Group agrees to cap on city health care contributions
Gilroy – The city’s largest union has agreed to pick up a share of increasing health care premiums in exchange for a “modest” pay raise and improved retirement benefits, according to city officials.
The two-year contract must still be formally written up and signed, but the major contract issues were ratified Friday by the 124-members who comprise the local chapter of the American Federation of State, County and Municipal Employees (AFSCME 101). The union represents a cross-section of workers from all city departments, including accountants, custodial workers and secretaries.
The deal includes pay raises of 1 and 2.5 percent, as well as the chance to retire at age 55 with 70 percent of final salary. Under the current contract, AFSCME members can only earn a retirement benefit of up to 60 percent of their final pay.
“Our members needed a more secure future,” AFSCME president Rodger Maggio said in a written statement.
The contract proposal caps city contributions toward rising health care premiums at 5 percent, a major concession for city officials eager to rein in spiraling expenses. In 2004, the city had to pick up the entire cost of a 16 percent spike in health care costs.
Mayor Al Pinheiro views the cap on the city’s health care costs as necessary to regain control over local spending.
“That’s a big thing for our city,” he said. “The day that employers have to carry those costs 100 percent are gone.”
The latest accord with AFSCME came painlessly compared to negotiations with Fire Local #2805.
The city and the 36-member fire union reached impasse in labor talks earlier this year. City officials have asked firefighters for many of the same concessions asked of AFSCME, including a cap on health care contributions.
An outside arbitrator will decide contract differences if the city and fire union fail to agree by the beginning of next year.
In the meantime, Pinheiro pointed to the AFSCME agreement as a way to silence critics – several of them fellow council members up for reelection – of the city’s handling of negotiations with the fire union.
City officials expect to formally vote on the AFSCME contract in November. The two-year agreement is scheduled to expire June 2007.