November 18, 2025
Agenda Item No. 13
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Grace K. Leung, City Manager - 949-644-3001, [email protected] PREPARED BY:
Tara Finnigan, Assistant City Manager/ Acting Human Resources Director – 949-644-3035, [email protected] TITLE:
Tentative Agreement with Newport Beach City Employees Association ABSTRACT:
The Memorandum of Understanding (MOU) between the City of Newport Beach (City) and the Newport Beach City Employees Association (NBCEA or Association) expires December 31, 2025. At the City Council’s direction, the parties began negotiating the terms and conditions of a new agreement in advance of the expiration date, with the goal of implementing a successor agreement with enhanced benefits as soon as possible. A Tentative Agreement (Agreement) has been reached. The Agreement addresses wages, benefits and other terms and conditions of employment for employees represented by NBCEA and was negotiated as required under the Meyers-Milias-Brown Act, California Government Code §3500.
To promote greater transparency in the negotiations process, including the costs associated with the labor contract, the Agreement with NBCEA is being presented for public review and comment. The complete Agreement, which spans the period November 29, 2025 through June 30, 2028, will be presented for the City Council’s consideration at its December 9, 2025 regular meeting.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Receive and consider the Tentative Agreement between the City of Newport Beach and the Newport Beach City Employees Association.
DISCUSSION:
The NBCEA represents just under 100 miscellaneous positions in administrative support, finance, library services and recreational services occupations and is affiliated with the Laborers’ International Union of North America (LIUNA). During negotiations, City representatives and NBCEA board members discussed wage adjustments, the medical cafeteria allowance and structure, leave time, employee retirement contributions, and other non-economic matters.
Earlier this fall, the two parties reached a Tentative Agreement to reduce NBCEA members’ California Public Employee Retirement System (CalPERS) pension retirement contributions. On September 23, 2025, the City Council adopted Resolution No. 2025-63, and thereby approved a Side Letter Agreement with the NBCEA to reduce its members’ CalPERS contributions to the following levels:
Tiers I & II – 8% of compensation earnable
Tier III – 8% of pensionable compensation or half the normal cost, whichever is higher.
City and NBCEA representatives continued to meet through the month of October and reached a Tentative Agreement earlier this month. Key provisions of the Tentative Agreement include:
Term: November 29, 2025 through December 31, 2028
Salary Adjustments:
November 29, 2025 – 5% increase
Effective the first full pay period after January 1, 2027 – 4% increase Effective the first full pay period after January 1, 2028 – 3% increase Medical Insurance: The City will contribute $2,025 per month (plus the minimum CalPERS participating employee contribution) to each member’s cafeteria plan Introduction of Longevity Pay starting at 15 years of full-time service with the City Adjustments to Shift Differential Pay and Holiday Leave Withdrawal from the LIUNA National Industrial Pension Fund A draft version of the Tentative Agreement between the City and NBCEA is provided as Attachment A (redline) and Attachment B (clean version). It should be noted that the CalPERS contribution rates approved by the City Council on September 23 have been incorporated into the draft MOU.
Costing information for the proposed Agreement is included as Attachment C. The total cost of the contract is approximately $3.8 million.
NBCEA’s members recently voted in favor of the Agreement. Following the City Council’s review of the Tentative Agreement with NBCEA, a final version of the successor MOU will be presented to the City Council on December 9, 2025. In the interim, the costing information and proposed MOU revisions will be posted for public review on the City’s website.
The Agreement will not become effective until the City Council formally adopts it. If approved at the December 9, 2025, City Council meeting, City staff will implement the provisions accordingly.
FISCAL IMPACT:
Detailed cost information is provided in Attachment C. Since the MOU covers the period from November 29, 2025, through December 31, 2028, it will result in the following annual fiscal impacts, totaling $3,784,234:
Fiscal Year
Amount
2025/26
$ 806,786
2026/27
$1,324,238
2027/28
$1,653,210
$3,784,234
The costs shown reflect the additional annual expenses for each corresponding fiscal year. These amounts include the costs associated with the side letter approved on September 23, 2025, which reduced the required CalPERS pension contributions to 8% or half of the normal cost, whichever is greater. On that same date, the City Council approved Budget Amendment No. 26-027, appropriating $283,181 for the aforementioned side letter with the NBCEA. Following the City Council’s consideration of the Tentative Agreement, staff will return with a budget amendment of $523,605 to appropriate the funds necessary to cover the full cost of the contract for Fiscal Year 2025–26. Adequate funding will be included in the annual budget for subsequent years.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A – Tentative Agreement and Proposed MOU Between the City of Newport Beach and the Newport Beach City Employees Association (Redline) Attachment B – Tentative Agreement and Proposed MOU Between the City of Newport Beach and the Newport Beach City Employees Association (Clean) Attachment C – Estimated Cost of Contract with NBCEA
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Tentative Agreement with Newport Beach City Employees Association November 18, 2025
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