The city could save up to $550,000 over three years under a new contract with the city freighters union, saving money in ways the union itself proposed, officials said.
"We want to thank you guys for the process this year," said John Miguel, president of Firefighters Association local 1965, to new city manager Dan Rich and assistant Melissa Stevenson Dile. "It had a whole different feel to it than it's ever had before."
The union is the first of four city employees groups expected to announce agreements in the coming weeks.
"Employees have been very generous in coming forward in these difficult times," said council member Margaret Abe-Koga. "They came forward and made concessions. You don't hear that very often."
Officials said the agreement exceeds the city's goal of saving $165,000 in the coming fiscal year. It caps vacation time that can be accrued at 80 hours, encouraging employees to take vacations rather than save hours to be cashed out later. Firefighters will pay an additional 2 percent of their salary towards their pensions (on top of 9 percent already paid) and a $10 copay for hospital visits. A pay raise of 2 percent is included in the third year of the contract.
The contract's savings may be as little as $250,000 if the city does not decide to join the CalPERS pension retirement program, an option the city will study this year.
Council passes non-controversial budget
Patching the smallest deficit in years, City Council members unanimously passed a $93 million general fund budget Tuesday.
City officials were faced with $1.1 million deficit until they became aware of $350,000 in unexpected city employee health care savings recently, reducing the deficit to $750,000. Other savings in the approved budget include $600,000 in concessions from four employee groups, though only one has finished negotiations.
New energy-efficient lighting and air conditioning in city buildings saved $91,000 on the city's PG&E bill, while another $100,000 in savings came from the consolidation of fire and police administration to form a new "Fire and Police Support Services Division."
City manager Dan Rich said he plans to use some of the savings to replenish reserves spent to balance the budget during the recession.