News Release News Release The City of Palo Alto
Communications Department
250 Hamilton Ave
Palo Alto, CA 94301


PRESS RELEASE 01/14/2014
Subject :

City Presents SEIU With Final Offer That Includes Raises, Market Adjustments
Contact : Melissa Tronquet, Manager, Employee Relations and Training    650/329-2126
Claudia Keith, Chief Communications Officer    650/329-2607
Palo Alto, CA –The City of Palo Alto has made a last, best and final offer to the Service Employees International Union (SEIU) bargaining unit that includes an average employee salary increase of 7% over two years.  SEIU represents almost half of the City's workforce with 570 budgeted employees included in the union.    

The proposal includes a 4% cost-of-living adjustment (COLA) for all employees over two years, as well as salary adjustments for job positions that are under-market based on a total compensation study of base salary, cash, insurance and the normal costs of retiree medical benefits for comparable positions in twelve Bay Area cities.

Under the City’s proposal, total increases for individuals will vary depending on where job salaries are currently, relative to the market. A total of 89 job classifications representing 315 employees were found to be under market in the study and will receive an upward adjustment in addition to the COLA.  In addition, under terms of the existing contract, approximately 141 current employees will be eligible for step increases (essentially moving up in the job range) of 5% each year. All employees would receive the 4% COLA.

"We are committed to attracting and retaining excellent, quality employees, and maintaining competitiveness in the market," said City Manager James Keene.  “We are also committed to ensuring a safe and healthy community, and the City’s offer on the table makes upward adjustments to all positions needed to keep our pay competitive.  The fact is that under this proposal, there are many individual employees who will receive sizable salary boosts over the next two years.  While we understand the union may want all of its employees to receive a larger cost-of-living increase, we have a proposal on the table that would give everyone a pay raise and low to no-cost health insurance, as well as competitive increases to those out-of-market positions.”

There are a range of adjustments and total increases for many positions would be significant.  For example, Utility Locators would receive sizable market salary increases of 10.1%, as well as the 4% COLA increase for a total of 14.1% over two years.  Street Maintenance positions will receive a 4.7% market increase in addition to the 4% COLA, for a total increase of 8.7%.  If eligible, individual employees could also receive additional step increases of 5% more each year.  

In addition, the City has proposed special adjustments above the market study results for certain positions due to the difficulty in recruiting or retaining qualified employees to fill these positions.  For example, the City is proposing to make a 15% market adjustment to the Utilities System Operator position in addition to the COLA increases for a total of 19%.  

In terms of timing, the first 2% COLA increase would go into effect following SEIU ratification of the contract and City Council approval, with another 2% raise effective during the last pay period of 2014.

Adjustments to the salaries for positions identified as under market would be increased by 50% of the amount required to bring it to market shortly after union ratification and City Council approval.  A second adjustment of 50% would be applied to positions in March 2015.

SEIU’s last, best and final offer includes a 6% COLA over 2 years with larger market salary adjustments than the City is proposing.  The total cost of the City’s proposal is approximately $3.8 million when fully implemented and constitutes an ongoing expense.  In contrast, SEIU’s proposal totals approximately $6.7 million.  

Under state law, SEIU has until February 7 to request nonbinding factfinding for a panel to make advisory findings and recommendations for settlement.  The City remains committed to reaching a reasonable agreement on a contract with SEIU.  

To see the City’s proposal, go here.