City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: January 12, 2026
Report #:2512-5752
TITLE
Adoption of Memorandum of Agreement with Service Employees International Union Hourly Unit effective upon adoption through December 31, 2027; and Adoption of Compensation Plan for Unrepresented Limited Hourly Employee effective upon adoption through June 30, 2028; CEQA Status - Not a project
RECOMMENDATION
Staff recommends:
1. Council adopt the updated Salary Schedule and Compensation Plan for unrepresented Limited hourly employees, effective through June 30, 2028 (Attachment A and B); and
2. Council adopt an updated Salary Schedule and Memorandum of Agreement for Service Employees International Union Hourly Unit, effective through December 31, 2027 (Attachment C and D).
BACKGROUND
Represented hourly employees covered by SEIU (Service Employees’ International Union) is a group of approximately 130 hourly employees who typically work under 1,000 hours in a fiscal year. Unrepresented limited hourly employees typically work less than 416 hours per fiscal year. These employees often perform seasonal work and, depending on the season, there are approximately 115 limited hourly employees. These employees are primarily found in Library, Community Services, Public Works and Utilities Departments. Classifications range include Library Clerk, Arts and Science Professional, Administrative Specialist, Recreation Leader, Open Space Technician, and General Laborer.
The current Memorandum of Agreement for SEIU-Hourly expired June 30, 2025. The SEIU- Hourly unit negotiation team opted to start negotiations after the expiration of the contract; The City continued to engage and maintained negotiation readiness before the end of Fiscal Year 2025 as required by the contract. The parties did actively negotiate in good faith and
reached an agreement that will begin upon Council adoption and continue through December 31, 2027.
ANALYSIS
It is consistent with the City’s practice and ongoing labor strategy to keep classifications with the same title and general nature of work and assignments compensated at similar, if not identical, hourly rates. Therefore, the staff recommendations for the changes in wages and benefits for SEIU- Hourly and limited hourly employees are as follows:
SEIU-Hourly:
Wages:
o3% wage increase effective the first full pay period following adoption by City Council.
o3% wage increase effective the first full pay period following July 1, 2026. Medical Stipend:
o4% stipend increase effective the first full pay period following adoption by City Council to $3.96 per hour.
o4% stipend increase effective the first full pay period following July 1, 2026 to $4.11 per hour.
oOne-time payment of $100 for those actively working in the first full pay period following City Council adoption.
In addition, SEIU – H agreed to the following revision which will streamline performance evaluation practices and improve recruitment timelines to fill hourly vacancies when needed:
Increase probationary length from 6 months to 12 months to align with general unit providing consistent time to train and evaluate performance of new employees. Decrease required job posting time supporting timely, competitive and efficient hiring while maintaining flexibility to have lengthier postings when needed.
Limited Hourly:
3% wage increase effective the first full pay period following adoption by City Council. 3% wage increase effective the first full pay period following July 1, 2026. 3% wage increase effective the first full pay period following July 1, 2027.
This Council staff report is being submitted concurrent to the SEIU-H ratification of the attached MOA (Attachment C). The City was notified by SEIU Hourly on December 19, 2025 that its membership ratified the new MOA.
FISCAL/RESOURCE IMPACT
Approval of the recommended agreements will result in an estimated cost of approximately $108,000 in FY 2026, which reflects the pro-rated impact of the initial wage increase and medical stipend adjustment for the remainder of the current fiscal year. These immediate costs will be absorbed within the General Fund’s existing FY 2026 appropriations.
Costs are estimated to increase to approximately $284,000 in FY 2027 as the initial increases are realized for a full year and the second wage increase effective July 1, 2026, is implemented.
For Fiscal Year 2028, the estimated cost is $348,000. This figure captures the full implementation of the agreements, including the final scheduled wage increase for the Limited Hourly unit. Consequently, the total cumulative cost to the General Fund over the full term of the agreements is estimated at approximately $740,000. The total cumulative cost across all funds is estimated at $1.0 million, which includes approximately $260,000 in costs attributable to the Enterprise Funds.
The ongoing structural impact to the General Fund base budget is estimated at $348,000 annually beginning in FY 2028, reflecting the fully annualized cost of all negotiated wage and stipend adjustments for both groups.
The City's current FY 2027–2036 Long Range Financial Forecast (LRFF) includes a standard 2% percent assumption for future labor cost increases but does not reflect the specific terms of these agreements. Staff will incorporate the incremental costs above this baseline into the Base Case during the upcoming annual budget development process to ensure long-term alignment with the City's financial plan.
STAKEHOLDER ENGAGEMENT
City staff will post the SEIU - Hourly Unit Memoranda of Agreement, the Limited Hourly Compensation Plan and salary schedules on the City’s website after Council adoption for public access. Human Resources will communicate the changes to the terms of this agreement and Compensation Plan to highlight in job postings to attract new talent and fill hourly position vacancies as needed and approved.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because adoption of this MOA and Compensation Plan is a continuing administrative activity. CEQA Guidelines section 15378(b)(2).
ATTACHMENTS
Attachment A: Limited Hourly Compensation Plan 2025 - 2028 Attachment B: Limited Hourly Salary Schedule 2025 – 2028 Attachment C: SEIU Hourly MOA 2025 - 2027
Attachment D: SEIU Hourly Salary Schedule 2025 - 2027
APPROVED BY:
Sandra Blanch, Human Resources Director