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City Council Approves Labor Contracts for Two Employee Groups

Post Date:June 20, 2018 2:06 pm

On Tuesday, June 19, 2018, the City Council approved four-year labor agreements with two employee groups, bringing to conclusion over a year of labor negotiations. The Program, Administrative, and Support Employees Association (PASEA), which includes over 80 city workers in professional positions, and the City’s Individual Management group both had contracts that expired in July of 2017 and have been meeting with the City’s negotiating team to come to agreements on contracts. The new contracts will be in place until June 30, 2021.

One of the key goals of the City Council was to focus on the total costs the City incurs per employee, rather than to focus solely on salary. In that light, the contracts provide both for a 2% annual cost of living adjustment for the duration of the contract, an amount already included as an assumption in the City’s long term fiscal model, as well as a cost sharing mechanism to address unanticipated increases in pensions costs.

The Council and the employee groups have agreed to an innovative cost sharing approach. Beginning in July 2019, employees in each of these groups have committed to pay an amount up to 1% of salary if pension costs to the City are higher than what’s been projected by CalPERS and included in the City’s long-term fiscal model. Likewise, if the CalPERS costs are less than currently expected, the employees will receive up to 1% in additional salary. These cost/saving shares will be ongoing. This agreement acknowledges the City’s total costs to compensate employees and results in employees taking a shared risk in those costs and benefits, in addition to the 8% of salary most employees in these groups already pay directly toward their retirement costs.

“This is what holding the line looks like,” said Mayor Robb Davis about the contracts. “This City Council has taken seriously the challenge of controlling City costs. While it is a complicated process over which we do not have complete control, we are confident these contracts strike the right balance between maintaining a competitive and talented workforce to provide services to the community and achieving cost control over total compensation.”

The total cost of both agreements for the first year is $191,000. The second year cost is $580,000, an amount anticipated in the long range forecasting model and consistent with the approved budget for FY 18/19. The total amounts for the final two years of the contracts will be dependent on the cost share agreement.

For more information, please contact the City Manager’s Office at 530-757-5602 or cmoweb@cityofdavis.org