Title
Report regarding a resolution approving a successor Memorandum of Understanding between the City of South San Francisco and International Union of Operating Engineers Local 39, amending the Public Safety Managers Compensation Plan, approving Amendment 2 to the City’s Wage and salary Schedule, and approving Budget Amendment Number 26.025.
(Leah Lockhart, Human Resources Director)
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RECOMMENDATION
Recommendation
Adopt a resolution approving a successor Memorandum of Understanding between the City of South San Francisco and International Union of Operating Engineers Local 39, amending the Public Safety Managers Compensation Plan, approving Amendment 2 to the City’s Wage and salary Schedule, and approving Budget Amendment Number 26.025
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BACKGROUND/DISCUSSION
The City’s regular full-time workforce is organized into six (6) represented employee bargaining units, as well as the unrepresented Public Safety Managers Unit and Executive Management Unit. In accordance with the Meyers-Milias-Brown Act (MMBA), the City negotiates agreements with each represented unit over wages, hours, and other terms and conditions of employment, and such agreements are memorialized in a Memorandum of Understanding (“MOU”) over a specified term. In addition, the City meets with members of unrepresented units and conducts informal negotiations over proposed changes to the compensation plan for the unit. In January 2025, City Council authorized City negotiators and staff to begin negotiations with each employee bargaining unit for successor MOUs, as the existing agreements were scheduled to expire as of July 1, 2025. On August 13, 2025, the City Council adopted Resolution Number 25-854, approving successor MOUs with five represented bargaining units, including American Federation of State, County and Municipal Employees (“AFSCME”) Local 829, International Association of Firefighters (IAFF) Local 1507, South San Francisco Police Association, Teamsters Local 856 Mid-Management Unit, and Teamsters Local 856 Confidential Unit, having reached tentative agreements by June 30, 2025. Under the same resolution, Council approved the amended Executive Management Compensation Plan for July 1, 2025, through June 30, 2027.
Council-appointed City negotiators and staff conducted multiple negotiation meetings with IUOE Local 39 representatives beginning in February 2025, and continued to meet until a tentative agreement was reached as on September 2, 2025. Staff also met with representatives of the Public Safety Managers Unit beginning in June 2025 and reached tentative agreement as of August 27, 2025. Each tentative agreement is for a two-year term, expiring June 30, 2027. The following is a summary of economic terms and other substantial changes included in the proposed agreements:
Base Wage and Salary Adjustments
When considering base wage and salary adjustments, the City evaluates such factors as local cost of living increases over prior years, compensation surveys of cities of similar size and service level, including future scheduled increases, and City workforce trends such as recruitment and retention rates. Consistent with other bargaining units, under the proposed agreements, IUOE Local 39 and the Public Safety Managers unit will receive a four percent (4%) across-the-board increase in the first year of the agreement, and another four percent (4%) across-the-board increase effective July 2026. In addition, equity adjustments are provided to public safety classifications, based on a review of a recent compensation survey for police and fire personnel and considering internal alignment of management classifications and their subordinates:
• Fire Battalion Chief, EMS Battalion Chief, Fire Marshal, and Deputy Fire Chief: One percent (1%)
• Police Lieutenant: One and one-half percent (1.5%)
The effective date for the first year salary adjustment for IUOE Local 39 is the beginning of the pay period in which Council approves the MOU, which is September 12, 2025, should Council approve this action. Due to a delay in the commencement of negotiations with the Public Safety Managers unit, the City tentatively agreed to retroactive salary adjustments to the start date of July 4, 2025, contingent upon timely completion of negotiations by August 31, 2025.
The proposed Amendment 2 to the Fiscal year 2025-26 Wage and Salary Schedule includes an additional 2.3% adjustment to the Fire Chief salary range, to ensure a minimum differential of ten percent (10%) between the Fire Chief and the Deputy Fire Chief, including all premiums and incentives. This was recommended based on a compaction analysis of the Executive Management positions and subordinate positions under the proposed Public Safety Managers Compensation Plan. Under the Executive Management compensation plan, adjustments to the salary range do not result in an immediate increase for the incumbent employee(s). The City Manager may grant adjustments within the established range in consideration of the employee’s annual performance review and experience.
Longevity Premium Pay
Previously, each City bargaining unit had provisions within their respective MOUs for an additional percentage of pay based on years of service. However, such provisions applied only to employees hired prior to 2012. The proposed agreements provide longevity premium pay for all employees in each unit. For IUOE Local 39, employees will receive an additional 1% of pay after 10 years of service, and 2.5% of pay after 15 years. For the Public Safety Managers, the longevity premium is 2.5% at 7 years, and 3.5% after 15 years, consistent with subordinate public safety units.
The South San Francisco Police Association MOU, which was approved by City Council on August 13, provides limited credit for prior law enforcement experience to lateral police officer hires, at 0.5 years for each 1 year of sworn officer experience in another qualifying agency (maximum 7 years). The proposed Public Safety Managers Compensation Plan does not permit lateral service credit for new hires. However, service credit granted to an employee while employed as a Police Officer in the Police Association unit may be carried over when the employee promotes to a position within the Public Safety Managers unit, allowing for a smooth transition without loss of pay.
Education Incentive Premium Pay
Currently, the Public Safety Managers unit compensation plan does not provide incentives or premiums for advanced education. Under the proposed agreement, Police Managers will receive premium pay in the amount of two- and one-half percent for completion of the Police Officers Standards and Training (“POST”) Management Certificate. Additional pay for managers who this certification is common among the City’s comparator agencies, and this incentive recognizes those who have completed significant training and requisite experience to enhance their management skills as a member of the police command staff.
Other allowances and stipends
The following allowances or stipends are granted or increased in the proposed agreements:
IUOE Local 39:
The annual allowance for safety shoes/boots, for employees who are required to purchase wear them on the job, is increased from $275 annually to $325 annually. The agreement also includes an annual professional development stipend of $500 annually for all unit employees, consistent with non-safety employee bargaining units.
Public Safety Managers:
The uniform allowance for police personnel is increased from $1,100 to $1,300 annually, to adjust for the increased cost of purchase and maintenance of uniform items and to align with subordinate positions represented by the Police Association. In addition, fire department management personnel would be eligible for a residency stipend of $500 per month if they maintain a primary residence in the area (San Mateo County, Santa Clara County, and San Francisco). This benefit is equivalent to that which was previously granted to subordinate personnel represented by IAFF Local 1507, to incentivize employees to live locally to provide for improved call-back response in the event of a major emergency or disaster.
Benefits and other terms
For the current fiscal year, City staff were able to negotiate minor enhancements to the City’s dental plan at no additional cost, including increasing the calendar year maximum from $1,500 to $2,000, and these changes were incorporated into the bargaining unit agreements. There were no other substantive changes to employee benefits. The proposed agreements include policy updates to sick leave and bereavement leave to be consistent with recent legislative changes, and changes to operational policies or rules within the purview of City Manager. These changes would not impact or modify City programs, service levels, or staffing, nor create new material obligations on the City.
FISCAL IMPACT
The fiscal year 2025-26 adopted budget includes an allowance for salary increases for all employee units. However, with the additional salary and premium enhancements contained in the proposed agreements, additional funds are required to cover the total cost of the salary and benefit package. The estimated total additional cost for the current fiscal year is $313,587, of which $226,760 would impact the City’s General Fund, with the remainder impacting the City’s Sewer Enterprise Fund. Budget Amendment Number 26.025, included in the accompanying resolution, provides for appropriation of funds for the current fiscal year budget to cover these additional costs.
RELATIONSHIP TO STRATEGIC PLAN
This action supports all aspects of the City’s strategic plan by ensuring that the City maintains competitive salary and benefits packages to attract and retain high-performing employees to carry out the strategic goals and priorities of the City.
CONCLUSION
Staff recommends that the City Council approve successor Memorandums of Understanding with IUOE Local 39 and approve the amended Public Safey Managers Compensation Plan as proposed. Staff further recommends that the City Council approve Amendment 2 to the City’s 2025-26 wage and salary schedule to provide for the associated salary adjustments contained within these agreements and provide for a compaction adjustment for the Fire Chief salary range included in the Executive Management salary schedule.