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APPROVAL OF MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF STOCKTON AND THE WATER SUPERVISORY UNIT
recommended action
RECOMMENDATION
It is recommended that the City Council adopt by resolution the attached successor Memorandum of Understanding (MOU) with the Water Supervisory Unit 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 Water Supervisory Unit 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 Water Supervisory 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 Water Supervisory Unit 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 Water Supervisory Unit represents supervisory employees assigned to the City’s Municipal Utilities Department. In 2023, the City entered into a three (3) year contract term with the unit. Under this agreement, bargaining unit members received a four percent (4%) cost of living adjustment (COLA) effective the first full pay period following ratification, 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, a one-time payment in the amount of four hundred and fifty dollars ($450), 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 Water Supervisory Unit for a successor MOU. On July 29, 2026, the City reached a tentative agreement on a successor MOU with the Water Supervisory Unit. On August 6, 2026, the City was notified that the unit’s members had ratified the tentative agreement.
Present Situation
The relevant amendments under the successor MOU for the Water Supervisory Unit are summarized as follows:
1. MOU contract term for three (3) years effective July 1, 2026, through June 30, 2029 (MOU Section 18).
2. COLAs to base pay consisting of a two percent (2%) COLA effective August 23, 2026, a two percent (2%) COLA effective June 27, 2027, and a two percent (2%) COLA effective June 25, 2028 (MOU Section 14).
3. Market Adjustments in alignment with the results of a mutually agreed-upon salary study. (MOU Appendix A).
4. Salary Step Plan. Adds salary steps 7, 8, and 9 to the salary schedule. There will be two and a half percent (2.5%) between steps seven (7) through nine (9) (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 (MOU Section 13).
6. Safety Protective Footwear. Offers a fifty dollar ($50) increase for eligible employees, increasing payment from two hundred fifty dollars ($250.00) to three hundred dollars ($300.00) per fiscal year (MOU Section 12.4).
7. Vacation Sellback. Allows a vacation cash payment option/sell-back of up to thirty (30) hours of vacation each calendar year (MOU Section 8).
8. Vacation Accrual. Converts vacation accrual amounts from annual to per pay period amounts. This change reflects how vacation accruals are earned (MOU Section 8).
9. Standby Pay. Increases standby pay from three dollars ($3.00) per hour to four dollars ($4.00) per hour and includes additional language clean-up. (MOU Section 10).
10. 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” (MOU Section 11).
11. Overtime Eligibility. Adds that vacation is counted as time worked for overtime purposes. Clarifies that overtime is paid at the employee’s regular rate of pay and eliminates language referring to the pay structure of employees who are not regularly scheduled to work holidays (MOU Section 10).
12. Compensatory Time Off. Clarifies that Compensatory Time Off will be paid out at the employee’s regular rate of pay (MOU Section 10).
13. Rates of Pay. Provides clarification of the definition of pay rates to include base rate, straight time rate, and regular rate (MOU Appendix C).
14. Elimination of language that is duplicative, obsolete, or already governed by City policies or applicable federal and state laws for: non-discrimination, FLSA, safety, longevity pay, call-back pay, bi-weekly pay period, one time payment, and GPS. These provisions remain fully enforceable and applicable to employees regardless of whether they are specifically referenced in the MOU.
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 cost of living and market adjustments for the Water Supervisors unit is approximately $295,124. These increases will be allocated to the Water, Wastewater, and Stormwater funds.
|
BASE WAGE INCREASES |
|
UNIT |
# of Positions |
FY 2026-27 |
FY 2027-28 |
FY 2028-29 |
Total |
|
WATER SUPERVISORS |
16 |
$182,494 |
$55,758 |
$56,873 |
$295,124 |
Additional salary steps 7-9
Three additional step ranges are also proposed for the unit salary schedule. The impact of this adjustment is a three-year cost of approximately $319,047.
|
ADDITIONAL STEP RANGES 7-9 |
|
UNIT |
# of Positions |
FY 2026-27 |
FY 2027-28 |
FY 2028-29 |
Total |
|
WATER SUPERVISORS |
16 |
$44,488 |
$104,637 |
$169,922 |
$319,047 |
Health Insurance
The cost for health contribution increases of 4%, 2% and 2% are approximately $37,000 over the three-year contract period.
|
HEALTH INCREASES |
|
UNIT |
# of Positions |
FY 2026-27 |
FY 2027-28 |
FY 2028-29 |
Total |
|
WATER SUPERVISORS |
16 |
$12,096 |
$12,338 |
$12,585 |
$37,019 |
Safety Protective Footwear Reimbursement
Increasing the footwear allowance from $250 to $300 would result in an additional cost of $2,400 over three years.
|
SAFETY FOOTWEAR |
|
UNIT |
# of Positions |
FY 2026-27 |
FY 2027-28 |
FY 2028-29 |
Total |
|
WATER SUPERVISORS |
16 |
$800 |
$800 |
$800 |
$2,400 |
The total three-year cost of this agreement is approximately $653,590. First-year implementation costs are approximately $239,878, with additional costs of $173,533 in the 2nd year and an increase in costs of $240,180 in the final year of the agreement.
|
TOTAL BY BARGAINING UNIT |
|
UNIT |
# of Positions |
FY 2026-27 |
FY 2027-28 |
FY 2028-29 |
Total |
|
WATER SUPERVISORS |
16 |
$239,878 |
$173,533 |
$240,180 |
$653,590 |
Attachment A - Water Supervisory Unit MOU - Redline
Attachment B - Water Supervisory Unit Costing Table