Originally published May 28, 2013 at 4:32 p.m., updated May 29, 2013 at 1:28 p.m.
Michael Zucchet, General Manager, San Diego Municipal Employees Association.
The six unions that represent city of San Diego employees tentatively agreed to a five-year labor deal that is expected to save the city millions of dollars and largely end a 6 percent salary cut implemented several years ago.
Mayor Bob Filner estimated that the city will save $25 million in each of the first two fiscal years, of which $20 million will stay in the general fund, which pays for basic services like public safety and parks. The savings in the third year will be around $10 million, said Filner, who pushed for such a deal during last year's mayoral campaign.
"That's an incredible amount of money for our budget,'' Filner said.
The savings will come from lower annual city contributions to the employee retirement system.
In exchange, municipal workers will see 5 to 5.25 percent non-pensionable compensation increases through flexible benefit allowances that pay for health and other benefits and an elimination of all mandatory furloughs within two years, according to the mayor's office.
Employees had originally sought 14.5 percent raises over five years. Although it might sound like employees ended up with the worse end of the deal, Mike Zucchet, the general manager of the San Diego Municipal Employees Association, one of the city's unions, said that isn't true.
"From the city’s perspective, they’re publishing headlines as to what these increases mean to their bottom line," he told KPBS Midday Edition. "In terms of our employees’ bottom line, this amounts to an 8 percent increase over their first three years. So in other words, they’re going to be better off in terms of where they are today by about 8 percent."
Zucchet said the compensation increase agreements only last for three years, after which point employees will attempt to negotiate for a 3 to 4 percent cost of living pay increase.
“In terms of what the amount of non-pensionable pay increases will be agreed to in year four or five, those are not defined yet," he said. "So in that sense, it’s almost two agreements. On the one hand, it’s a five-year agreement; on the other hand, it only has three years of terms and can rightly be characterized as a three-year deal.”
Councilman David Alvarez said the deal is the best for taxpayers.
"It gives our employees some certainty, but we also are able to plan out over the future years for more services, which is really what taxpayers want,'' Alvarez said. "They want to see some of those services that have been taken away restored.''
The proposed deal would also implement a key provision of a pension reform initiative passed by voters last year, which places a five-year limit on the type of compensation that workers can use to later calculate their retirement pay.
City Councilman Kevin Faulconer, who helped brokered the deal, said if the agreements are signed in time, their savings can be included in the coming year’s budget.
“I’m going to be pressing very hard to be sure that they go to our top priorities, which is public safety, road repair and restoring hours in our neighborhoods to rec centers and libraries,” he said.
The agreements took a lot of work to push through because initially Filner and employees were asking for "double-digit, across-the-board pay increases," he said.
"But we had to hold firm," he said. "We had to hold firm on a deal that made sense for taxpayers, that was fair to our employees. And I knew we could get there."
The compensation raises, which employees won't be able to figure into their future retirement income, would eat up about half of the projected savings the first two years, according to Filner.
The mayor said city workers "have suffered a great deal'' as San Diego recovered from the recession.
The rank-and-file of all six labor groups need to ratify the contract, which would then be voted on by the City Council.
The San Diego Police Officers Association would receive a boost in total compensation of 2 percent in the upcoming fiscal year. Officers have been leaving the San Diego Police Department in droves for nearby agencies in recent years, mainly because of wide differences in take-home pay, according to officials with both the SDPOA and SDPD.
The raise in future years would be 1 percent, 2 percent, 1 percent and 1 percent.
Firefighters and lifeguards would be boosted 2.25 percent, 1.25 percent and 1.75 percent over the next three years. After that, they could reopen negotiations over pay, the mayor said.
The American Federation of State, County and Municipal Employees, Local 127; San Diego Municipal Employees Association; and Deputy City Attorneys Association would get an extra 1.75 percent hike in each of the next three years. They would also be able to reopen negotiations over compensation beginning with the fourth year.
Interim Chief Operating Officer Scott Chadwick said the city calculates the pay increases per union. The extra compensation could vary by employee, however.
Zucchet said the agreement is not perfect for either side, "but it works within all the challenges of politics and letigimate financial challenges that the city still has."
"I think this is a deal that nobody is jumping up and down and thumping their chest about, which probably means that it’s a pretty good deal for everybody," he said.