City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: June 15, 2026
Report #:2604-6203
TITLE
Adoption of Amended Salary Schedules for Service Employees‘ International Union, Utilities Management and Professional Association of Palo Alto, International Association of Fire Fighters, and Unrepresented Management and Professional Employees and Limited Hourly groups; and Adoption of Side letters for the International Association of Fire Fighters, Fire Chiefs‘ Association, and Palo Alto Police Officers‘ Association and Amendments to the FY 2027 Table of Organization to Reclassify 1.0 Economic Development Manager and 1.0 Treasury Manager - CEQA Status - Not A Project.
RECOMMENDATION
Staff recommends City Council:
1. Adopt the Amended Salary Schedule for Service Employees‘ International Union (SEIU)
2. Adopt the Amended Salary Schedule for Utilities Management and Professional Association of Palo Alto (UMPAPA)
3. Adopt the Amended Salary Schedule for the Unrepresented Management and Professional Employees and amendments to the FY 2027 Table of Organization to:
a. Reclassification: Add 1.0 Economic Development Manager and delete 1.0 Assistant to the City Manager
b. Reclassification: Add 1.0 Treasury Manager and delete 1.0 Treasury, Debt, and Investments Manager
4. and Adopt the Amended Salary Schedule for International Association of Fire Fighters (IAFF) and corresponding Side Letters
5. Adopt the Side Letter for Palo Alto Fire Chiefs‘ Association (FCA)
6.Adopt the Amended Salary Schedule for the Unrepresented Limited Hourly group
7. Adopt the Side Letter for Palo Alto Police Officers‘ Association (PAPOA)
BACKGROUND
Under the Meyers Milias Brown Act “MMBA”, organized labor groups have a right to meet and confer over the impacts of changes to wages, benefits, and working conditions applied to job classifications within their bargaining unit. The City has fulfilled its requirement to meet and confer with represented groups on changes included in the staff recommendation.
The City's labor strategy emphasizes the successful recruitment of top-quality employees and maintaining competitive salaries to continue being an Employer of Choice, which also results in continuing to improve employee retention and decrease in turnover. Effective recruiting involves understanding the job market, industry trends, and adapting to current conditions as needed.
Following last year’s labor negotiations, staff continued to address a few outstanding compensation and classification updates. Staff brings amendments to the following Salary Schedules adopted by Council: International Association of Fire Fighters (IAFF), Utilities Management and Professional Association of Palo Alto (UMPAPA), Service Employees International Association, Local 521, the Unrepresented Management and Professional Employees and Limited Hourly groups.
In the Fiscal Year 2026 Budget Adoption, Council approved the creation of the Single Role classifications of Emergency Medical Technician (EMT) and Paramedic. Through a collaborative meet and confer with IAFF, the parties have reached the attached Side Letter Agreement and amended Salary Schedule defining the wages and benefits for these non-sworn classifications.
All other classification additions or adjustments are described in detail below.
Amending salary schedules and classification titles requires following the California Public Employees Retirement System (“CalPERS”) administrative rules that every classification in active use by an employer have a publicly adopted salary schedule or range within which the member organization will compensate employees. This publicly adopted salary schedule or range is the official document utilized for any employee final compensation factored by CalPERS for future pension calculations or obligations.
Additionally, in response to the FY27 Annual Budget Finance Committee and City Council recommendations, staff brings a side letter agreement with PAPOA to allow for a hiring incentive to be provided to lateral officers upon approval by City Manager.
ANALYSIS
Staff have completed the required meet and confer process required for each of the changes.
The classifications adjusted in this report include:
SEIU: Senior Utility Field Service Representative, Senior Utility Systems Operator, Customer Service Representative, Senior Maintenance Mechanic and Utility Field Service Representative
IAFF: Single Role classifications: EMT and Paramedic
UMPAPA: Senior Business Analyst
MGMT: Senior Business Analyst, Economic Development Manager, Laboratory Manager, Treasury and Revenue Collections Manager
SEIU:
Senior Utility Systems Operator: Adopting the staff recommendation and revised salary schedules is an administrative step related to the Council’s previous approval of the SEIU Memorandum of Agreement (MOA) and direction through the budget process to create the Senior level of the Utility Systems Operator. In alignment with the SEIU MOA, this classification will be paid 7% above the journey level classification.
Customer Service Representative: Per the SEIU MOA, the incumbents in this classification filed for a Reclassification in the fall of 2022. After extensive review of the classification by the Utilities Department management and HR staff, there was a finding of an increased expectation of technical understanding and depth of knowledge in order to provide the necessary level of service to the community. These classifications not only provide Palo Alto customers with answers to billing related questions, but also analyzes and provides education various energy efficiency, water conservation, solar and citywide climate objectives. This first line support allows for efficient delivery of accurate and up to date information on the City’s energy efficiency and sustainability programs. Those currently in the classification will receive a three percent (3%) increase in compensation for these additional expectations and certification in Water and/or Energy Efficiency trainings. This will result in additional salary costs that are anticipated to be limited and absorbed within the existing operating budget of the Utilities Department.
Senior Mechanic and Utility Field Service Representative (FSR): As required by the SEIU MOA Article 7 Section 6 – Assignment to a Lead or Senior Position, the pay range for the lead position shall be a minimum of seven percent (7%) above the pay step of the highest paid employee on the crew. The salary adjustment of 3% to the step range satisfies the contractual requirement of lead pay over Maintenance Mechanic Welders. The FSR pay scale was incorrectly marked in the salary schedule based on contractual negotiations and the Council adopted MOA. This amended salary schedule fixes this error. This will result in additional salary costs that are anticipated to be limited and absorbed within the existing operating budget of the impacted departments.
UMPAPA/MGMT:
Senior Business Analyst: As part of the July 2025 contract negotiations, HR staff and UMPAPA agreed to continue to review this classification as a post-negotiations meet and confer. After extensive review of the classification by Utilities department management and HR staff, it was determined that there was a compaction issue between the Business Analyst classification (SEIU) and the Senior Business Analyst classification (UMPAPA and Management and Professional). Inclusive of 2026 cost of living adjustments, the classifications are paid within $0.30 per hour of each other. This is an adjustment to the salary range maximum of seven percent (7%), but does not automatically adjust any of the incumbents in the classifications and therefore has low to no estimated impact to salary costs. Individual adjustments would be subject to Department and City Manager approval.
Economic Development Manager: In order to bring in specialized and highly desirable talent, the City Manager’s office, in coordination with Human Resources, conducted an expedited recruitment process and direct appointment of one of the City’s budgeted Assistant to the City Manager positions. This position has been temporarily overfilled as an Economic Development Manager/Assistant to the City Manager while Human Resources conducted the needed market study of the economic development landscape and could recommend a proper salary range in alignment with city practices. This update restores the Economic Development Manager classification and accordingly a revised salary, aligning with the City’s compensation methodology and addresses the funding needed to maintain this critical role. To align this change, this item also reclassifies 1.0 Assistant to the City Manager to the Economic Development Manager classification in the Table of Organization in the City Manager’s Officer.
Treasury Manager: In the FY 2027 Proposed Budget, the classifications of Manager Treasury, Debt and Investments will merge with the Manager Revenue Collections position if adopted by City Council. This action updates the salary schedule so recruitment can begin following action taken by City Council in the FY 2027 budget to approve this Administrative Services Department restructuring and operational efficiency. To align this change, this item also reclassifies 1.0 Manager Treasury, Debt and Investments to 1.0 Treasury Manager in the Table of Organization in the Administrative Services Department.
Water Quality Control Plant Lab Manager: An initial review identified strong indicators that this specialized classification had fallen out of alignment with the market and warranted an individual compensation analysis. Based on the review of comparable positions in agencies with Water Treatment Plants, staff determined the classification was positioned below market supporting the recommended adjustment to the salary range. This is an adjustment to the salary range maximum of eight percent (8%) but does not automatically adjust any of the incumbents in the classifications and therefore has low to no estimated impact to salary costs.
Individual adjustments would be subject to Department and City Manager approval.
IAFF:
Single Role EMT and Paramedics: Adopting the staff recommendation and revised salary schedules is an administrative step related to the Council’s previous direction through the Fiscal Year 2026 budget process to create the EMT and Paramedic classifications. Staff and IAFF successfully met and conferred over wages and benefits and have tentatively agreed to the attached Side Letter and Salary Schedule pending Council Adoption. Recruitments will quickly get underway promptly following the adoption of the Side Letter and Salary Schedule.
Limited Hourly:
Adoption of the updated Limited Hourly salary schedule will incorporate the part time Single Role EMT and Paramedic classifications and incorporate a CalPERS required adjustment for the Police Reserve Officer I/II.
The Single Role EMT/Paramedic hourly classifications will provide necessary coverage for the full-time classifications described above. The City Council approved five 0.2 FTEs to supplement the coverage of the 12-hour ambulance.
Police Reserve Officer I/II serve as needed for special event patrol. The revised rates for Police Reserve I align with the rates for the entry step of Police Officer, and the revised rates for Police Reserve II algin with the rates for the entry step of Police Trainee, both of which are in the Palo Alto Peace Officers’ Association (PAPOA). These roles are often filled with Police Officer retirees. This salary adjustment will meet CalPERS regulations which require that retired persons be eligible for reasonable and regular adjustments to base salary that apply generally to positions doing equivalent work (California Gov. Code Section 21224(a)). This is an adjustment to the salary range maximum, but does not automatically adjust any of the incumbents in the classifications and therefore has low to no estimated impact to salary costs.
FCA/IAFF:
CalPERS informed the City that additional verbiage is needed in the City’s MOAs for the Fire Chiefs’ Association (FCA) and IAFF for compliance on pensionability. The Side Letter Agreements articulate the City’s current practice and are in conformance with the requirements of CalPERS.
This is an administrative change and does not change any current cost nor does it increase any current benefit being provided to classifications within these unions.
PAPOA:
A hiring incentive for lateral officers was recommended to be explored by the Finance Committee and City Council. The attached side letter authorizes the City Manager and Police Department to provide a hiring incentive. The costs of this hiring bonus will be absorbed through salary savings within the Police Department’s budget.
FISCAL/RESOURCE IMPACT
The proposed amendments to the municipal salary schedules and unit side letters represent administrative adjustments and regulatory compliance cleanups that do not alter authorized baseline position totals. Funding for the Service Employees International Union Utility Field Service Representative pay scales, the Senior Utility Systems Operator classification, and the full-time and limited-hourly Single Role EMT and Paramedic roles are already authorized and included within the active Fiscal Year Operating Budget allocations for FY 2026 and the proposed FY 2027 budget. Furthermore, the Side Letter Agreements for the Fire Chiefs’ Association and IAFF represent cost-neutral administrative updates required to satisfy CalPERS public salary schedule disclosure regulations, adding zero immediate operational cost or benefit liabilities to the City. Any incremental compensation or structural adjustments—including the SEIU Customer Service Representative certification incentives, the Senior Mechanic lead-pay step alignment, and the CalPERS-mandated Police Reserve Officer base rate adjustments— are anticipated to be limited and will be fully absorbed within the existing operating appropriations of the respective departments utilizing salary savings from position vacancies, no additional funding or budget amendments are requested. Table or Organization changes align with the compensation schedule changes, current practices, and the FY 2027 budget planning.
STAKEHOLDER ENGAGEMENT
City staff engaged with relevant internal stakeholders throughout the development of the revised salary schedules to ensure accurate alignment with organizational needs. The HR Department consulted with department leadership, labor representatives, and the City’s Office of Management and Budget to review proposed adjustments, assess operational impacts, and verify fiscal consistency with the FY 2027 Proposed Budget. All required meet-and-confer obligations were satisfied, and no outstanding labor issues remain related to the proposed revisions.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because amending salary schedules and adopting side letters is a continuing administrative activity. CEQA Guidelines section 15378(b)(2).
ATTACHMENTS
Attachment A: Amended Salary Schedule for Service Employee’s International Union (SEIU) Attachment B: Amended Salary Schedule for Utilities Management and Professional Association of Palo Alto (UMPAPA)
Attachment C: Amended Salary Schedule for the Unrepresented Management and Professional Employees
Attachment D: Amended Salary Schedule for International Association of Fire Fighters (IAFF) and corresponding Side Letters
Attachment E: Side letter for Palo Alto Fire Chief’s Association (FCA) and International Association of Fire Fighters (IAFF) re Holidays
Attachment F: Amended Salary Schedule for the Unrepresented Limited Hourly group Attachment G: Side letter for Palo Alto Police Officer’s Association (PAPOA) APPROVED BY:
Sandra Blanch, Human Resources Director