REPORT TO THE CITY COUNCIL
FROM: SUMEET MALHI, Director
Personnel Services Department
BY: YER TAYLOR, Principal Labor Relations Analyst
Personnel Services Department
SUBJECT
Title
Actions pertaining to the International Union of Operating Engineers, Stationary Engineers, Local 39 for Unit 1
1. ***Adopt a successor Memorandum of Understanding between the City of Fresno and International Union of Operating Engineers, Stationary Engineers, Local 39 (Local 39), Non-Supervisory Blue Collar - Unit 1 (Subject to Mayor’s veto)
2. ***RESOLUTION: Adopt the Fourteenth Amendment to FY 2026 Salary Resolution No. 2025-177, amending Exhibit 1, Unit 1 - Non-Supervisory Blue Collar (Local 39), to provide a salary increase for respective classes as required by the Memorandum of Understanding between the City of Fresno and International Union of Operating Engineers, Stationary Engineers, Local 39 (Local 39) (Subject to Mayor’s veto)
Body
RECOMMENDATION
It is recommended Council (1) approve the attached successor Memorandum of Understanding (MOU) to implement wages, hours and other terms and conditions of employment for City employees in Unit 1, Non-Supervisory Blue Collar, represented by Local 39; and (2) adopt the Fourteenth Amendment to FY 2026 Salary Resolution No. 2025-177 to amend Exhibit 1.
EXECUTIVE SUMMARY
The City of Fresno and Local 39 reached a tentative agreement on a successor MOU which will replace the MOU that expired on June 15, 2025. The MOU provides for an agreement from June 16, 2025 through June 25, 2028, increases to wages, and other changes in terms or conditions of employment.
Upon Council approval of the Fourteenth Amendment to the FY 2026 Salary Resolution, Exhibit 1 of the FY 2026 Salary Resolution will be updated to reflect the amended Exhibit 1 as approved by Council.
BACKGROUND
The City of Fresno and Local 39 started meeting in February 2025 to work towards reaching agreement on a successor MOU and the parties reached a tentative agreement on November 7, 2025. Members of the Unit ratified on November 18, 2025.
Significant changes to the MOU are summarized below.
• Term: Three-year contract effective June 16, 2025 through June 25, 2028.
• Salaries: FY26: 4.5% wage increase effective December 15, 2025; FY27: 3% wage increase effective June 15, 2026; FY28: 3% wage increase effective June 14, 2027.
• Certificate Pay: Adding new Qualified Applicator Certificate or License Pay of $175/month and new Water Distribution Operator, Grade D5, Certificate Pay of $250/month. Increasing Wastewater Mechanical Series Certificate Pay and Wastewater Treatment Plant Series Certificate Pay by $25 or $50/month. Increasing Water Treatment Operator, Grade T5, Certificate Pay by $50/month. Clarifying that certificate pay will be applicable for those classifications where the certification is a minimum qualification, unless specifically stated otherwise.
• Health Reimbursement Arrangement (HRA): Adding that accumulated Supplemental Sick Leave, Holiday Leave, and Special Holiday Leave can go towards HRA. Modifying criteria of those who qualify for HRA. Increasing the number of Sick Leave hours that can go towards HRA from in excess of 240 to in excess of 100.
• On-Duty Meal Periods: Adding new provision allowing specific classifications who work alone on a shift and must remain on-site at the Water or Wastewater Treatment Plants to have a paid 30-minute on-duty meal period as part of their regular shift and have their schedules adjusted accordingly.
• Holiday Leave: Increasing the maximum holiday leave accrual from 48 to 80 hours and modifying the criteria in which employees would not receive the 2 personal business days accrual.
• Maintenance & Construction Worker Temporary Assignment Pay: Increasing the premium pay from 5% to 7.5%.
• Workers’ Compensation: Allowing integration of leave for the first year of a claim at the employee’s option.
• Overtime: Reducing the wait time for acceptance of a planned overtime assignment from 1 hour to 30 minutes.
• Call Back Pay: Moving Call Back Pay from Overtime section to Premium Pay section with modifications.
• Standby Pay: Increasing Standby Pay from $1.90/hour to $2.00/hour.
• Bereavement Leave: Adding new section to be consistent with Government Code.
• Sick Leave: Updating the Sick Leave section to be consistent with state law.
• Attendance Policy: Modifications to Attendance Policy to be in alignment with Sick Leave.
In addition to the above, there was language clean up throughout the MOU.
The City Attorney’s Office has approved the new MOU and Salary Resolution Amendment as to form.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this item does not qualify as a “project” and is therefore exempt from the California Environmental Quality Act requirements.
LOCAL PREFERENCE
Local preference is not implicated because this item does not involve public contracting or bidding with the City of Fresno.
FISCAL IMPACT
Approval of the MOU and Salary Resolution Amendment will result in estimated additional salary and benefit expenses of $142,277 to the General Fund and $1,616,292 to All Funds in FY26, and $481,633 to the General Fund and $5,420,166 to All Funds in FY27, and $684,405 to the General Fund and $7,672,577 to All Funds in FY28, for a total of $1,308,315 to the General Fund and $14,709,035 to All Funds for the term of the MOU, which expires June 25, 2028.
Attachments:
City of Fresno and Local 39 MOU - Redline
City of Fresno and Local 39 MOU - Final
Costing for Proposed Local 39 MOU
Resolution - Fourteenth Amendment to FY 2026 Salary Resolution No. 2025-177
Salary Table - Fourteenth Amendment to FY 2026 Salary Resolution No. 2025-177 - Redline
Salary Table - Fourteenth Amendment to FY 2026 Salary Resolution No. 2025-177 -