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APPROVAL OF THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF STOCKTON AND THE STOCKTON FIREFIGHTERS’ LOCAL 456 FIRE UNIT AND THE STOCKTON FIREFIGHTERS’ LOCAL 456 FIRE MANAGEMENT UNIT
recommended action
RECOMMENDATION
It is recommended that the City Council adopt by resolution the attached successor Memoranda of Understanding (MOU) for the Stockton Firefighters’ Local 456 Fire Unit and the Stockton Firefighters’ Local 456 Fire Management Unit effective July 1, 2026 through June 30, 2028.
It is further recommended that the City Manager be authorized to take all appropriate and necessary actions to carry out the purpose and intent of the resolution, including implementation and funding of the successor MOU.
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Summary
In March 2026, City representatives began negotiations with the Stockton Firefighters’ Local 456 Fire and Fire Management Units for a successor MOU, as the contracts were set to expire on June 30, 2026. Following a series of bargaining sessions, the City and the Fire and Fire Management units successfully reached an agreement on the terms of a successor MOU. The proposed successor MOUs includes a two-year term and provides for cost-of-living and market salary adjustments, the addition of salary steps to the bargaining unit salary schedule, and increased City contributions toward health insurance premiums.
Approval of the successor MOU will ensure continued labor stability and establish the agreed-upon wages, hours, and working conditions for employees represented by the Fire and Fire Management Units. It is intended to ensure that the City maintains a competitive compensation structure that supports the recruitment and retention of qualified employees while promoting internal equity and fiscal responsibility.
DISCUSSION
Background
In 2025, the City entered into a one (1) year contract term with the Fire and Fire Management Units. Under this agreement bargaining unit members received a two percent (2%) cost of living adjustment (COLA) effective September 1, 2025, a lump sum payment equal to two percent (2%) COLA from July 1, 2025 through August 31, 2025, and a two percent (2%) increase to the City’s health contribution. Additionally, the City entered into a side letter agreement with the Fire and Fire Management Units that offers Longevity Pay, effective September 1, 2025 through March 31, 2034, of various percentages for employees with five (5), ten (10), fifteen (15), and twenty (20) years of paid service.
Present Situation
The relevant amendments under the successor MOUs for the Stockton Firefighters’ Local 456 Fire and Fire Management Units are summarized as follows:
1. MOU contract term for two (2) years effective July 1, 2026, through June 30, 2028 (Fire Unit MOU Section 19 and Fire Management Unit MOU Section 19).
2. Increases to base pay totaling a 2% COLA and 4% Market Adjustment effective the first full pay period following City Council Adoption and a 2% COLA effective June 27, 2027 (Fire Unit MOU Section 14 and Fire Management Unit MOU Section 14).
3. Salary Step Plan. Adds 2.5% to existing salary steps, 7, 8, and 9 to the salary schedule for Firefighter. Adds salary steps 7, 8, and 9 to the salary schedule for Firefighter Engineers, Fire Captains, and Fire Battalion Chief classifications with 2.5% between each added step. Offers advancement in selected steps dependent on classification (Fire Unit MOU Section 14 and Fire Management Unit MOU Section 14).
4. City Health Contribution. 4% increase to the City’s health insurance premium contribution effective January 1, 2027, and a 2% increase effective January 1, 2028 (Fire Unit MOU Section 13.1 and Fire Management Unit MOU Section 13.1).
5. Administrative Positions. Establishes an hourly pay conversion for employees assigned to a 40-hour administrative schedule from a 56-hour suppression schedule and provides a 14% Fire Staff Premium for employees routinely assigned to administrative positions (Fire Unit MOU Section 12.13 and Appendix B; and Fire Management Unit MOU Section 12.10 and Appendix A).
6. Uniform Allowance. Updates the annual value to reflect a per pay period amount (Fire Unit MOU Section 12.8 and Fire Management Unit MOU Section 12.4).
7. Vacation Sellback provision allows a vacation cash payment option/sell-back of up to eighty (80) hours of vacation each calendar year (Fire Unit MOU Section 8.1 and Fire Management Unit MOU Section 8.1).
8. Vacation Accrual. Converts vacation accrual amounts from annual to per pay period amounts. This change reflects how vacation accruals are currently earned (Fire Unit MOU Section 8.1 and Fire Management Unit MOU Section 8.1).
9. Holidays. Converts the Cesar Chavez and the Birthday holidays into two floating holidays that can be used throughout the calendar year. Upon separation, any accrued and unused floating holiday hours will be cashed out at the employee’s current straight rate of pay. Additionally, it changes “Columbus Day” to “Indigenous Peoples Day” (Fire Unit MOU Section 11 and Fire Management Unit MOU Section 11).
10. Longevity Pay that incorporates the longevity offered in an established side letter agreement into the MOU. Provides longevity pay at various percentages for employees with at least five (5), ten (10), fifteen (15), and twenty (20) years of paid service (Fire Unit MOU Section 12.14 and Fire Management Unit MOU Section 12.8).
11. Education Incentive Pay. Outlines education incentive pays for employees who possess sixty (60) units, an Associate’s Degree, or a Bachelor’s Degree from an accredited college. It also outlines an incentive pay for those who hold an intermediate or advanced education certification on June 30, 2027 (Fire Unit MOU Section 12.4 and Fire Management Unit MOU Section 12.5).
12. Paramedic Pay. Incorporates the paramedic incentive pay previously established in a side letter agreement into the MOU, providing eligible employees with incentive pay equal to twelve percent (12%) of the top step Engineer base rate of pay. (Fire Unit MOU Section 12.7 and Fire Management Unit MOU Section 12.13).
13. Rank-for-Rank Overtime. Clarifies that employees will receive their existing wage for their regularly assigned classification for all hours worked, including overtime. It also clarifies overtime assignment procedures, including the use of higher-ranking employees to fill vacancies when necessary and the application of mandatory overtime when voluntary staffing is unavailable (Fire Unit MOU Section 10.1 (g) and Fire Management Unit MOU Section 10.4 (a)).
14. Elimination of language that is duplicative, obsolete, or already governed by City policies or applicable federal and state laws for: city recognition, reopener language, union rights, non-discrimination, layoffs, sick leave, bereavement leave, jury duty pay, life insurance, long term disability insurance, salary plan, and maintenance of operations. Provisions related to federal or state laws remain fully enforceable and applicable to employees regardless of whether they are specifically referenced in the MOU.
15. Rates of Pay. Defines the different rates of pay for payroll purposes (Fire Unit MOU Appendix C and Fire Management Unit MOU Appendix B).
The relevant amendments under the successor MOU for the Stockton Firefighters’ Local 456 Fire Unit are summarized as follows:
1. Chief’s Operator Assignment Pay. Offers Fire Engineers and Fire Captains assigned as the Chief Operator a 10% add pay for all hours worked as a Chief Operator (Fire Unit MOU Section 12.12).
2. Call-Back Pay. Serves to clarify that call-back pay applies to employees who physically return to work (Fire Unit MOU Section 12.11).
3. Compensatory Time Off (CTO). Includes that employees cannot carry over more than eighty (80) hours of CTO at any time consistent with current department policy (Fire Unit MOU Section 10.2).
The proposed agreement has been reviewed by the Administrative Services Department to ensure consistency with the City's compensation strategy and available budget appropriations.
FINANCIAL SUMMARY
COLA ADJUSTMENT
The annual impact of a 6% base wage increase in FY27 with a 2% adjustment in FY28 is shown in the table below. First-year costs are approximately $3.2 million, with an additional $1.1 million in costs for the 2nd year of the agreement.
SALARY TABLE ADJUSTMENTS
An additional three steps have also been added to the salary schedule. The impact of this change is $2.5 million in FY27, with increased costs of $4.2 million in FY28.
VACATION SELL BACK
The provisions of the agreement allow for the sell back of earned vacation hours. The following table reflects that impact.
HEALTH CARE CONTRIBUTION
The City will increase its health care contribution by 4% in FY27 with an additional 2% contribution increase in FY28.
TOTAL COSTS
The total cost of this proposal is approximately $4.8 million in FY27, with an additional $3.6 million in FY28.
Funding from the Known Contingency Reserve has been earmarked to cover this cost.
Attachment A - Stockton Firefighters’ Local 456 Fire Unit MOU - Redline
Attachment B - Stockton Firefighters’ Local 456 Fire Management Unit MOU - Redline
Attachment C - Fire Costing Table