Staff Report - Labor Agreement Sacramento City Exempt Employees Association Successor Labor Agreement Memorandum of Understanding and the Citywide Salary Schedule

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00358 1/9/2024 Discussion Item 25.

Labor Agreement: Sacramento City Exempt Employees Association Successor Labor Agreement/Memorandum of Understanding; and the Citywide Salary Schedule File ID: 2024-00358
Location: Citywide
Recommendation: Subject to being advised by representatives of the Sacramento City Exempt Employees Association of membership ratification: Adopt a Resolution by two-thirds vote: 1) waiving the requirement for 10-day posting of labor agreements; 2) approving the Memorandum of Understanding (MOU) between the City of Sacramento (City) and Sacramento City Exempt Employees Association (SCXEA); 3) approving the revised citywide salary schedule; 4) authorizing the City Manager to conduct the necessary budget adjustments and transfers from fund balances to adequately fund the MOU; and 5) authorizing the City Manager or City Manager’s designee to make minor changes or adjustments to the exhibits in order to correct omissions and errors in the MOU and salary schedule.

Contact: Aaron Donato, Labor Relations Manager, (916) 808-5816, Department of Human Resources; Sean Arnold, Labor Relations Officer, (916) 808-5536, Department of Human Resources.

Presenter: Sean Arnold, Labor Relations Officer, (916) 808-5536, Department of Human Resources.

Attachments:
1-Description/Analysis
2-SCXEA MOU (Redline)
3-Salary Schedule (Redline)
4-SCXEA Labor Agreement Costing
5-Resolution
6-Exhibit A - SCXEA MOU
7-Exhibit B - Salary Schedule Final
Additional Description/Analysis
Issue Detail:

Sacramento City Exempt Employees Association (SCXEA) Successor Labor Agreement/Memorandum of Understanding (MOU)

Page 1 of 4 ends

File ID: 2024-00358 1/9/2024 Discussion Item 25.

The 2021-2023 MOU between the City and SCXEA expired on September 22, 2023. The City and SCXEA have negotiated a successor MOU. Attachment 2 is a redline version of the successor MOU which includes the following major new contract terms:
· New term: September 23, 2023, through September 19, 2025. · Effective September 23, 2023, salary ranges will be increased by five percent (5%). · Within sixty (60) calendar days, all employees who are still on payroll will receive retroactive pay.
· Effective July 13, 2024, salary ranges will be increased by two percent (2.0%). · Health and Welfare Contributions
· 2024 Calendar Year Health Changes, effective December 30, 2023:
§ Employee Only - City contribution of $955.00 per month, § Employee Plus One Dependent - City contribution of $1,520.00 per month, and § Employee Plus Two or More Dependents - City contribution of $2,026.00 per month.
· 2025 Calendar Year Health Changes, effective the first paycheck of 2025:
§ The City will contribute fifty percent (50%) of the first fifty dollars ($50.00) of premium increases, up to a maximum contribution of twenty-five dollars ($25.00) per month, toward a cumulative total increase in premium from plan year 2024 to plan year 2025.

The final version of the SCXEA MOU is attached to the Resolution as Exhibit A (Attachment 6).

Salary Schedule
The California Code of Regulations requires that the City Council adopt the City’s Salary Schedule at a public meeting (2 CCR § 570.5). This obligation arises whenever salary ranges are changed to ensure that salary rates are transparent and publicly available. These publicly adopted rates are used by California Public Employees’ Retirement System (CalPERS) to determine the appropriate compensation earnable for each City employee when calculating their pension benefit.

A redline version of the salary schedule is shown in Attachment 3. The final, comprehensive Citywide salary schedule is attached to the Resolution as Exhibit B (Attachment 7).

Policy Considerations:

Approval of this action by the City Council is consistent with the City’s legal obligation under the Meyers-Milias-Brown Act, adheres to the City’s positive labor management relations concept, and provides labor stability.

The Sacramento City Code Section 4.04.020 and Council Rules and Procedure (Chapter 7, Section E.2.d) mandate that unless waived by a two-thirds vote of the City Council, all labor agreements, and all agreements greater than $1,000,000 shall be made available to the public at least ten (10) days

Page 2 of 4 ends

File ID: 2024-00358 1/9/2024 Discussion Item 25.
prior to Council action. This provision will be waived by City Council.

Economic Impacts: None.

Environmental Considerations: The report contains administrative activities that will not have a significant effect on the environment and that do not constitute a “project” as defined by the California Environmental Quality Act (CEQA) Guidelines Sections 15061(b)(3) and 15378(b)(2).

Sustainability: Not applicable.

Commission/Committee Action: Not applicable.

Rationale for Recommendation: Approval of this action will establish a new MOU between the City and SCXEA. Additionally, approval of this action will establish compliance with the California Code of Regulations § 570.5.

Financial Considerations:

Approval of this agreement will result in an ongoing increase in general fund expenses with the chart below outlining the estimated financial impact over a five-year period:
$s in millions FY2023/24 FY2024/25 FY2025/26 FY2026/27 FY2027/28 G/MU Funds Cost
Increase
$4.4 $10.2 $11.1 $11.3 $11.5
Other Funds Cost
Increase
$1.2 $2.8 $3.1 $3.1 $3.2
The City’s current five-year forecast is in deficit. To balance the City Budget, as required by the City Charter, the City will need to make spending reductions and/or increase revenues. The City’s current General/Measure U Fund five-year forecast, excluding homelessness services 1, is below2:
$s in millions FY2023/24 FY2024/25 FY2025/26 FY2026/27 FY2027/28 Approved Budget
Surplus / (Deficit)
$0.4 $12.1 ($23.6) ($25.3) ($30.1)
Labor Contract
Negotiating Authority
($28.7) ($44.5) ($46.3) ($47.1) ($47.9)
Other Spending
Increases
($10.4) ($8.9) ($9.1) ($9.3) ($9.5)
Anticipated Salary
Savings
$16.6 $16.9 $17.3 $17.6 $18.0
Budgetary Reserve
Adjustments
$22.0 ($22.0) $0.0 $0.0 $0.0
Total Surplus/(Deficit) $0.0 ($46.4) ($61.7) ($64.1) ($69.5)

Page 3 of 4 ends

File ID: 2024-00358 1/9/2024 Discussion Item 25.

1. Including homelessness services would increase projected deficits. The size of the forecasted FY2024/25 homelessness services deficit will depend on the final City allocation amount for State Homeless Housing, Assistance and Prevention (HHAP) Round 5 funding.

2. Increased costs and decreased revenues are represented as negatives as they increase deficits. The budgetary reserve is separate from the Economic Uncertainty Reserve and represents savings in prior years allocated to the FY2024/25 budget year. The updated forecast moves $22.0 million from FY2024/25 to FY2023/24 to cover projected deficits in the current fiscal year.

Local Business Enterprise (LBE): Not applicable.

Page 4 of 4 ends

Attachment 2
SCXEA MOU (Redline)
TBD ‐ AƩac
hment Pending Union RaƟﬁcaƟon
Attachment 3
Salary Schedule (Redline)