf of the City, including all necessary documents, amendments, and provisions, subject to the City Attorneys approval.
G.C. Section 84308: No
Fiscal Impact:
The proposed MOU will result in increased personnel costs associated with negotiated salary adjustments, longevity incentive pay, enhanced overtime provisions, healthcare benefits, and RHS contributions over the four-year term of the agreement. 2 4
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The estimated fiscal impact of the agreement is approximately:
Approximate increased cost compared to previous Fiscal YearYear Union Entire City FY 2026-2027* $353,688.77 $1,743,056.04
FY 2027-2028** $224,691.04 $1,134,939.09
FY 2028-2029** $457,368.08 $2,309,706.39
FY 2029-2030** $473,633.38 $2,390,846.61
*Fiscal Year 2026-2027 amounts are estimates based on current staffing levels, salary schedules, benefit rates, and projected overtime usage. Actual costs may vary due to changes in staffing, overtime utilization, and health insurance premium rates. **Fiscal Year 2027-2028 through Fiscal Year 2029-2030 amounts are long-range projections based on current assumptions regarding staffing levels, negotiated compensation increases, and benefit costs.
Actual expenditures may differ due to employee turnover, vacancies, retirements, position additions or deletions, overtime utilization, health insurance premium changes, and other operational factors.
The City has utilized reasonable assumptions in developing these projections; however, the estimates should be considered planning-level forecasts rather than guaranteed expenditures. The actual fiscal impact will be determined through the annual budget process and may differ from the amounts reflected above.
Funding for these costs will be incorporated into the City's annual operating budgets and financial planning process.
Strategic Plan Impact
Approval of the proposed MOU supports the City's strategic goals related to organizational excellence, workforce stability, employee retention, and delivery of high-quality public services.
The agreement provides competitive compensation and benefits necessary to attract and retain qualified employees while maintaining effective municipal operations.
Environmental Review
This action is not a project subject to the California Environmental Quality Act (CEQA) pursuant to Section 15378 of the CEQA Guidelines because it involves organizational and administrative activities that will not result in a direct or indirect physical change to the environment.
Conclusion
The proposed Memorandum of Understanding represents a mutually beneficial agreement between the City and Teamsters Local 986. The agreement provides reasonable compensation and benefit enhancements while supporting the City's ability to maintain a skilled and effective workforce.
Staff recommend approval of the MOU and adoption of the accompanying resolution.
Background:
The City of Lancaster and the California Teamsters Public, Professional and Medical Employees Union, Local 986 (Teamsters Local 986), have completed negotiations for a successor Memorandum of Understanding covering employees represented by the bargaining unit.
Representatives of the City and Teamsters Local 986 engaged in good-faith negotiations and have 2 4
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reached a tentative agreement on wages, benefits, and working conditions for a four-year term beginning July 1, 2026, and ending June 30, 2030.
The proposed agreement reflects a balanced approach that supports the City's operational needs while providing competitive compensation and benefits necessary to recruit, retain, and recognize the contributions of represented employees.
Discussion
Major provisions of the proposed MOU include:
Compensation
Cost of Living Adjustments (COLA) to base salary as follows:
2% effective July 1, 2026
2% effective July 1, 2027
4% effective July 1, 2028
4% effective July 1, 2029
Longevity Incentive
The agreement establishes enhanced longevity incentive pay recognizing long-term service to the City:
2.5% upon completion of 10 years of service
5.0% upon completion of 15 years of service
7.5% upon completion of 20 years of service
Overtime Provisions
The agreement modifies call-out overtime minimums to provide additional compensation for employees responding to after-hours work assignments:
Minimum of two (2) hours of overtime compensation for callouts occurring Monday through Thursday
Minimum of four (4) hours of overtime compensation for callouts occurring Friday through Sunday and designated holidays
Additionally, for planned non-emergency events requiring mandatory overtime, the City will provide employees with at least forty-five (45) days’ advance notice whenever practicable.
Vacation Benefits
The agreement enhances vacation accrual opportunities for long-term employees by increasing maximum annual vacation accruals as follows:
180 hours for employees with 11 to 14 years of service 190 hours for employees with 15 to 19 years of service 200 hours for employees with 20 or more years of service 2 4
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Sick Leave Program
The agreement modifies the sick leave payout provision by reducing the required remaining sick leave balance from 320 hours to 160 hours for employees participating in the sick leave cash-out program.
Health Benefits
To assist employees with rising healthcare costs, the City will absorb increases to the Kaiser Family medical plan premium during the term of the agreement.
Retiree Health Savings Plan (RHS)
The City's contribution to the Retiree Health Savings Plan will increase as follows:
Additional $25 per month effective July 2028
Additional $25 per month effective July 2029
Attachments:
1. Resolution No. ____ Approving the Memorandum of Understanding Between the City of Lancaster and California Teamsters Public, Professional and Medical Employees Union, Local 986
2. Memorandum of Understanding (July 1, 2026 – June 30, 2030)
3. Appendix A1 – Salary Structure Teamsters