HomeMy WebLinkAboutItem 5g. Approve a side letter to the MOU between City of SLO and SLOCEA regarding standby pay Item 5g
Department: Human Resources
Cost Center: 3001
For Agenda of: 2/17/2026
Placement: Consent
Estimated Time: N/A
FROM: Nickole Domini, Human Resources Director
Prepared By: Jeff Andrews, Human Resources Manager
SUBJECT: APPROVE A SIDE LETTER TO THE JULY 1, 2025, TO JUNE 30, 2028,
MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF SAN
LUIS OBISPO AND THE SAN LUIS OBISPO CITY EMPLOYEES'
ASSOCIATION REGARDING STANDBY PAY
RECOMMENDATION
Adopt a Draft Resolution entitled “A Resolution of the City Council of the City of San Luis
Obispo, California, approving a Side Letter to the July 1, 2025, through June 30, 2028,
Memorandum of Understanding between the City of San Luis Obispo and the San Luis
Obispo City Employees’ Association.” (Attachment A)
POLICY CONTEXT
A side letter is a supplemental agreement between the City and a recognized employee
organization that addresses specific matters related to an existing Memorandum of
Understanding (MOU). The Side Letter Agreement of the San Luis Obispo City
Employees’ Association (SLOCEA) MOU is in alignment with Council adopted
Compensation Philosophy and Labor Relations Objectives.
DISCUSSION
Background
On June 17, 2025, the City Council adopted a resolution entitled, “A Resolution of the City
Council of the City of San Luis Obispo, California, adopting and ratifying the Memorandum
of Understanding between the City of San Luis Obispo and the San Luis Obispo City
Employees’ Association for the period of July 1, 2025, to June 30, 2028.” SLOCEA is the
largest bargaining unit in the City, representing 218 positions in classifications providing
a wide variety of services to the community. Key changes in the successor MOU included
annual cost-of-living adjustments and annual health insurance contribution increases
through cost-sharing, the City assuming responsibility and costs for providing and
administering a plan for long-term disability insurance, and changes to overtime and
standby compensation.
The City and SLOCEA have been working collaboratively to test and implement various
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Item 5g
terms and changes to the MOU, including provisions related to Standby and Callback
assignments. Standby is defined as a circumstance which requires an employee so
assigned to be ready to respond immediately to a call for service; and be readily available
at all hours by telephone or other agreed upon communication equipment; and refrain
from activities which might impair their assigned duties upon cal l. Callback is a
circumstance requiring an employee to unexpectedly return to work duties after the
employee has left work at the end of the employee's work duties.
During the testing period, SLOCEA raised concerns regarding the City’s interpretation of
the Standby language in the MOU. Specifically, SLOCEA asserted that a week-long (168
hour) standby assignment requires eight days of compensation, rather than seven, due
to shift overlap. In addition, SLOCEA asserted that employees eligible for Holiday-in-Lieu
hours are entitled to the higher daily standby rate when assigned to standby on
designated holidays.
As a result of these concerns, SLOCEA submitted a formal grievance on December 5,
2025. A grievance is defined as an alleged violation, misinterpretation, or misapplication
of the employer-employee resolution, the Personnel Rules and Regulations, any MOU,
or any existing written policy or procedure relating to wages, hours, or other terms and
conditions of employment, excluding disciplinary matters. While grievances are
sometimes perceived negatively, they can serve as an important tool to identify
contractual ambiguities and provide a structured process for resolution . In this instance,
the grievance process highlighted areas of the MOU requiring clarification and
constructive dialogue between the parties.
The City and SLOCEA have reached a tentative agreement, pending City Council
approval, to resolve the grievance through a Side Letter Agreement amending the
Standby Article in the SLOCEA MOU. While it is atypical for the City to agree to modify
an MOU provision that results in an ongoing fiscal impact outside of a formal renegotiation
period, the change in this instance is limited and results in a minimal ongoing cost of less
than $500 annually.
The Side Letter clarifies two key provisions: (1) employees assigned to standby on
designated holidays will receive the higher daily standby rate ($75 per day compared to
$55 per day), and (2) employees assigned to a seven-day (168 hour) standby shift will be
eligible for seven daily standby rates.
Under applicable statutes and regulations, the City Council must approve the labor
agreement containing any item of special compensation reported to CalPERS. Based on
this requirement, City staff prepared a Side Letter Agreement with the revised lang uage
for Standby for Council approval.
Previous Council or Advisory Body Action
The City Council adopted the 2025-28 SLOCEA MOU on June 17, 2025.
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Item 5g
Public Engagement
This report is on the consent agenda for February 17, 2026. The agenda and report will
be posted seven days in advance of the meeting, and the public will have an opportunity
to provide feedback in writing or during public comment in advance of the Council voting
on the consent agenda.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended
action in this report, because the action does not constitute a “Project” under CEQA
Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2025-26 and ongoing
Funding Identified: Yes
Fiscal Analysis:
The ongoing costs amount to $440 per year (eleven (11) fixed holidays x two (2)
employees x $20 per holiday date). The fiscal forecast in the water and sewer funds
includes adequate budget to cover the costs as part of the 2025 -27 Financial Plan and
the ongoing increases will be built into future fiscal forecasts. There is no impact to the
General Fund; employees eligible for Holiday-in-Lieu are only in the Utilities department.
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0
Water Fund $0 $220 $220
Sewer Fund $0 $220 $220
State
Federal
Fees
Other:
Total $0 $440 $ $440
ALTERNATIVES
Do not approve the side letter. Instead, direct staff to continue discussions with
SLOCEA. Should this alternative be chosen and additional discussions conclude
unsuccessfully, this may lead to impasse.
ATTACHMENTS
A - Draft Resolution approving a Side Letter to the July 1, 2025, through June 30, 2028,
Memorandum of Understanding between the City of San Luis Obispo and the San
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Item 5g
Luis Obispo City Employees’ Association.
B - Exhibit A to the Draft Resolution – Side Letter Agreement
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R ______
RESOLUTION NO. _____ (2026 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING A SIDE LETTER TO THE JULY 1,
2025, THROUGH JUNE 30, 2028, MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF SAN LUIS OBISPO AND
THE SAN LUIS OBISPO CITY EMPLOYEES’ ASSOCIATION.
WHEREAS, on June 17, 2025 the City Council adopted Resolution # 11579 (2025
Series) ratifying the 2025-2028 Memorandum of Understanding between the City of San
Luis Obispo and The San Luis Obispo City Employees’ Association; and
WHEREAS, the City of San Luis Obispo and The San Luis Obispo City Employees’
Association have agreed that employees in the group who are assigned to standby on
designated holidays will receive $75 per day.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The Side Letter to the July 1, 2025, through June 30, 2028,
Memorandum of Understanding between the City of San Luis Obispo and The San Luis
Obispo City Employees’ Association, attached hereto as “Exhibit A” and incorporated
herein by this reference, is hereby approved by the Council. All other terms and conditions
of the Memorandum of Understanding remain as previously approved on June 17, 2025.
SECTION 2. The City Clerk shall file and furnish a copy of the resolution to Ryan
Dale, President of The City of San Luis Obispo City Employees’ Association, and Nickole
Domini, Director of Human Resources.
SECTION 3. Amendments to compensation for The San Luis Obispo City
Employees’ Association do not constitute a “Project” under CEQA Guidelines Sec. 15378.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 20 26.
___________________________
Mayor Erica A. Stewart
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Resolution No. _____ (2026 Series) Page 2
R ______
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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ARTICLE 7 - STANDBY
A. Standby duty is defined as that circumstance which requires an employee so
assigned to:
Be ready to respond immediately to a call for service; and
Be readily available at all hours by telephone or other agreed upon
communication equipment; and
Refrain from activities which might impair their assigned duties upon call
(including, but not limited to, alcohol consumption).
B. Employees will receive fifty-five dollars ($55.00) for each scheduled workday and
seventy-five dollars ($75.00) for each scheduled day off, including observed holidays,
of such standby assignment. Employees assigned to standby on one of the eleven
(11) designated holidays, as listed in Article 17 Section (A)(1), but excluding the two
(2) floating holidays, shall receive seventy-five dollars ($75.00).
C. A standby rotation is a defined period, generally consisting of seven (7) days or 168
hours, when a standby assignment is allocated to a single employee. The rotation
begins when the employee assumes standby responsibilities and concludes when
the responsibilities are transferred to another employee. Employees shall be paid for
no more than seven (7) days of standby per weekly rotation.
Example: A standby rotation begins on Thursday at 7:00 AM and concludes on the
following Thursday at 7:00 AM. Employee A, who works Monday through Friday,
assumes standby responsibility (e.g., takes possession of the standby
phone/vehicle) on Thursday at 7:00 AM. Employee A remains on standby for seven
(7) consecutive 24-hour periods. Employee A transfers responsibility to Employee
B the next Thursday at 7:00 AM.
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This example constitutes one (1) rotation. Employee A would receive compensation
for five (5) scheduled workdays and two (2) scheduled days off, provided no
designated holidays occur during this period.
Although this assignment spans eight (8) calendar dates, it consists of seven (7)
distinct 24-hour periods. Compensation is limited to seven (7) daily payments. The
final morning of the rotation is considered the conclusion of the previous day's shift
and does not qualify for a separate daily payment.
B.D. Employees who are assigned standby duty but are unable to fulfill duty requirements
must notify their supervisor as soon as possible. Such employees will not receive
standby pay.
C.E. Employees who are contacted and required to work as part of a standby assignment,
as defined in Section A above, will be compensated in accordance with Article 8 –
Callback.
D.F. The parties agree that employees on standby, as defined above, are waiting to be
engaged.
E.G. The City and SLOCEA agree to maintain a separate document governing standby
shifts at the Whale Rock Reservoir that may be revised based on the mutual
agreement of the City and SLOCEA during the course of this MOU, without the
need for a separate side letter. The terms and conditions outlined in the side letter
dated December 6, 2024, will continue in force and effect unless amended by
agreement of the Parties.
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