"The city and negotiators have been working together for a long time," said council member Laura Macias. "There's been, I think, the best of results here."
Over 167 employees represented by Service Employees International Union will are effected by the contract, which expires in June 15, 2015. The employees will see see relatively modest raises compared to years past while also receiving cuts to vacation time and reimbursed costs. The contract includes a bonus payment in 2012-13 equal to 1 percent of pay, followed by 2-percent annual pay raises in 2013-14 and 2014-15.
Savings comes from a myriad of small changes, including a new, optional high-deductible health care plan. Reimbursements for employees who buy tools for their job have been capped to $750 per employee in the first year and $500 after that. There are new limits for saving up vacation time that can be cashed out, with a range of 12 to 23 days depending on seniority.
An additional quarter-percent of employee pay goes toward retirement pension costs, raising the cost share from 13.25 percent to 13.5 percent this year.
"The 13 percent is incredible," said council member Tom Means, who works for the state as an economics professor at San Jose State University. "It's disappointing to see other cities have not come to bat on this. We did this at the state level but we don't pay as much as you are paying now."
The city appears well on its way to achieving a goal of $600,000 in employee compensation cuts this year. The council approved an agreement with firefighters on June 12 that could save between $250,000 and $550,000, depending on whether the city has firefighters join the CalPERS pension retirement program, an option the city will study this year. On July 10 the city is expecting to announce two more union agreements, with police and the EAGLES, a mid-level managers union.
"It's been a haul doing all four groups in the same year," said Mayor Mike Kasperzak.