AGENDA TITLE:
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Adopt a Resolution Approving Side-Letter Agreements with Lodi Police Dispatchers Association, the Police Officers’ Association of Lodi, Lodi Police Mid-Management Organization, Lodi Professional Firefighters, and Lodi Fire Mid-Management to Address Holiday Leave Cash Out Requirements (HR)
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MEETING DATE:
November 19, 2025
PREPARED BY:
Cristina Gonzales, Interim Human Resources Manager
recommendation
RECOMMENDED ACTION:
Adopt a Resolution Approving Side-Letter Agreements with Lodi Police Dispatchers Association, the Police Officers’ Association of Lodi, Police Mid-Management Organization, Lodi Professional Firefighters, and Lodi Fire Mid-Management to address holiday leave cash out requirements.
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BACKGROUND INFORMATION:
During the last financial audit, it was identified that the City of Lodi had incorrectly reported certain types of compensation to CalPERS. Specifically, the City’s agreements (“MOUs”) with public safety labor groups did not meet CalPERS requirements for reporting holiday cash‑outs as pensionable, or special compensation for Classic members under state regulations (CCR Section 571(a)(5)).
Because public safety positions require staffing every day, including holidays, employees in these roles receive a bank of holiday leave each January. They may use this leave as time off during the year or cash out any unused hours. However, the way this benefit was described in the MOUs did not meet CalPERS reporting standards, creating compliance concerns and the risk of inaccurate pension reporting.
To address the issue, City staff worked with CalPERS to review each public safety MOU and identify the changes needed. The City provides holiday leave banks to members of the Lodi Police Dispatchers Association (LPDA), Police Officers’ Association of Lodi (POAL), Lodi Police Mid‑Management Organization (LPMO), Lodi Professional Firefighters (LPF), and Lodi Fire Mid‑Management (LFM). While these groups already allowed cash‑outs of unused holiday leave, the labor agreements lack the specific language CalPERS requires.
The new side‑letters, included as Attachment 1 to this item, add the required language and include the following provisions:
• Reference to CCR 571(a)(5) and CCR 571.1(4).
• Clarify that holiday pay applies only to employees required to work on approved holidays.
• Specify that cash-outs or banking of holiday pay apply only to CalPERS Classic members.
• State that cash-outs are processed once a year, in the same period the leave is earned.
• Provide that holiday pay is issued regularly during the period it is earned.
• Backdate the side-letters to 2017, when CalPERS issued updated guidance for PEPRA members.
• List all observed holidays in the policy.
By adopting these side-letters, the City will correct past reporting deficiencies, ensure compliance with CalPERS regulations, and protect both the City and its employees from future audit findings or pension calculation errors. Each side-letter now meets CalPERS requirements for reporting holiday cash-outs as pensionable compensation. Therefore, staff recommends Council adopt a resolution approving the attached sideletter agreements with the City’s public safety bargaining units.
STRATEGIC VISION:
All.
FISCAL IMPACT:
None.
FUNDING AVAILABLE:
Not Applicable.