PREPARED BY: ALICIA PLATT DATE OF MEETING: 09/08/2026
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO APPROVING AMENDMENTS THROUGH A SIDE-LETTER AGREEMENT TO SECTION 4.3(A), OPERATION DIVISION DIFFERENTIAL, AND SECTION 4.3(E), MANAGEMENT INCENTIVE PAY, OF THE MEMORANDUM OF UNDERSTANDING WITH THE SAN PABLO POLICE EMPLOYEES' ASSOCIATION POLICE MANAGEMENT UNIT TO CLARIFY ELIGIBILITY AND CONDITIONS OF PAYMENT FOR CALPERS REPORTING PURPOSES, EFFECTIVE RETROACTIVELY JULY 1, 2022 THROUGH JUNE 30, 2027
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
FY 2025-2027 Council Priority Workplan Compliance Statement:
FY 2025-27 Council Priority Workplan Compliance Statement: Continue to be an “Employer of Choice” to attract and retain talent and to continue to provide the community with exceptional services is in the FY 2025-27 City Council Priority Workplan, effective April 7, 2025. The proposed action supports this priority by ensuring the City's compensation provisions are clearly defined and administered in compliance with CalPERS reporting requirements.
CEQA Compliance Statement
This proposed action is not a project as defined by CEQA.
BACKGROUND
The City and the San Pablo Police Employees' Association (SPPEA) Police Management Unit are parties to an MOU covering the period of July 1, 2022, through June 30, 2027.
The City was recently advised by the California Public Employees' Retirement System (CalPERS) Compensation Compliance Review Team that the language for the compensation provisions identified in Section 4.3(A), Operation Division Differential, and Section 4.3(E), Management Incentive Pay, should more specifically identify eligibility requirements and conditions of payment to satisfy CalPERS reporting requirements under the Public Employees' Retirement Law and Title 2, California Code of Regulations, Section 571.
The City and the Association have agreed to address this guidance through a Side Letter Agreement clarifying the applicable provisions.
The parties acknowledge that the amendments are clarifying in nature and are intended to reflect the parties' original intent throughout the term of the MOU. The amendments are not intended to create new compensation, modify the amount of compensation, or expand employee eligibility.
The Side Letter Agreement shall become effective upon approval by the City Council and execution by the parties. The amendments shall be deemed effective July 1, 2022, shall remain in effect through June 30, 2027, and shall be incorporated into the successor MOU unless otherwise agreed by the parties in writing.
Proposed Amendments
In response to this guidance, the City and the Association have agreed to amend the applicable MOU provisions through a Side Letter Agreement. Staff recommends that the City Council adopt a Resolution approving the Side Letter Agreement between the City of San Pablo and the San Pablo Police Employees' Association (SPPEA) Police Management Unit, which amends Section 4.3(A), Operation Division Differential, and Section 4.3(E), Management Incentive Pay, of the MOU. The Resolution would also authorize the City Manager to execute the Side Letter Agreement on behalf of the City. The proposed amendments are intended to clarify the existing eligibility requirements and conditions of payment and accurately reflect the parties' original intent throughout the term of the MOU. The proposed amendments do not create new compensation, modify the amount of compensation, or expand employee eligibility.
Operation Division Differential - Section 4.3(A)
The Side Letter Agreement clarifies that the four percent (4%) Operation Division Differential applies to Lieutenants assigned to Operations (Patrol) who are routinely and consistently assigned by the City, as a regular and ongoing condition of their position, to work schedules other than a standard daytime schedule.
Eligible schedules include, but are not limited to, graveyard shifts, swing shifts, rotating shifts, split shifts, scheduled shift changes, weekends, or other non-daytime operational schedules required by the City. The differential shall be paid only while the employee is assigned to and actively working an eligible operational schedule.
Management Incentive Pay - Section 4.3(E)
The Side Letter Agreement clarifies that sworn employees covered by the MOU shall receive Management Incentive Pay equal to five percent (5%) of their base salary in recognition of the ongoing managerial, supervisory, and operational responsibilities assigned to their positions.
Management Incentive Pay shall be paid only while the employee is appointed to and actively serving in a sworn classification covered by the MOU.
The amendments shall be effective retroactively to July 1, 2022, and remain in effect through June 30, 2027, consistent with the current term of the MOU.
Except as expressly modified by the Side Letter Agreement, all other provisions of the MOU shall remain in full force and effect.
The Side Letter Agreement further provides that the amendments are intended solely to clarify the eligibility requirements and conditions of payment for the Operation Division Differential and Management Incentive Pay in response to guidance provided by the CalPERS Compensation Compliance Review Team. The Side Letter Agreement does not establish a past practice or precedent regarding any other provision of the MOU.
FISCAL IMPACT
The Side Letter Agreement is clarifying in nature and does not create new compensation, change the amount of compensation currently provided, or expand employee eligibility. The 4% Operation Division Differential and 5% Management Incentive Pay remain unchanged in rate and application.
No additional appropriation is required. These costs are already included in adopted Police Department appropriations in the General Fund under the FY 2026-27-2027-28 Biennial Budget. The amendments are intended to ensure that the City's compensation provisions accurately reflect the eligibility requirements and conditions of payment for CalPERS reporting purposes, consistent with the guidance provided by the CalPERS Compensation Compliance Review Team.
ATTACHMENTS:
Att A. Resolution
Exh 1. Side Letter Agreement between the City of San Pablo and San Pablo Police Employees' Association Police Management Unit