Pacific Grove City Council
June 17, 2026

4912-4455-4420, v. 1
Classification Step 1A Step 2B Step 3C Step 4D Step 5E Step 6F Step 7G Police Officer $50.63 $53.16 $55.81 $58.60 $61.54 $64.62 $67.84 Police Sergeant $58.50 $61.42 $64.49 $67.72 $71.10 $74.66 $78.39 SECTION 3. The City Manager is directed to execute all documents and to perform all other necessary City acts to implement this Ordinance.

SECTION 4. In accord with Article 15 of the City Charter, this ordinance shall become effective on July 5, 2026.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 15th day of July 2026, by the following vote:

AYES:

NOES:

ABSENT:

APPROVED:
________________________
NICK SMITH, Mayor
ATTEST:

DATED:__________________________
_________________________________
SANDRA KANDELL, City Clerk
APPROVED AS TO FORM:
_________________________________
ALEX LORCA, City Attorney
PGCC 6-17-26

Agenda No. 11 C

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Fred Marsh, Administrative Services Director
MEETING DATE: June 17, 2026
SUBJECT: Ordinance to Adopt the Fiscal Year 2026-27 Update to the Operating and Capital Improvement Budget for Fiscal Years 25-26 and 26-27; Resolution authorizing continued operations under the current Fiscal Year 2025-26 Budget CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Approve the resolution authorizing continued operations under the current Fiscal Year 2025-26 Budget

1. Introduce and hold the first reading of an ordinance to adopt the Fiscal Year 2026-27 Update to the Operating and Capital Improvement Budget for Fiscal Years 25-26 and 26-27.

2. Direct that publication of the ordinance will be satisfied by publication of a summary approved by the City Attorney.

3. DISCUSSION
Staff will be presenting tonight as part of a PowerPoint presentation a draft of the City’s proposed 2026-27 Update to the two year budget for Fiscal Years 2025-26 and 2026-27. These items are subject to additional changes from staff as well as feedback from the City Council. A revised version of the update to the 26-27 budget will be presented at the second reading of the ordinance at the July 17th City Council meeting. Due to the fact that the enactment of the ordinance will not occur until July, staff is also requesting that Council also adopt a resolution allowing for continued operations under the current Fiscal Year 2025-26 budget until the ordinance is enacted.

OPTIONS
Approve resolution and ordinance
Provide alternate direction
FINANCIAL IMPACT:

The fiscal impact of the proposed Fiscal Year 2026-27 update to the budget for Fiscal Years 25-26 and 26-27 is contained in the attached budget document.

FOCUSED PRIORITY AREA: Financial Sustainability
PGCC 6-17-26

Attachments
Continuing Operations Resolution for Budget
Budget Ordinance
Attachment A
Attachment B
PPT
PGCC 6-17-26

RESOLUTION NO. 26-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE

AUTHORIZING CONTINUED OPERATIONS UNDER THE
CURRENT FISCAL YEAR 2025-26 BUDGET

FINDINGS
WHEREAS, the City Council has not yet adopted the budget for Fiscal Year 2026-27; and WHEREAS, it is necessary to ensure the uninterrupted provision of essential public services and the continued operation of all City departments; and
WHEREAS, the City Council finds it in the public interest to authorize expenditures at levels consistent with the current Fiscal Year 2025-26 budget until the new budget is adopted; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pacific Grove as follows:

1. Authorization to Continue Operations
The City Manager is hereby authorized to continue operating under the Fiscal Year 2025-26 budget, including all appropriations, staffing levels, and expenditure limits, until the Fiscal Year 2026-27 budget is formally adopted.

2. Limitations
No new programs, projects, or capital expenditures not previously authorized in the current budget shall be initiated without prior Council approval.

3. Duration
This authorization shall remain in effect until the Adoption of the Fiscal Year 2026-27 budget.

4. Effective Date
This Resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 17th day of June 2026, by the following vote:

AYES:

NOES:

ABSENT:

PGCC 6-17-26

ORDINANCE NO. 26-xxx

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE

ADOPTING THE OPERATING AND CAPITAL PROJECTS BUDGET FOR THE FISCAL YEAR (FY) 2026-27;
FACTS

1. The City Council held a public hearing and first reading of an ordinance to adopt the FY 2026-27 Operating and Capital Projects Budget.

2. The City Manager is recommending adoption of the FY 2026-27 Budget to reflect the City Council’s expressed goals for the fiscal year budget.

3. Pursuant to Charter Article 15, adoption of the annual budget and or amendment of the budget must be approved by ordinance.

4. A summary of the Ordinance, approved by the City Attorney, was published on .

5. In the enactment of this ordinance, the City followed the guidelines adopted by the State of California and published in the California Code of Regulations, Title 14, Section 15000, et seq.

6. Enactment of this ordinance does not constitute a “project” as defined by California Environmental Quality Act (CEQA) and as such is not subject to/exempt from CEQA because it is an administrative activity that will not result in a direct or reasonably foreseeable indirect physical change in the environment and involves the creation of a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment.

NOW, THEREFORE, THE COUNCIL OF THE CITY OF PACIFIC GROVE DOES ORDAIN AS FOLLOWS:

SECTION 1. The foregoing recitals are adopted as findings of the City Council as set forth fully within the body of this ordinance.

SECTION 2. That the City Council does hereby approve and adopt the operating budget and capital improvement program for the City for FY 2026-27, as summarized in Attachments A and B to this ordinance.

SECTION 3. That the City Council authorizes at the closeout of Fiscal Year 2025-26 by the Administrative Services Department the carryover of any unspent and encumbered funds for operations and capital projects and any other unspent funds for active capital projects, to be reappropriated in the Fiscal Year 2026-27 budget for continued use in the same manner so long as there are sufficient available fund balances to finance these commitments.

SECTION 4. In accord with Article 15 of the City Charter, this ordinance shall become effective upon adoption hereof.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 15th day of July, 2026, by the following vote:

PGCC 6-17-26

AYES:

NOES:

ABSENT:

APPROVED:

NICK SMITH, Mayor
ATTEST:

SANDRA KANDELL, City Clerk
APPROVED AS TO FORM:

ALEX LORCA, City Attorney
PGCC 6-17-26

ATTACHMENT A - GENERAL FUND BUDGETED EXPENSES BY DEPARTMENT FISCAL YEAR 2026-27
Expenditures
City Council $ 339,800
City Manager 1,158,398
Economic Development 509,345
City Attorney 865,000
Finance 1,411,296
Information Services 1,240,962
Community Development 2,498,477
Police 7,984,569
Fire 4,090,791
Public Works 4,443,516
Library 1,244,321
Museum 441,843
Recreation 1,804,081
Debt Services & Obligations 6,588,293
Other Transfers 674,903
Capital Outlay 225,500
Capital Project Transfers 500,000
Total General Fund Budgeted Expenses $ 36,021,095
PGCC 6-17-26

ATTACHMENT B - BUDGETED REVENUES / EXPENSES BY FUND
FISCAL YEAR 2026-27
Fund Number / Name Revenues Expenditures
01 - General Fund $ 34,437,400 $ 36,021,095 $ 34,437,400 $ 36,021,095 63 - Capital Improv Proj Fund 506,682 850,000 506,682 850,000 Enterprise Funds
74 - Local Water Project 1,001,146 1,066,388
75 - Cemetery Fund 548,987 901,149
76 - Sewer Fund 4,095,902 9,404,531
77 - Golf Fund 624,381 460,097
78 - Sewer Lateral Loans 3,908 30,000 6,274,324 11,862,165 Internal Service Funds:
70 - Emp Benefit Fund 377,424 373,485
71 - Workers Comp Fund 1,000,299 977,316
72 - Liability Ins Fund 918,944 958,386 2,296,667 2,309,188 Special / Other Funds:
03 - Carillon Fund 353 -
04 - Hyperbaric Chamber 11,491 17,250
05 - Environmental Enhancement 2,802 -
06 - State Franchise Peg 49,171 60,000
07 - Library Bldg & Equip Fund 27,292 28,000
08 - Museum Improvement 8,073 40,000
09 - Downtown Business Distric 31,760 33,500
10 - Hospitality Imprvmt Dist. 540,566 554,560
11 - Library Book Fund 42,154 43,575
12 - Fire Emerg Equip Fund 24,575 12,880
15 - Housing Fund 26,132 161,775
17 - Local Streets And Roads 784,575 818,000
18 - Gas Tax Fund 426,993 462,452
22 - Asset Seizure Fund 188 -
24 - Lovers Point Pool 1,605 8,000
25 - Recreation Donation Fund 11,475 -
26 - Chautauqua Hall Fund 543 -
27 - Lighthouse Maint.& Impv. 135,351 133,946
28 - Senior Housing Fund 379 -
31 - Operating Donations 2,365 -
34 - Cdbg Grant Fund 29,474 73,673
36 - Calhome Reuse Account 22,444 24,000
40 - Poetry Promotion Fund 42,232 17,400
41 - Yount Income Fund 8,485 -
42 - Pub Safety Aug Fund 528,452 562,908
43 - Slesf Fund 188,879 245,388
45 - Abandoned Vehicle Program 10,984 -
47 - Rmra Fund 430,826 420,261
55 - General Plan Maintenance Fee 9,681 -
69 - Coastal Conservancy Grant 3,031 -
85 - Library Trust Fund 13,141 -
86 - Cemetary Endowment Fund 129,319 -
90 - Yount Nonexpendable Fund 8,000 8,000
91 - Strong Disbursements 9,307 -
92 - Mcindoo Donation 1,167 -
93 - Reiko Koo Estate Donation 487 3,563,751 - 3,725,568 Total Budgeted Revenues and Expenses $ 47,078,824 $ 54,768,016 $ 47,078,824 $ 54,768,016 FY26-27 Amended Budget
Summary by Fund Type
PGCC 6-17-26

City of Pacific Grove, CA
FY 2026-27 Budget Update
6/17/2026
1 PGCC 6-17-26

Presentation Overview
2 1
FY26-27 Budget by Fund
• Overview of all fund types
2 General Fund Revenues
• Revenues by major categories
3 General Fund Expenses
4 Summary of Major Changes
• Charts by dept and object
5 Updated Staff Plan
• Summary across all depts
• Proposed reclassifications
6 General Fund Five Year Forecast
• General Fund reserve levels
• General Fund
• Overview of Capital Program • Enterprise / Other Funds PGCC 6-17-26

FY26-27 Budget by Major Fund Type (In Millions)
All Funds
3 Fund Type Revenues
/ Transfers
Expenses /
Transfers
Net
Change
Ending
Reserves
General $34.4 $36.0 -$1.6 $12.7
Enterprise 6.3 11.9 -5.6 2.3
Internal Service 2.3 2.3 0.0 0.7
Capital Project 0.5 0.9 -0.4 1.0
Special / Other 3.6 3.7 -0.1 3.4
Totals $47.1 $54.8 -$7.7 $20.1
$ Change * $1.6 $-0.4 $1.9 $0.1
% Change * 4% -1%
66%
21%
13%
Expenses by
Fund Type
General
Enterprise
Other
* Change from original two year budget
PGCC 6-17-26

Two Year Capital Program (In Millions)
3 Project Type 25-26 26-27 2 Year
Total
Transportation $3.92 $0.50 $4.42
Waste/Storm Water 5.00 6.00 11.00
Capital / Other 1.58 .67 2.25
Totals $10.50 $7.17 $17.67 66% 8%
26%
Expenses by Project Type
2 Year Totals
Sewer / Storm
Other
Streets
Note: The budgeted amounts for FY 25-26 include
cip carryovers from prior fiscal years
PGCC 6-17-26

FY26-27 General Fund – Revenues (In Millions)
4 Category FY25-26 FY26-27
Property Taxes $11.1 $11.6
Hotel Taxes $7.3 $7.6
Sales & Use Tax $5.9 $6.0
Utility Users Tax $2.2 $2.2
Other Taxes $2.1 $2.3
Licenses & Permits $1.0 $1.1
Charges for Service $2.1 $2.2
Other Revenues $1.7 $1.4
Total Revenues $33.5 M $34.4 M
34%
22%
18%
13%
13%
Distribution of Revenues
Property Taxes Hotel Taxes
Sales & Use Tax Other Taxes
Other Revenues
PGCC 6-17-26

FY26-27 General Fund Expenses/Transfers ($36 Million)
5 43%
31%
18%
8%
Expenses by Major Category
Personnel
Operating
Debt / Pension Liability
Capital / Other
30%
18% 16%
8%
17%
11%
Expenses by Department
Police Fire
Public Works Development
Administration Recreation/Other
PGCC 6-17-26

General Fund – Summary of Major Changes
6 General Fund - Revenues
Property Taxes + $269k
Based upon revised estimates from HDL.

TOT Revenue + $703k
Reflects the addition of the Kimpton Hotel.

General Fund - Expenses
Salaries & Benefits ($94k)
Reflects changes anticipated new MOUs.

Other Expenses / Transfers + $161k
Includes CDD study and revised fire costs
Golf Enterprise Fund
Net Revenues + $174k
Based upon new contract with Courseco
Sewer Enterprise Fund
Net Revenues ($900k)
Budget appropriations moved from FY27 to FY26
for the Sewer Force Maintenance Replacement
project (–$1.3M). Additional $400k needed for
Sewer Collection System Master Plan.

Other Funds
Museum Fund + $40K
Estimated costs for fence replacement Expenditure Reductions ($94k) Reflects cuts to travel and legal expenses
PGCC 6-17-26

Proposed Staffing Reclassifications for FY 2026-27
(No Changes in FTE for FY 26-27 – 107.5)
12 The staffing changes below were made due to address departmental needs.

Any cost increases were offset by reductions in these departments’ operating costs:

Community Development:
• Administrative Assistant to
Administrative Coordinator
Information Technology:
• Management Analyst to
IT Management Analyst
Library:
• Administrative Analyst to
Management Analyst
Administrative Services:
• Management Analyst to
Program Manager
Recreation:
• Elevate the 30 hour Recreation Admin Assistant and reclassify that position to a 30-hour Admin Coordinator, do not backfill Recreation Coordinator position.

PGCC 6-17-26

Updated General Fund 5-Year Forecast
(In Millions)
7 24-25 25-26 26-27 27-28 28-29 29-30
Revenues / Transfers In $35.2 $ 33.6 $34.4 $35.4 $36.5 $37.7 Expenses / Transfers Out 35.0 35.0 36.0 37.3 38.8 38.2
Net Change for Fiscal Year $ 0.1 $ (1.4) $ (1.6) $ (1.9) $ (2.3) $ (0.5) Projected Ending Reserves $ 15.7 $ 14.3 $ 12.7 $ 11.2 $ 8.9 $ 8.4 Projected Reserve Level 50% 42% 36% 30% 23% 22%
Change from 2 Year Budget N/A ↑6% ↑9% ↑12% ↑14% ↑17%
50% 42% 36% 30% 23% 22%
24-25 25-26 26-27 27-28 28-29 29-30
Reserve %
PGCC 6-17-26

Proposed Gann Limit for FY 2026-27
12 PGCC 6-17-26

Recommendations (can just state to adopt items 1-6)
12 1. Receive the report and provide staff feedback regarding the proposed update to the Budget for Fiscal Year 2026-27.

2. Approve the resolution authorizing continued operations under the current Fiscal Year 2025-26 Budget.

3. Request the City Attorney to read the title of the ordinance.

4. Motion to waive further reading of the ordinance.

5. Introduce and hold the first reading of an ordinance to adopt the Fiscal Year 2026-27 Update to the Operating and Capital Improvement Budget for Fiscal Years 25-26 and 26-27.

6. Direct that publication of the ordinance will be satisfied by publication of a summary approved by the City Attorney.

PGCC 6-17-26

Agenda No. 13 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Che Johnson, Chief Negotiator and Leticia Livian, Human Resources Director MEETING DATE: June 17, 2026
SUBJECT: Memorandum of Understanding between the City of Pacific Grove and the Management Employees Association (MEA)
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Approve a resolution approving the Memorandum of Understanding between the City of Pacific Grove and the Management Employees Association to cover the period of July 1, 2026, through June 30, 2027.

1. 2. Take an alternative action related to this item.

DISCUSSION
The City and Management Employees Association (MEA) have been negotiating a successor to the Memorandum of Understanding (MOU) that is set to expire June 30, 2026.

The attached resolution implements the tentative agreement reached with MEA. MEA’s membership preauthorized this agreement. Below are key items that have been negotiated:

One year agreement, term ending June 30, 2027.

No increase to salary/cost of living adjustment (COLA).

Paid holiday closure beginning Christmas Eve and through New Year’s Day.

Increase to PTO accruals by 8 hours more a month in lieu of a separate sick leave bank.

Increase to monthly employer health contributions:

Employee only, from $950 to $997.50
Employee plus a dependent, from $1,475 monthly to $1,548.75 monthly Employee plus two or more dependents, from $1,975 monthly to $2,073.75 monthly The annual employer cost of the healthcare increase is estimated to be $7,515.

Adding a monthly employer dental contribution to cover increase cost to dental:

Employee only, city contributes $4.44
Employee plus one dependent, City contributes $8.96
Employee plus two or more dependents, City contributes $10.92 The annual employer cost of dental the increase is estimated to be $694.56.

PGCC 6-17-26

All other terms and conditions in the current MOU are unchanged.

The negotiations were fully collaborative and were based on shared interests of the MEA employees, and the City. This is a continuation of the MEA’s ongoing approach to seek what is best for its members, and to do so in the larger context of what is best for the City as a whole.

Approval of the attached resolution confers authority upon the City Manager to take all steps necessary to implement this MOU and authorizes budget adjustments, if necessary, to implement expenditures during FY 26/27.

OPTIONS

1. Not approve

2. Provide alternative direction
FINANCIAL IMPACT:

It is anticipated that the impact to the fiscal year 26/27 budget will increase by approximately $8,209.56.

FOCUSED PRIORITY AREA: Community Development
Attachments
Resolution

MEA MOU
PGCC 6-17-26

RESOLUTION NO. 26 - ____________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE

APPROVING THE MEMORANDUM OF UNDERSTANDING
WITH THE PACIFIC GROVE MANAGEMENT EMPLOYEES ASSOCIATION.

FINDINGS

1. The City of Pacific Grove and the Management Employees Association (MEA) have negotiated and have reached agreement on a successor Memorandum of Understanding amending the Memorandum of Understanding that governs wages, benefits, hours and working conditions Management Employee Association members.

2. This action does not constitute a “project” as defined by California Environmental Quality Act (CEQA) because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment; and

RESOLUTION

NOW, THEREFORE, THE COUNCIL OF THE CITY OF PACIFIC GROVE DOES RESOLVE AS FOLLOWS:

SECTION 1. The City Council finds each recital set forth above to be true and correct, and by this reference incorporates each as an integral part of this Resolution.

SECTION 2. The City Council approves the attached Memorandum of Understanding with the Management Employees Association that covers the period July 1, 2026, through June 30, 2027.

SECTION 3. The City Manager is authorized to execute all documents and to perform all other necessary City acts to implement the Memorandum of Understanding.

SECTION 4. This resolution confers authority upon the City Manager to take all steps necessary to implement this MOU and authorizes budget adjustments if necessary to implement expenditures during FY 26/27.

SECTION 5. This Resolution shall take effect immediately following its adoption.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 1st day of June 17, 2026 by the following vote:

AYES:

NOES:

ABSENT:

PGCC 6-17-26

APPROVED:
_________________________________
__________________________

NICK SMITH
Mayor
ATTEST:
_________________________________

SANDRA KANDELL
City Clerk
APPROVED AS TO FORM:
_________________________________

ALEX LORCA
City Attorney
PGCC 6-17-26

MEMORANDUM OF

UNDERSTANDING

MANAGEMENT EMPLOYEES

ASSOCIATION
July 1, 2026 – June 30, 2027

CITY OF PACIFIC GROVE
PGCC 6-17-26

MEA MOU July 1, 2026 – June 30, 2027 Page 1
Table of Contents
ARTICLE 1 ADMINISTRATIVE ................................................ 3

1.1 Parties................................................................. 3

1.2 Recognition............................................................. 3

1.3 Unit Description ......................................................... 3

1.4 Coverage............................................................... 3

1.5 Duration and Scope of MOU ................................................ 3

1.6. Nondiscrimination ....................................................... 4

1.7 Association Dues ........................................................ 4

1.8 Release Time for Association Business ........................................ 4

1.9 Contracting Out/Bidding ................................................... 5

1.10 Safety ................................................................ 5

1.11 Safety Committee ........................................................ 5 ARTICLE 2 COMPENSATION ................................................. 5

2.1 Salary ................................................................. 5

2.2 Management Time Compensation............................................ 5

2.3 Salary Step on Promotion or Reclass ......................................... 6 ARTICLE 3 INSURANCE BENEFITS ............................................ 6

3.1 Employee Health Plan Eligibility ............................................. 6

3.2 City Paid Health Premiums ................................................. 6

3.3 City Dental Contribution ................................................... 7

3.4 Rate of Contribution Cash in Lieu (Grandfathered Employees) ...................... 7

3.5 Rate of Contribution Cash in Lieu (New Employees) ............................. 7

3.6 Proof of Other Coverage ................................................... 7

3.7 Section 125 Plan ........................................................ 8

3.8 457 Deferred compensation Plan ............................................ 8

3.9 Group Life Insurance ..................................................... 8

3.10 Short Term/ Long Term Disability Plan (STD/ LTD) .............................. 8

3.11 State Disability Income Protection Plan ...................................... 8

3.12 Medical, Dental, and Vision Insurance ....................................... 8

3.13 Medicare .............................................................. 8

3.14 Workers Compensation Salary Continuation .................................. 8 ARTICLE 4 FITNESS INCENTIVE .............................................. 9

4.1 Fitness Reimbursement Program Overview..................................... 9 ARTICLE 5 RETIREMENT .................................................... 9

5.1 Definition ............................................................. 10 PGCC 6-17-26

MEA MOU July 1, 2026 – June 30, 2027 Page 2

5.2 Service Pension for Classic Members ....................................... 10

5.3 Cost Sharing - Service Pension for Classic Members............................ 10

5.4 Final Compensation for Classic Members .................................... 11

5.5 Credit for Unused Sick Leave for Classic Members ............................. 11

5.6 New CalPERS Members Benefit Rate, Contribution and Final Compensation ......... 11

5.7 1959 Survivor’s Allowance ................................................ 11

5.8 Military Service Credit.................................................... 11

5.9 Continued Application .................................................... 11 ARTICLE 6 LEAVE PROVISIONS ............................................. 11

6.1 Sick Leave............................................................. 11

6.2 Sick Leave Buyout ...................................................... 11

6.3 Personal Necessity Leave................................................. 11

6.4 Bereavement Leave ..................................................... 12

6.5 Paid Time Off (PTO) ..................................................... 12

6.6 Paid Holidays .......................................................... 13 ARTICLE 7 WORKING CONDITIONS .......................................... 15

7.1 Uniform .............................................................. 15

7.1.1 Uniform Allowance ................................................... 15

7.2 Alternate Work Schedule ................................................. 15

7.3 Step Advancement ...................................................... 15

7.4 Work Outside Business Hours ............................................. 15 ARTICLE 8 CONTINUING EDUCATION AND PROFESSIONAL DEVELOPMENT ..... 16

8.1 Tuition Reimbursement................................................... 16

8.2 Professional Development Program ......................................... 16

8.3 City Training Day ....................................................... 16 ARTICLE 9 MISC ........................................................... 16

9.1 MOU Negotiations Timing ................................................. 16

9.2 Future Negotiations ..................................................... 16 ARTICLE 10 SAVINGS CLAUSE .............................................. 17 PGCC 6-17-26

MEA MOU July 1, 2026 – June 30, 2027 Page 3
Memorandum of Understanding Between
City of Pacific Grove and
Management Employees’ Association
July 1, 2026 - June 30, 2027
In accordance with State requirements, the City of Pacific Grove, through its negotiating team, and the Pacific Grove Management Employees’ Association, through its negotiating team, have met and conferred in good faith on matters within the scope of representation. As a result of these meetings, the parties make the following Memorandum of Understanding as required and subject to the conditions of Government Code Section 3503.1.

ARTICLE 1 ADMINISTRATIVE

1.1 Parties
This agreement is made and entered into between the City of Pacific Grove (herein called the “City”) and the Pacific Grove Management Employees’ Association, (herein called the “Association”).

1.2 Recognition
The City recognizes the Pacific Grove Management Employees' Association as the exclusive representative of the employees of the City in the Management Unit.

1.3 Unit Description
The Management Unit consists of all regular employees of the City occupying positions in the following non-confidential designated job classes:

Accountant
Construction Project Manager
IT Analyst
Librarian
Management Analyst
Planner, Principal
Program Manager
Public Works Superintendent
Senior Librarian
Senior Recreation Coordinator

1.4 Coverage
This Memorandum of Understanding applies only to full-time positions in the Management Association.

1.5 Duration and Scope of MOU
The MOU shall govern the period July 1, 2026 - June 30, 2027. It is understood that as to any terms not covered by this MOU. Section 4.20 of the Pacific Grove Municipal Code and Policy & Procedures Manual is applicable.

PGCC 6-17-26

MEA MOU July 1, 2026 – June 30, 2027 Page 4

1.6. Nondiscrimination
The provisions of this Memorandum of Understanding shall be applied equally to all employees covered hereby without discrimination because of Association membership.

Employees may elect to exercise their right to join and participate in the activities of the Association for the purpose of representation in all matters of their working conditions and employer-employee relations.

1.7 Association Dues
Employees in classifications and positions recognized to be represented by the Association may authorize the City to deduct specified amounts for payment of dues to the Association. The City is not a party to any matters regarding the process and any other terms applicable to employee authorization or rescission of authorization for such deductions. Such matters are exclusively between the Association and affected employee(s) only.

The Association will maintain records of employee authorizations for such payroll deductions and will provide the City with a document identifying unit employees who have authorized payroll deductions and the amount that each employee has authorized the City to deduct. The City will rely upon the list of employees and the deduction amounts contained in the document provided by the Association, subject to the following terms:

Deduction of membership dues will cease starting with the next pay period following the effective date of promoting or demoting out of the association.

No payroll deductions shall be made under this Section during any pay period in which an employee’s earnings, after all other deductions are made, are insufficient to cover the full amount authorized.

When an employee is in a non-pay status for an entire pay period, no deduction will be made to cover the pay period from future earnings.

In the case of an employee who is in a non-pay status during less than an entire pay period and whose earnings, after all other deductions are made, are insufficient to cover the full amount authorized under this Section, no deduction shall be made from future earnings to cover the pay period.

The City shall transmit to the Association, as soon as reasonably possible, the aggregate of such deductions, along with an itemized statement of the deductions taken. Dues deducted and paid to the Association in error shall be refunded to City upon presentation of proof of such error. The Association shall indemnify, defend, and hold the City harmless against any liability arising in any forum, whether judicial, administrative, or otherwise, from any claims, demands, or other action relating to the City’s compliance with any obligations imposed under Section 1.7 including but not limited to payroll deductions made in reliance on information provided by the Association and the Association’s use of monies collected under these provisions.

1.8 Release Time for Association Business
Up to three (3) designated Association representatives (in addition to the Association’s business agent) shall be allowed, as long as there is no disruption in work, a reasonable amount of release time off without loss of pay for purposes of participating in meetings and conferring or meeting and consulting sessions with City representatives on matters within the scope of PGCC 6-17-26

MEA MOU July 1, 2026 – June 30, 2027 Page 5
representation. Such Association representatives shall first obtain permission through the appropriate management channel before leaving the work or work location.

New Employee Orientation: The City provides new employee orientation on an as needed basis.

The City shall provide MEA with prior notice of a new employee orientation and with prior approval shall provide a reasonable amount of paid release time to meet with the employee.

1.9 Contracting Out/Bidding
The City has the right to contract out bargaining unit services, however, when feasible, the City will perform cost analysis to meet the best interest of the City. In the event that the City exercises its right to contract out bargaining unit work, the City shall provide at least 45 days’ notice prior to issuing a request for proposal, request for quotes, or renewing or extending an existing contract, to perform services that are within the scope of work of the job classifications represented by MEA. Notice shall be provided to Association along with an opportunity for the Association to meet and confer on the impacts and effects of this decision and comply with current law.

1.10 Safety
The City recognizes its obligation and is committed to providing a safe place of employment for its employees. To assist in accomplishing this goal, it is agreed that the City reserves the right to adopt reasonable City rules and regulations, which become effective when posted. City agrees to meet and discuss with the Association proposed changes prior to implementation.

The Association agrees that it is the duty of all employees to comply with all reasonable rules and regulations and to be alert to all unsafe places, equipment and conditions and to report any such unsafe practices or conditions to their immediate supervisor.

Association representatives shall have reasonable access to work locations of unit employees to inspect worksites to ensure a safe work place.

1.11 Safety Committee
The City shall convene a Safety Committee to discuss the provision of safety equipment appropriate to specific job classifications.

ARTICLE 2 COMPENSATION

2.1 Salary
For fiscal year 2026/2027 the Parties have agreed to maintain the status quo regarding salary rates.

2.2 Management Time Compensation
Due to the unique aspects of their normal job duties, employees shall receive Management Time Compensation is lieu of paid management leave, overtime, or compensatory time in the amount of 3% of base salary.

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2.3 Salary Step on Promotion or Reclass
The salary of an employee who is promoted or reclassified to a class having a higher salary range shall be adjusted to the first step of the new salary range or to the next higher step that provides a minimum of five percent (5%) salary increase.

2.4 Bilingual Pay
Bilingual pay is $200 monthly for Spanish speaking skills used in assignments that routinely and consistently require Spanish communication skills. The Department Head will make a determination with City Manager approval, if Spanish bilingual skills are being used routinely and consistently.

Employees may test and pass the test for Spanish (verbal) skills. Bilingual Pay is effective the first full pay period after HR receives the passing results. If the assignment changes and there is no longer a need for Spanish speaking skills, the bilingual pay will be removed at the next full pay period.

If the employee fails the Spanish test, they may retest after 6 months.

ARTICLE 3 INSURANCE BENEFITS

3.1 Employee Health Plan Eligibility
Association employees shall be entitled to participate in the City-sponsored group health plans including medical, dental, and vision as well as optional benefits.

Eligible employees enrolling in the group health plans within 60 days following their appointment will be covered subject to the contract limitation with the group health plan carrier. Coverage shall commence when the employee is eligible for coverage under CalPERS rules and the group health plan carriers’ rules.

Human Resources will notify employees of annual open enrollment periods to change group health plans or enroll in additional benefits; unless the employee can certify a qualifying loss of coverage. (an eligible spouse, domestic partner, or minor child requiring health coverage because of a court order; new children by birth or adoption, or placement of adoption; new family members due to marriage or domestic partnership registration; or those whose health plan was cancelled due to an involuntary loss of coverage).

3.2 City Paid Health Premiums
(a) City shall pay the employer required statutory minimum contribution for employees enrolled in the PERS health plans as required by the Public Employee Medical and Hospital Care Act (PEMHCA).
(b) Health care premiums include medical, dental and vision. (c) For employees participating in all three health plans: medical, dental and vision. (d) Effective for July 2026 premiums, the employer contribution will increase to the chart amounts below.

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Plan Enrollment Level Monthly Employer Contribution
(amount excludes PEMHCA)
Employee Only $997.50
Employee + 1 Dependent $1,548.75
Employee + 2 or More Dependents $2,073.75
(e) Medical Premium Re-opener
Contract will be re-opened to meet and discuss medical premiums only, if premiums increase an average of 15% between all four eligible plans for CalPERS Region 1 (PERS Platinum, PERS Gold, Anthem HMO Select, and Blue Shield Trio HMO) at one or more of the employee only, employee plus one, or employee plus family enrollment levels. Only enrollment levels that meet the 15% average increase criteria will be subject to the re-opener. No rounding shall be applied for purposes of this section (e.g. an average increase of 14.995% at the employee-only enrollment level does not meet the 15% percent requirement.)

3.3 City Dental Contribution
The City shall contribute toward the monthly premium for employees participating in group dental. Effective for July 2026 dental premiums, the employer contribution amount is listed below.

Plan Enrollment Level Monthly Employer Contribution
(amount excludes PEMHCA)
Employee Only $4.44
Employee + 1 Dependent $8.96
Employee + 2 or More Dependents $10.92

3.4 Rate of Contribution Cash in Lieu (Grandfathered Employees) The City shall contribute $368.75 per month ($171.20 for each of twenty- six pay periods) for current employees who are not participating in medical health plan coverage at the time of MOU ratification. This option in not available to new hires or current employees participating in the City’s medical health plan coverage. There is no opt-in for this program and employees who opt out will no longer be allowed to receive this benefit but may be able to participate in the New program outlined in Section 3.4. This contribution terminates 6/30/27.

3.5 Rate of Contribution Cash in Lieu (New Employees)
Beginning January 2021, employees who are not currently grandfathered in the cash-in-lieu program may opt out of health (medical, dental and vision) during open enrollment and receive $250 per month taxable cash in lieu ($115.38 for each twenty-six pay periods). Employees who receive the cash-in-lieu, must provide proof of other coverage for medical.

3.6 Proof of Other Coverage
Employees who opt out of the medical plan and receive cash in lieu must provide the following:
(a) proof the employee and all individuals for whom the employee intends to claim a personal exemption deduction (“tax family”), have or will have minimum essential coverage through another source (other than coverage in the individual market, whether or not obtained through Covered California) for the plan year to which the opt out arrangement applies (“opt out period”);
and
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(b) the employee must sign an attestation that the employee and his/her tax family have or will have such minimum essential coverage for the opt out period. An employee must provide the attestation every plan year at open enrollment or within 30 days after the start of the plan year. The City will not make an in lieu payment if the City knows the employee or tax family member doesn’t have such alternative coverage, or if the conditions in this paragraph are not otherwise satisfied.

3.7 Section 125 Plan
Employees may elect to participate in three Section 125 programs offered by the City. The available programs are Pre-Tax Premium Option, Dependent Care, and Flexible Spending Account. Each of these programs shall be administered in accordance to the IRS Code. For purposes of information, the following provides a description of the programs. • Pre-Tax Premium Option- Permits payment of health insurance premiums subject to salary deduction with pre-tax income.
• Dependent Care- Permits payment of eligible dependent care with pre-tax income. • Flexible Spending Account- Permits payment of eligible health care expenses not reimbursed by health insurance with pre-tax income.
• Optional Insurance Programs (e.g. AFLAC or other pre-tax offerings sponsored by the City.

3.8 457 Deferred compensation Plan
The City will match up to $100.00 per pay period of any MEA member’s contribution to the City’s Deferred Compensation Plan authorized under the Internal Revenue Code Section 457.

3.9 Group Life Insurance
The City shall provide at its cost Group Life Insurance with Accidental Death and Dismemberment at a minimum benefit of $75,000.

3.10 Short Term/ Long Term Disability Plan (STD/ LTD)
The City shall provide at its cost supplemental Short-Term and Long-Term Disability Insurance.

3.11 State Disability Income Protection Plan
Association employees are covered by the State Disability Income (SDI) Protection Plan at their expense. Accrual banks may be integrated with SDI benefits.

3.12 Medical, Dental, and Vision Insurance
The City and Association agree to periodically review health insurance policies currently in place to provide the most favorable insurance coverage available.

3.13 Medicare
Medicare is withheld for employees.

3.14 Workers Compensation Salary Continuation
Association members who suffer a bona fide on the job injury or illness, as determined under the provisions of the California Workers’ Compensation laws, and who, as a result of such injury or illness, are unable to work in their regularly assigned position or other position as determined by the City will be entitled to receive full salary and benefits for the first 90 days of such absence from the date of the incurred injury or illness. No charge to the member’s sick leave, vacation, compensatory time off or other leave will be made during the 90 days from the date of the PGCC 6-17-26

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incurred injury. It is noted that the City offers a Disability Insurance policy which establishes additional benefits for absences due to disabilities.

If a claim has been filed with, but not yet finally accepted or rejected by, the City’s Worker’s Compensation provider, the employee will be required to use any accrued and available paid leave to cover their absence. If the claim is finally accepted, the employee’s leave banks will be restored for days actually used, up to 90 days.

FMLA/CFRA will automatically be activated for employee’s off work for a week. FMLA/CFRA will run until the employee returns to work. or until exhausted. FMLA/CFRA will mirror W/C leave even when intermittent.

ARTICLE 4 FITNESS INCENTIVE

4.1 Fitness Reimbursement Program Overview.

A. City will reimburse up to $500 per calendar year for employee’s personal fitness costs.

Eligible covered fitness reimbursement are listed below. o Fitness Classes (Yoga, Pilates, Cycling, etc.)
o Fitness Subscriptions (such as Peloton, etc.)
o Gym Membership
o Weight Management Programs (such as Weight Watchers)
o Registration fees for 5K’s, 10’k, half and full running marathons B. Reimbursement for fitness expenses not listed above, will be subject to the City Manager's discretion and approval. To avoid declination of reimbursement, items not listed should be pre-approved by the City Manager, or designee. Declination of reimbursement for items not listed above are not grieveable.

C. Annual requests for reimbursement must be submitted by December 1st of calendar each year.

D. To be eligible for reimbursement, a requesting employee must be in active status and remain a current employee through December 31st of the year in which seeking reimbursement.

E. Subject to IRS guidelines, the fitness incentive is taxable income.

ARTICLE 5 RETIREMENT
This MOU shall incorporate the two tiered retirement system to address Classic Members and New CalPERS Members required for Miscellaneous Employees by the California Public Employees' Pension Reform Act (PEPRA) of 2013.

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5.1 Definition
The terms Classic Member and New CalPERS members are defined by PERS law and regulations, but in general these are construed to have the following meanings:

A. Classic CalPERS Member
“Classic Member” is typically defined as an employee who was hired on or before December 31, 2012, or is a member of a reciprocal retirement system.

B. New Employee
"New Employee" means an employee of a public employer who is employed for the first time by any public employer on or after January 1, 2013, and who was either:
• Not employed by any other public employer prior to that date; or • Employed by another public employer prior to that date, but who was not subject to reciprocity between his new employer's plan and another public retirement system.

C. New CalPERS Member
"New Member" means an individual who either:
• Becomes a member of the plan for the first time on or after January 1, 2013 and either (i) was not a member of any other public retirement system prior to that date or (ii) was a member of another public retirement system prior to that date but was not subject to reciprocity between his new employer's plan and another public retirement system; or
• Was an active member in the plan and, after a break in service of more than six months, returned to active membership in that plan with a new employer.

5.2 Service Pension for Classic Members
The retirement formula expressed in Government Code Section 21354 commonly known as 2% at 55 local miscellaneous members shall apply to covered Classic Members.

5.3 Cost Sharing - Service Pension for Classic Members
The parties shall engage in sharing the City’s employer contribution towards retirement benefits in accordance with Government Code Section 20516. Cost-sharing shall be in effect and will require the employee to pay the portion of the employer contribution.

A. For the duration of the MOU, the employee shall pay a total of 12% of the employee and employer share (7% of the employee share and 5% of the employer share).

B. The City completed a contract amendment with CalPERS under Section 20516 that allows for employee cost sharing of the employer rate and provides member’s contribution to be credited to each member’s account. Following the expiration of the current MOU, the City will initiate a contract amendment with CalPERS to end the Section 20516 amendment if not re-negotiated at that time. The Association recognizes that the CalPERS amendment process may take up to 90 days or longer for the amendment to become effective.

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5.4 Final Compensation for Classic Members
“Final Compensation” shall be applied for retirement purposes as specified in Government Code Section 20042, as one year’s highest compensation.

5.5 Credit for Unused Sick Leave for Classic Members
Employees shall be given service credit upon retirement for unused sick leave as specified in Government Code Section 20965.

5.6 New CalPERS Members Benefit Rate, Contribution and Final Compensation New CalPERS Members shall receive and make contributions for PERS benefits in compliance with PEPRA.

A. Benefit Rate New Members benefit rate shall be MISC 2% @ 62.

B. Contribution New Members shall pay 50% of the normal cost of their pension benefit.

C. Final Compensation Three-year average final compensation period.

5.7 1959 Survivor’s Allowance
The “1959 Survivor’s Allowance Fourth Level” as defined in Government Code Section 21574 shall apply to both Classic and New CalPERS Members.

5.8 Military Service Credit
Military Service Credit as defined in Government Code Section 21024 shall apply to both Classic and New CalPERS Members

5.9 Continued Application
The Parties agree that all elements of the CalPERS article shall have continued application until or unless it is amended by mutual agreement of the parties.

ARTICLE 6 LEAVE PROVISIONS

6.1 Sick Leave
Sick leave is replaced by paid time off (PTO). However, employees who were previously employed by the City in a part-time status, may utilize their accumulated sick leave.

6.2 Sick Leave Buyout
Upon separation of employment, other than retirement, the employee shall be entitled to be paid for 50% of his/her sick leave accumulated at the time of such termination.

Upon retirement the employee shall be entitled to be paid for 50% of any accumulated sick leave in excess of that for which retirement credit is given.

In the event the employee is terminated by virtue of a conviction of a felony or any other illegal act, the City shall have no obligation to provide sick leave buy-out.

6.3 Personal Necessity Leave
Employees may use accrued sick leave and or PTO leave in the event of the personal illness or injury of a family member, including father, mother, brother, sister, spouse, registered domestic partner, child, step-child, grandparent, or in-laws.

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6.4 Bereavement Leave
Up to a maximum of five (5) days of paid leave will be granted per occurrence in the case of the death of a family member, including father, mother, brother, sister, spouse, child, step parent, step child, grandparent, grandchild, in-laws, registered domestic partner, child of registered domestic partner or any other member of the immediate household.

6.5 Paid Time Off (PTO)
A. Accrual Rate
PTO Accruals are based upon full years of consecutive employment.

Employees shall earn PTO according the rates set out in the following table.

Effective the first full pay period following City Council approval of the MOU, accruals earned will be as follows for all members of the MEA.

Years of Service Hours Earned per
Pay Period
Hours Earned per
Month
Less than 5 9.231 20.000
5 to 6 10.154 22.000
7 to 8 10.462 22.667
9 to 10 10.769 23.333
11 to 12 11.077 24.000
13 to 14 11.385 24.667
15 11.692 25.333
16 plus 12.000 26.000
17 12.308 26.667
18 12.615 27.333
19 12.923 28.000
20 plus 13.231 28.667
B. PTO Accumulation
PTO shall not be accrued any time the employee’s PTO balance exceeds 400 PTO hours.

C. Sick Leave Balances
Employees with Sick Leave balances may be retained as a sick leave bank.

Sick leave accrued before June 30, 2015 may be used as PTO or may be retained as a sick leave bank.

D. PTO/Vacation Buy-Back Program
Employees may sell back to the City up to 80 hours of their PTO/ vacation in any calendar year if both of the following conditions are met:

1. The employee has used (taken) at least 40 hours of PTO/ vacation during the preceding calendar year.

AND
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2. The employee must have at least 40 hours of PTO/ vacation remaining after the buy-back of some of the accumulated vacation.

3. On or before the pay period which includes December 15 of each calendar year, an employee may make an irrevocable election to cash out up to eighty (80) hours of accrued PTO (in whole hour increments) which will be earned in the following calendar year at the employee’s base rate of pay. On the pay day for the pay period which includes Thanksgiving in the following year, the employee will receive cash for the amount of vacation the employee irrevocably elected to cash out in the prior year. However, if the employee’s PTO leave balance is less than the amount the employee elected to cash out (in the prior calendar year) the employee will receive cash for the amount of leave the employee has accrued at the time of the cash out.

E. PTO/Vacation Pay Out
PTO/Vacation leave balance shall be paid out upon employee’s separation from employment in compliance with CalPERS rules and regulations.

6.6 Paid Holidays
Employees shall receive annually the following nine (9) paid holidays:

Paid Holiday Schedule

1. New Year’s Day

2. Memorial Day

3. Independence Day

4. Labor Day

5. Veteran’s Day

6. Thanksgiving Day

7. Thanksgiving Holiday/Day after Thanksgiving

8. Christmas Eve Day

9. Christmas Day
C. Paid Holiday Pay
Paid holidays will be calculated at eight (8) hours of holiday pay for full-time employees and will be calculated at six (6) hours of holiday pay for 30-hour weekly employees.

Holiday pay is paid at the base hourly rate (8 hours x base pay, or 6 hours x base pay).

D. Holiday Schedule Observance
Unless otherwise provided, when a holiday falls on a Sunday, the following Monday shall be observed; a holiday falls on a Saturday, the prior Friday shall be observed.

When a holiday falls on an employee’s time off, the working day immediately preceding or immediately following such holiday, at the determination of the department manager and subject to approval of the personnel officer, shall be observed as a holiday.

E. Floating Holidays
Employees shall receive six (6) floating holidays each fiscal year (48 hours).

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Employees may select the date upon which they shall use any floating holiday, subject to scheduling needs of the City. If a floating holiday is not used within the fiscal year, the time shall be forfeited.

Floating holidays denied due to staffing shortages or other operational reasons will be paid or accumulated at the employee’s choice at the end of the fiscal year. The employee will have the burden to prove the request was made in a timely manner and then denied.

F. Prorated Allocation for New Employees
Employees who are hired during the Fiscal Year (FY) shall have the number of floating holidays prorated based upon their date of hire as follows:

Date of Hire Number of Floating Days
July 1 to August 31 6 floating holidays
September 1 to October 31 5 floating holidays
November 1 to December 31 4 floating holidays
January 1 to February 28 (29) 3 floating holidays
March 1 to April 30 2 floating holidays
May 1 to June 30 1 floating holiday
G. Paid Holiday Closure
a. While an mou is in term, (i.e. not expired) the City shall establish a Holiday Closure for non - holiday work days beginning Christmas Eve through New Year' s Day. The maximum of closure hours shall be 32 hours.

For 2026 the holiday closure dates shall be:
- Monday - December 28th
- Tuesday – December 29th
- Wednesday – December 30th
- Thursday – December 31st
Subsequent years for the closure shall be enumerated in the subsequent MOU or by side letter as negotiated. In the event the MOU expires without a subsequent agreement or side letter extension, the Holiday Closure shall end. b. Employee will receive 8 hours of straight time pay for each holiday closure day. If an employee is on an alternative work schedule, i.e. 10 hour days, employees shall use leave accruals for the remaining daily pay.
c. During the Holiday Closure, the City shall designate departments or divisions which will close operations to the public.
d. The City may designate employees as exempt from the holiday closure due to operational needs of the City. Such determination regarding exemption, shall be made by the respective department head and may be subject to final approval by the City Manager.
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during the designated closure day. Such hours are to be used during the calendar year following Christmas, (2027 for 2026). Employees who do not use the hours in the designated calendar year shall forfeit the hours at the end of the calendar year. Banked Holiday Closure hours shall have no cash out value.
f. Employees covered by this Agreement must be in a City full-time paid status ( i. e., not on an unpaid leave of absence, etc.) prior to December 23rd in the year to be eligible for Holiday Closure under this Section.
g. Holiday Closure hours are not counted as hours worked for determining overtime or CTO eligibility.

ARTICLE 7 WORKING CONDITIONS

7.1 Uniform
The City may provide field working uniforms and/or safety shoes for Public Works employees working out in the field.

7.1.1 Uniform Allowance
The City will provide a uniform allowance for designed members of field departments in the amount of $92.50 each calendar month. The classifications to which this Article applies shall be the Police Management Analyst and any other classification approved by the City Manager or designee.

7.2 Alternate Work Schedule
Employees may, upon approval of the appropriate Department Head and the City Manager, implement an alternative work schedule providing for 80 hours of work in two consecutive fiveday Monday through Friday periods.

The schedule shall allow for adequate coverage of all activities normally and customarily covered during the Monday through Friday workweek. Approval by the appropriate Department Head and the City Manager shall not be unreasonably withheld.

7.3 Step Advancement
Employees are eligible for a salary step increase on their anniversary or new classification date following completion of 2,080 hours of paid service, or whichever is longer. Time spent on legally protected leaves of absence such as FMLA or CFRA count towards step increase eligibility. Salary step increases will be effective the first full pay period following the step eligibility date.

7.4 Work Outside Business Hours
Management employees receive management incentive compensation to recognize the unique aspects of the normal job duties. Management employees are expected to:

1. Regularly attend City Council Meetings and/or a City Advisory Board(s); to include preparation and presentation of agenda items; and
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2. Regularly work on special projects, or City initiatives that may require work hours before or after normal business hours as well as be required to work weekends.

3. Be the first to staff the department outside of normal business hours, including weekends, when there is a critical need to complete work and/or during a natural disaster or emergency.

Management employees who do not work outside business hours as listed above or similarly, will forfeit the management incentive compensation. Department heads will monitor.

ARTICLE 8 CONTINUING EDUCATION AND PROFESSIONAL

DEVELOPMENT

8.1 Tuition Reimbursement
Tuition Reimbursement is up to $3,000 in a fiscal year for qualified expenses per the MEA Education Reimbursement Program.

8.2 Professional Development Program
A lump sum payment of $500.00 shall be made by City to an employee represented by the Association who has completed a course of study and/or examination that results in attaining an acknowledged level of professional development – evidenced, for example, by degree, credential or certification – in the employee’s field of work. To qualify for this payment, the achievement must demonstrate, as determined by the City Manager, attainment of a significant achievement based on national, state, or professional department standards.

The City Manager shall determine, prior to employee’s embarking on the work and study required for the desired degree, credential or certification, whether the desired goal qualifies for the payment.

No more than three (3) such payments shall be paid to an individual during his or her tenure with the City.

8.3 City Training Day
Effective 2021, the City will close operations to the public for non-sworn personnel on a Monday in October and provide a mandatory employee “Training Day”.

ARTICLE 9 MISC

9.1 MOU Negotiations Timing
At least six (6) months prior to the MOU expiring, management will initiate MOU negotiations with MEA.

9.2 Future Negotiations
The parties hereto acknowledge and agree that they have reached settlement regarding all total compensation and non-compensation items, and that said issues are settled through the period expiring June 30, 2027, provided that either party may request to meet and confer upon written notice given to the other party.

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The parties therefore agree to waive any and all rights or obligations to meet and confer on any subject fully covered by this MOU with the exception of the economic re-opener, until a reasonable period prior to June 30, 2027.

ARTICLE 10 SAVINGS CLAUSE
If any Article or Section of this Memorandum of Understanding should be found invalid, unlawful or unenforceable by reason of any existing or subsequent enacted legislation or by judicial authority, all remaining Articles and Sections of this Memorandum of Understanding shall remain in full force and effect for the duration of the MOU. In the event of invalidation of any Article or Section, the City and the Association agree to meet within 30 calendar days of such invalidation for the sole purpose of meeting and conferring upon said Article or Section.

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This MOU constitutes a full and complete agreement between the parties on all matters within the scope of representation.
__
Matt Mogensen, City Manager Phillip Anderson
City of Pacific Grove Management Employees’ Association (MEA)

Che Johnson, Chief Negotiator Mary Weyant
Management Employees Association (MEA)
Leticia Livian, Human Resources Director
City of Pacific Grove

__
Date Date
PGCC 6-17-26

Agenda No. 13 B

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Che Johnson, Chief Negotiator and Leticia Livian, Human Resources Director MEETING DATE: June 17, 2026
SUBJECT: Compensation and Benefits Plan for Department Heads and Non-Represented Management and Confidential Group Employees
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Approve a resolution approving the amended compensation and benefits plan for Department Heads and for the Non-Represented Management and Confidential Group Employees.

DISCUSSION
Non-represented management, confidential, and department head employees (non-represented groups) have a Compensation and Benefits Plan that outlines salary, benefits, and working conditions. Prior to the creation of the Compensation and Benefits Plan, the non-represented group received the same salary and benefit enhancements and concessions as the Management Employee Association (MEA). This was the City’s past practice.

The Compensation and Benefits Plans formally tied the salary and benefit alignment with MEA. The Compensation and Benefits Plan states the non-represented group will receive the same improvements, or concessions to the working conditions, and benefits as the Management Employee’s Association (MEA).

Recently, the City and the Management Employees Association (MEA) have come to a tentative agreement to improve salary, benefits, and working conditions in their Memorandum of Understanding dated July 1, 2026 – June 30, 2027. Therefore, beginning July 1, 2026, the non-represented group shall receive the same improvements of MEA if the MEA MOU is approved. If the MEA MOU is not approved, no changes will be made at this time for the non-represented groups.

In alignment with MEA, below are key items that will be implemented for the non-represented groups:

No increase to salary/cost of living adjustment (COLA).

Paid holiday closure beginning Christmas Eve and through New Year’s Day.

Increase to PTO accruals by 8 hours more a month in lieu of a separate sick leave bank.

Increase to monthly employer health contributions:

Employee only, from $950 to $997.50
Employee plus a dependent, from $1,475 monthly to $1,548.75 monthly Employee plus two or more dependents, from $1,975 monthly to $2,073.75 monthly PGCC 6-17-26

The annual employer increased cost for healthcare is estimated to be $12,900.

Adding a monthly employer dental contribution to cover increase cost to dental:

Employee only, city contributes $4.44
Employee plus one dependent, City contributes $8.96
Employee plus two or more dependents, City contributes $10.92 The annual employer increased cost to dental is estimated to be $1,320 All other terms and conditions in the current benefits and compensation plan are unchanged.

OPTIONS

1. No approve the resolution

2. Provide alternative direction
FINANCIAL IMPACT:

It is anticipated that the impact to the fiscal year 26/27 budget will increase by approximately $14,220.

FOCUSED PRIORITY AREA: Not Applicable.

Attachments
DH Resolution
Non-Rep Resolution
DH Compensation & Benefits Plan
Non-Rep Compensation & Benefits Plan
PGCC 6-17-26

RESOLUTION NO. 26 - ____________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE

APPROVING THE SALARY AND BENEFIT IMPROVEMENTS WITH THE PACIFIC

GROVE DEPARTMENT HEAD GROUP (GROUP)

FINDINGS

1. The City of Pacific Grove and the Management Employees Association (MEA) have negotiated and have reached agreement on a successor Memorandum of Understanding amending the Memorandum of Understanding that governs wages, benefits, hours and working conditions Management Employee Association members.

2. Under the Compensation and Benefits Plan for the department head group (group), the group will receive the same improvements, or concessions to the working conditions and benefits as the Management Employee’s Association (MEA). If the MEA MOU is not approved, no changes will be made at this time for the group.

3. This action does not constitute a “project” as defined by California Environmental Quality Act (CEQA) because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment; and

RESOLUTION

NOW, THEREFORE, THE COUNCIL OF THE CITY OF PACIFIC GROVE DOES RESOLVE AS FOLLOWS:

SECTION 1. The City Council finds each recital set forth above to be true and correct, and by this reference incorporates each as an integral part of this Resolution.

SECTION 2. The City Council approves the improvements to salary, benefits, and working conditions of the department head group.

SECTION 3. The City Manager is authorized to execute all documents and to perform all other necessary City acts to implement the improvements.

SECTION 4. This resolution confers authority upon the City Manager to take all steps necessary to implement the improvements to the salary, benefits, and working conditions and authorizes budget adjustments if necessary to implement expenditures during FY 26/27.

SECTION 5. This Resolution shall take effect immediately following its adoption.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 17th day of June 2026, by the following vote:

AYES:

PGCC 6-17-26

NOES:

ABSENT:

APPROVED:
_________________________________
__________________________

NICK SMITH
Mayor
ATTEST:
_________________________________

SANDRA KANDELL
City Clerk
APPROVED AS TO FORM:
_________________________________

ALEX LORCA
City Attorney
PGCC 6-17-26

RESOLUTION NO. 26 - ____________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE

APPROVING THE SALARY AND BENEFIT IMPROVEMENTS WITH THE PACIFIC

GROVE NON-REPRESENTED MANAGEMENT AND CONFIDENTIAL GROUP (GROUP)

FINDINGS

1. The City of Pacific Grove and the Management Employees Association (MEA) have negotiated and have reached agreement on a successor Memorandum of Understanding amending the Memorandum of Understanding that governs wages, benefits, hours and working conditions Management Employee Association members.

2. Under the Compensation and Benefits Plan for the non-represented management and confidential group (group), the group will receive the same improvements, or concessions to the working conditions and benefits as the Management Employee’s Association (MEA). If the MEA MOU is not approved, no changes will be made at this time for the group.

3. This action does not constitute a “project” as defined by California Environmental Quality Act (CEQA) because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment; and

RESOLUTION

NOW, THEREFORE, THE COUNCIL OF THE CITY OF PACIFIC GROVE DOES RESOLVE AS FOLLOWS:

SECTION 1. The City Council finds each recital set forth above to be true and correct, and by this reference incorporates each as an integral part of this Resolution.

SECTION 2. The City Council approves the improvements to salary, benefits, and working conditions of the non-represented management and confidential group.

SECTION 3. The City Manager is authorized to execute all documents and to perform all other necessary City acts to implement the improvements.

SECTION 4. This resolution confers authority upon the City Manager to take all steps necessary to implement the improvements to the salary, benefits, and working conditions and authorizes budget adjustments if necessary to implement expenditures during FY 26/27.

SECTION 5. This Resolution shall take effect immediately following its adoption.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 17th day of June 2026, by the following vote:

PGCC 6-17-26

AYES:

NOES:

ABSENT:

APPROVED:
_________________________________
__________________________

NICK SMITH
Mayor
ATTEST:
_________________________________

SANDRA KANDELL
City Clerk
APPROVED AS TO FORM:
_________________________________

ALEX LORCA
City Attorney
PGCC 6-17-26

Revised 7/1/2026

CITY OF PACIFIC GROVE
Compensation and Benefits Plan
The Department Head Group
July 1, 2021 (Amended 7/1/2026)
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1 | Page Department Head Group
Compensation and Benefits Plan (amended 7/1/2026)
Contents
A. Purpose and Intent .......................................................................................................................... 2 B. Unit Description............................................................................................................................... 2 C. Compensation.................................................................................................................................. 3 D. Insurance Benefits ........................................................................................................................... 3 E. Fitness Reimbursement ................................................................................................................... 6 F. Retirement....................................................................................................................................... 6 G. Leave Provisions............................................................................................................................... 8 H. Working Conditions .......................................................................................................................12 I. Continuing Education and Professional Development..................................................................14 J. Term...............................................................................................................................................14 PGCC 6-17-26

2 | Page Department Head Group
Compensation and Benefits Plan (amended 7/1/2026)
City of Pacific Grove
Department Head Group
Compensation and Benefits Plan
Effective July 1, 2021
A. Purpose and Intent
This Compensation and Benefits Plan (Plan) is intended to establish compensation, benefits and terms and conditions of employment for Department Heads, the Chief of Police, and management classifications that report directly to the City Manager (collectively, the Department Head Group or Unit).

The City Manager has the authority to hire employees for classifications in the Department Head Group, and to adjust their compensation consistent with this Plan. Employees in the Department Head Group are exempt from the Fair Labor Standards Act (FLSA), are at-will employees, serve at the pleasure of the City Manager, and can be terminated with or without notice or cause and with no rights of appeal.

The Department Head Group will receive the same improvements or concessions to the working conditions and benefits as the Management Employee’s Association (MEA). The Department Head Group may make recommendations to the Benefits and Compensation Plan to the City Manager on or about the same time when the MEA’s Memorandum of Understanding has been approved by the City Council.

B. Unit Description
The covered employees in this unit consist of regular employees of the City of Pacific Grove (City) occupying positions in the job classes set forth below. Classes are not necessarily exclusive. The City Manager has the right to add classifications to this group as determined by the City Manager:

Department Heads:
• Administrative Services Director
• Assistant City Manager/Administrative Services Director • Chief of Police
• Community Development Director
• Deputy City Manager
• Deputy City Manager/Public Works Director
• Library Director
• Human Resources Director
• Public Works Director
Key Personnel:
• City Clerk
• City Clerk/DEI Coordinator
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Compensation and Benefits Plan (amended 7/1/2026)
C. Compensation
C.1. Salary
Salaries for this unit are listed in the salary schedule published on the City’s website.

C.2. Management Time Compensation
Due to the unique aspects of their normal job duties, employees shall receive Management Time Compensation in lieu of paid management leave, overtime, or compensatory time in the amount of 3% of base salary.

C.3. Salary Steps
Salary steps for classifications in this unit span from one (1) to seven (7) steps with an approximate 5% salary difference between each step.

The salary of an employee who is promoted or reclassified to a class having a higher salary range shall be adjusted to the first step of the new salary range or to the next higher step that provides a minimum of five percent (5%) salary increase.

D. Insurance Benefits
D.1. Employee Health Plan Eligibility
The City contracts with the California Public Employees’ Retirement System (CalPERS) for participation under the Public Employees Medical and Hospital Care Act (Government Code Section 22750, et. seq. [“PEMHCA”]), for the purpose of providing medical insurance benefits for employees, and employees who have retired from employment with the City and who constitute “annuitants” as defined by PEMHCA.
a) Unit employees shall be entitled to participate in the City-sponsored group health plans including medical, dental, and vision as well as optional benefits. b) Eligible employees enrolling in the group health plans within 60 days following their appointment with the City will be covered subject to the contract limitation with the group health plan carrier. Coverage shall commence when the employee is eligible for coverage under CalPERS rules and the group health plan carriers’ rules. c) Human Resources will notify employees of annual open enrollment periods to change group health plans or enroll in additional benefits - unless the employee can certify a qualifying loss of coverage allowing such a change. (an eligible spouse, domestic partner, or minor child requiring health coverage because of a court order; new children by birth or adoption, or placement of adoption; new family members due to marriage or domestic partnership registration; or those whose health plan was cancelled due to an involuntary loss of coverage).

D.2. City Paid Health Premiums
a) City shall pay the employer required statutory minimum contribution for eligible employees and annuitants (as defined by Government Code section 22760) enrolled in the CalPERS health plans as required by PEMHCA.
b) Health care premiums include medical, dental and vision. c) In addition to the PEMHCA contribution set forth above, and for active City employees participating in any three health plans: medical, dental and vision:

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Compensation and Benefits Plan (amended 7/1/2026)
Effective with the July 2026 premiums, the employer contribution will increase to the chart amounts below.

Plan Enrollment Level Monthly Employer Contribution (amount excludes PEMHCA)
Employee Only $997.50
Employee + 1 Dependent $1,548.75
Employee + 2 or More Dependents $2,073.75
d) Medical Premium Re-opener
Contract will be re-opened to meet and discuss medical premiums only, if premiums increase an average of 15% between all four eligible plans for CalPERS Region 1 (PERS Platinum, PERS Gold, Anthem HMO Select, and Blue Shield Trio HMO) at one or more of the employee only, employee plus one, or employee plus family enrollment levels. Only enrollment levels that meet the 15% average increase criteria will be subject to the re-opener. No rounding shall be applied for purposes of this section (e.g. an average increase of 14.995% at the employee-only enrollment level does not meet the 15% percent requirement.)
D.3. City Dental Contribution
The City shall contribute toward the monthly premium for employees participating in group dental effective with the July 2026 premiums. The employer contribution amount is listed below.

Plan Enrollment Level Monthly Employer Contribution
(amount excludes PEMHCA)
Employee Only $4.44
Employee + 1 Dependent $8.96
Employee + 2 or More Dependents $10.92
D.4.Rate of Contribution Cash In Lieu
Beginning January 2021, employees who are not currently grandfathered in the cash-in-lieu program may opt out of health (medical, dental and vision) during open enrollment and receive $250 per month taxable cash in lieu ($115.38 for each twenty-six pay periods). Employees who receive the cash-in-lieu, must provide proof of other coverage for medical.

D.5. Proof of Other Coverage
Employees who opt out of the City’s medical plan and receive cash in lieu must provide the following:
(a) proof the employee and all individuals for whom the employee intends to claim a personal exemption deduction (“tax family”) have, or will have, minimum essential coverage through another source (other than coverage in the individual market, whether or not obtained through Covered California) for the plan year to which the opt out arrangement applies (“opt out period”);
and
(b) the employee must sign an attestation that the employee and their tax family have, or will have, such minimum essential coverage for the opt out period. An employee must provide the attestation every plan year at open enrollment or within 30 days after the start of the plan year.

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Compensation and Benefits Plan (amended 7/1/2026)
D.6. Section 125 Plan
Employees may elect to participate in three Section 125 programs offered by the City, as well as optional programs. The available programs are Pre-Tax Premium Option, Dependent Care, and Flexible Spending Account. Each of these programs shall be administered in accordance to the IRS Code. For purposes of information, the following provides a description of the programs. • Pre-Tax Premium Option: Permits payment of health insurance premiums subject to salary deduction with pre-tax income.
• Dependent Care: Permits payment of eligible dependent care with pre-tax income. • Flexible Spending Account: Permits payment of eligible health care expenses not reimbursed by health insurance with pre-tax income.
• Optional Insurance Programs (e.g. AFLAC or other pre-tax offerings sponsored by the City).

D.7. 457 Deferred Compensation Plan
The City will match up to $100.00 per pay period of any member’s contribution to the City’s Deferred Compensation Plan authorized under the Internal Revenue Code Section 457.

D.8.Group Life Insurance
The City shall provide, at its cost, Group Life Insurance with Accidental Death and Dismemberment at a minimum benefit of $75,000.

D.9. Supplemental Short-Term/Long Term Disability Plan (STD/LTD) The City shall provide, at its cost, supplemental Short-Term and Long-Term Disability Insurance.

D.10.State Disability Income Protection Plan
Department Head Group employees shall be covered by the State Disability Income (SDI) Protection Plan at their expense. The SDI benefit may be integrated with City PTO leave benefits.

D.11.Medicare
Medicare is withheld for employees.

D.12.Workers Compensation Salary Continuation
Unit members who suffer a bona fide on-the-job injury or illness, as determined under the provisions of the California Workers’ Compensation laws, and who, as a result of such injury or illness, are unable to work in their regularly assigned position or other position as determined by the City, will be entitled to receive full salary and benefits for the first 90 days of such absence from the date of the incurred injury or illness. No charge to the member’s sick leave, vacation, personal time off, or other compensatory time off or other leave will be made during the first 90 days from the date of the incurred injury. The City also offers a Disability Insurance policy that establishes additional benefits for absences due to disabilities.

If a claim has been filed with, but not yet finally accepted or rejected by, the City’s Worker’s Compensation provider, the employee will be required to use any accrued and available paid leave to cover their absence. If the claim is finally accepted, the employee’s leave banks will be restored for days actually used, up to 90 days.

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6 | Page Department Head Group
Compensation and Benefits Plan (amended 7/1/2026)
FMLA/CFRA will automatically be activated for employee’s off work for a week. FMLA/CFRA will run until the employee returns to work. or until exhausted. FMLA/CFRA will mirror W/C leave even when intermittent.

E. Fitness Reimbursement
A. City will reimburse up to $500 per calendar year for employee’s personal fitness costs. Eligible covered fitness reimbursement are listed below.
o Fitness Classes (Yoga, Pilates, Cycling, etc.)
o Fitness Subscriptions (such as Peloton, etc.)
o Gym Membership
o Weight Management Programs (such as Weight Watchers)
o Registration fees for 5K’s, 10K’s, half, and full running marathons B. Reimbursement for fitness expenses not listed above, will be subject to the City Manager's discretion and approval. To avoid declination of reimbursement, items not listed should be preapproved by the City Manager, or designee. Declination of reimbursement for items not listed above are not grieveable.

C. Annual requests for reimbursement must be submitted by December 1st of calendar each year.

D. To be eligible for reimbursement, a requesting employee must be in active status and remain a current employee through December 31st of the year in which seeking reimbursement.

E. Subject to IRS guidelines, the fitness incentive is taxable income.

F. Retirement
Employees in this group are eligible for retirement benefits as provided under the law. Those plans and benefits are described in this section for informational purposes only. The City does not provide these benefits under a separate contract. Therefore, where there is a conflict between the description of benefits provided in this Plan and what is provided under CalPERS laws and regulations, the CalPERS laws and regulations shall govern.

The City’s CalPERS plans currently include a two-tiered retirement system to address Classic Members and New CalPERS Members as required by the California Public Employees’ Pension Reform Act (PEPRA) of 2013.

F.1. Definitions
The terms “Classic Member” and “New CalPERS members” are defined by CalPERS law and regulations, but in general, are construed to have the following meanings:

A. Classic Member
“Classic Member” is determined by CalPERS through CalPERS rules and is typically defined as an employee who is not a “new member.”
B. New CalPERS Member
“New Member” is defined by CalPERS and generally means an individual who either:

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7 | Page Department Head Group
Compensation and Benefits Plan (amended 7/1/2026)
• Becomes a member of CalPERS for the first time on or after January 1, 2013 and either (i) was not a member of any other public retirement system prior to that date or (ii) was a member of another public retirement system prior to that date but was not subject to reciprocity between their new employer’s plan and another public retirement system;
or
• Was an active member in CalPERS and, after a break in service of more than six months, returned to active membership in CalPERS with a new employer.

F.2. Service Pension for Classic Members
The retirement formula expressed in Government Code Section 21354 commonly known as “2% at 55” local miscellaneous members shall apply to covered Classic Members.

The retirement formula expressed in Government Code Section 21362.2 commonly known as “3% at 50” local safety members shall apply to covered Classic Members, to the extent required by PEPRA.

F.3. Cost Sharing - Service Pension for Classic Members The parties shall share the City’s contribution towards retirement benefits in accordance with Government Code Section 20516, subdivision (a), as follows:

• Classic Members subject to this Compensation and Benefits Plan who are local miscellaneous members shall pay 5% of the employer share of PERS costs in addition to the employee’s member contribution.
• Classic Members subject to this Compensation and Benefits Plan who are local safety members shall pay 5% of the employer share of PERS costs in addition to the employee’s member contribution.

F.4. Final Compensation for Classic Members
“Final Compensation” shall be applied for retirement purposes as specified in Government Code Section 20042, as one year’s highest compensation.

F.5. Credit for Unused Sick Leave for Classic Members
Employees shall be given service credit upon retirement for unused sick leave as specified in Government Code Section 20965.

F.6. New CalPERS Members Benefit Rate, Contribution and Final Compensation New CalPERS Local Miscellaneous and Local Safety Members shall receive and make contributions for PERS benefits in compliance with PEPRA.

A. Benefit Rate. Per Government Code 7522.20, New Local Miscellaneous (non-safety) Members benefit rate shall be 2% @ 62. New Local Safety Members benefit rate shall be

2.7% @57 in accordance with Government Code 7522.25.

B. Contribution. New CalPERS Members shall pay 50% of the normal cost of their pension benefit.

C. Final Compensation. Final compensation is the three-year average of the final compensation period.

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Compensation and Benefits Plan (amended 7/1/2026)
F.7. 1959 Survivor’s Allowance
The “1959 Survivor’s Allowance Fourth Level” as defined in Government Code Section 21574 shall apply to both Classic and New CalPERS Members. The employee cost is $2 per month.

F.8. Military Service Credit
Military Service Credit as defined in Government Code Section 21024 shall apply to both Classic and New CalPERS Members.

F.9. Continued Application
The City and the Department Head Group (collectively, the Parties) agree that all elements of the CalPERS article shall have continued application until or unless it is amended by mutual agreement of the Parties.

G. Leave Provisions
G.1.Sick Leave (applies only to “Legacy” Employees, hired before June 30, 2015) A. Sick Leave Balances
Employees with sick leave balances may retain balances as a sick leave bank. Sick leave accrued before June 30, 2015 may be used as personal time off (PTO) or may be retained as a sick leave bank.

B. Sick Leave Buy Out
Upon separation of employment, other than retirement, the employee shall be entitled to be paid for 50% of their sick leave balance accumulated at the time of such termination.

Upon retirement, the employee shall be entitled to be paid for 50% of any accumulated sick leave in excess of that for which retirement credit is given.

In the event the employee is terminated by virtue of a conviction of a felony or any other illegal act, the City shall have no obligation to provide sick leave buy-out.

G.2.Personal Necessity Leave
Employees may use accrued sick leave or PTO leave in the event of the personal illness or injury of a family member, including father, mother, sibling, spouse, registered domestic partner, child, stepchild, grandparent, or in-laws.

G.3.Bereavement Leave
Up to a maximum of five (5) days of paid leave will be granted per occurrence in the case of the death of a family member, including father, mother, brother, sister, spouse, child, step parent, step child, grandparent, grandchild, in-laws, registered domestic partner, child of registered domestic partner or any other member of the immediate household.

G.4.Paid-Time Off (PTO)
A. Accrual Rate
PTO Accruals are based upon full years of consecutive employment.

Employees shall earn PTO according the rates set out in the following table.

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Compensation and Benefits Plan (amended 7/1/2026)
Effective the first full pay period in July 2026, accruals earned will be as follows:

Years of Service Hours Earned
per Pay Period
Hours Earned per
Month
Less than 5 9.231 20.000
5 to 6 10.154 22.000
7 to 8 10.462 22.667
9 to 10 10.769 23.333
11 to 12 11.077 24.000
13 to 14 11.385 24.667
15 11.692 25.333
16 plus 12.000 26.000
17 12.308 26.667
18 12.615 27.333
19 12.923 28.000
20 plus 13.231 28.667
B. PTO Accumulation for Employees
PTO shall not be accrued any time the employee’s PTO balance exceeds 400 PTO hours.

A. PTO Buy-Back Program
Employees may sell back to the City up to 80 hours of their PTO/Vacation in any calendar year if both of the following conditions are met:
• The employee has used (taken) at least 40 hours of PTO/vacation during the preceding calendar year; and
• The employee must have at least 40 hours of PTO/vacation remaining after the buy-back of some of the accumulated vacation.

On or before the pay period that includes December 15 of each calendar year, an employee may make an irrevocable election to cash out up to eighty (80) hours of accrued vacation (in whole hour increments), which will be earned in the following calendar year at the employee’s base rate of pay. On the pay day for the pay period that includes Thanksgiving in the following year, the employee will receive cash for the amount of vacation the employee irrevocably elected to cash out in the prior year. However, if the employee’s vacation leave balance is less than the amount the employee elected to cash out (in the prior calendar year) the employee will receive cash for the amount of leave the employee has accrued at the time of the cash out.

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Compensation and Benefits Plan (amended 7/1/2026)
B. PTO/Vacation Payout
PTO leave balance shall be paid out at the base rate of pay upon employee’s separation from employment.

G.5.Paid Holidays
Paid holidays will be calculated at eight (8) hours of holiday pay for full-time employees and will be calculated at six (6) hours of holiday pay for 30-hour weekly employees. Holiday pay is paid at the base hourly rate (8 hours x base pay, or 6 hours x base pay).

A. Paid Holiday Observation
Unless otherwise provided, when a holiday falls on a Sunday, the following Monday shall be observed; when a holiday falls on a Saturday, the prior Friday shall be observed. When a holiday falls during an employee’s regularly scheduled time off, the working day immediately preceding, or immediately following such holiday, shall be observed as a holiday with the determination of the City Manager.

B. Paid Holiday Schedule
Employees shall receive annually the following nine (9) paid holidays:

Paid Holiday Schedule

1. New Year’s Day

2. Memorial Day

3. Independence Day

4. Labor Day

5. Veteran’s Day

6. Thanksgiving Day

7. Thanksgiving Holiday/Day after Thanksgiving

8. Christmas Eve Day

9. Christmas Day
G.6.Floating Holidays
Employees shall receive six (6) floating holidays each fiscal year.

Employees may select the date upon which they shall use any floating holiday, subject to scheduling needs of the City. If a floating holiday is not used within the fiscal year, the time shall be forfeited.

With the approval of the City Manager, floating holidays denied due to staffing shortages or other operational reasons will be paid or accumulated, at the employee’s choice, at the end of the fiscal year. The employee will have the burden to prove the request was made in a timely manner and then denied.

A. Prorated Allocation for New Employees
Employees shall have the number of floating holidays prorated based upon their date of hire as follows:

Date of Hire Number of Floating Days
July 1 to August 31 6 floating holidays
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Compensation and Benefits Plan (amended 7/1/2026)
September 1 to October 31 5 floating holidays
November 1 to December 31 4 floating holidays
January 1 to February 28 (29) 3 floating holidays
March 1 to April 30 2 floating holidays
May 1 to June 30 1 floating holiday
G.7.Paid Holiday Closure
While an MOU is in term with MEA, (i.e. not expired) the City shall establish a Holiday Closure for non - holiday workdays beginning Christmas Eve through New Year' s Day for employees covered in this Plan. The maximum of closure hours shall be 32 hours.

For 2026 the holiday closure dates shall be:
- Monday - December 28th
- Tuesday – December 29th
- Wednesday – December 30th
- Thursday – December 31st
Subsequent years for the closure shall be enumerated in the subsequent MEA MOU or by side letter as negotiated. In the event the MEA MOU expires without a subsequent agreement or side letter extension, the Holiday Closure shall end as well for employees covered in this Plan.

A. Employee will receive 8 hours of straight time pay for each holiday closure day. If an employee is on an alternative work schedule, i.e. 10 hour days, employees shall use leave accruals for the remaining daily pay.

B. During the Holiday Closure, the City shall designate departments or divisions which will close operations to the public.

C. The City may designate employees as exempt from the holiday closure due to operational needs of the City. Such determination regarding exemption, shall be made by the respective department head and may be subject to final approval by the City Manager.

D. If an employee is scheduled to work (excluding standby) during the Holiday Closure, they will receive a bank of holiday closure hours for the actual number of hours worked during the designated closure day. Such hours are to be used during the calendar year following Christmas, (2027 for 2026). Employees who do not use the hours in the designated calendar year shall forfeit the hours at the end of the calendar year. Banked Holiday Closure hours shall have no cash out value.

E. Employees covered by this Agreement must be in a City full-time paid status ( i. e., not on an unpaid leave of absence, etc.) prior to December 23rd in the year to be eligible for Holiday Closure under this Section.

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Compensation and Benefits Plan (amended 7/1/2026)
H. Working Conditions
H.1. Step Advancement
A. Step Eligibility
Employees are eligible for a salary step increase upon their hire date anniversary, last reclassification/promotion/classification change anniversary, or after the completion of 2,080 hours of paid service from their last step increase, whichever is longer (step eligibility date), and upon successful performance. Time spent on legally protected leaves of absence such as FMLA or California Family Rights Act (CFRA) count towards step increase eligibility.

A step increase is discretionary and may be withheld due to marginal performance. Please refer to the City’s Administrative Policy and Procedure Manual.

B. Step Increase Effective Date
The effective date of the step increase shall be the first full pay period following the employee’s step eligibility date.

H.2.Work Outside Business Hours
Department Head Group employees receive management incentive compensation to recognize the unique aspects of the normal job duties. Management employees are expected to:

A. Regularly attend City Council Meetings and/or a City Advisory Board(s); to include preparation and presentation of agenda items; and
B. Regularly work on special projects, or City initiatives that may require work hours before or after normal business hours as well as be required to work weekends.

C. Be the first to staff the department outside of normal business hours, including weekends, when there is a critical need to complete work and/or during a natural disaster or emergency.

Management employees who do not work outside business hours as listed above or similarly, will forfeit the management incentive compensation. The City Manager will monitor.

H.3.Uniform Allowance
The City will contribute a $92.50 monthly uniform allowance for the sworn police personnel in the Department Head Group.

H.4.Call-Back Vehicles
The City will provide the Chief of Police with a vehicle for emergency response during off-duty time.

H.5.Personal Use Cell Phone Stipend
The City will pay a cell phone stipend of $50 per month (taxable) for employees using their personal cell phone for City-related business. Employees receiving this stipend shall keep the cell phone in service (voice & data) at all assigned times and shall maintain the phone in proper working order at the employee’s expense. No employee will be allowed the personal cell phone stipend if they also maintain a City-provided cell phone. The City has no financial responsibility for upgraded, lost, or damaged personal cell phones.

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Compensation and Benefits Plan (amended 7/1/2026)
Employees receiving the personal use cell phone stipend must provide their cell phone number to the City and have it published in the internal City directory. City-related communications made on a personal cell and the City-issued cell phone are subject to disclosure under the Public Records Act. Employees must provide City-related personal cell phone records upon request.

H.6.At-Will Status and Severance Pay
Employees in this Group are in the general service (i.e. at-will employees). For purposes of this Plan, general service or at-will status shall mean the City has right to terminate the employment relationship for any reason, with or without cause, with or without notice, without further obligation or liability except for the severance pay option provided under this Plan. This provision supersedes any contrary oral agreements between the City and any Department Head Group employee.

The City need not state reasons for release of an at-will or general service employees, and such employees have no right or expectation to have release or post-release proceedings, hearings, or appeals, except persons subject to the Public Safety Officer Procedural Bill of Rights (Govt.

Code Section 3300 et seq). Specifically, the Chief of Police shall be afforded the protections of subdivision (c) of Section 3304 of the Government Code.

The following positions are at-will and subject to general service. These employees have no right to return to employment in a former position or a right to employment in a former position, or a right to employment in any other position within the City by reason of their employment status:
• Administrative Services Director
• Assistant City Manager
• Chief of Police
• City Clerk
• City Clerk/DEI Coordinator
• Community Development Director
• Deputy City Manager
• Deputy City Manager/Public Works Director
• Library Director
• Human Resources Director
• Public Works Director
No statement, whether oral or written, or conduct may change such status, except a formal resolution of the Council resolved at a duly held meeting adopting a change of the terms of this Plan. Apart from the Council at a duly noticed meeting no person employed by the City has the authority to modify the at-will or general service status of such of Department Head Group employees. The City Manager has discretion to include additional positions to this list.

A. Severance Option
Such at-will or general service employees shall be entitled to a severance option to receive one week of severance pay for each full year of completed service with the City for up to a maximum of four weeks if involuntarily terminated by the City following completion and execution of the City severance agreement. The amount of each week of severance pay shall be equivalent to the total salary for one week plus the pro rata share of the amount the City would have paid towards health benefits for that week.

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Compensation and Benefits Plan (amended 7/1/2026)
Employees terminated for illegal activities, gross malfeasance or dereliction of duties or absence from employment without a good cause are not eligible for this severance option.

H.7.Discipline
The City will generally follow progressive discipline guidelines as outlined in the Pacific Grove Municipal Code Section 4.20.410 Discipline of officers and employees and the APPM; however, nothing in Section 4.20.410 modifies the at-will nature of the employment status for employees in this Department Head Group.

I. Continuing Education and Professional Development
I.1. Tuition Reimbursement
The City shall reimburse eligible tuition expenses up to $3,000 per fiscal year. Courses must be work-related and be pre-approved by the City Manager prior to enrolling. Classes must be taken during the employee’s off-duty hours for which the employee is not receiving any form of compensation from the City. Employees must obtain a grade B or better for reimbursement.

Upon successful completion of the course, the employee shall submit a request for reimbursement to the City Manager, with a grade record or other suitable certification, and proof of payment.

The tuition reimbursement program may be suspended at any time with or without notice pending City finances. However, reimbursement requests for courses pre-approved and inprocess will be honored.

J. Term
The term of this Plan shall commence July 1, 2021 and shall continue in force until amended.

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.

CITY OF PACIFIC GROVE
Compensation and Benefits Plan
Non-Represented Management and
Confidential Group
July 1, 2021 (amended 7/1/2026)
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1 | Page Non-Represented Management and Confidential Group Compensation and Benefits Plan (amended 7/1/2026)
Contents

1. Purpose and Intent .......................................................................................................................... 2

2. Unit Description............................................................................................................................... 2

3. Compensation.................................................................................................................................. 3

4. Insurance Benefits ........................................................................................................................... 3

2. Fitness Reimbursement ................................................................................................................... 6

3. Retirement....................................................................................................................................... 6

4. Leave Provisions............................................................................................................................... 8

5. Working Conditions .......................................................................................................................12

6. Continuing Education and Professional Development..................................................................14

7. Term...............................................................................................................................................14 PGCC 6-17-26

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City of Pacific Grove
Non-Represented Management and Confidential Group
Compensation and Benefits Plan
Effective July 1, 2021

1. Purpose and Intent
This Compensation and Benefits Plan (Plan) is intended to establish compensation, benefits and terms and conditions of employment for Non-Represented Management, Police Commander (Administrative and Operations), and Confidential employees not represented by a bargaining group (collectively, the Non-Represented Management and Confidential Group or Unit). The City Manager has the authority to hire employees for classifications in the Non-Represented Management and Confidential Group, and to adjust their compensation consistent with this Plan.

With the exception of the Deputy City Clerk, employees in the Non-Represented Management and Confidential Group are exempt from the Fair Labor Standards Act (FLSA). The Non-Represented Management and Confidential Group are at-will employees, serve at the pleasure of the City Manager, and can be terminated with or without notice or cause and with no rights of appeal.

The Non-Represented Management and Confidential Group will receive the same improvements or concessions to the working conditions and benefits as the Management Employee’s Association (MEA). The Non-Represented Management and Confidential Group may make recommendations to the Benefits and Compensation Plan to the City Manager on or about the same time when the MEA’s Memorandum of Understanding has been approved by the City Council.

2. Unit Description
The covered employees in this unit consist of regular employees of the City of Pacific Grove (City) occupying positions in the job classes set forth below. Classes are not necessarily exclusive. The City Manager has the right to add classifications to this group.

Confidential:
• Deputy City Clerk (Non-exempt)
• Management Analyst (Exempt) (Assigned to Payroll or Human Resource functions) Non-Represented Management
• Police Commander, Administrative (Sworn and Exempt)
• Police Commander, Operations (Sworn and Exempt)
• Program Manager, Senior (Exempt)
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3. Compensation

3.1. Salary
Salaries for this unit are listed in the salary schedule as approved by City Council and published on the City’s website.

3.2. Management Time Compensation for Exempt Unit Employees Due to the unique aspects of their normal job duties, exempt employees shall receive Management Time Compensation in lieu of paid management leave, overtime, or compensatory time in the amount of 3% of base salary. Non-exempt employees are ineligible.

3.3. Salary Steps
Salary steps for classifications in this unit span from one (1) to seven (7) steps. Steps one (1) to five (5) have an approximate 5% salary difference between steps. Steps six (6) through seven (7) have an approximate 3.75% (former longevity steps), or 5% salary difference between steps depending on classification.

3.4. Bilingual Pay
Bilingual pay is $200 monthly for Spanish speaking skills used in assignments that routinely and consistently require Spanish communication skills. The Department Head will make a determination with City Manager approval, if Spanish bilingual skills are being used routinely and consistently.

Employees may test and pass the test for Spanish (verbal) skills. Bilingual Pay is effective the first full pay period after HR receives the passing results. If the assignment changes and there is no longer a need for Spanish speaking skills, the bilingual pay will be removed at the next full pay period.

If the employee fails the Spanish test, they may retest after 6 months.

4. Insurance Benefits

4.1. Employee Health Plan Eligibility
The City contracts with the California Public Employees’ Retirement System (CalPERS) for participation under the Public Employees Medical and Hospital Care Act (Government Code Section 22750, et. seq. [“PEMHCA”]), for the purpose of providing medical insurance benefits for employees, and employees who have retired from employment with the City and who constitute “annuitants” as defined by PEMHCA.
a) Unit employees shall be entitled to participate in the City-sponsored group health plans including medical, dental, and vision as well as optional benefits. b) Eligible employees enrolling in the group health plans within 60 days following their appointment with the City will be covered subject to the contract limitation with the group health plan carrier. Coverage shall commence when the employee is eligible for coverage under CalPERS rules and the group health plan carriers’ rules. c) Human Resources will notify employees of annual open enrollment periods to change group health plans or enroll in additional benefits - unless the employee can certify a qualifying loss of coverage allowing such a change. (an eligible spouse, domestic partner, or minor child requiring health coverage because of a court order; new children by birth or adoption, or placement of PGCC 6-17-26

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adoption; new family members due to marriage or domestic partnership registration; or those whose health plan was cancelled due to an involuntary loss of coverage).

4.2. City Paid Health Premiums
a) City shall pay the employer required statutory minimum contribution for eligible employees and annuitants (as defined by Government Code section 22760) enrolled in the CalPERS health plans as required by PEMHCA.
b) Health care premiums include medical, dental and vision. c) In addition to the PEMHCA contribution set forth above, and for active City employees participating in any three health plans: medical, dental and vision:

Effective for July premiums in 2026, the employer contribution will increase to the chart amounts below.

Plan Enrollment Level Monthly Employer Contribution (amount excludes PEMHCA)
Employee Only $997.50
Employee + 1 Dependent $1,548.75
Employee + 2 or More Dependents $2,073.75

1.1. City Dental Contribution
The City shall contribute toward the monthly premium for employees participating in group dental effective with the July 2026 premiums. The employer contribution amount is listed below.

Plan Enrollment Level Monthly Employer Contribution
(amount excludes PEMHCA)
Employee Only $4.44
Employee + 1 Dependent $8.96
Employee + 2 or More Dependents $10.92

1.2. Rate of Contribution Cash In Lieu
Beginning January 2021, employees who are not currently grandfathered in the cash-in-lieu program may opt out of health (medical, dental and vision) during open enrollment and receive $250 per month taxable cash in lieu ($115.38 for each twenty-six pay periods). Employees who receive the cash-in-lieu, must provide proof of other coverage for medical.

1.3. Proof of Other Coverage
Employees who opt out of the City’s medical plan and receive cash in lieu must provide the following:
(a) proof the employee and all individuals for whom the employee intends to claim a personal exemption deduction (“tax family”) have, or will have, minimum essential coverage through another source (other than coverage in the individual market, whether or not obtained through Covered California) for the plan year to which the opt out arrangement applies (“opt out period”);
and
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(b) the employee must sign an attestation that the employee and their tax family have, or will have, such minimum essential coverage for the opt out period. An employee must provide the attestation every plan year at open enrollment or within 30 days after the start of the plan year.

1.4. Section 125 Plan
Employees may elect to participate in three Section 125 programs offered by the City, as well as optional programs. The available programs are Pre-Tax Premium Option, Dependent Care, and Flexible Spending Account. Each of these programs shall be administered in accordance to the IRS Code. For purposes of information, the following provides a description of the programs. • Pre-Tax Premium Option: Permits payment of health insurance premiums subject to salary deduction with pre-tax income.
• Dependent Care: Permits payment of eligible dependent care with pre-tax income. • Flexible Spending Account: Permits payment of eligible health care expenses not reimbursed by health insurance with pre-tax income.
• Optional Insurance Programs (e.g. AFLAC or other pre-tax offerings sponsored by the City).

1.5. 457 Deferred Compensation Plan
The City will match up to $100.00 per pay period of any member’s contribution to the City’s Deferred Compensation Plan authorized under the Internal Revenue Code Section 457.

1.6. Group Life Insurance
The City shall provide, at its cost, Group Life Insurance with Accidental Death and Dismemberment at a minimum benefit of $50,000.

1.7. Supplemental Short-Term/Long Term Disability Plan (STD/LTD) The City shall provide, at its cost, supplemental Short-Term and Long-Term Disability Insurance.

1.8. State Disability Income Protection Plan
Non-Represented Management and Confidential Group employees shall be covered by the State Disability Income (SDI) Protection Plan at their expense. The SDI benefit may be integrated with City PTO leave benefits.

1.9. Medicare
Medicare is withheld for employees.

1.10. Workers Compensation Salary Continuation
Unit members who suffer a bona fide on-the-job injury or illness, as determined under the provisions of the California Workers’ Compensation laws, and who, as a result of such injury or illness, are unable to work in their regularly assigned position or other position as determined by the City, will be entitled to receive full salary and benefits for the first 90 days of such absence from the date of the incurred injury or illness. No charge to the member’s sick leave, vacation, personal time off, or other compensatory time off or other leave will be made during the first 90 days from the date of the incurred injury. The City also offers a Disability Insurance policy that establishes additional benefits for absences due to disabilities.

If a claim has been filed with, but not yet finally accepted or rejected by, the City’s Worker’s Compensation provider, the employee will be required to use any accrued and available paid PGCC 6-17-26

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leave to cover their absence. If the claim is finally accepted, the employee’s leave banks will be restored for days actually used, up to 90 days.

FMLA/CFRA will automatically be activated for employee’s off work for a week. FMLA/CFRA will run until the employee returns to work. or until exhausted. FMLA/CFRA will mirror W/C leave even when intermittent.

2. Fitness Reimbursement

2.1. Fitness Reimbursement Program Overview
A. City will reimburse up to $500 per calendar year for employee’s personal fitness costs.

Eligible covered fitness reimbursement are listed below. o Fitness Classes (Yoga, Pilates, Cycling, etc.)
o Fitness Subscriptions (such as Peloton, etc.)
o Gym Membership
o Weight Management Programs (such as Weight Watchers)
o 5K, 10K, ½ marathons and marathon registration fees
B. Reimbursement for fitness expenses not listed above, will be subject to the City Manager's discretion and approval. To avoid declination of reimbursement, items not listed should be pre-approved by the City Manager, or designee. Declination of reimbursement for items not listed above are not grieveable.

C. Annual requests for reimbursement must be submitted by December 1st of calendar each year.

D. To be eligible for reimbursement, a requesting employee must be in active status and remain a current employee through December 31st of the year in which seeking reimbursement.

E. Subject to IRS guidelines, the fitness reimbursement is taxable income.

3. Retirement
Employees in this group are eligible for retirement benefits as provided under the law. Those plans and benefits are described in this section for informational purposes only. The City does not provide these benefits under a separate contract. Therefore, where there is a conflict between the description of benefits provided in this Plan and what is provided under CalPERS laws and regulations, the CalPERS laws and regulations shall govern.

The City’s CalPERS plans currently include a two-tiered retirement system to address Classic Members and New CalPERS Members as required by the California Public Employees’ Pension Reform Act (PEPRA) of 2013.

3.1. Definitions
The terms “Classic Member” and “New CalPERS members” are defined by CalPERS law and regulations, but in general, are construed to have the following meanings:

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A. Classic Member
“Classic Member” is determined by CalPERS through CalPERS rules and is typically defined as an employee who is not a “new member.”
B. New CalPERS Member
“New Member” is defined by CalPERS and generally means an individual who either:
• Becomes a member of CalPERS for the first time on or after January 1, 2013 and either (i) was not a member of any other public retirement system prior to that date or (ii) was a member of another public retirement system prior to that date but was not subject to reciprocity between their new employer’s plan and another public retirement system;
or
• Was an active member in CalPERS and, after a break in service of more than six months, returned to active membership in CalPERS with a new employer.

3.2. Service Pension for Classic Members
The retirement formula expressed in Government Code Section 21354 commonly known as “2% at 55” local miscellaneous members shall apply to covered Classic Members.

The retirement formula expressed in Government Code Section 21362.2 commonly known as “3% at 50” local safety members shall apply to covered Classic Members, to the extent required by PEPRA.

3.3. Cost Sharing - Service Pension for Classic Members The parties shall share the City’s contribution towards retirement benefits in accordance with Government Code Section 20516, subdivision (a), as follows:

• Classic Members subject to this Compensation and Benefits Plan who are local miscellaneous members shall pay 5% of the employer share of PERS costs in addition to the employee’s member contribution.
• Classic Members subject to this Compensation and Benefits Plan who are local safety members shall pay 5% of the employer share of PERS costs in addition to the employee’s member contribution.

3.4. Final Compensation for Classic Members
“Final Compensation” shall be applied for retirement purposes as specified in Government Code Section 20042, as one year’s highest compensation.

3.5. Credit for Unused Sick Leave for Classic Members
Employees shall be given service credit upon retirement for unused sick leave as specified in Government Code Section 20965.

3.6. New CalPERS Members Benefit Rate, Contribution and Final Compensation New CalPERS Local Miscellaneous and Local Safety Members shall receive and make contributions for PERS benefits in compliance with PEPRA.

A. Benefit Rate. Per Government Code 7522.20, New Local Miscellaneous (non-safety) Members benefit rate shall be 2% @ 62. New Local Safety Members benefit rate shall be

2.7% @57 in accordance with Government Code 7522.25.

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B. Contribution. New CalPERS Members shall pay 50% of the normal cost of their pension benefit.

C. Final Compensation. Final compensation is the three-year average of the final compensation period.

3.7. 1959 Survivor’s Allowance
The “1959 Survivor’s Allowance Fourth Level” as defined in Government Code Section 21574 shall apply to both Classic and New CalPERS Members. The employee cost is $2 per month.

3.8. Military Service Credit
Military Service Credit as defined in Government Code Section 21024 shall apply to both Classic and New CalPERS Members.

3.9. Continued Application
The City and the Non-Represented Management and Confidential Group (collectively, the Parties) agree that all elements of the CalPERS article shall have continued application until or unless it is amended by mutual agreement of the Parties.

4. Leave Provisions

4.1. Sick Leave (applies only to “Legacy” Employees, hired before June 30, 2015) A. Sick Leave Balances
Employees with sick leave balances may retain balances as a sick leave bank. Sick leave accrued before June 30, 2015 may be used as personal time off (PTO) or may be retained as a sick leave bank.

B. Sick Leave Buy Out
Upon separation of employment, other than retirement, the employee shall be entitled to be paid for 50% of their sick leave balance accumulated at the time of such termination.

Upon retirement, the employee shall be entitled to be paid for 50% of any accumulated sick leave in excess of that for which retirement credit is given.

In the event the employee is terminated by virtue of a conviction of a felony or any other illegal act, the City shall have no obligation to provide sick leave buy-out.

4.2. Personal Necessity Leave
Employees may use accrued sick leave or PTO leave in the event of the personal illness or injury of a family member, including father, mother, sibling, spouse, registered domestic partner, child, stepchild, grandparent, or in-laws.

4.3. Bereavement Leave
Up to a maximum of five (5) days of paid leave will be granted per occurrence in the case of the death of a family member, including father, mother, brother, sister, spouse, child, stepparent, step child, grandparent, grandchild, in-laws, registered domestic partner, child of registered domestic partner or any other member of the immediate household.

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4.4. Paid-Time Off (PTO)/Vacation
A. Accrual Rate
PTO Accruals are based upon full years of consecutive employment.

Employees shall earn PTO according the rates set out in the following table.

Effective the first full pay period in July 2026, accruals earned will be as follows:

Years of Service Hours Earned
per Pay Period
Hours Earned per
Month
Less than 5 9.231 20.000
5 to 6 10.154 22.000
7 to 8 10.462 22.667
9 to 10 10.769 23.333
11 to 12 11.077 24.000
13 to 14 11.385 24.667
15 11.692 25.333
16 plus 12.000 26.000
17 12.308 26.667
18 12.615 27.333
19 12.923 28.000
20 plus 13.231 28.667
B. PTO Accumulation
PTO shall not be accrued any time the employee’s PTO balance exceeds 400 PTO hours.

4.4.1. PTO/Vacation Buy-Back Program
Employees may sell back to the City up to 80 hours of their PTO/Vacation in any calendar year if both of the following conditions are met:
• The employee has used (taken) at least 40 hours of PTO/vacation during the preceding calendar year; and
• The employee must have at least 40 hours of PTO/vacation remaining after the buy-back of some of the accumulated vacation.

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accrued vacation (in whole hour increments), which will be earned in the following calendar year at the employee’s base rate of pay. On the pay day for the pay period that includes Thanksgiving in the following year, the employee will receive cash for the amount of vacation the employee irrevocably elected to cash out in the prior year. However, if the employee’s vacation leave balance is less than the amount the employee elected to cash out (in the prior calendar year) the employee will receive cash for the amount of leave the employee has accrued at the time of the cash out.

4.4.2. PTO/Vacation Payout
PTO/Vacation leave balance shall be paid out at the base rate of pay upon employee’s separation from employment.

4.5. Paid Holidays
Paid holidays will be calculated at eight (8) hours of holiday pay for full-time employees and will be calculated at six (6) hours of holiday pay for 30-hour weekly employees. Holiday pay is paid at the base hourly rate (8 hours x base pay, or 6 hours x base pay).

4.5.1. Paid Holiday Observation
Unless otherwise provided, when a holiday falls on a Sunday, the following Monday shall be observed; when a holiday falls on a Saturday, the prior Friday shall be observed. When a holiday falls during an employee’s regularly scheduled time off, the working day immediately preceding, or immediately following such holiday, shall be observed as a holiday with the determination of the City Manager.

4.5.2. Paid Holiday Schedule
Employees shall receive annually the following nine (9) paid holidays:

Paid Holiday Schedule

1. New Year’s Day

2. Memorial Day

3. Independence Day

4. Labor Day

5. Veteran’s Day

6. Thanksgiving Day

7. Thanksgiving Holiday/Day after Thanksgiving

8. Christmas Eve Day

9. Christmas Day

4.6. Floating Holidays
Employees shall receive six (6) floating holidays each fiscal year.

Employees may select the date upon which they shall use any floating holiday, subject to scheduling needs of the City. If a floating holiday is not used within the fiscal year, the time shall be forfeited.

With the approval of the City Manager, floating holidays denied due to staffing shortages or other operational reasons will be paid or accumulated, at the employee’s choice, at the end of the fiscal year. The employee will have the burden to prove the request was made in a timely manner and then denied.

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4.6.1. Prorated Allocation for New Employees
Employees shall have the number of floating holidays prorated based upon their date of hire as follows:

Date of Hire Number of Floating Days
July 1 to August 31 6 floating holidays
September 1 to October 31 5 floating holidays
November 1 to December 31 4 floating holidays
January 1 to February 28 (29) 3 floating holidays
March 1 to April 30 2 floating holidays
May 1 to June 30 1 floating holiday

4.7. Holiday Closure
While an MOU is in term with MEA, (i.e. not expired) the City shall establish a Holiday Closure for non - holiday workdays beginning Christmas Eve through New Year' s Day for employees covered in this Plan. The maximum of closure hours shall be 32 hours.

For 2026 the holiday closure dates shall be:
- Monday - December 28th
- Tuesday – December 29th
- Wednesday – December 30th
- Thursday – December 31st
Subsequent years for the closure shall be enumerated in the subsequent MEA MOU or by side letter as negotiated. In the event the MEA MOU expires without a subsequent agreement or side letter extension, the Holiday Closure shall end as well for employees covered in this Plan.

A. Employee will receive 8 hours of straight time pay for each holiday closure day. If an employee is on an alternative work schedule, i.e. 10 hour days, employees shall use leave accruals for the remaining daily pay.

B. During the Holiday Closure, the City shall designate departments or divisions which will close operations to the public.

C. The City may designate employees as exempt from the holiday closure due to operational needs of the City. Such determination regarding exemption, shall be made by the respective department head and may be subject to final approval by the City Manager.

D. If an employee is scheduled to work (excluding standby) during the Holiday Closure, they will receive a bank of holiday closure hours for the actual number of hours worked during the designated closure day. Such hours are to be used during the calendar year following PGCC 6-17-26

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Christmas, (2027 for 2026). Employees who do not use the hours in the designated calendar year shall forfeit the hours at the end of the calendar year. Banked Holiday Closure hours shall have no cash out value.

E. Employees covered by this Agreement must be in a City full-time paid status ( i. e., not on an unpaid leave of absence, etc.) prior to December 23rd in the year to be eligible for Holiday Closure under this Section.

5. Working Conditions

5.1. Step Advancement

5.1.1. Step Eligibility
Employees are eligible for a salary step increase upon their hire date anniversary, last reclassification/promotion/classification change anniversary, or after the completion of 2,080 hours of paid service from their last step increase, whichever is longer (step eligibility date), and upon successful performance. Time spent on legally protected leaves of absence such as FMLA or California Family Rights Act (CFRA) count towards step increase eligibility.

A step increase is discretionary and may be withheld due marginal performance. Please refer to the City’s Administrative Policy and Procedure Manual.

5.1.2. Step Increase Effective Date
The effective date of the step increase shall be the first full pay period following the employee’s step eligibility date.

5.2. Work Outside Business Hours
Exempt unit employees receive management incentive compensation to recognize the unique aspects of the normal job duties. Exempt unit employees are expected to:

A. Regularly attend City Council Meetings and/or a City Advisory Board(s); to include preparation and presentation of agenda items; and
B. Regularly work on special projects, or City initiatives that may require work hours before or after normal business hours as well as be required to work weekends.

C. Be the first to staff the department outside of normal business hours, including weekends, when there is a critical need to complete work and/or during a natural disaster or emergency.

Exempt unit employees who do not work outside business hours as listed above or similarly, will forfeit the management incentive compensation. The City Manager will monitor.

5.3. Uniform Allowance
The City will contribute a $92.50 monthly uniform allowance for uniformed police personnel in the Non-represented Management and Confidential Group.

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5.4. Call-Back Vehicles
The City will provide the Police Commander with a vehicle for emergency response during offduty time.

5.5. POST Certification Pay
Sworn Police Commander classifications who possess a POST Management Certificate shall receive a five percent (5%) certification pay.

5.6. Education Pay
Sworn Police Commander classifications who possess a master’s degree from an accredited college or university in a related field shall receive a five percent (5%) education pay.

5.7. Personal Use Cell Phone Stipend
The City will pay a cell phone stipend of $50 per month (taxable) for employees using their personal cell phone for City-related business. Employees receiving this stipend shall keep the cell phone in service (voice & data) at all assigned times and shall maintain the phone in proper working order at the employee’s expense. No employee will be allowed the personal cell phone stipend if they also maintain a City-provided cell phone. The City has no financial responsibility for upgraded, lost, or damaged personal cell phones.

Employees receiving the personal use cell phone stipend must provide their cell phone number to the City and have it published in the internal City directory. City-related communications made on a personal cell and the City-issued cell phone are subject to disclosure under the Public Records Act. Employees must provide City-related personal cell phone records upon request.

5.8. At-Will Status and Severance Pay
Employees in this Group are in the general service (i.e. at-will employees). For purposes of this Plan, general service or at-will status shall mean the City has right to terminate the employment relationship for any reason, with or without cause, with or without notice, without further obligation or liability except for the severance pay option provided under this Plan. This provision supersedes any contrary oral agreements between the City and any Non-Represented Management and Confidential Group employee.

The City need not state reasons for release of an at-will or general service employees, and such employees have no right or expectation to have release or post-release proceedings, hearings, or appeals, except persons subject to the Public Safety Officer Procedural Bill of Rights (Govt.

Code Section 3300 et seq). Specifically, the Police Commander shall be afforded the protections of subdivision (c) of Section 3304 of the Government Code.

The following positions are at-will and subject to general service. These employees have no right to return to employment in a former position or a right to employment in a former position, or a right to employment in any other position within the City by reason of their employment status:
• Deputy City Clerk (Confidential, Non-exempt)
• Management Analyst (Confidential, Exempt)
• Police Commander, Administrative and Operations (Sworn and Exempt) • Program Manager, Senior (Exempt)
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No statement, whether oral or written, or conduct may change such status, except a formal resolution of the Council resolved at a duly held meeting adopting a change of the terms of this Plan. Apart from the Council at a duly noticed meeting no person employed by the City has the authority to modify the at-will or general service status of such of Non-Represented Management and Confidential Group employees. The City Manager has discretion to include additional positions to this list.

5.8.1. Severance Option
Such at-will or general service employees shall be entitled to a severance option to receive one week of severance pay for each full year of completed service with the City for up to a maximum of four weeks if involuntarily terminated by the City following completion and execution of the City severance agreement. The amount of each week of severance pay shall be equivalent to the total salary for one week plus the pro rata share of the amount the City would have paid towards health benefits for that week.

Employees terminated for illegal activities, gross malfeasance or dereliction of duties or absence from employment without a good cause are not eligible for this severance option.

5.9. Discipline
The City will generally follow progressive discipline guidelines as outlined in the Pacific Grove Municipal Code Section 4.20.410 Discipline of officers and employees and the APPM; however, nothing in Section 4.20.410 modifies the at-will nature of the employment status for employees in this Non-Represented Management and Confidential Group.

6. Continuing Education and Professional Development

6.1. Tuition Reimbursement
The City shall reimburse eligible tuition expenses up to $3,000 per fiscal year. Courses must be work-related and be pre-approved by the City Manager prior to enrolling. Classes must be taken during the employee’s off-duty hours for which the employee is not receiving any form of compensation from the City. Employees must obtain a grade B or better for reimbursement.

Upon successful completion of the course, the employee shall submit a request for reimbursement to the City Manager, with a grade record (or other suitable certification), and proof of payment.

The tuition reimbursement program may be suspended at any time with or without notice pending City finances. However, reimbursement requests for courses pre-approved and inprocess will be honored.

7. Term
The term of this Plan shall commence July 1, 2021 and shall continue in force until amended.

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Agenda No. 13 C

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Matthew Mogensen, City Manager
MEETING DATE: June 17, 2026
SUBJECT: Authorization for Staff to Explore the Feasibility of Expanding Paid Parking CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Authorize staff to explore the feasibility of expanding paid parking on Ocean View Boulevard and report back to the City Council for further consideration and direction.

1. 2. Alternatively, discuss and take other action related to this item.

DISCUSSION
Pacific Grove welcomes a significant number of visitors throughout the year. Ocean View Boulevard (OVB), especially is a popular location for visitors with access to the recreation trail, coastline, seal viewing area, Lovers Point, and points of interest outside the City boundary such as the Monterey Bay Aquarium and Cannery Row. Currently, the City of Monterey maintains paid parking generally throughout the Cannery Row/Monterey Bay Aquarium area. The meter rates are $2.25 per hour and up to $50 for the day in the parking structures on peak weekends. Pacific Grove parking is free to park except for spaces immediately adjacent to the American Tin Cannery (ATC) property. Free time limited parking exists on Sloat Avenue in the residential area and Central Avenue in the commercial area. On OVB, there are no time limitations between 1st Street and Fountain Avenue and parking is free. Due to the convenience of free parking with no time limitations, many visitors of Cannery Row or other visitor servicing destinations in the vicinity will park in Pacific Grove and walk a few blocks to the Aquarium.

The same is true for Central Avenue and the residential blocks in between.

Exploration of Paid Parking Expansion
As part of the City's efforts to find ways to generate revenue for visitor serving impacts, staff is requesting City Council direction to explore the feasibility of expanding the existing Coastal Development Permt approved paid parking area that currently exists around the ATC. The ultimate intention of this effort would be to generate revenue from visitors that will fund the service demands that PG experiences with the high volume of visitors to the coastline. The service demands placed on PG for providing the one-of-a-kind visitor experience include: high wear and tear on the coastal trail and coastal bluff, additional public safety enforcement to remind visitors of rules and cite offenders, added maintenance demands on Lovers Point and its restrooms, and increased traffic enforcement due to the high traffic volumes. Presently, there are not many other opportunities for visitors to support these services through contributions through sales taxes or other means.

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If directed, staff will explore the feasibility of paid parking expansion beyond the existing 101 parking meters to other areas in the City starting with Ocean View Blvd. This will include, but not be limited to, consulting with the Coastal Commission to learn more about the possibilities or restrictions, investigating ways that free parking can still be provided to residents, what sort of parking permit districts would be required in order to ensure residents are not adversely impacted in the surrounding area and any feedback local business may have.

Once staff has gathered adequate facts and information for the City Council to consider, staff will return to a future City Council Meeting for further discussion, public input and direction.

OPTIONS

1. Direct staff to explore paid parking in other areas of the City.

2. Do not authorize staff to explore feasibility of paid parking expansion.

FINANCIAL IMPACT:

There is no financial impact as a result of this discussion.

FOCUSED PRIORITY AREA: Financial Sustainability
PGCC 6-17-26