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


PRESS RELEASE 05/14/2012
Subject :

Palo Alto City Council Approves Agreement with Police Officers' Union
Contact : Marcie Scott, Acting Employee Relations Manager, Human Resources Department    650-329-2429
Palo Alto, CA – After many long months of negotiation, the City and the Palo Alto Police Officers' Association (PAPOA) reached an agreement on terms for a new labor contract that will be in effect from May 14, 2012 until June 30, 2014. Union members voted to ratify the agreement last week and the City Council approved the terms of the new Memorandum of Agreement (MOA) at its meeting last night. The net effect of the contract will provide savings to the City of $149,339 this fiscal year, which ends on June 30, 2012, and savings of $1.3 million annually starting next fiscal year 2012-2013

"The City has consistently sought fairness and mutual sacrifice by all employee groups to solve our ongoing budget gap by seeking structural changes to employee pension and medical plans," stated City Manager James Keene. "With this agreement, PAPOA has made an important step in assisting the City's efforts to reduce expenditures." 

The City sought and achieved economic concessions similar to those made by non-sworn employees represented by Service Employee International Union (SEIU) Local 521, the unrepresented Management/Professional employees, and the sworn safety employees covered under new MOAs recently adopted for the Local 1319, International Association of Fire Fighters and the Fire Chiefs’ Association. 

The agreement between the City and PAPOA creates for future employees a new, less expensive second tier pension formula for new hires of 3% of final salary for each year worked with retirement  at age 55. Additionally, there is a change to the base for pension calculations for final year salary from the single highest year to the average salary of the three highest consecutive years worked. 

Other concessions in the agreement include employee payment of the 9% PERS pension member contribution, a decrease in salary by 1.33% for all classifications in this bargaining group, and elimination of 3 holidays. 
The City and PAPOA were unable to reach agreement on a contribution to the post-retirement medical benefit for future retirees, and remain at impasse on this issue. In the interest of moving forward, the City and Union agreed to immediately adopt a new contract that implements all of the provisions agreed upon in the tentative MOA, and proceed through the legally required impasse procedures solely on the issue of the retiree medical contribution. 

The City’s MOA with PAPOA expired on June 30, 2011. Negotiations for a new contract began in July 2011 after a period of unsuccessful informal meetings. After 16 formal negotiation meetings, the City was unable to reach agreement with the Union, so the City declared Impasse on February 24, 2012. 

The Budget adopted for this fiscal year anticipated a $4.3 million funding gap and the City is counting on savings in its contracts with its public safety unions to help close that gap.  This new agreement provides short and long term structural savings that will assist the City in managing benefit costs and reducing the budget gap this year and in future years.