Employee Union Agreements Hold Salary Increases at or Below the Cost of Living Adjustment of 1.7% Annually

On August 8, 2017, the Santa Monica City Council authorized City Manager Rick Cole to execute seven employee union agreements representing the largest percentage of municipal employees. Overall, the agreements limit annual salary increases to 1.5 to 1.7%, which is equal to or below the region’s Consumer Price Index increase of 1.7% (as of January 2017). The net increase over the two or three year term of the contracts range from 3.5 to 4.7%. The total cost of the negotiated changes is approximately $2,842,088 for FY 2017-18. The budget impact of these changes was included in the General Fund FY 2017-18 through FY 2021-22 Five-Year Financial Forecast.

In addition to keeping compensation increases at or below cost of living, the agreements also minimize increases in pension obligations and include tradeoffs that equitably share the rising costs of pension and medical benefits between the City and employees.

“The recent cycle of negotiations demonstrate the City’s commitment to addressing our long-term pension obligations by limiting salaries to no more than the annual cost of living and sharing more pension and medical costs with employees,” said Mayor Pro Tem Gleam Davis. “We are being fiscally prudent while offering competitive compensation to our workforce.”

The seven unions with new Memoranda of Understanding are Administrative Team Associates (ATA), Supervisory Team Associates (STA), SM Firefighters Local 1109, Municipal Employees Association (MEA), Management Team Associates (MTA), Public Attorneys Union (PAU), and Confidential Unrepresented Employees (CUE).

All are three-year agreements effective July 1, 2017 through June 30, 2020 with the exception of MEA, which has a two-year agreement ending June 30, 2019. Here are the highlights of the new agreements:

• ATA, STA, and MTA employees will earn a net increase of 4.7% over the three-year contract.
• For ATA and STA there will be a delayed implementation of the second and third year salary increases to January of 2019 and January of 2020, respectively, which offsets the costs of the deferred compensation over the course of the contract.
• For SM Firefighters Local 1109, there is no salary increase in the first year and the net increase for years two and three is 1.5% with members paying a total of 15% towards retirement benefits and an additional 3% (11% total) toward their medical premiums.
• MEA employees will earn a net increase of 3.2% over the two-year contract.
• PAU employees will earn a net increase of 4.5% over the three-year contract.
• The City will contribute to deferred compensation accounts to offer a competitive benefit to staff that does not increase the City’s unfunded pension liabilities. The contribution amounts are: ATA – $100/month at the end of the three year contract; STA – $84/month at the end of the three year contract; SM Firefighters Local 1109 – $90/month; MEA – a monthly increase of $12.50, for a total match of $62.50/month; and MTA – $68/month in the third year of the agreement.
• Other adjustments were made to non-cashable and cashable leave days for MTA and PAU.

For more information on other changes, read this resolution.

The Council is currently undertaking a compensation review overseen by the City Council Audit Subcommittee that will provide a comprehensive analysis for future policy direction on employee compensation.