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APPROVAL OF MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF STOCKTON AND THE MID-MANAGEMENT/SUPERVISORY LEVEL UNIT (B&C)
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RECOMMENDATION
It is recommended that the City Council adopt by resolution the attached successor Memorandum of Understanding (MOU) with the Mid-Management/Supervisory Level Unit (B&C) effective July 1, 2026 through June 30, 2029.
It is further recommended that the City Manager be authorized to take any 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 Mid-Management/Supervisory Level Unit (B&C) for a successor MOU, as the contract was set to expire on June 30, 2026. Following a series of bargaining sessions, the City and the B&C unit successfully reached an agreement on the terms of a successor MOU. The proposed successor MOU includes a three-year term and provides for cost-of-living and market salary adjustments, the addition of salary steps to the bargaining unit salary schedule, increased City contributions toward health insurance premiums, and cleanup language.
The successor MOU for B&C 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
The B&C unit represents mid-management and supervisory employees within various City departments. In 2023, the City entered into a three (3) year contract term with B&C. Under this agreement, bargaining unit members received a four percent (4%) cost of living adjustment (COLA) effective July 1, 2023, a three percent (3%) COLA effective July 1, 2024, a three percent (3%) COLA effective July 1, 2025, market adjustments for classifications that were more than ten percent (10%) below median of market effective July 1, 2024 and July 1, 2025, two (2) lump sum payments of two thousand dollars ($2,000) paid out on July 1, 2024 and July 1, 2025, and a two percent (2%) increase to the City’s health contribution for each year of the contract.
In March 2026, City representatives began negotiations with the B&C unit for a successor MOU. On June 23, 2026, the City reached a tentative agreement on a successor MOU with B&C. On July 6, 2026, B&C notified the City that members had ratified the tentative agreement.
Present Situation
The relevant amendments under the successor MOU for the B&C unit are summarized as follows:
1. MOU contract term for three (3) years effective July 1, 2026, through June 30, 2029 (B&C MOU Section 19).
2. COLAs consisting of a two percent (2%) effective July 1, 2026, a two percent (2%) COLA effective July 1, 2027, and a two percent (2%) COLA effective July 1, 2028 (B&C MOU Section 14).
3. Market Adjustments consisting of a one and a half percent (1.5%) increase for all classifications, and a four point two-five percent (4.25%) increase for Fire Telecommunications Supervisors effective July 12, 2026 (B&C MOU Section 14).
4. Salary Step Plan. Adds salary steps 7, 8, and 9 to the salary schedule. Clarifies that there is a five percent (5%) between steps one (1) through six (6) and two and a half percent (2.5%) between steps seven (7) through nine (9) (B&C MOU Section 14).
5. City Health Contribution. Four percent (4%) increase to the City’s health insurance premium contribution effective January 1, 2027, two percent (2%) increase effective January 1, 2028, and two percent (2%) increase effective January 1, 2029 (B&C MOU Section 13).
6. Reopener Clause for Health Insurance. At B&C’s request, the City will meet and confer regarding premium contributions should medical, dental, and vision insurance premiums increase more than four percent (4%) and if the City’s general fund revenue forecast exceeds three hundred and eighty million dollars for fiscal year 2028/29 (B&C MOU Section 13).
7. Uniform Allowance. Offers a twenty-five dollar ($25) increase to specific classifications and updates the annual value to reflect a per pay period amount. Also offers a fifty dollar ($50) increase to safety protective footwear reimbursements for eligible employees (B&C MOU Section 12).
8. Vacation Sellback provision allows a vacation cash payment option/sell-back of up to forty (40) hours of vacation each calendar year (B&C MOU Section 8).
9. Vacation Accrual. Converts vacation accrual amounts from annual to per pay period amounts. This change reflects how vacation accruals are currently earned (B&C MOU Section 8).
10. Call Back Pay. Increases call-back pay to three (3) hours of pay for employees who are physically called back to work (B&C MOU Section 12).
11. Bilingual Pay. Updates language to reflect the value of the pay on a bi-weekly basis consistent with current payroll practices (B&C MOU Section 12).
12. 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” (B&C MOU Section 11).
13. Holiday in Lieu for Police and Fire Telecommunications Supervisors. Employees in these classifications that are scheduled without regard for the holidays will receive holiday-in-lieu in the amount of five and a half-percent (5.5%) of their base hourly rate (B&C MOU Section 11).
14. Overtime Eligibility. Clarifies that overtime is paid at the employee’s regular rate of pay and eliminates language referring to Fire Telecommunications Supervisors assigned to a 56-hour workweek as they no longer work a 56-hour workweek (B&C MOU Section 10).
15. Other Leaves with Pay. Offers clean-up language for Jury Duty and Court Leave. Also offers a reopener where the parties agree to continue to meet and confer over a citywide legally protected leaves policy (B&C MOU Section 8).
16. Elimination of language that is duplicative, obsolete, or already governed by City policies or applicable federal and state laws for: City recognition, union rights, non-discrimination, sick leave, bereavement leave, compensatory time off, CalPERS retirement, longevity pay, standby pay, bi-weekly pay period, maintenance of operations, and bankruptcy. These provisions remain fully enforceable and applicable to employees regardless of whether they are specifically referenced in the MOU.
17. Rates of Pay. Defines the different rates of pay for payroll purposes (B&C MOU Section 14).
The proposed compensation plan has been reviewed by the Administrative Services Department to ensure consistency with the City's compensation strategy and available budget appropriations.
FINANCIAL SUMMARY
COLA & MARKET Adjustments
The total three-year cost for the COLA and Market adjustment increases to base pay for the 177 employees in the B&C Mid-Management bargaining group is approximately $2.3 million. Of this amount, $1.1 million is a General Fund cost. The table below shows the cost increases for the three-year term of the contract.
ADDITIONAL SALARY STEPS
Three additional steps have been proposed for each of the classification salary schedules within the bargaining group. The three-year cost of this adjustment is approximately $2.3 million. The impact on the General Fund is approximately $1.1 million.
HEALTH CARE INCREASES
The City has agreed to increase its contribution to the cost of employee health care by 4% in FY27, 2% in FY28, and 2% in FY29. The total three-year cost is approximately $409,000. This would be an additional $198,000 in costs to the General Fund over three years.
UNIFORM & SAFETY ALLOWANCE
An increase of $25 towards the annual uniform allowance, and an additional $50 towards safety footwear is proposed for a three-year cost of $3,300.
VACATION SELLBACK
Bargaining group members may cash out up to 40 vacation hours each year. This would amount to approximately $1.1 million over three years, with a potential impact to the General Fund of roughly $536,000.
TOTAL COSTS
The total cost of this agreement is approximately $6.1 million. Of this amount, the cost would be approximately $1.9 million in FY27, $1.8 million in FY28, and $2.4 million in FY29. The impact on the General Fund is approximately $2.9 million.
Attachment A - B&C MOU - Redline
Attachment B - B&C Costing Table