CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
7/14/2025
1 SUBJECT:
Resolutions approving the Memorandums of Understanding (MOUs) between the City of Pacifica and the following represented labor groups: 1) Teamsters Union Local 856 Miscellaneous; 2) Teamsters Union Local 856 Wastewater; 3) Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400; 4) Pacifica Police Officers Association; 5) Pacifica Police Management Association; and 6) Pacifica Police Supervisors Association for the period of July 1, 2025 through June 30, 2028.
RECOMMENDED ACTION:
Adopt the resolutions approving the Memorandum of Understanding between the City of Pacifica and 1) Teamsters Union Local 856 Miscellaneous; 2) Teamsters Union Local 856 Wastewater; 3) Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400; 4) Pacifica Police Officers Association; 5) Pacifica Police Management Association; and 6) Pacifica Police Supervisors Association; for the period of July 1, 2025, through June 30, 2028, including the revised salary schedules effective July 1, 2025, July 1, 2026, and July 1, 2027. 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:
Zach Harris, Human Resources Manager
650-339-3461
[email protected]
Yulia Carter, Assistant City Manager
650-501-6004
[email protected]
Marisol Gómez, Director of Finance and Administrative Services 650-501-0257
[email protected]
BACKGROUND:
The current Memoranda of Understanding with all bargaining groups within the City expired on June 30, 2025.
The City of Pacifica (City) has negotiated in good faith and reached an agreement with the represented groups regarding wages, hours, and other terms and conditions of employment in accordance with the Meyers-Milias-Brown Act (MMBA):
1) Teamsters Union Local 856 Miscellaneous; 2) Teamsters Union Local 856 Wastewater; 3) Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400; 4) Pacifica Police Officers Association; 5) Pacifica Police Management Association; and 6) Pacifica Police Pacifica City Council 2
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Supervisors Association. The above-mentioned labor groups and the City reached terms for a successor of Memorandum of Understanding (MOU), which expired on June 30, 2025. The specific terms are reflected in the attached Tentative Agreements (TA).
DISCUSSION:
Challenging Fiscal Realities
Fiscal and organizational stability is one of the Council's top priorities. While the City continues to provide quality programs and services, as underscored during the FY 2025-26 budget development process, it is becoming increasingly difficult to do so in a financially sustainable manner without identifying and pursuing additional long-term revenue sources.
The City's tax revenue base remains significantly lower than the majority of Bay Area cities, even with the voter-approved 2022 Measure Y Transaction and Use Tax and increase in the Transient Occupancy Tax to 15% in 2024. Despite these measures, the City's long-term financial outlook remains unsustainable to maintain current levels of municipal services and address future fiscal challenges. Projected revenue losses from recent changes to the ShortTerm Rental Ordinance, and reduced Cannabis Tax revenues have further contributed to a significant, ongoing multi-million-dollar structural deficit. At the same time, the cost of delivering services continues to rise due to inflation, increased personnel costs, and unfunded liabilities related to pension and OPEB. On June 23, 2025, the City Council adopted the City Manager’s recommended budget-balancing strategies, which included one-time policy adjustments such as reallocating Excess ERAF, pausing the annual pension trust contribution, and utilizing debt service fund relief to offset upcoming payment obligations. While these measures were necessary to achieve a balanced budget for FY 2025-26, they are not sustainable long-term solutions and underscore the urgency of identifying ongoing revenue sources to ensure the City’s fiscal stability.
On July 2, the second day of the new fiscal year, the City received notice that the adopted State Budget reduced the amount of Vehicle License Fee (VLF) backfill funding the City had anticipated by $772,000. In anticipation of this potential outcome, the City Council had previously approved a contingency strategy to offset the shortfall by reducing General Fund reserves in FY 2025-26. As a result, the adopted budget is no longer structurally balanced but instead relies on one-time use of fund balance and other temporary measures that may not be viable or available in future years.
Challenging Labor Market
The 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 ongoing challenges presented by the highly competitive Bay Area labor market. Like many public agencies in the region, the City continues to face significant recruitment and retention difficulties, with a historical turnover rate of approximately 16.8%. Turnover rate was calculated by dividing the number of full-time employee separations during the fiscal year by the average number of full-time employees over the same period. These challenges often result in multiple recruitment efforts for key professional and management positions. Replacing these roles is often difficult, timeconsuming, frequently resulting in the loss of valuable institutional knowledge, and placing additional increased demands on staff for training and onboarding of new employees.
On average, the City is running a vacancy rate of approximately 12% translating into 22-23 vacant positions at any given time. This continuing staffing challenge is due in part to the fact Pacifica City Council 3
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that over 95% of City job classifications fall below market in total compensation, ranging from as little as 5% to as much as over 30% below comparable positions in other agencies in San Mateo County. However, as outlined above, the City does not have sufficient resources to bring them all to the market median at once.
While the FY 2025-26 Adopted Budget does not include assumptions regarding the outcome of current labor negotiations, addressing this structural and organizational challenge remains a clear City Council priority.
Two years ago, as part of the labor contracts that recently expired, the City Council authorized a compensation strategy focused on equity. Specifically, the Council approved targeted, classification-specific equity adjustments based on how far below market each classification was placed. This thoughtful and strategic approach (aligned with the Council’s commitment to fiscal and organizational stability) helped improve the City’s overall market positioning. As a result, the City was able to reduce its average vacancy rate from 16.8% and successfully fill several critical roles, including key positions at the Division Manager and Department Director levels.
Despite these efforts, the City remains uncompetitive in many classifications, and the worsening fiscal outlook has made it increasingly difficult to maintain progress initiated during the last negotiations. Nevertheless, instead of reverting to concession bargaining, a traditional approach during times of structural deficits, the City is continuing an equity-driven strategy that reflects its ongoing priority to attract and retain a talented workforce. This strategy includes budgeting for salary savings equivalent to 5% of total salaries and benefits. While this is not a fiscally sustainable practice, it is a necessary short-term measure given current financial realities and critical staffing priorities.
Compensation Framework
The Council reaffirmed its commitment to addressing these issues through the adopted Strategic Plan, specifically Strategic Goal #1: Enhance Organizational and Fiscal Stability. The Council authorized the City's management team to pursue labor agreements that include targeted equity adjustments for classifications more than 5% below market, in addition to costof-living adjustments (COLA) for all classifications to help improve market placement for those severely below market and maintain market alignment where it already exists. Per Council’s direction, this strategy places particular emphasis on public safety classifications, which play a critical role in protecting the community and ensuring the continuity of essential emergency and safety services. These efforts are especially sensitive, given the critical staffing challenges in the Police Department, which is currently operating with four vacant sworn positions and five officers out on medical or other leave, straining the department’s ability to maintain core patrol and response services.
While the current labor package reflects the City's best efforts within limited fiscal constraints, it is not sufficient on its own to fully address the City’s market competitiveness. Looking ahead, the labor market is expected to remain a significant challenge in the coming years. Continued progress will require not only sustained investments in the workforce but also strategic revenue enhancement to provide the resources necessary to improve market placement and maintain service delivery. Without additional ongoing revenue, the City’s ability to attract, retain, and support a high-performing workforce, and deliver critical services to the community, will remain at risk.
Each negotiated MOU provides an annual COLA wage increase, specified below, and the continuation of the city contribution towards the deferred compensation plan that was set to expire on June 30, 2025.
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In addition, a structured equity adjustment was proposed as a Citywide framework to gradually bring all City classifications to market over time, consistent with the City’s previously adopted compensation philosophy. Under the proposed framework, members whose salaries were more than 5% below market, would receive an equity adjustment outlined in the table below, and would additionally receive a one percent (1%) COLA increase for FY 2025 / 26, and FY 2026 /
27. Members who are less than the 5% below market threshold would receive a one and half percent (1.5%) COLA increase for FY 2025 / 26, and FY 2026 / 27. Members who are in the 20- 25% below market range would receive a two percent (2%) COLA wage increase, plus a onetime additional step increase to their classification’s top step for a total of seven percent (7%) adjustment to top-step salary in the third year of the contract. Members in the 25+% below market range would receive a 2% COLA and two additional 5% step increases will be added to their classifications in year three, resulting in total 12% adjustment to top-step salary, subject to the standard 5% annual merit-based step progression.
These structured equity adjustments were proposed as a Citywide framework approach to all labor groups in order to gradually bring all City classifications to market over time, consistent with the previously developed compensation philosophy. They are tied directly to how far below market each classification currently falls, based on data from the Citywide Total Compensation Survey conducted by an independent classification and compensation consulting firm.
The equity adjustments range from 1% to 5% in years 1-2 of the contract, and COLA are outlined in the table below:
In year 3, all employees receive a 3% COLA adjustment, except for those classifications eligible for extra steps based on their current market placement. Those classes will receive 2% COLA in the third year of the contract
With Pacifica's persistently low staffing levels and below-market employee compensation compared to peer agencies, and limited revenue sources to fund critical services, infrastructure and other capital needs, this labor package represents a significant and strategic Council investment in the City workforce. It reflects the Council’s strong commitment to maintaining high-quality municipal services by supporting City staff, even within a constrained fiscal environment, as a key priority for long-term organizational stability.
The terms of the agreements for each of the bargaining groups are listed below:
Teamsters Union Local 856 Miscellaneous and Teamsters Union Local 856 Wastewater:
The City engaged in multiple bargaining sessions with the Teamsters Union Group with the Pacifica City Council 5
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intention of negotiating a new contract that included an equity adjustment framework, described above, designed to bring certain classifications in line with salaries at comparable agencies to address existing disparities in the labor market. Throughout these discussions, The Teamsters Union Local 856 Miscellaneous and Teamsters Union Local 856 Wastewater Employee Group elected to proceed with a flat three percent (3%) annual COLA wage increase, in each contract year, applicable to all members of the groups, forgoing the equity adjustment structure described above that would have provided a higher increase to those positions furthest from market median. Teamsters Union Local 856 Miscellaneous were shown to have the following number of classifications in the below market range: 0-5%, 2 classifications; 5-10%, 12 classifications; 10-15%, 8 classifications; 15-20%, 5 classifications; and 20+%, 2 classifications.
Teamsters Union Local 856 Wastewater Employee Group were shown to have the following number of classifications in the below market range: 5-10%, 2 classifications; 10-15%, 1 classification; and 20+%, 2 classifications.
In addition to the COLA adjustment, unit represented employees of the Police Department miscellaneous who are required to wear uniforms not provided by the City shall receive a uniform allowance for the purchase and maintenance of uniforms and will receive a uniform allowance of seven hundred and fifty dollars ($750) per year. Individuals in the position of the mechanic will be reimbursed up to five hundred dollars ($500) per year for personal purchase of tools used at the work site.
Bargaining Unit members with 5 years of service shall receive an extra floating holiday each year. Bargaining Unit members with more than 10 years of service shall receive an additional floating holiday (total of 2 additional floating holidays).
Police Department miscellaneous employees, subject to Chief approval, shall receive an additional one hundred dollars ($100) per month for performance of bilingual duties. Unit represented employees must pass a proficiency test to be determined by the City in that language.
Unit represented employees required to wear steel-toed safety shoes in the performance of their job duties shall receive an allowance of three hundred dollars ($300) each year.
Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400:
The City shall improve the salary schedule for all of the Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400 by six percent (5% equity and 1% COLA) effective July 1, 2025, and July 1, 2026. The City shall improve the salary schedule for all Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400 by two percent (2%) effective July 1, 2027. The FY2027/28 salary schedule will reflect two additional step increases.
Any unit represented member who is not at the top step of the revised schedule shall receive a step increase on their anniversary date until such time as they reach the top of the schedule.
Pacifica Police Officers Association:
The City shall improve the salary schedule for Police Officers by three percent (3%) effective July 1, 2025, and July 1, 2026. The City shall improve the salary schedule for Police Corporal by four percent (4%) effective July 1, 2025, and July 1, 2026. The City shall improve the salary schedule for all Pacifica Police Officers Association bargaining unit classifications by two percent (2%) effective July 1, 2027. The FY2027/28 salary schedule will reflect an additional step increase per given priority to public safety classifications. Any unit represented member who is not at the top step of the revised schedule shall receive a step increase on their anniversary date until such time as they reach the top of the schedule.
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In addition to the COLA adjustment, the City will continue the one percent (1%) City match on 457 Deferred Compensation through the duration of the contract.
A unit represented employee assigned to work as a canine officer will receive the overtime rate for four (4) hours per week of canine duties based upon a separate hourly rate equal to the greater of $20.00 per hour or the California minimum wage.
Pacifica Police Supervisors Association:
The City shall improve the salary schedule for all Pacifica Police Supervisors Association bargaining unit classifications by three percent (3%) effective July 1, 2025, and July 1, 2026.
The City shall improve the salary scheduled for all Pacifica Police Supervisors Association bargaining unit classifications by two percent (2%) effective July 1, 2027.
In addition to the COLA adjustment, the City will continue the one percent (1%) City match on 457 Deferred Compensation through the duration of the contract.
To align with emerging standards in law enforcement leadership development, unit-represented employees who complete the Sherman Block Supervisory Leadership Institute (SBSLI) and obtain POST certification will receive an additional $125 per month.
To support internal career advancement and recognize long-term service, the agreement provides that sworn employees promoted from within the Pacifica Police Department into the Pacifica Police Supervisors Association unit will receive a merit salary increase of 5% or be placed at the bottom step of the new salary range, whichever is greater. In addition, unitrepresented employees with more than 15 years of service with the City will continue receiving an additional 1% increase to their base salary in recognition of their continued dedication and tenure.
Pacifica Police Management Association:
The City shall improve the salary schedule for all Pacifica Police Management Association bargaining unit classifications by three percent (3%) effective July 1, 2025, and July 1, 2026.
The City shall improve the salary scheduled for all Pacifica Police Management Association bargaining unit classifications by two percent (2%) effective July 1, 2027. The FY2027/28 salary schedule will reflect an additional step increase. Any unit represented member who is not at the top step of the revised schedule shall receive a step increase on their anniversary date until such time as they reach the top of the schedule.
In addition to the COLA adjustment, the City will continue the one percent (1%) City match on 457 Deferred Compensation through the duration of the contract.
To recognize and reward long-term service, the agreement includes a longevity incentive providing an additional 1% increase to base salary for unit-represented employees who have completed more than 15 years of service with the City of Pacifica.
The redlined copy of the agreements are attached with the respective resolutions. After Council approval, Staff will ensure the Compensation and Benefits Plan is 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.
ALTERNATIVE ACTION:
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The City Council may choose not to approve the proposed Memoranda of Understanding (MOUs) at this time and may direct staff to return to the negotiating table to pursue additional modifications. However, because these agreements are the result of a meet-and-confer process conducted in good faith under the Meyers-Milias-Brown Act (MMBA), any material changes would require the agreement of the respective labor group(s) and may delay implementation.
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 2025-26 fiscal impact associated with the labor agreements for 1) Teamsters Union Local 856 Miscellaneous; 2) Teamsters Union Local 856 Wastewater; 3) Pacifica Fire Fighters Association and San Mateo County Fire Fighters IAFF 2400; 4) Pacifica Police Officers Association; 5) Pacifica Police Management Association; and 6) Pacifica Police Supervisors Association, is estimated to be approximately $662k, with $542k in General Fund. The second year of the contract will result in an additional incremental increase of nearly $1.2 million. The third year of the contract will result in an additional incremental increase of nearly $1.8 million.
The current FY 2025-26 Budget will be amended during the mid-year budget review to include this increased cost and corresponding salary savings for a net zero change across all affected funds. The following FY 2026-27 and FY 2027-28 budgets 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
ATTACHMENT LIST:
Attachment A: Resolution for approving MOU for IAFF (PDF) Attachment B: AppendixA_IAFF_Redline FINAL (DOCX)
Attachment C: Resolution for approving MOU for Teamsters Misc 856 (PDF) Attachment D: AppendixA_Misc856Redline FINAL (DOCX)
Attachment E: Resolution for approving MOU for WW856 (PDF) Attachment F: AppendixA_WW-856_Redline FINAL(DOCX)
Attachment G: Resolution for approving MOU for PPMA/PPSA (PDF) Attachment H: AppendixA_PPMAPPSARedline FINAL (DOCX)
Attachment I: Resolution for approving MOU for PPOA (PDF) Attachment J; AppendixA_PPOA FINAL (DOCX)