Starting next year, city workers will receive 5 percent pay
raises for the next two years
About 100 city employees will enjoy an annual pay increase of 5 percent a year for the next two years, thanks to a new employment contract approved by the city council this week.
The pay increase will cost the city an additional $740,000 for the life of the three-year contract. Employees will receive the raises beginning next year.
Negotiations between the city and both unions – the American Federation of State County and Municipal Employees (AFSCME) Local 101 and the Morgan Hill Community Service Officers Association began Feb. 23 and concluded Aug. 25. Human Resources Director Mary Kaye Fisher described the negotiations as “challenging, but respectful.”
The AFSCME package, which will cost the city $499,000 over the three-year period ending in 2008, covers a total of 82 employees, including all city employees, except management and support positions that handle confidential material, CSOA members and public safety officers. Workers agreed to forego pay raises this year, but will receive a 5 percent salary increase starting next year – 3.5 percent in June of 2006 and another 1.5 percent in December of 2006. Employees will receive another 5 percent increase in 2007 – 3 percent effective July 1, 2007, and 2 percent effective Dec. 20, 2007.
The CSOA represents 16 community service officers, including dispatchers, records specialists, animal control officer, community service officer and multi-service officers. Their agreement, which will cost the city $241,000 over the three-year period, also calls for no salary increase this year, except for the public safety dispatcher position, which will receive a 3.5 percent salary applied retroactively to June 19, 2005 and another 3.5 percent on Jan. 1, 2006, as well as a 3 percent increase for dispatchers who work alone.
Like AFSCME members, CSOA members will receive a 5 percent increase next year and in 2007, divided during similar pay periods as the AFSCME agreement. In addition, community service officers will receive an increased uniform allowance to $600 for in-office and $750 for street positions.
Key elements in both agreements were increasing comp time to 200 hours starting on June 18, 2006 and increasing employee pension plans. The Public Employment Retirement System (PERS) for city workers will increase by a half-percent to 2.5 percent at 55 – meaning employees will receive 2.5 percent of their salary for each year of employment beginning at age 55. In addition, the employee pays an additional 1 percent of their salary into PERS with a greater cost sharing arrangement in future years.
The previous contract set PERS at 2 percent at 55 years old, with the city paying the entire employer share.
In addition, the CSOA agreement brings community service officers in par with other city employees with regard to family health care benefits. Beginning Jan. 1, 2006, for family health care allowance, the city will pay 90 percent of the total cost of the lowest medical and dental premiums; for employee plus one dependent, the city will pay 96.5 percent of the total cost of the lowest premiums; for employee only, the city will pay 100 percent of the total cost of the lowest premiums.
Salaries and benefits of CSOA members are supported by the general fund. Of AFSCME salary and benefits, $1.7 million is from the general fund, and the rest are supported by revenues the city receives from the various sources related to the individual departments.
The city spends $2.6 million annually on pensions for all its employees.
Of 184 positions in the city, the salaries of 96 positions are supported by the general fund. Salaries, which total $6.9 million, make up 34.7 percent of the general fund; PERS totaling $1.5 million, make up 7.7 percent; and health insurance totaling $796,552, makes up 4 percent.
The City Council approved both contracts as consent agenda items Wednesday and called the increases “modest,” praised their employees and said they wished they could give them more, but are unable to do so in light of the city’s budget situation. The city faces a $1.2 million deficit this year.
“Negotiations this year were challenging because we’re facing a tough budget, but labor relations with the city and our bargaining units are very strong,” Fisher said. “We spent a lot of time at the table for the good of the city employees and the community because that’s what we’re here for.”
She indicated labor contracts will now be renegotiated every three years, instead of every two years.
“This is a big deal because it brings stability and security for both sides. We can forecast where we’re headed and so can our employees,” said Fisher, adding that the city provides a good salary and benefits package in order to retain quality employees.
“We have a very good work force,” Fisher said.
Donna McKnight, representative of the CSOA, said the group is pleased with the agreement.
“Negotiations were reasonably amiable,” said McKnight. “We think the two negotiating teams and the city do pretty well together. It was just difficult because of the city budget problems.”
