The city’s largest employee union has agreed to have its members contribute an additional 1% to their pensions and a new promotion system that eliminates across-the-board salary increases.
The new contract for the Glendale City Employees Assn., which took four months of negotiations, was approved by the City Council on Tuesday and is expected to save the city $447,000 this fiscal year, according to a city report.
“In general I think it was a good deal,” said Councilman Ara Najarian. “It gave us significant concessions. [City employees] realize the fiscal situation the city was in.”
The contract comes one year after the City Council, having failed to reach an agreement with the union, cut salaries by 1.5%.
It was the latest in a series of concessions agreed to by other unions.
Earlier this year, police officers agreed to reduce salaries by 2% and increase contributions for benefits to save the city a projected $2.2 million over the next year. City managers and department executives have also agreed to pay a larger share of their health care and pension plans for a savings of about $760,000.
And last year, firefighters agreed to concessions that were expected to save the city more than $3 million over the course of three years.
City officials sought union concessions with renewed vigor this year because of an $18-million budget shortfall amid ballooning contributions to the California Public Employees Retirement System.
Although Glendale has upped employee contributions to CalPERS from 8% to 9.5%, the city must still cope with the high cost of retirement benefits. During a budget workshop in May, Glendale’s pension advisor, John Bartel, said the pension obligation may stay at current levels or rise through 2017.
According to the city’s annual financial report, Glendale can expect to pay more than $135 million into CalPERS through 2014.