The San Luis Obispo City Council approved one-year agreements after meeting with four of the city’s labor groups at its Nov. 16 meeting. The labor groups agreed to forego cost of living increases and increases to the city’s health contribution on behalf of employees. But harmony and peace didn’t win out on all counts: The police union turned down the city’s offer and is still negotiating.

The city claims the new union agreements will save $490,000 a year, but the new deals will do little to help with long-term financial problems.

The city faces a foreboding financial future, much of which is due to exploding labor costs. The last financial forecast projected an annual budget gap of about $2.2 million in the 2011-12 fiscal year, growing to $3 million the following year. That gap is expected to grow to $3.5 million per year in 2013-14 because of rising pension payments. The forecast presumes the economy will come to the rescue and begin reducing the gap by 2014-15, but if Measure Y (the half-cent sales tax increase) isn’t renewed, the budget gap will jump to $7.5 million.

The agreements keep labor costs at the status quo level established when most labor groups agreed to freeze wages for 2010. The city will continue to pay both the employers’ and employees’ share of pension contributions of many of the city’s workers. The workers will still get step pay raises—incremental pay hikes built into every
city position.

All five of the labor groups’ contracts with the city were set to run out at the end of the year.

The agreements are with the San Luis Obispo City Employees’ Association (SLOCEA), the International Association of Firefighters, Local 3523 (Fire Union) and will also cover unrepresented managers and confidential employees, which means more than 80 percent of the city’s employees will be covered by the agreement.

The police union had no problem with the financial terms accepted by the other groups, said Matt Blackstone, president of the San Luis Obispo Police Officers’ Association. He said the stumbling block was staffing levels.

“It had nothing to do with compensation,” Blackstone said. “We wanted layoff protection for our current employees.”

Layoff protection was a feature of the police union’s present contract that expires at the end of the year, a feature taken off the table by the city.

The city has two vacant police positions open now, and there will soon be two more, according to Blackstone, a situation he acknowledges the city has a right to maintain.

“The city can eliminate positions,” Blackstone said. “That is their right. But where do you draw the line on safety? When [police] are lost, it comes from first responders, not from the top. We want a say in what is the appropriate level of staffing.”

Erik S. Baskin, president of the fire union, said his members were excited about the new council and wanted to set up the incoming members with a new agreement to help the city’s finances.

Many options were discussed during the negotiations, including, Baskin said, his organization offering long-term pension reforms with no pay raises. He said the city negotiators told him they “were not in a position to deal” with those issues yet.

“Our members were glad to help out the city with this one-year extension,” Baskin said.