REPORT TO COUNCIL
SUBJECT
Title
Approve a Memorandum of Understanding Between the City of Sunnyvale and the Sunnyvale Employees’ Association/IFPTE Local 21, and Adopt two Resolutions: (1) Amending the City's Salary Resolution and Schedule of Pay to Increase Salaries for Pay Plan Category B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees); and (2) Paying and Reporting the Value of Employer Paid Member Contributions to the California Public Employees' Retirement System for Pay Plan Category B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees)
Report
BACKGROUND
A Tentative Agreement has been reached between the City of Sunnyvale (City) and the Sunnyvale Employees’ Association/IFPTE Local 21 (SEA/IFPTE Local 21) on a Successor Memorandum of Understanding (MOU). SEA/IFPTE Local 21 represents non-management miscellaneous full-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 SEA/IFPTE Local 21 expires on June 30, 2026. Representatives from the City and SEA/IFPTE Local 21 began the meet-and-confer process in April 2026 and met eight times to reach an agreement. A Tentative Agreement was reached on June 8, 2026, and the City was notified on June 17, 2026 that SEA/IFPTE Local 21 membership ratified the Tentative Agreement.
Pursuant to the existing provisions of the Salary Resolution Article 1.000, Unrepresented Classified Confidential (Pay Plan Category G) employees receive the same treatment for wages, benefits, and leaves as Pay Plan Category B (SEA/IFPTE Local 21) employees, except for benefits associated with FLSA exempt designation (as defined in Articles 3.910, 4.000, 4.100, and 4.300). Unrepresented Classified Confidential employees are not organized and do not negotiate changes to their wages, hours, or other terms and conditions of employment. The action outlined in the Report to Council provides for the same salary and benefits changes recommended for Category B employees to be implemented for Category G employees.
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 Sunnyvale Employees’ Association/IFPTE Local 21 (SEA/IFPTE Local 21) focused on areas of mutual interest, including recruitment and retention, and market comparability. In addition, the composition of the SEA/IFPTE Local 21 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, which impacts total compensation priorities given the different retirement benefits for those groups. The significant provisions of the new SEA/IFPTE Local 21 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 due to the change in Employer-Paid Member Contributions discussed below.
• Effective July 1, 2029: 3% across the board salary increase.
In addition, the City will complete a compensation study by September 30, 2028. The parties agree to a December 2028 reopener regarding the implementation of any market adjustments.
Effective July 2, 2028, the City will cease paying or reporting the 4% Employer-Paid Member Contributions (EPMC), and will give an additional 4% across the board salary increase in exchange;
• All CalPERS Classic members will pay the full 8% (for Tier 1) or 7% (for Tier 2) member contribution. CalPERS requires the attached resolution to complete this change.
Deferred Compensation
The City will make a contribution to each employee's deferred compensation retirement account as follows:
• Effective July 5, 2026: A total of $50 per pay period.
• Effective July 2, 2028: A total of $75 per pay period.
• Effective July 1, 2029: A total of $100 per pay period.
Bilingual Pay
Increase the bilingual pay from $108.33 to $151.67 per month for verbal skills, effective July 2026, and introduce a new benefit of $200 per month for verbal and written skills.
Shift Differentials
Increase the shift differential for graveyard shift from 5% to 10% effective July 2026, while maintaining the differential for swing shift at the existing 5%.
Safety Footwear and Tool Allowances
The existing annual allowance of $275 for safety footwear and $450 for tool allowance will be adjusted annually in July based on the Consumer Price Index (CPI-U) for the San Francisco Bay Area (San Francisco-Oakland-Hayward). In addition, the Golf Course Equipment Mechanic classification will be eligible to receive the tool allowance.
Paid Medical Leave and State Disability Insurance
Employees will participate in the California State Disability Insurance (SDI) program, including Paid Family Leave (PFL), expanding income protection benefits available during qualifying medical and family leave events.
To ensure continuity of benefits during implementation, the City’s existing Paid Medical Leave (PML) program will remain in effect until the later of January 1, 2028, or one year after SDI payroll deductions begin. In addition, the City will provide up to 120 hours of supplemental paid leave annually to coordinate with SDI/PFL benefits and help employees maintain income during approved leave periods. The supplemental paid leave may not be cashed out, and the unused balance will terminate at the end of each year.
General Language Changes and Clean Up
Parties agreed to other non-economic administrative and operational language items, including provisions related to layoffs associated with artificial intelligence and use of old written reprimands, as well as language clean-up to remove outdated language, correct formatting, typos and grammatical issues, update in accordance with legal changes, and provide additional clarity.
Corresponding Salary and Benefit Changes for Unrepresented Classified Confidential (Category G) Employees
Based on the Salary Resolution Article 1.000, it is recommended that the same salary and benefits changes recommended for Category B employees be implemented for Unrepresented Classified Confidential (Category G) Employees.
FISCAL IMPACT
Employees represented by SEA and Unrepresented Classified Confidential employees are funded by all City funding sources that include personnel costs. The FY 2026/27 Adopted Budget includes assumptions for total compensation but does not fully account for the impact of this successor MOU. Staff will monitor budgeted revenues and expenditures against actual results and will return to Council if a budget amendment is needed. The increased cost over the 4-year term of the agreement is $754,000 ($420,000 General Fund) and $10.1 million ($5.7 million General Fund) over 20 years.
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 Sunnyvale Employees’ Association/IFPTE Local 21 (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 B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees) (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 B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees) (Attachment 4 to the report).
2. Do not authorize the City Manager to execute the Memorandum of Understanding between the City of Sunnyvale and the Sunnyvale Employees’ Association/IFPTE Local 21, and do not adopt the related resolutions.
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 Sunnyvale Employees’ Association/IFPTE Local 21 (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 B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees) (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 B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees) (Attachment 4 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 Sunnyvale Employees’ Association/IFPTE Local 21, 2026-2030 - redlined version
2. Memorandum of Understanding between the City of Sunnyvale and the Sunnyvale Employees’ Association/IFPTE Local 21, 2026-2030 - final version
3. Resolution Amending the City's Salary Resolution and Schedule of Pay to Increase Salaries for Pay Plan Category B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees)
4. Resolution for Paying and Reporting the Value of Employer Paid Member Contributions to the California Public Employees' Retirement System for Pay Plan Category B (Employees Represented by the Sunnyvale Employees’ Association/IFPTE Local 21) and Pay Plan Category G (Unrepresented Classified Confidential Employees)