City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: June 16, 2025
Report #:2505-4737
TITLE
Adoption of Memoranda of Agreement with International Association of Fire Fighters (IAFF) Local 1319, Fire Chiefs Association (FCA), and Utilities Managers and Professionals Association of Palo Alto (UMPAPA) for Terms Ending June 30, 2028, and Adoption of the Updated Management and Professional Compensation Plan and Corresponding Salary Schedules; CEQA Status – Not a Project
RECOMMENDATION
Staff recommend that the City Council:
1) Adopt the Memoranda of Agreement (MOAs), and all associated salary schedules, between the City of Palo Alto and the:
a. International Association of Fire Fighters (IAFF) Local 1319; b. Fire Chiefs Association (FCA);
c. Utilities Managers and Professionals Association of Palo Alto (UMPAPA); and 2) Adopt the updated Management and Professional Compensation Plan covering unrepresented employees and the associated salary schedules, effective the first full pay period following Council adoption through June 30, 2028
BACKGROUND
As a public agency under California law, the City of Palo Alto must meet and confer in good faith with recognized employee organizations on matters relating to wages, hours, and terms and conditions of employment. Following thoughtful and thorough negotiations, City representatives reached tentative agreement with IAFF, FCA, and UMPAPA. IAFF, FCA, and UMPAPA have ratified the tentative agreement. An updated compensation plan has been developed for the City’s unrepresented management and professional employees.
These agreements align with the City's labor strategy to emphasize recruitment and maintaining competitive salaries to attract top talent; to continue improving employee retention and reduce turnover, and to foster a positive work environment to continue being an Employer of Choice. Each agreement builds upon key themes of equity, competitiveness, and
operational sustainability as well as focusing on fiscal responsibility. The current agreements expire on June 30, 2025.
ANALYSIS
These agreements reflect a coordinated effort to standardize core elements across bargaining groups and the City’s unrepresented workforce, supporting long-term financial planning and operational consistency. General wage increases and health care contribution adjustments are applied uniformly; each agreement also includes tailored adjustments—such as market-based or certification-related compensation—that address the distinct needs of each group. These targeted adjustments are intended to strengthen the City's ability to attract and retain talent in competitive labor markets and will be detailed in the subsequent sections. Additionally, language updates across the agreements improve clarity, align with current practices, and support operational efficiency.
Common Elements Across All Agreements and Compensation Plan:
• Term: July 1, 2025 – June 30, 2028 (3-year term)
• Cost of Living Adjustments (COLA):
ο FY 2026: 3%
ο FY 2027: 3%
ο FY 2028: 3%
• Medical Contributions:
ο July 2025: alignment with SEIU (all units will be on one flat rate) ο Jan 2026: None
ο Jan 2027: 4% increase in flat-rate contributions
ο Jan 2028: 4% increase in flat-rate contributions
• Market-Based or Certification-Based Enhancements (Unit Specific)
IAFF – International Association of Fire Fighters, Local 1319 Unit Description: The International Association of Fire Fighters represents front-line fire personnel including Firefighters, Apparatus Operators, Fire Captains, and Inspection. This unit is comprised of 96 full time equivalent “FTE” and is responsible for daily fire suppression and prevention activities.
This agreement supports continuity of emergency response services and sustainable staffing enhancements creating a pathway for future Council direction around use of single role classifications and promotes long-term retention of trained public safety professionals through introduction of an education-based incentive program.
Summary of Specifics:
• Market-based Adjustments
ο FY 2026: None
ο FY 2027: 0.75%
ο FY 2028: 0.75%
• Education Incentive
ο FY 2026: None
ο FY 2027: Tier 1: 2.5%
ο FY 2028: Tier 2: 5%
FCA – Fire Chiefs’ Association
Unit Description: The Fire Chiefs’ Association represents Fire Battalion Chiefs “BC” who oversee, manage, and supervise day to day operations of the fire department. This unit is comprised of four FTE: three shift BCs and one training BC. The City has at least one Battalion Chief on duty at all times.
This agreement ensures equity and alignment between our BC classifications and the line staff who they supervise. Considering fiscal constraints in the FY 2026 budget process, FCA and City representatives collaborated to develop cost-savings through deferred compensation without roll-up and to move the majority of market-based adjustments to later years of the agreement.
Summary of Specifics:
• Market-based Adjustments
ο FY 2026: 1.5%
ο FY 2027: None
ο FY 2028: 2%
• Deferred Compensation
ο FY 2026: Increase to $300/month (previously $220/month) ο FY 2027: Increase to $600/month
ο FY 2028: Remain at $600/month
UMPAPA – Utilities Managers and Professionals Association of Palo Alto Unit Description: Represents managers, engineers, and professionals across Utilities Operations, including Electric, Water, Gas, Wastewater, and Fiber. The unit is comprised of 54 FTE.
The agreement provides targeted adjustments for positions key to completing large-scale projects, such as grid modernization, in an effort to promote, attract, and retain staff in hard- to-fill technical and regulatory roles.
Summary of Specifics:
• 6% strategic market adjustment for Electrical Engineering positions (Principal, Manager) • 4% strategic market adjustment for WGW Engineering positions (Principal, Manager)
• Market adjustment of 0.7% for the Administrative job family
Management and Professional Compensation Plan (Unrepresented) Group Description: The Management and Professional Compensation Plan covers managers and professionals not represented by a labor union. The group is comprised of 247.75 FTE. These employees span department directors, division managers, supervisors and analysts from all city departments.
This compensation reinforces internal equity and consistency with represented counterparts and ensures a minimum salary differential between managerial/supervisory classifications and the represented classifications they supervise.
Summary of Specifics:
• Targeted compaction-based increases to the salary range to ensure differential from supervised classifications for: Senior Technologist, Chief Transportation Official, Public Safety Communications Manager, and Manager Solid Waste. Adjustments to the range do not necessarily result in a corresponding salary increase to the incumbents in the position unless to address a current compaction issue. Any individual adjustments will be done at the discretion of the City Manager in alignment with the Management and Professional Compensation Plan.
• $500 increase in Management excess benefit (from $2,500/year to $3,000/year) • Creation of the Principal Transportation Engineer Classification to improve the management oversight of the transportation engineering work. The salary of this new position will be 7% above the Senior Engineer. The Table of Organization will be amended to add a 1.00 FTE Principal Transportation Engineer position and eliminate a
1.00 Senior Engineer position as part of the FY 2026 Budget Adoption (Staff Report # 2503-4250) also scheduled for the June 16, 2025 City Council meeting.
FISCAL/RESOURCE IMPACT
Adoption of the MOAs for IAFF, FCA, and UMPAPA and the updated Management and Professionals compensation plan will result in estimated cost increases of $14.5 million in the General Fund and $22.4 million across all funds over the three-year term, ending June 30, 2028.
The first-year contract costs are incorporated into the FY 2026 budget, scheduled for adoption on June 16, 2025 (Staff Report # 2503-4250). Costs for years two and three of the contracts were included in the General Fund long-range financial forecast and financial forecasts for the City‘s various utilities; however, final estimates may vary based on actual staffing levels, classification changes, and health plan enrollment.
STAKEHOLDER ENGAGEMENT
All MOAs and compensation plans were ratified by the respective bargaining units and reviewed by internal stakeholders. Following Council adoption, documents will be publicly posted.
ENVIRONMENTAL REVIEW
The proposed Council action is not a project under the California Environmental Quality Act (CEQA), as it involves organizational and administrative activities. (CEQA Guidelines, Section 15378(b)(2))
ATTACHMENTS
Attachment A: MOA – IAFF Local 1319
Attachment B: MOA – FCA
Attachment C: MOA – UMPAPA
Attachment D: Management & Professional Compensation Plan Attachment E: IAFF Local 1319 Salary Schedule
Attachment F: FCA Salary Schedule
Attachment G: UMPAPA Salary Schedule
Attachment H: Management and Professional Salary Schedule
APPROVED BY:
Sandra Blanch, Human Resources Director