REPORT TO COUNCIL
SUBJECT
Title
Approve a Memorandum of Understanding Between the City of Sunnyvale and the Service Employees International Union (SEIU), and Adopt two Resolutions: (1) Amending the City's Salary Resolution and Schedule of Pay to Increase Salaries for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union); and (2) Paying and Reporting the Value of Employer Paid Member Contributions to the California Public Employees' Retirement System for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union)
Report
BACKGROUND
A Tentative Agreement has been reached between the City of Sunnyvale (City) and the Service Employees International Union (SEIU) on a Successor Memorandum of Understanding (MOU). SEIU represents 42 classified regular part-time employees. The report recommends approval of the MOU, which, if approved by the City Council, will be in effect from July 1, 2026, through June 30, 2030.
The current MOU between the City and SEIU expires on June 30, 2026. Representatives from the City and SEIU began the meet-and-confer process in May 2026 and met five times to reach an agreement. A Tentative Agreement was reached on June 8, 2026, and the City was notified on June 18, 2026 that SEIU membership ratified the Tentative Agreement.
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.
Council Adopted Strategic Goals (July 2025 to June 2027): A responsive, transparent and efficient City government.
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)(4) in that is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
DISCUSSION
This round of negotiations with the Service Employees International Union (SEIU) focused on areas of mutual interest, including internal equity. In addition, the composition of the SEIU membership has changed from a majority of Classic CalPERS members to a majority of Public Employees' Pension Reform Act (PEPRA) members since the last contract was negotiated. The significant provisions of the new SEIU MOU are as follows:
Term
July 1, 2026 through June 30, 2030.
Salary and CalPERS Retirement
• Effective July 5, 2026: 5% across the board salary increase.
• Effective July 4, 2027: 4% across the board salary increase.
• Effective July 2, 2028: 3% across the board salary increase; plus an additional 4% salary increase to reflect the Employer Paid Member Contribution change discussed below.
• Effective July 1, 2029: 3% across the board salary increase.
Effective July 2, 2028 the City will cease paying or reporting the 4% Employer-Paid Member Contributions (EPMC) to CalPERS, and will give an additional 4% across the board increase in exchange.
• All CalPERS Classic members will then pay the full 8% (for Tier 1) or 7% (for Tier 2) member contribution. CalPERS requires the attached resolution to complete this change.
Paid Time Off
Modify Paid Time Off (PTO) accrual tiers from hours of service to years of service effective July 2026 to promote internal equity, with minor adjustments to the accrual rates.
Establishes the ability to negotiate enhanced PTO accrual rates for new hires as a recruitment incentive, and adds an annual PTO cash-out opportunity, subject to specified eligibility requirements and IRS regulations.
General Language Clean Up
Remove historical date-specific language, organize like contract terms together, provide gender-neutral language, correct typos and grammatical issues, update with legislative changes, and clarify language.
FISCAL IMPACT
Employees represented by SEIU are funded by various City funds. The FY 2026/27 Adopted Budget includes assumptions for total compensation that sufficiently cover the costs of this successor MOU.
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 City Hall 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.
ALTERNATIVES
1. Authorize the City Manager to execute the Memorandum of Understanding Between the City of Sunnyvale and the Service Employees International Union (SEIU) (Attachment 2 to the report), and adopt two Resolutions: (1) Amending the City's Salary Resolution and Schedule of Pay to Increase Salaries for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union) (Attachment 3 to the report); and (2) Paying and Reporting the Value of Employer Paid Member Contributions to the California Public Employees' Retirement System for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union) (Attachment 3 to the report).
2. Do not authorize the City Manager to execute the Memorandum of Understanding between the City of Sunnyvale and the Service Employees International Union, and do not adopt the related resolution.
3. Provide other direction to staff.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Authorize the City Manager to execute the Memorandum of Understanding Between the City of Sunnyvale and the Service Employees International Union (SEIU) (Attachment 2 to the report), and adopt two Resolutions: (1) Amending the City's Salary Resolution and Schedule of Pay to Increase Salaries for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union) (Attachment 3 to the report); and (2) Paying and Reporting the Value of Employer Paid Member Contributions to the California Public Employees' Retirement System for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union) (Attachment 3 to the report).
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 $500 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
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Vienne Choi, Principal Human Resources Analyst
Reviewed by: Heather Ruiz, Director, Human Resources
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Memorandum of Understanding between the City of Sunnyvale and the Service Employees International Union, 2026-2030 - redlined version
2. Memorandum of Understanding between the City of Sunnyvale and the Service Employees International Union, 2026-2030 - final version
3. Resolution Amending the City's Salary Resolution and Schedule of Pay to Increase Salaries for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union)
4. Resolution for Paying and Reporting the Value of Employer Paid Member Contributions to the California Public Employees' Retirement System for Pay Plan Category L (Classified Regular Part-time Employees Represented by the Service Employees International Union)