CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
7/10/2023
1 SUBJECT:
Resolutions Approving the Memorandums of Understanding (MOUs) between the City of Pacifica and the following represented labor groups: 1) Pacifica Battalion Chiefs, IAFF Local 2400; 2) Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400; 3) Management Employees Teamsters Local 350; 4) Teamsters Union Local 856 Miscellaneous; 5) Pacifica Police Officers Association; 6) Pacifica Police Management Association; and 7) Pacifica Police Supervisors Association for the period of July 1, 2023 through June 30, 2025.
RECOMMENDED ACTION:
Adopt resolutions approving the Memorandum of Understanding between the City of Pacifica and: 1) Pacifica Battalion Chiefs, IAFF Local 2400; 2) Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400; 3) Management Employees Teamsters Local 350; 4) Teamsters Union Local 856 Miscellaneous; 5) Pacifica Police Officers Association; 6) Pacifica Police Management Association; and 7) Pacifica Police Supervisors Association; for the period of July 1, 2023 through June 30, 2025, including the revised salary schedule effective July 1, 2023 and July 1, 2024. After Council approval, staff will ensure the MOUs are properly cleaned up, and all technical corrections are made, including any remaining typos, fixing the tables of contents, finalizing the documents for signature, and eventually posting online.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
(650)738-7301
[email protected]
Irene Camarena, Human Resources Manager
(650)738-7303
[email protected]
BACKGROUND:
The current Memoranda of Understanding with all bargaining groups within the City expired on June 30, 2023.
The City of Pacifica (City) has met and negotiated in good faith wages, hours, and other terms and conditions of employment for represented employees with the following labor organizations in accordance with the Meyers-Milias-Brown Act (MMBA):
1) Pacifica Battalion Chiefs, IAFF Local 2400; 2) Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400 Bargaining Unit; 3) Management Employees Teamsters Local 350; 4) Teamsters Union Local 856 Miscellaneous; 5) Pacifica Police Officers Association; 6) Pacifica Police Management Association; and 7) Pacifica Police Supervisors Association.
The above-mentioned labor groups and the City reached terms for a successor Memorandum of Understanding (MOU), which expired on June 30, 2023. The specific terms are reflected in the attached Tentative Agreements (TA).
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The City and the vast majority of the labor groups have completed negotiations early enough to ensure a seamless transition into the new fiscal year and to be able to bring to Council the full, red-lined Memorandum of Understandings (MOU) tonight with the salaries, benefits, and other terms and conditions of employment already incorporated (see Attached MOUs). After Council approval, staff will have some additional minor technical changes and clean-up work including ensuring the correction of any remaining typos, fixing the tables of contents, and finalizing the documents for signature and eventually posting online. Staff will ensure that final MOUs comport with the Tentative Agreements and are fully executed and posted online.
DISCUSSION
Fiscal and organizational stability is one of the Council's top priorities as the City continues to provide quality programs and services in a financially sustainable manner. In the previous years, the City's long-term financial forecast projected a significant multi-million dollar ongoing structural deficit.
Because Pacifica residents approved Measure Y Transaction and Use Tax during the last elections, the Council adopted a structurally balanced FY 2023-24 Budget on June 26, 2023.
Although the passage of Measure Y was a considerable achievement for Pacifica that resolved the City's ongoing structural deficit, the updated financial outlook only covers the current level of municipal services. The projected revenues from Measure Y will not be sufficient to address other critical organizational needs. The cost to deliver services and City operations has increased due to inflation, personnel costs, and unfunded liabilities related to pension and OPEB. Although Measure Y essentially helped balance the budget deficit, the City's tax revenue base remains significantly lower than the majority of Bay Area cities, and the City's long-term financial outlook is not sustainable to address future fiscal challenges.
Specifically, the difficult labor market remains one of the ongoing challenges the City will likely continue facing in the upcoming years.
Staff has previously shared with the Council the challenging labor market condition in the Bay Area. Like many Bay Area agencies, the City has been experiencing critical recruitment and retention challenges (over 30% turnover rate), having to conduct multiple recruitments for the most critical professional and management positions and their replacement is often challenging, taking a long time and often results in loss of institutional knowledge and substantial training and onboarding needs.
On average, the City is running a 10-15% vacancy rate, translating into 19-28 vacant positions at any given time. This is partially because more than 2/3 of City classifications appear below market in total compensation. Yet, the City does not have sufficient resources to bring them all to the market median at once.
Although the Adopted FY 2023-24 Budget does not include any assumptions for the outcome of the labor negotiations with all labor groups, the City Council made a commitment to start addressing this structural, organizational challenge as part of their recently adopted Strategic Plan and specifically, strategic goal #1 to Enhance Organizational and Fiscal Stability. The Council authorized the City's management team to negotiate labor agreements that include the citywide targeted equity adjustments to those classifications that are significantly (over 5%) below market, in addition to regular cost-of-living adjustments (COLA) to all classifications to help keep those positions currently at market as such.
Each negotiated MOU provides for a two percent 2% annual COLA wage increase, and continuation of the City contribution towards the deferred compensation plan, plus structured equity adjustment in each contract year. The structured equity adjustments were presented as a Pacifica City Council 3
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Citywide long-term framework approach to all labor groups to eventually bring all City classifications to market per previously developed compensation philosophy. The structured equity adjustments are based on how far below market compensation for a specific classification falls according to the Citywide Total Compensation Survey conducted by the independent classification and compensation consulting firm. The structured equity adjustments ranged from 1%-4% each year of the contract, as illustrated in the table below:
With Pacifica's perennial low staffing levels and below-market employee compensation compared to cities in our region, and limited revenue sources to fund critical infrastructure and other capital projects, this unprecedented package represents a strong commitment by the City Council to maintain the high level of municipal services by supporting this extraordinary investment in City staff to address the ongoing recruitment and retention challenges while maintaining long-term financial sustainability. The Council also committed to amending the FY 2023-24 Budget to include increased labor costs once the new agreements are approved and executed.
In addition to these economic terms, the new agreements include some non-economic updates and clarified language related to several citywide provisions, including bereavement, grievances, etc.
The attached Tentative Agreements (EXHIBIT A-G) highlight the additional changes specific to each bargaining unit. The Teamsters Union Local 856 Wastewater Treatment Plant is the only remaining labor group within the City that has not completed contract negotiations. Although a tentative agreement was reached with the negotiation committee, the membership of Teamsters 856 Wastewater has voted it down twice. The City’s negotiations team will continue labor meetings with this group into the new fiscal year. Individual resolutions authorizing the execution of the Memorandum of Understanding with members of each Bargaining Unit are also attached in the agenda packet as Exhibits A1-G1.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
The recommended action is consistent with the following Council goal: "Enhance organizational and fiscal stability" includes strategies to improve staff retention, recruitment, mental health, and wellness resources and increase staffing for rising workloads.
FISCAL IMPACT:
The FY 2023-24 fiscal impact associated with these agreements is estimated to be approximately $1.4 million, with $1.2 million in General Fund. The second year of the contract will result in an additional incremental increase of nearly $1.1 million, including $0.9 million in the General Fund. The current FY 2023-24 Budget will be amended in a future meeting, and the Pacifica City Council 4
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following FY 2024-25 budget will also include built in salary savings assumptions to accommodate the increased salaries and benefits over the life of these agreements.
ORIGINATED BY:
Human Resources
City Manager
ATTACHMENT LIST:
EXHIBIT A - Signed TA - Pacifica Battalion Chiefs, IAFF Local 2400 (PDF) EXHIBIT B - Signed TA - PFFA and San Mateo County FF IAFF 2400 (PDF) EXHIBIT C - Signed TA Management Employees Teamsters Local 350 (PDF) EXHIBIT D - Signed TA - Teamsters Local 856 Miscellaneous (PDF) EXHIBIT E - Signed TA - Pacifica Police Officers Association (PDF) EXHIBIT F - Signed TA - Pacifica Police Management Association (PDF) EXHIBIT G - Signed TA - Pacifica Police Supervisors Association (PDF) Attachment 1 - MOU BC Redlined for Council Ratification (PDF) Attachment 2 - MOU FF-IAFF Redlined for Council Ratification (PDF) Attachment 3 - MOU TEAMSTERS 350 MGMT Redlined for Council Ratification (PDF) Attachment 4 - MOU TEAMSTERS 856 MISC Redlined for Council Ratification (PDF) Attachment 5 - MOU PPMA & PPSA Redlined for Council Ratification (PDF) Attachment 6 - MOU PPOA Redlined for Council Ratification (PDF) RESOLUTION BC-IAFF 2400 - EXHIBIT A1 (DOCX)
RESOLUTION FF-IAFF 2400 - EXHIBIT B1 (DOCX)
RESOLUTION MGMT-TEAMSTERS 350 - EXHIBIT C1 (DOCX)
RESOLUTION TEAMSTERS 856 MISC - EXHIBIT D1 (DOCX)
RESOLUTION PPOA - EXHIBIT E1 (DOCX)
RESOLUTION PPMA - EXHIBIT F1 (DOCX)
RESOLUTION PPSA - EXHIBIT G1 (DOCX)