A tentative agreement has been reached between San Luis Obispo and its largest employee union, likely ending an impasse declared in February as negotiations stalled.
The agreement, which must still be ratified by San Luis Obispo City Employees Association members, includes a 6.8 percent reduction in total compensation, equaling about $937,620 in savings over the three-year contract.
The contract, which would expire in December 2014, also implements a two-tier pension system for future hires.
The projected savings will come from employees paying their entire retirement contribution; the city now pays part of their share. The union represents maintenance and utility workers, inspectors, engineers, planners and administrative support.
This had been the first time an impasse had been declared with the union. A fact-finding session was held Friday, leading to the tentative agreement. Negotiations with the union began in December.
The city is negotiating about $3.1 million in employee compensation cuts — or 6.8 percent per employee — with all of its employee groups as a way to balance its current two-year budget.
If union members accept the agreement, the City Council will be asked to approve it June 19.