City employees will share revenues and costs under new contracts

City employees will share revenues and costs under new contracts

Michele Ellson

The City Council unanimously signed off on a trio of contracts for non-safety workers Tuesday that offer pay increases if the city does well financially in exchange for increased employee health and pension contributions. City leaders will also be asking the workers’ representatives to consider reducing pension benefits for future hires.

The new contracts for the three bargaining units and a fourth for non-sworn police department employees will save the city an estimated $873,000 over three years if pay increases are factored in, staff reports on the contracts showed.

“To our bargaining units – I want to thank you for recognizing the tough times we’re all under. I want to thank you for stepping up to the plate and being a good partner for the city,” Mayor Marie Gilmore said.

Non-safety employees represented by the three unions will pay the maximum amount the state allows them to pay toward their pensions – 8.868 percent – and will absorb as much as half of any increase in the cost of their health benefits by the end of their three-year contracts, which will be in place through December 26, 2015. The contracts also offer raises of up to 4 percent in 2014 and 5 percent in 2015 if the city’s revenue growth reaches certain levels.

The council also approved a contract for its non-sworn police department workers – a group that includes the city’s dispatchers – that will see those workers pay the same increases as the other non-safety unions for health and pension benefits but will assign pay raises in 2014 based on a salary survey of neighboring cities. Their union will also talk with the city about offering a reduced retirement benefit for future workers, who could also see their retirement age raised from 55 to 60.

Five employee groups have agreed to meet with the city’s negotiators in 2013 to discuss a reduction in retirement benefits for future employees. Current non-safety employees get 2 percent of their top salary for each year they’ve worked at 55; the city wants to discuss raising the age non-safety employees get their full benefits to 60.

In March, the city signed off on a contract with electrical workers at Alameda Municipal Power that offers pay raises but that also sees those employees paying the maximum allowable amount of their salaries toward their pensions and helping to cover increases in health care costs.

Police and firefighters receive 3 percent of their top salaries for each year served at the age of 50, and City Manager John Russo has said he plans to meet with their unions this summer to discuss fresh ways to reduce the city’s pension and health care costs.

City leaders here and elsewhere have been grappling with the issues of rising pension and health care costs. City staff is projecting health care cost increases of 12 percent next year, though pension payment rates are expected to remain flat.

City leaders are working to close an anticipated $5.1 million budget deficit for the next fiscal year, which begins on July 1. The council is slated to consider a budget on Tuesday.

Last year the city negotiated contracts with its public safety unions that increased the percentage of their pay they contribute to their pensions from 9 percent to 11 percent. A representative for the local firefighters’ union told The Alamedan this week that the increased contributions cost firefighters an average of $300 per month.

The city’s safety workers haven’t received a pay raise since 2006, and its non-safety workers, since 2008. But at a June 12 hearing on the city’s budget that followed the failure of the Measure C sales tax initiative, some residents expressed frustration about city workers’ salaries and benefit costs.

Councilman Doug deHaan questioned the contracts, saying he’s concerned the revenue-sharing provisions could become a benchmark for the city’s other unions. The provisions cover the city’s non-safety employees but have not been included in police and firefighters’ contracts.

“My concern, during the budget we’re going through right now is, we have some real difficulties facing us, not this year, but next year, and in the out years. The concern I have is that this is a benchmark for further negotiations on the other contracts we have,” said deHaan, who ultimately voted for the contracts.

Assistant City Manager Lisa Goldman said the changes don’t come at a net cost to the city, and the rest of the council voiced support for the contracts.

“I think maybe it is innovative,” Councilwoman Beverly Johnson said. “I expect to see more of this in the future. And we should recognize that maybe we’re a leader on this front.”

Separately, the council unanimously agreed to allow Alameda County Industries to raise garbage collection rates by 5 percent, a move that will make Alameda’s average garbage bill the second highest in the county. Public Works Director Matt Naclerio said the company had requested a 9.2 percent hike due to declining commercial collection business, city-mandated replacement of the company’s trucks with alternative-fuel vehicles, increased costs and an anticipated revenue shortfall of $1.4 million.

City Manager John Russo said he and other top managers will be re-examining the city’s contract with Alameda County Industries, which was approved in 2009 and extends through 2022. In Alameda County, only Piedmont residents will pay more for garbage service.

The council also approved a one-year extension of their contract with the Alameda Unified School District to operate and maintain the district’s two pools; the city will cover half of the estimated $295,000 cost. Recreation and Parks director Amy Wooldridge said major capital projects, like the recent removal of lead paint from the Emma Hood Swim Center, would be covered by the school district – provided the district has the money to pay for them.

The council also voted in favor of an ordinance that will require the city to pay prevailing wages on public works contracts of $1,000 or more as required by state law. The ordinance, which still requires final council passage, would exempt certain improvements made to leased properties at Alameda Point.