Since the beginning of negotiations, when the City proposed $4.5 million in annual cost concessions, the City has dropped its contract proposal to $2.5 million for FY 2010, a $2 million reduction.  Below is a table that compares Current benefits versus City's proposals. Specifically, the terms of the SEIU contract that expired in June 2009 is compared to the terms of the City's September 22 proposal and the City's Last, Best and Final Offer presented on October 16, 2009. While other cities have resorted to layoffs, the City of Palo Alto is pursuing cost savings and taking every possible step to avoid employee layoffs.

• To view offer letter, click here (PDF)
• To view offer details, click here (PDF)
• To view conclusion of impasse letter, click here (PDF)
• To view resolution, prepared for October 26 Council Meeting, asking approval to impose City's Last, Best and Final Offer, click here (PDF)

   
COMPARISON CHART: Current benefits versus City's proposals     

	Current Benefit	City proposal 9/22 (term 7/2009-6/2011)	City's Last, Best, Final proposal 10/16 (term 7/2009-6/2010)
Total Package Savings	N/A	$2,565,542 (1st yr) $2,650,765 (2nd yr)	$2,547,000 Including $1,220,000 savings for General Fund
Retirement Formula	2.7% at 55 (1)	Continue 2.7% at 55 for all current employees. 2% at 60 for new hires on or after January 1, 2010.	Continue 2.7% at 55 for all current employees. 2% at 60 for new hires on or after January 1, 2010.
Retirement Benefits	Total retirement funding equals 25% of employee's salary contributed annually    City pays 23% toward employee retirement plan.    Employee pays 2% toward plan.	Total retirement funding equals 25% of employee's salary contributed annually    City pays 18% toward employee retirement plan.    Employee pays 7% toward plan. see (2a) for sample impact	Total retirement funding equals 25% of employee's salary contributed annually    Effective 11/21/09, City pays 17% toward employee retirement plan.    Effective 11/21/09, employee pays 8% toward plan. see (2b) for sample impact    Effective 6/19/10, the City will pay 19.25% toward employee retirement plan.    Effective 6/19/10, employee contribution reduced to 5.75%. see (2c) for sample impact
Tuition Reimbursement (job-related tuition, books, professional memberships, computer equipment)	$1,000 per fiscal year per employee	$400 per fiscal year per employee Personal computer purchase allowed once every 36 months.	No Tuition Reimbursement
Furlough Days	No existing furlough program	2 days of furlough in FY 2010 No furlough in FY 2011	No furlough days in proposal
Salary Adjustments	No salary increase (previous contract expired)	No salary increase is proposed No salary wage cut proposed	No salary increase is proposed No salary wage cut proposed
Health Care Benefits	City pays full premium for employee and dependents.  Premium cost for family coverage is $1,500 per month ($18,012 annually)    City is responsible for all future premium increases.	No change in current City-paid premiums.     Effective after January 31, 2010 any premium increase will be shared equally by City and employee; employee share capped at 5% per year.   (3) and (4)    If a premium increase equals 10% in year one, then 50% of the increase will be paid by the employee. City to contribute value of employee contributions in any year to irrevocable retiree medical trust (6)	No change in current City-paid premiums.    Effective after January 31, 2010 any premium increase will be shared equally by City and employee; employee share capped at 5% per year.   (3) and (4)     If a premium increase equals 10% in year one, then 50% of the increase will be paid by the employee.    This share will continue until employee share equals 10% of total premium cost.  City to pay 90% of total premium cost.  This has imposed a further cap on the employee paid share. (5)    City to contribute value of employee contributions in any year to irrevocable retiree medical trust (6)
Retiree Health Care Benefits (current retirees)	Employees hired before 1/2005:   City pays full premium for retirees and portion of dependent coverage.       In 2011, City pays 90% of dependent coverage       Employees hired after 1/2005:  City pays 50% of employer contribution for retiree and dependents after 10 years vesting requirement.      Benefit increases each subsequent year by 5%.	No change for current retirees	No change for current retirees
Retiree Health Care Benefits (future retirees)		No change in current City-paid premiums. (3)    Effective after any January 31, 2010 premium increase, future retirees and City share equally any premium cost increase; future retiree share capped at 5% per year (4) If a premium increase equals 10% in year one, then 50% of the increase will be paid by the future retiree.    City to contribute value of retiree contributions in any year to irrevocable retiree medical trust (6)	No change in current City-paid premiums.    Effective after any January 31, 2010 premium increase, the City and future retirees will share equally in any cost increases to health care premiums up to a maximum of 10% premium increase. (4)    If a premium increase equals 10% in year one, then 50% of the increase will be paid by the future retiree.     This share will continue until future retiree share equals 10% of total premium cost.  City to pay 90% of total premium cost. This has imposed a further cap on the employee paid share. (5)    City to contribute value of retiree contributions in any year to irrevocable retiree medical trust (6)