Memorandum — San Jose City Council, October 27, 2026

TO: HONORABLE MAYOR

AND CITY COUNCIL
FROM: Aram Kouyoumdjian
SUBJECT: See Below DATE: October 16, 2026
Approved Date:
10/16/26
COUNCIL DISTRICT: Citywide
SUBJECT: Approval of the Terms of an Agreement with the Municipal Employees’ Federation, AFSCME, Local 101 (MEF) for the Term of July 1, 2026, Through June 30, 2029

RECOMMENDATION
Adopt a resolution approving the terms of a collective bargaining agreement between the City and the Municipal Employees’ Federation, AFSCME, Local 101 (MEF) for the term of July 1, 2026, through June 30, 2029, and authorizing the City Manager to execute an agreement with those terms.

SUMMARY AND OUTCOME
Adoption of the resolution will result in a collective bargaining agreement between the City and MEF and authorize the City Manager to execute an agreement with a term of July 1, 2026, through June 30, 2029, with the terms in the Attachment - City of San José - MEF Negotiations Tentative Agreement.

BACKGROUND
MEF currently represents approximately 2,413.33 full-time-equivalent employees in the City, including, but not limited to, the classifications of Code Enforcement Inspectors, Public Safety Dispatchers, Office Specialists, Analysts, Librarians, and Planners.

In February 2026, the City commenced bargaining with MEF to negotiate a successor agreement to the Union contract set to expire on June 20, 2026. The parties reached an overall Tentative Agreement on October 8, 2026, on the terms to be contained in the successor Memorandum of Agreement between the City and MEF.

COUNCIL AGENDA: 10/27/26
FILE: 26-1113
ITEM: 3.4

HONORABLE MAYOR AND CITY COUNCIL
October 16, 2026
Subject: Approval of the Terms of an Agreement with the Municipal Employees’ Federation, AFSCME, Local 101 (MEF), for the Term of July 1, 2026, Through June 30, 2029

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The Tentative Agreement is pending ratification by MEF membership. MEF will notify the City of the ratification results prior to the October 27, 2026 City Council meeting.

ANALYSIS
A complete copy of the overall Tentative Agreement is attached. The following is a summary of the key provisions of the Tentative Agreement.

Term July 1, 2026, through June 30, 2029
Pensionable
General Wage
Increase
Fiscal Year 2026-2027
Effective September 27, 2026, all salary ranges for employees holding positions in classifications assigned to MEF will receive a pensionable base pay increase of approximately 3.00%. This will result in both the top and bottom steps of the pay range being increased by approximately 3.00%.

Fiscal Year 2027-2028
Effective the first full pay period of Fiscal Year 2027-2028, all salary ranges for employees holding positions in classifications assigned to MEF will receive a pensionable base pay increase of approximately 3.00%. This will result in both the top and bottom steps of the pay range being increased by
approximately 3.00%.

Fiscal Year 2028-2029
Effective the first full pay period of Fiscal Year 2028-2029, all salary ranges for employees holding positions in classifications assigned to MEF will receive a pensionable base pay increase of approximately 3.00%. This will result in both the top and bottom steps of the pay range being increased by
approximately 3.00%.

If the revised Five-Year Forecast included as part of the 2028- 2029 Proposed Operating Budget includes a General Fund
surplus of at least $3.75 million dollars in Fiscal Year 2028- 2029, the general wage increase effective the first full pay period of Fiscal Year 2028-2029, for employees holding
positions in classifications assigned to MEF, shall be increased by 0.25% for a total of 3.25%.

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If the revised Five-Year Forecast included as part of the 2028- 2029 Proposed Operating Budget includes a General Fund
surplus of at least $7.50 million dollars in Fiscal Year 2028- 2029, the general wage increase effective the first full pay period of Fiscal Year 2028-2029, for employees holding
positions in classifications assigned to MEF, shall be increased by 0.50% for a total of 3.50%.

If the revised Five-Year Forecast included as part of the 2028- 2029 Proposed Operating Budget includes a General Fund
surplus of at least $15.00 million dollars in Fiscal Year 2028- 2029, the general wage increase effective the first full pay period of Fiscal Year 2028-2029, for employees holding
positions in classifications assigned to MEF, shall be increased by 1.00% for a total of 4.00%.

One-Time NonPensionable Lump
Sum Payment
Effective the first full pay period of Fiscal Year 2026- 2027 following Union ratification and City Council approval in open session, all full-time employees holding positions assigned to MEF shall receive a one-time non-pensionable lump sum
payment equivalent to 1.00% of their base annual wages. To receive this lump sum payment, the employee (1) must have been employed by the City in an MEF-represented
classification on October 10, 2026, and (2) must have been continuously employed in an MEF-represented classification through the date the payment is made.

Part-time benefited employees who meet the criteria above shall receive a one-time non-pensionable lump sum payment as provided in the table below:

Benefit Level One-Time Non-Pensionable
Lump Sum Payment

30.00 – 34.00 $ 510

25.00 – 29.00 $ 435

20.00 – 24.00 $ 360
Part-time unbenefited employees who meet the criteria above and who had at least 520.00 hours of regular hours worked (REG) between October 10, 2025 and October 10, 2026 shall receive a one-time non-pensionable lump sum payment of
$250.00.

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Non-Pensionable
Pay Conversion
Fiscal Year 2028-2029
1% of the 5% ongoing compensation that MEF-represented
classifications receive as non-pensionable pay shall be automatically converted to pensionable pay effective June 3, 2029, if both of the following conditions are met:
• The 2028 Federated Pension Actuarial Valuation, due to be released in December 2028, shows that the
Federated Plan has a funding ratio of 80.00% or higher
on an Actuarial Valuation of Assets basis; and
• The 2028 Federated Pension Actuarial Valuation, due to be released in December 2028, shows that the City’s
contributions to the Federated Pension Plan for Fiscal
Year 2028-2029 do not exceed the value contained in
the 2025 Federated Pension Actuarial Valuation for
Fiscal Year 2028-2029 – $252 million.

If the aforementioned conditions are satisfied and 1% of the 5% ongoing non-pensionable compensation is converted to pensionable pay, the remaining 4% of the original 5% ongoing non-pensionable compensation shall remain non-pensionable.

If the aforementioned conditions are not both satisfied, the parties agree to a reopener to discuss converting 1% of the 5% ongoing non-pensionable compensation to pensionable pay effective June 3, 2029, if either of the following conditions is met:
• The 2028 Federated Pension Actuarial Valuation, due to be released in December 2028, shows that the
Federated Plan has a funding ratio of 80.00% or higher
on an Actuarial Valuation of Assets basis; or
• The 2028 Federated Pension Actuarial Valuation, due to be released in December 2028, shows that the City’s
contributions to the Federated Pension Plan for Fiscal
Year 2028-2029 do not exceed the value contained in
the 2025 Federated Pension Actuarial Valuation for
Fiscal Year 2028-2029 – $252 million.

Should this reopener be triggered, the parties agree that no promises, representations, understandings, or warranties have

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been made or relied upon by any party other than those
expressly contained in the Tentative Agreement.

Side Letter –
Artificial
Intelligence

1. The parties agree to changes to the City’s Artificial Intelligence Policy to specify that AI shall not be used as the sole determining factor in the hiring, promotion,
discipline or evaluation of employees, and to further
clarify that AI is a tool that employees may use in the performance of their duties, but employees shall remain ultimately responsible for the accuracy and caliber of
their work.

2. The parties further agree that, where artificial
intelligence will result in workforce reductions, the City will utilize, to the extent that City resources and
operational needs allow, training, upskilling, reskilling, and reassignment as mitigation measures prior to
effectuating layoffs that lead to separation from City
employment.

3. The parties agree to convene an annual Labor
Management Meeting to discuss issues related to AI
and technology. The meeting will be attended by the
Director of the Information Technology Department or
their designee, who must be at the level of Deputy
Director or above.

4. The parties further agree to meet quarterly to discuss classifications that may be impacted by or vulnerable to AI integration. These meetings will be attended by the
Director of Human Resources or their designee, who
must be at the level of Division Manager or above. The
parties agree two of these meetings will be in lieu of the Citywide Labor Management Committee meeting.

5. Finally, the Union reserves the right to meet and confer over proposed changes to the City’s Artificial
Intelligence Policy that potentially affect the terms and conditions of employment.

Council Staff Unit
Modification
The parties agree the following terms shall be implemented for the classifications in the table below:

Job
Code
Classification Title FLSA
Status
7662 Unit 99; Council Aide PT Exempt
7648 Council Assistant Exempt
7653 Council Assistant PT Exempt

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7649 Senior Council Assistant Exempt
7672 Council Community Relations Aide Exempt
7682 Council Community Relations Aide PT Exempt
7674 Council Community Relations Representative Exempt
7676 Council Community Relations Coordinator Exempt
7671 Council Policy and Legislative Aide Exempt
7675 Council Policy and Legislative Advisor Exempt
8021 Executive Assistant (Unclassified) (*) – for
positions within Council offices only
Exempt

1. Incumbents in the Executive Assistant (Unclassified) (8021) classification in Council offices shall be moved into a newly created Council Executive Assistant (Unclassified) (8025) classification, which will have the same salary range as the Executive Assistant (Unclassified) (8021) classification.

This action will not result in any salary changes to current incumbents.

2. The classifications in the table above shall be converted from an open salary range to salary steps. The salary steps will be established using the following methodology:
• The top of the classification’s current salary range, as of May 7, 2026, will become the top step for the
new salary step system.
• A step schedule will be calculated based on that top
step using an approximate 2.50% differential
between steps.
• When this calculation returns a value below the
minimum of the classification’s current salary range
(as of May 7, 2026), a “first” step will be established at the minimum of the classification’s current salary
range (as of May 7, 2026).

Classifications will contain between 5 and 20 salary steps, where neither the minimum nor the maximum rate of pay
for a given classification has been changed.

Given their FLSA-exempt status, employees in the
classifications listed in the table above shall not be eligible for contractual overtime or compensatory time, call back pay, standby pay, or shift differentials.

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3. Employees in the classifications in the table above shall be placed at the salary step in their classification that is closest to their current rate of pay that would not result in a pay increase.

Employees placed at a salary step whose rate of pay is
less than their current rate of pay shall have their
compensation “Y-Rated,” meaning that despite the salary step corresponding to a lower rate of pay, the employee’s compensation shall not be decreased and shall remain
unchanged as part of this placement.

4. Incumbents who have been continuously employed in a
classification listed in the table above since January 17, 2026, who would have been eligible for a merit increase through the Management Performance Program in fall 2026 had they remained in Unit 99, and who are not placed at the top step of their classification’s step schedule, shall be granted a step increase effective the beginning of Pay
Period 21 of Payroll Calendar Year 2026.

Incumbents who have not been continuously employed in a classification listed in the table above since January 17, 2026 (and would not have been eligible for a merit increase through the Management Performance Program in fall 2026 had they remained in Unit 99) shall begin accruing time for the purposes of salary step advancement upon the date of hire, promotion, or demotion into a classification listed in the table above.

5. Part-time hour limits provided for in the MEF MOA Article

7.7.1 shall not apply.

6. Employees in the classifications in the table above shall be entitled to up to a maximum of forty-eight (48) hours / six (6) days of Executive Leave during a payroll calendar year.

Executive Leave is not an accrued benefit and unused
leave does not carry over from year to year. When an
employee is hired or promoted into a position in a
classification listed above, their Executive Leave balance will be prorated during the first-year dependent upon the hire date. An employee who is promoted or demoted into a classification listed above will have the number of Executive Leave hours they receive upon promotion or demotion

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reduced on an hour-for-hour basis based on their usage of Personal Leave and/or Executive Leave within the same
payroll calendar year. Executive Leave will also be adjusted if an employee is on a reduced work week schedule. In no event shall an employee receive both Executive Leave and Personal Leave.

Incumbents who hold positions in the classifications listed above as of the date that a Tentative Agreement for a
successor MOA is signed shall receive a one-time
additional allowance of sixteen (16) hours of Executive Leave during payroll calendar year 2027.

Given their FLSA-exempt status, employees in the
classifications listed above shall also remain eligible for the four-hour rule, as discussed in City Administrative Policy Manual 4.2.4, Executive Leave and Absence Policy.

7. The grievance Procedure in the MEF MOA shall apply for the classifications listed above with the exception of
disciplinary grievance and appeal procedures as the
positions are at-will positions in the unclassified service.

Employees who are subject to separation due to
disciplinary action may request a meeting with the Office of Employee Relations.

8. Current incumbents in the Tier 3 plan will be transferred to the Federated Tier 2 plan. However, the parties agree to continue discussions regarding future eligibility of
employees in the classifications above to participate in the Tier 3 plan.

The parties agree that no promises, assurances,
representations, agreements, understandings or warranties have been made or relied upon by any party other than
those that are expressly contained in the Tentative
Agreement. No language in the Tentative Agreement shall confer a right to or entitlement upon employees in the
classifications noted above to be eligible to participate in the Tier 3 plan. The parties further agree that any
agreements will be subject to approval by the City Council and/or the Federated Retirement Plan Board.

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9. Current incumbents who hold positions in any of the
classifications above as of the date of the agreement will continue to receive a monthly Technology Stipend in the amount of $90 during the period of their employment in
eligible classifications. The Technology Stipend is in lieu of any voice and/or data stipend that any employee may have been eligible for under the City’s Mobile Devices Policy.

Employees hired on or after the effective date of this
agreement into any of the classifications above shall not be eligible to receive a monthly Technology Stipend but may be eligible for the voice and/or data stipend provided for in the City’s Mobile Devices Policy.

Leaves The City may provide additional unpaid leave pursuant to the interactive process and separate an employee at a later date beyond the maximums provided for in the Leaves provision of the MOA. The parties agree that the interactive process under the Americans with Disabilities Act and California Fair Employment and Housing Act is not subject to the grievance procedure. Any separation under the Leaves provision in the MOA shall be deemed a voluntary resignation, grievable
pursuant to Article 21.4 of the MOA without other
administrative remedy.

Side Letter –
Flexibly Staffed
Classes
The parties agree to amend the City’s Flexibly Staffed Classes Policy to allow employees to initiate the process for qualifying promotions and add a review process through the Human
Resources Department if qualifying promotion assessments are delayed or denied.

Call Back / Standby
Pay
Employees authorized or required to conduct work remotely shall be compensated at the appropriate rate of pay for actual time worked rounded to the nearest fifteen-minute increment or, if called, for one (1) hour at the appropriate rate (1.5), whichever is greater.

Use of Volunteers
in the Library
The expanded volunteer duties described in the Side Letter related to shelving, weeding, community bulletin board area, and welcoming, in addition to pre-existing programmatic volunteer position descriptions will remain in effect unless modified through mutual agreement.

In Fiscal Year 2026-2027, the Library Department will
undertake a review of its volunteer programs, including the

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scope and extent of volunteer use (e.g., clarifying the role of volunteers supporting Literacy Programs), and will discuss the findings with representatives of the Union no later than August 31, 2027. The Library Department will invite input from the Union prior to commencing the review. Finally, the Union reserves the right to meet and confer over proposed changes to use of volunteers that potentially affect the terms and conditions of employment for MEF-represented classifications.

Side Letter – Public
Safety Radio
Dispatcher (PSRD)
Certification Pay
The parties agree that effective October 25, 2026, PSRD Certification Pay will be a non-pensionable premium paid each biweekly pay period during which the employee is in paid status. The PSRD Certification Pay shall be a flat amount equivalent to 3.75% of the top step biweekly base pay of the Senior Public Safety Radio Dispatcher (8513) classification.

Except as otherwise required by State or Federal law including the FLSA, PSRD Certification Pay shall not be included in the hourly rate or as regular compensation in computing other pay or benefits.

The parties further agree to the following for employees actively employed by the City as of October 8, 2026, in order to avoid further dispute regarding an arbitrator’s award:

1. The City includes the premium pay in the City’s
calculation of the regular rate of pay whenever an
employee works in excess of 40 hours in a seven (7)
day work period and is entitled to overtime
compensation pursuant to the FLSA.

2. Effective within 4 full pay periods following Union
ratification and Council approval in open session, the
City will retroactively implement the premium pay
beginning with the paycheck inclusive of July 4, 2024 on all paid sick leave hours; and

3. Effective within 4 full pay periods following Union
ratification and Council approval in open session, the
City will pay the premium pay on all paid hours,
including hours coded as paid sick leave, prospectively through July 4, 2026, the pay period inclusive of the
June 30, 2026 expiration of the MOA; and

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4. Effective within 4 full pay periods following Union
ratification and City Council approval in open session, the City will return any amounts deducted on the March
6, 2026 paycheck due to the prior exclusion of sick
leave as “time worked”; and

5. MEF will withdraw its April 21, 2026 request to reengage the arbitrator to clarify her intent in the arbitration award dated October 23, 2025 and forgo any other legal
process or remedy, administrative or otherwise, related to the grievance and its underlying issues.

Personal Leave Effective Pay Period 1 of Payroll Calendar Year 2027, employees (1) who are in a classification listed below and (2) whose paid time off (with the exception of holiday leave) is not considered time worked for purposes of calculating overtime shall be eligible to have their Personal Leave balance in a payroll calendar year count toward the calculation of overtime in instances when an eligible employee is held over to work a shift that is at least sixteen (16) or more continuous hours and is scheduled to begin a work shift less than eight (8) hours after the conclusion of the shift that was sixteen (16) or more hours in duration.
• Animal Services Officer (3252)
• Animal Services Officer, Senior (3251)
• Community Services Officer I/II (6131/6132)
• Community Services Officer, Senior (6133)
• Police Forensic Analyst I/II (7667/7668)
Use of Personal Leave under this subsection may not be used during an Emergency Operations Activation or in conjunction with an Emergency Operations Center shift.

Uniform Allowance The Police Data Specialist, Senior (1185), Public Safety Communications Specialist (8536), and the Public Safety Communications Specialist (8537) classifications will be added to the list of eligible classifications that may receive an annual uniform allowance, not to exceed $500.

Full-time and part-time employees who become eligible after the annual lump sum payment has been issued shall receive a prorated amount of the allowance based on the number of full

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pay periods remaining in the payroll calendar year at the time the eligibility begins.

Library Holiday
Schedule
The terms contained in the Library Holiday Schedule Pilot Program Side Letter shall be incorporated into the MEF MOA.

Apparel Allowance Apparel allowance for eligible classifications will be increased from $100 to $120 and the Zoo Keeper PT classification (6354) will be added to the list of eligible classifications.

Public Safety
Communications
Specialist (8536 /
8537)
Classifications
The parties agree to incorporate the Public Safety
Communications Specialist (8536) and the Public Safety
Communications Specialist PT (8537) classifications into various provisions in the MEF MOA which are applicable to the Public Safety Radio Dispatcher series, including: a 480-hour accrual limit on compensatory time accumulation, eligibility for overtime compensation calculated at 2.0 times the hourly rate for hours worked past twelve (12) hours in a single shift, Holiday-In-Lieu pay, shift differential schedules, Public Safety Communications Specialist Training Pay of 7.50% when
engaged in one-on-one training of a Dispatcher trainee, Public Safety Radio Dispatcher Certification Pay for possession of an Emergency Fire Dispatch certification and Emergency Medical Dispatch certification, and sworn Employee Assistance
Program benefits.

Union Release Time The Secretary and Treasurer shall each be granted release time not to exceed two (2) hours per week, to review routine reports and/or notices issued by the City.

Side Letter –
Voluntary Furlough
Full-time, hourly City employees shall be eligible to voluntarily take up to forty (40) hours of unpaid leave each Fiscal Year, in 4-hour increments, subject to advance approval of the
Department Director or their designee.

Side Letter – Data
Analyst
Classification Study
The City will conduct a classification study within eighteen (18) months following the Tentative Agreement to assist the City in making a determination as to whether it would be beneficial to create a Data Analyst classification. This shall not be construed as agreement to create a Data Analyst classification, nor shall it be construed as an agreement that a Data Analyst classification will be automatically designated to be
represented by MEF.

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Side Letter –
Leaves of Absence
The parties agree to amend the City’s Leaves of Absence Policy to allow employees who are receiving Workers’
Compensation temporary disability benefits to elect to use any accrued leave balances during the period of receipt of wage replacement benefits. The current policy requires leave balances to be used in a specific order.

EVALUATION AND FOLLOW-UP
No additional follow-up action with the City Council is expected at this time.

FISCAL IMPACTS
In Fiscal Year 2026-2027, the cost of the one-time non-pensionable lump sum payment is approximately $2.3 million, of which approximately $1.4 million is in the General Fund. The ongoing cost of the 3.00% pensionable general wage increase is approximately $7.4 million in all funds ($4.6 million in the General Fund), with a prorated cost in Fiscal Year 2026-2027 of $5.4 million ($3.4 million in the General Fund). The ongoing costs will be factored into the annual development of the Base Budget. The ongoing cost of remaining benefit enhancements contained in this agreement is anticipated to be approximately $50,000 in all funds, of which approximately $50,000 is in the General Fund. The costs in 2026-2027 will be offset by a recommended decrease to the Salaries and Benefits Reserve and other adjustments, as necessary, as part of the budget actions that will be brought forward for City Council consideration as part of the 2026-2027 Mid-Year Budget Review.

In Fiscal Year 2027-2028, the ongoing cost of the 3.00% pensionable general wage increase is approximately $7.6 million in all funds, of which $4.7 million is in the General Fund. In Fiscal Year 2028-2029, the ongoing cost of the 3.00% general wage increase is approximately $7.8 million in all funds, of which $4.9 million is in the General Fund.

These ongoing costs will be factored into the annual development of the Base Budget.

Costs associated with vacation sellback for both of these years will continue to be absorbed by departmental personal services budgets to the extent possible.

COORDINATION
This memorandum was coordinated with the City Attorney’s Office and the City’s Manager’s Budget Office.

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PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the October 27, 2026 City Council meeting.

BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action.

CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.

PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.

Aram Kouyoumdjian
Director of City Manager’s Office of Employee Relations Director of Human Resources
For questions, please contact Elsa Cordova, Deputy Director, City Manager’s Office of Employee Relations at (408) 535-8150.

ATTACHMENT:

City of San José - MEF Negotiations Tentative Agreement

San Jose City CouncilOctober 27, 2026

San Jose City Council
October 27, 2026