San Luis Obispo has reached agreement with its last employee group — the Police Officers Association — after nearly a year of grueling negotiations that reduced all city employees’ compensation by at least 6.8 percent.
The Police Officers Association ratified a four-year contract Monday resulting in a 4 percent salary cut, a larger contribution to pension costs and the elimination of an annual $1,000 uniform allowance.
The cuts will save the city $632,000 annually once they are fully implemented, said Monica Irons, human resources director.
The 61-member union also agreed to forgo cost-of-living increases through the contract’s expiration in December 2015, and accepted a new, lower pension formula for new hires.
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City leaders began negotiations with six employee unions in December, hoping to achieve $3.1 million in pay and benefit cuts — the equivalent of a 6.8 percent cut in total compensation for all employees.
The City Council remained adamant that those cuts occur. Two impasses were declared during the negotiation process, including one with the city’s largest employee union, the San Luis Obispo City Employees Association, for the first time in city history. That impasse was resolved in June.
An impasse was declared with the Police Officers Association in June when the city and union could not agree on new pension formulas for new hires.
Matt Blackstone, president of the Police Officers Association, said he is concerned the two-tier pension system — effective for all new employees starting in January 2013 — will make recruiting experienced officers difficult.
“It was a tough deal,” Blackstone said.
The police union also agreed to a new salary schedule for new employees that will add two lower steps to the pay scale. As a result, new employees will be hired at rates up to 10.5 percent less than existing ones.
Employees of the police union will not face the impact of the pay cuts until January when the first in a pair of 2 percent salary cuts is phased in. The second cut will take effect in July 2014.
Other employee unions, which settled with the city earlier this year, had their salaries reduced starting in July.
At its peak in 2009-10, staffing costs accounted for 80 percent of the city’s general fund. The savings gained during negotiations will be phased in over the next three years and ultimately reduce staffing costs to 73 percent of the anticipated general fund — the lowest level since 2003-04.