COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Graciela Reynoso, Chief Human Resources Officer
DATE: August 4, 2026
SUBJECT: Adoption of a Resolution Approving the Successor Memorandum of Understanding between the City of Santa Maria and the Service Employees International Union Local 620 covering the period August 4, 2026, to June 25, 2027, and updated Comprehensive Schematic
Description:
The City Council will consider adopting a Resolution approving the successor Memorandum of Understanding between the City of Santa Maria and the Service Employees International (SEIU) Union Local 620 covering the period August 4, 2026, and adopting an updated Comprehensive Schematic Pay Schedule as a result thereof.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
Adopt a Resolution approving the Successor Memorandum of Understanding between the City of Santa Maria and the Service Employees International Union, Local 620 covering the period of August 4, 2026 to June 25, 2027 and the updated Comprehensive Schematic Pay Schedule.
BACKGROUND:
The current Memorandum of Understanding (MOU) between the City of Santa Maria (City) and the Service Employees International Union Local 620, AFL -CIO-CLC (SEIU L620), adopted by City Council Resolution No. 23-4704, covering the period February 20, 2024 through December 31, 2025 (SEIU MOU 2024 -25) was extended by further MOU amendment to June 30, 2026, which has since expired. SEIU L620 represents approximately 321 total City employees across 158 different classifications. The City and SEIU Local 620 commenced labor negotiations for a successor MOU with their first meeting on January 29, 2026.
The City and SEIU L620 approached negotiations with a shared commitment to honoring employee contributions while ensuring long term orga nizational sustainability. The parties subsequently met again on March 12, 2026, April 15, 2026, April 27, 2026, May 7, 2026, May 26, 2026, June 11, 2026, June 23, 2026 , and July 9, 2026. The City provided its initial written Proposal #1 for a successor MOU on April 15, 2026. SEIU L620 2 provided its counter Proposal #1 for the same on May 7, 2026. The parties thereafter exchanged additional proposals and counterproposals, with the City’s last Proposal #5 dated July 9, 2026, being accepted and ratified by SEIU L620 on or about July 17, 2026 (Attachment B). The parties subsequently prepared a joint draft successor MOU covering the period of August 4, 2026 to June 25, 2027 for City Council determination (SEIU MOU 2026-27) (Attachment C).
DISCUSSION:
Over the course of the bargaining sessions, the City and SEIU L620 engaged in collaborative discussions focused on aligning compensation, benefits, and working conditions with current operational and budgetary realities. Through t his mutual commitment, the parties reached a successor SEIU MOU 2026 -27 that reflects a balanced and sustainable agreement. Both parties agreed that a one-year MOU was the most practical and balanced approach, providing stability for employees while givin g the City flexibility to navigate current budget conditions and plan for longer-term negotiations.
The deal terms having been ratified by SEIU L620’s membership and the successor SEIU MOU 2026-27 having been approved and executed by SEIU L620 representat ives as both a tentative agreement and MOU, it is for City Council to consider and approve or reject the SEIU MOU 2026 -27 within 30 days of the date it is first considered at a duly noticed public meeting per California Government Code Section 3505.1, which provides:
“If a tentative agreement is reached by the authorized representatives of the public agency and a recognized employee organization or recognized employee organizations, the governing body shall vote to accept or reject the tentative agreement within 30 days of the date it is first considered at a duly noticed public meeting. A decision by the governing body to reject the tentative agreement shall not bar the filing of a charge of unfair practice for failure to meet and confer in good faith. If the governing body adopts the tentative agreement, the parties shall jointly prepare a written memorandum of understanding.”
The SEIU MOU 2026-27 provides a two percent cost of living adjustment and maintains 2027 health coverage at the CalPERS Gold tier rate. Health benefits premiums change yearly with the calendar year. The City’s contribution will fully cover CalPERS Gold at all three tier levels for full -time SEIU employees. For part -time employees, the City will increase its contributions to fully cover CalPERS Gold for employee only. Contributions for Employee +1 and Employee +2 or more will be increased by the difference between the 2026 and 2027 CalPERS Gold tier employee only premiums.
In addition to the monetary changes outlined above, the City and the employee association have agreed to minor language adjustments which were included to improve clarity, ensure consistent application of provisions, and streamline administrative interpretation throughout the MOU as reflected in Attachment C).
The cost-of-living adjustment and ancillary items will be effective the first full pay period after City Council approval and adoption of the successor SEIU MOU 2026-27. 3 The recommendation is fo r City Council to approve and adopt the proposed successor SEIU MOU 2026-27 covering the period of August 4, 2026 – June 25, 2027.
As a result of the wage increases provided to SEIU represented employees, the city-wide Comprehensive Schematic Pay Schedul e must also be updated and approved by City Council (Attachment D). The recommendation is for City Council to approve and adopt the updated Comprehensive Schematic Pay Schedule.
Alternative(s)
A decision by the City Council not to approve the SEIU MOU 2 026-27 would send the parties back to the bargaining table on an expired MOU.
Fiscal Considerations
The financial impact of a two percent cost-of-living adjustment for FY 2026 -27 and increasing the City’s Health Benefit Premium contributions in calend ar year 2027 for members of the SEIU Local 620 is approximately $795,000 across all funds; of which approximately $341,926 would impact the City of Santa Maria’s General Fund for FY 2026-27.
Impact on the Community
Approval of this successor SEIU MOU 2 026-27 is crucial to maintaining positive employee-employer relations and retaining a well-staffed, qualified workforce, who in turn will continue to support the City’s operational needs.
ATTACHMENT(S)
A. Resolution;
B. City’s Proposal #5 dated July 9, 2026;
C. SEIU MOU 2026-27; and
D. Updated Comprehensive Schematic Pay Schedule