A series of delays and reversals of decisions resulted in members of the City of Morgan Hill’s largest union losing a month’s worth of pay raises in their latest employment contract.
A union representative for the local chapter of American Federation of State, County and Municipal Employees (AFSCME) said members approved the deal with the understanding that it would go retroactive back to July 1, the beginning of the fiscal year. City staff said AFSCME is responsible for delays resulting in contract approval more than two months after the previous agreement expired, and the city had no obligation to make the pay increase retroactive.
The City Council Sept. 16 approved the new memorandum of understanding with about 80 employees represented by AFSCME that gives them an annual base salary increase of 2.5 percent. The new 3.5-year contract expires at the end of 2018.
But the deal does not include the month of July’s portion of the raise for the 2015-16 fiscal year.
AFSCME members approved the deal before the council considered it, about a month after initially rejecting it and without realizing it did not include a month’s worth of raises.
“This takes a full month of your employees’ pay increase away,” AFSCME Business Agent John Tucker told the council, just before the elected body voted on the agreement. “There are a lot of people that are upset about this contract. To do this, and arbitrarily take pay away is a bad message. It’s not going to do much for our relationship over the next three and a half years.”
While negotiations between the city and AFSCME’s bargaining team began in the spring, the union notified the city July 28 that members voted to reject City Hall’s “last, best and final offer,” according to Morgan Hill Human Resources Director Michelle Katsuyoshi. The previous contract expired June 30.
On July 29, Tucker, who is not a city employee, notified the city that the union would declare an impasse in negotiations.
“After that, negotiations stopped,” Katsuyoshi said.
Then on Aug. 31, AFSCME members took another vote on the same offer from the city, and this time the union accepted the deal.
City Attorney Renee Gurza said the city was not required to make the salary increases—dispersed with employees’ paychecks throughout the year—retroactive.
“The city felt they delayed the process,” Katsuyoshi added after the council approved the contract. “The first opportunity we had to go to the council was Sept. 16; we have to wait for the council to approve the MOU prior to any salary increases. We felt it was a compromise (with AFSCME) that we would retro back to Aug. 3. We could have made it effective at the end of September.”
The total annual cost of a 2.5 percent raise for the AFSCME members employed by Morgan Hill is $203,490, according to city staff. That means for the month of July, the union members collectively missed out on about $16,957 of their pay increase for the 2015-16 fiscal year.
Following the public discussion at the Sept. 16 meeting, Councilmember Rich Constantine asked city staff and Tucker to clarify some details of the chronology of negotiations. He then made a motion to approve the AFSCME contract as presented, without July’s pay increase. The motion passed unanimously.
Tucker could not be reached for follow-up comment.
Morgan Hill employees represented by AFSCME include public works, planning, engineering, accounting, environmental programs and community development staff.
“The total compensation package offered to AFSCME members is competitive with that of other local government employers in this region, and provides incentives for employees to stay with the city,” reads a city staff report. “The compensation and benefits provided to our employees allow the city to recruit and retain a quality workforce.”
