REPORT TO COUNCIL
SUBJECT
Title
Approval of Side Letter Agreement between the City of Sunnyvale and the Sunnyvale Public Safety Officers Association (PSOA)
Report
BACKGROUND
California Public Employees’ Retirement System (CalPERS) provides pension and health benefits for more than 1.5 million California public employees. Retirement benefits are calculated based on years of service, age at retirement, and final compensation. CalPERS conducts periodic audits to ensure compliance with reporting special compensation as defined by the California Public Employees’ Retirement Law (PERL).
This report presents for Council consideration a Side Letter Agreement between the City of Sunnyvale and the Sunnyvale Public Safety Officers’ Association (PSOA) related to the existing education incentive premium. On review and in consultation with CalPERS, staff determined that the existing language requires changes to ensure that it is consistent with the original intent and special compensation definitions in the PERL. Retitling the education premium to the special compensation title Master Police Officer and clarifying the eligibility criteria will ensure that this education-related compensation is reportable to CalPERS, as originally intended by the City and the PSOA.
EXISTING POLICY
Council Policy 7.3.1 Legislative Management - Goals and Policies, Goal 7.3D: Maintain a quality work force, consistent with state and federal laws, City Charter, and adopted policies in order to assure that City services are provided in an effective, efficient, and high-quality manner.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
The Public Safety Officers Association (PSOA) represents Public Safety Officers-In-Training, Public Safety Officer 1, Public Safety Officer 2, and Public Safety Lieutenants. Employees in these classifications perform a variety of sworn law enforcement and firefighting duties in support of the Department of Public Safety.
The most recent Memorandum of Understanding (MOU) between the City and PSOA has a term of January 1, 2021 through December 31, 2024. Negotiations for a successor agreement began in summer 2024 and are currently ongoing.
Section 31.5 of the MOU sets forth the existing Education Incentive Program. The Parties intended the Education Incentive Program to be pensionable and the City has reported the Education Incentive as Special Compensation under the Public Employees Retirement Law (PERL). However, CalPERS has raised concerns about the appropriateness of reporting this pay.
In August 2024, the City received a compensation review notice from the California Public Employees’ Retirement System (CalPERS) related to education premium for an employee considering retirement. Through consultation with CalPERS, Staff determined the existing language related to Education Incentive Program needed clarification to ensure it is consistent with the original intent and special compensation definitions. Retitling the Education Incentive to the special compensation title Master Police Officer and clarifying the eligibility criteria for this premium ensures that it is consistent with CalPERS requirements for special compensation, as intended.
The Parties agree to replace the existing Education Incentive Program with a Master Police Officer Program, retroactive to January 1, 2021, and to replace existing Article 31 of the MOU with the language outlined in the Side Letter Agreement. The Master Police Officer premium will remedy CalPERS issues related to the current education premium in the PSOA MOU. The urgency of this side letter agreement before the MOU is to ensure PSOA employees who have recently retired or who plan to retire before the end of the calendar year are compensated appropriately.
FISCAL IMPACT
There is no fiscal impact from replacing the Education Incentive Program with the Master Police Officer Program; the proposed change is a clarifying measure to ensure that the program meets CalPERS special compensation standards and is consistent with the intent of the original program.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Approve the Side Letter Agreement between the City of Sunnyvale and Public Safety Officers’ Association (PSOA) amending the PSOA Memorandum of Understanding Retitling Education Premium to Master Police Officer Special Assignment Pay.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
_X_ Labor or personal employment contract
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Tina Murphy, Director, Human Resources
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Public Safety Officers’ Association (PSOA) Side Letter Agreement