Just how big is the City of Morro Bay’s workforce? With a general fund budget topping $19 million, it’s a pertinent question and one that now helps get answered by a State Law, Assembly Bill 2561 enacted in 2024, and due before a local agency passes its next budget.
“AB 2561,” reads a report from Rachael Hendricks, the City’s Human Resources/Risk Manager, “mandates that public agencies hold at least one public hearing each fiscal year before the adoption of their budgets to report on vacancy levels, evaluate hiring and retention efforts, and allow for participation by recognized bargaining groups. This report includes workforce data for the 2025 calendar year, along with the most current staffing status as of April 1, 2026.”
The law is designed to help the employees and their unions. “The purpose of AB 2561,” Hendricks said, “is to address growing concerns over staffing shortages in public agencies, which can lead to increased workloads, employee burnout, lower morale, and reduced service delivery to citizens.”
The law has some requirements “to mitigate these impacts,” they are:
• Report annually on vacancies, recruitment activity, and retention strategies;
• Identify any policies or practices that may hinder hiring or retention;
• Provide recognized bargaining groups an opportunity to present during the public hearing; and,
• If any bargaining group vacancy rate reaches or exceeds 20% of authorized positions, provide additional data upon request, including applicant volume, hiring timelines, and efforts to improve compensation, benefits, and working conditions.”
Three of the City’s bargaining units — the Firefighters Association, Service Employees International Union (SEIU); and the Police Officers Association were invited to participate in the hearing, held April 14 and the SEIU rep sent a letter.
“We want to congratulate and acknowledge the City’s efforts in maintaining a low vacancy rate in our public sector workforce,” wrote Nicole Bryant, field representative for SEIU Local 620. “Every filled position makes a meaningful difference in our members’ workload and in the quality of services delivered to the community of Morro Bay.”
How many employees does Morro Bay have? According to Hendricks’ report, as of April Fools’ Day, the City had 117.5 “full-time equivalent” budgeted positions.
“Of the 117.5 FTE’s,” Hendricks said, “86.5 are represented by bargaining groups. No bargaining group currently meets or exceeds the 20% vacancy threshold that would trigger enhanced reporting under AB 2561. The City’s overall vacancy rate is currently 1.7%, which is considered low.”
In a table Hendricks included in her report the City had four confidential employees and zero vacancies; eight department heads and no vacancies; 19 management positions with two vacancies (the only ones the City has); 13 association firefighters and no vacancies; 16 police officers and no vacancies; and 57.5 SEIU employees and again, zero vacancies. Of the 117.5 FTEs there are only two open jobs — senior civil engineer and assistant to the city manager. (They will soon need a new public works director after the current director accepted the Los Osos CSD’s General Manager position. He starts there May 18.)
Hiring hasn’t been exceptionally busy over the past year. “In 2025, the City filled 11 full-time positions and hired 97 part-time, temporary employees,” Hendricks said. “Human resources staff reviewed 333 applications for full-time positions, demonstrating consistent interest in City employment opportunities.”
But she said the over 300 applicants doesn’t mean they had a flood of qualified people.
“A high volume of applications does not always indicate a strong pool of qualified candidates,” she said. “The City often receives applications from across the country and internationally, many of which are from individuals seeking remote-only roles or from candidates who do not meet minimum qualifications. Additionally, some qualified candidates choose not to proceed in the recruitment process due to the region’s high cost of living or compensation levels that do not align with their expectations or desired lifestyle.”
The City lost 13 employees in 2025 — six left for jobs with other agencies seeking higher pay or better chances for promotions. One left for the private sector; one left to go back to school; two were “released from their contract positions;” and two apparently couldn’t cut the mustard and were let go after their probationary periods ended.
“These separation figures,” Hendricks explained, “reflect broader workforce mobility trends and highlight the ongoing need to support alternative work schedules, offer competitive compensation and benefits, and create pathways for internal advancement.”
To boost their employee retention, Hendricks said they “implemented an enhanced deferred compensation program. The City has also continued to reinforce current initiatives designed to improve employee satisfaction, promote longevity, and enhance professional growth.”
She pointed to a 3-year contract, reached in 2024, as one of the things they’ve done to try and keep people here. In the past, union contracts have usually only been for one year, or, occasionally, for two.
The contract included “competitive wage increases and expanded benefits, including market-aligned wage adjustments from the 2023 Classification and Compensation Study.”
She noted that it’s the new hires that tend to leave quickest. “City data indicates that employees with shorter tenure are more likely to leave within their first few years of service. This reinforces the importance of robust onboarding and meaningful engagement strategies to support employee retention and long-term success.”
Though its population is just about 10,435, the City enjoys a full complement of services including its own police and fire departments, at a time when many small cities contract with a larger agency, usually the County, for fire and police protection.
It also has its own planning and engineering departments and an active recreation department as well.
In the past, when City budgets have been tight and services threatened, voters have stepped up and raised taxes — sales or TOT — to help keep up the high level of services they enjoy.
