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


PRESS RELEASE 03/05/2014
Subject :

SEIU Approves City Agreement That Includes Raises, Market Adjustments
Contact : Claudia Keith, Chief Communications Officer    650/329-2607
Melissa Tronquet, Manager, Employee Relations and Training    650/329-2126
Palo Alto, CA –The City of Palo Alto's largest employee union – the Service Employees International Union (SEIU), which represents almost half of the City’s workforce with 570 budgeted employees – has voted to accept a proposal from the City that offers both salary increases and market adjustments.      

The two year agreement runs from December 2013 to December 2015 and includes a 2% salary increase upon adoption of the proposal and a 2.5% increase at the beginning of the second year of the contract, for a total cost of living adjustment ("COLA") of 4.5% over the two year term.  In addition, the agreement calls for adjustments to bring positions identified as under market in the City’s total compensation study up to the comparable market rate. Total compensation includes base salary, any additional cash benefits, insurance benefits, and normal cost of retiree medical.  

“We are pleased that the SEIU membership has voted to accept this proposal, which offers a fair and balanced deal that seeks to ensure we can retain our excellent employees, where we are seeing heightened marketplace competition, especially in the utilities and enterprise services sector, while also controlling health care costs in the future.” said City Manager James Keene.

Under the agreement, market pay adjustments are being provided to over half of the bargaining unit employees. The dollar amount of the market adjustments will cost the City close to the cost of the COLAs in the agreement.

The City’s offer also alters the formula for employer-paid medical costs from 90% of the premium cost which can rise every year to a flat fixed rate contribution from the City.  

Under the agreement, total increases for individuals will vary depending on where job salaries are currently, relative to the market.  A total of 89 job classifications representing approximately 315 employees will receive an upward market adjustment in addition to the cost-of-living increases.  Several positions will receive an additional adjustment to address unique recruitment and retention challenges of qualified employees in those positions. All employees would receive the 4.5% COLA.

The total cost of the City’s proposal is an increase of approximately $7.6 million when fully implemented at the conclusion of the two year term, equivalent to 6.3% increase in total compensation. Of the total amount, the General Fund cost for the two years will be approximately $2.7 million.  

The City Council is scheduled to consider approval of the contract on March 17, 2014.