CITY COUNCIL STAFF REPORT
DATE: MAY 27, 2026 CONSENT CALENDAR
SUBJECT: APPROVE SIDE LETTER AGREEMENT MODIFYING ARTICLE 22 OF THE PALM SPRINGS POLICE OFFICERS’ ASSOCIATION MOU TO
INCLUDE HOLIDAYS RECOGNIZED
FROM: Scott C. Stiles, City Manager
BY: Human Resources
SUMMARY:
The City Council will consider approval of a Side Letter Agreement between the City of Palm Springs (City) and the Palm Springs Police Officers’ Association (PSPOA) to clarify language in Article 22 of the current Memorandum of Understanding (MOU) regarding recognized holidays and holiday-in-lieu pay. The Side Letter ensures the MOU language aligns with current City-recognized holidays and confirms compliance with California Public Employees’ Retirement System (CalPERS) reporting requirements related to special compensation.
RECOMMENDATION:
Approve Side Letter of Agreement between City of Palm Springs and Palm Springs Police Officers’ Association modifying Article 22 of the MOU to reflect current holidays for which members receive holiday-in-lieu pay and clarifying that such compensation is reported to CalPERS in accordance with applicable regulations.
BACKGROUND:
The City of Palm Springs and the Palm Springs Police Officers’ Association (PSPOA) have met and conferred in good faith and maintain a current Memorandum of Understanding (MOU) governing wages, hours, and other terms and conditions of employment for the period of July 1, 2025 through June 30, 2028.
As part of ongoing administration of the MOU, the City and PSPOA periodically enter into side letter agreements to clarify or update specific provisions without reopening negotiations or making substantive changes to the overall agreement.
City Council Staff Report
May 27, 2026 -- Page 2
Modifying Article 22 of the PSPOA MOU to Include Holidays Recognized The attached Side Letter Agreement modifies Article 22 of the MOU to reflect the City’s currently recognized holidays for which employees receive holiday-in-lieu pay. In lieu of observing holidays in a traditional manner, employees in classifications requiring continuous staffing receive holiday-in-lieu compensation distributed evenly across pay periods.
Additionally, the Side Letter clarifies that this holiday-in-lieu pay qualifies as special compensation and will continue to be reported to CalPERS in the pay period earned, consistent with Title 2, California Code of Regulations Sections 571(a)(5) and 571.1(b)(4).
Holiday-in-lieu pay has historically been reported as special compensation for eligible employees, and this Side Letter is intended to memorialize and reaffirm that long-standing practice to ensure ongoing compliance with CalPERS requirements. The Side Letter does not create a new benefit, increase compensation, or otherwise modify the substantive terms of the existing MOU.
Both the City and PSPOA are in agreement with the terms of this Side Letter.
STAFF ANALYSIS:
The proposed Side Letter Agreement modifies Article 22 of the MOU to include an updated and comprehensive list of City-recognized holidays for which employees receive holiday-in-lieu pay. Clarifying this language ensures continued alignment with California Public Employees’ Retirement System (CalPERS) requirements regarding the reporting of special compensation.
By explicitly identifying the holidays associated with this compensation, the Side Letter supports the classification of holiday-in-lieu pay as pensionable compensation pursuant to Title 2, California Code of Regulations Sections 571(a)(5) and 571.1(b)(4). This clarification is consistent with the City’s long-standing practice of reporting this pay as special compensation and helps ensure that such reporting remains compliant and defensible.
The proposed changes are administrative in nature and do not modify the amount, structure, or eligibility of holiday-in-lieu pay. The Side Letter does not create a new benefit or increase compensation, but rather formalizes existing practice and provides additional clarity within the MOU.
The Palm Springs Police Officers’ Association (PSPOA) has reviewed the proposed Side Letter Agreement and concurs with the clarifying updates to Article 22. Both parties acknowledge that the revisions accurately reflect current practice and are intended to ensure continued compliance with CalPERS reporting requirements. The Side Letter reflects a mutual understanding between the City and PSPOA and demonstrates the collaborative approach taken to maintain clear, compliant, and administratively sound provisions within the MOU.
City Council Staff Report
May 27, 2026 -- Page 3
Modifying Article 22 of the PSPOA MOU to Include Holidays Recognized ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve agreements for the above-mentioned bargaining units, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT:
There is no fiscal impact.
REVIEWED BY:
Department Director: Stephanie George
City Manager: Scott Stiles
ATTACHMENTS:
A. Side Letter with PSPOA