Council Approves New Agreements with Four Labor Groups
The City Council approved new agreements at its meeting on April 11 for four of Palo Alto's labor groups including the Palo Alto Police Officers' Association (PAPOA), International Association of Firefighters’ Union Local 1319 (IAFF), Service Employees’ International Union Local 521 (SEIU) and Palo Alto Police Management Association (PAPMA) that represent 769 positions within the City’s workforce.
Although negotiations have been going on for an extended period, all of the labor groups were working under expired contracts, and there has been no labor agreement finalized with PAPMA since its inception in 2009. The contracts with PAPOA and IFF run through June 30, 2018; SEIU’s contract expires Dec. 31, 2018, and the PAPMA agreement expires on June 30, 2017.
There were a number of challenging issues that contributed to the extended negotiations including City salaries that have fallen behind the market for many job classes; prior concessions that included restructured retiree medical benefits and new pension tiers that were adopted to save costs; a desire by the City for employees to further share in the cost of pensions; a fixed cap on medical premiums and employer/employee share of future increases, as well as operational issues including shift schedules, staffing and assignments.
"We are pleased that we could come to agreement with four of our labor groups that represent the vast majority of our workforce," said City Manager Jim Keene. "The negotiations have been challenging as we needed to meet twin goals of providing competitive salaries to our employees in a changing market, while managing long term health care and pension costs. We achieved that with these agreements, which are fair and balanced. Fixed monthly amounts for health care premiums and shared future increases will help us stabilize costs, and the salary and market adjustments will ensure that we are able to recruit and retain quality employees."
Overall, the new Memorandum of Agreements with each group includes:
• Pension Contributions: In addition to the mandatory employee contributions currently in place, each of the public safety labor organizations will increase their share of pension contributions by 28 to 33 percent over the terms of the agreement, and miscellaneous employees have agreed to increase their contributions by 12.5 to 16 percent over the terms of the SEIU agreement • General Salary Adjustments: Will be applied across-the-board with percentages based on the Consumer Price Index and other factors to reflect inflation and regional cost of living • Market adjustment: Will be based on salaries in comparable agencies, with the City’s goal to set compensation at the middle of the comparable market. Market adjustments will only apply to employees who are below the median of the market.
All of the labor organizations agreed to move from a 90 percent/10 percent share of medical premiums (with employer paying 90 percent of cost) to a fixed cap on the City’s health contributions with the goal of sharing future increases (rather than continuing to split the premiums according to a percent of cost). For both SEIU and PMA, the City’s contribution toward medical premiums is already a fixed dollar amount per month. IAFF and POA will change to a fixed amount beginning in 2017. It is estimated the capped medical premiums will save approximately $350,000 over the life of the contracts.
General salary adjustments for each group will be 7.5 percent over three years, with the first scheduled with the adoption of the agreement. No retroactive salary adjustments were included. The range and timing of market adjustments vary, depending on the labor group and its members’ salaries relative to the comparable market.
The estimated net costs of the agreements, after pension contributions, medical caps and other concessions (inclusive of changes to salary, pension and other roll-ups to salary) for the complete terms of the agreement include:
Palo Alto Police Officer’s Association (PAPOA) Term: July 1, 2014 through June 30, 2018 (4 years) Cumulative cost for term of agreement: $4.2 million
International Association of Firefighters Union Local 1319 (IAFF) Term: July 1, 2014 through June 30, 2018 (4 years) Cumulative cost for term of agreement: $6.3 million
Service Employees’ International Union Local 521 (SEIU) Term: December 1, 2015 through December 31, 2018 (3 years) Cumulative cost for term of agreement: $5.2 million to the General Fund and $6.3 million to Special Funds
Palo Alto Police Management Association (PAPMA) Term: January 11, 2016 through June 30, 2017 (1.5 years) Cumulative cost for term of agreement: $317,736