Palo Alto workers to get raises in new contracts

City prepares to approve new agreements with SEIU, police and firefighter unions

After years of relatively flat wages, Palo Alto's police officers, firefighters and the nearly 600 workers represented by the Service Employees International Union (SEIU) will see salaries increases under new terms that the City Council is set to review and approve on Monday night.

The contracts, which will be the subject of a closed session at the beginning of the meeting and of a vote later that night, vary by each labor group. Each, however, has two main objectives: to bring salaries up to the level of the market median and to make sure that each group takes on a greater share of the costs of benefits.

For the SEIU workers, the new contract will bring a 7.5 percent salary increase spread out over the three years of the contract. All employees will receive a 1.5 percent increase after the contract is approved, a 3 percent increase on Dec. 1, 2016, and another 3 percent increase on Dec. 1, 2017.

About 80 percent will receive additional salary bumps to bring them close to the market median, based on the city's recent study of the 151 job classifications that were identified as "under market." These adjustments will range from less than 2 percent up to 10 percent and will be spread out over the three year period of the contract.

"We took a very detailed look at each of the markets for the various positions ... and we are making adjustments over the term of the agreement to get our employees to the middle of their comparable markets," Assistant City Manager Suzanne Mason told the Weekly.

For the two major police and firefighter unions -- the Palo Alto Peace Officers' Association and the International Association of Firefighters (IAFF), Local 1313 -- the new agreement will represent the first new contract since the existing agreement expired in June 30, 2014. And for the Palo Alto Police Management Association, which represents seven managers in the Police Department, the contract will be the group's first agreement since the union's inception in 2009.

Both the Peace Officers' Association, which represents 83 positions, and IAFF, which represents 99 positions, will see their members' salaries rise by 7.5 percent over three years, in three 2.5 percent increments. Each union will also see its salaries brought up to the market standard.

In the case of the firefighters union, the bump will be particularly significant, with employees below the market median receiving an initial 5 percent pay bump and an additional 8 percent increase on July 1, 2017. Police officers whose salaries are below median will get market increase of 3 percent, followed by an additional 2.2 percent on July 1, 2016.

"Providing these market adjustment will allow the City to better recruit and retain employees," a new report from Human Resources Department states. "Due to the strong economy, employees have more opportunities in both the public and private sectors. Ensuring that the City's total compensation packages are consistent with comparable agencies in this market is a very important factor in retaining and attracting quality employees."

The Palo Alto Police Managers Association will also see salary increases in its new contract -- 2.5 percent upon adoption and 2.5 percent in July. The seven police managers will also get a 3 percent market adjustment upon the adoption of the agreement and two additional increases of 0.5 percent in July 2016 and on June 30, 2017, respectively.

Collectively, the four contracts are expected to add about $22 million in costs to the city, even as they reduce the city's risk for rising medical costs and its burden for employees' pensions.

Each of the public-safety unions has agreed to increase its share of the pension contributions by 28 to 33 percent over the term of the agreement, while the SEIU will up its contributions by 12.5 to 16 percent.

Employees will also now have a greater stake in the rising costs of medical care in the new contracts, as the city's contribution will shift from a percentage to a flat rate. The city had already made this change in 2013 with the SEIU contract. Now, it will also apply to police and firefighters. Starting in January 2017, the city's maximum contribution toward a police officer's or a firefighter's health care will be capped at $773 ($1,544 for an employee plus a family member and $2,008 for an employee plus two or more family members). The fixed amount, according to the staff report, "eliminates the city's obligation to automatically pay the cost of premium increases."

For the city, the agreements are a culmination of months -- and in the cases of the police officers and firefighters, years of complex and at times contentious negotiations with its labor unions. Firefighters and police officers had maintained that their salaries are well below the market -- an argument that was confirmed by the city's own studies. SEIU employees made a similar argument over a period of public hearings, with many workers saying that their stagnant wages make it difficult for them to keep up with the rising cost of living in Silicon Valley.

Irwin Gonzalez, a recreation coordinator in the Community Services Department, told the council on March 14 that the SEIU workers have made "substantial concessions" since the 2009 recession, including new cost-sharing arrangements for medical benefits and a greater contribution from workers toward pensions. The union, he said, wants to see its members brought up to the "median market compensation" and to have cost of living adjustments included in the new contract. Lena Perkins, a resource planner at the Utilities Department, concurred that workers have already "given up a great deal."

"To not bring the City of Palo Alto workers up to the median -- it doesn't play well and it doesn't make people feel valued. It looks penny-wise and pound-foolish," Perkins said.

In recent years, the city has pursued market adjustments for managers and highly specialized positions in Public Works and Utilities.

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22 people like this
Posted by Zalltime
a resident of Downtown North
on Apr 9, 2016 at 9:50 am

Zalltime is a registered user.

But do they really deserve the raise? is the question we should all be asking ourselves.

Life is all questions, there are no definitive answers, and people who offer you answers in the form of solutions are frauds with an agenda.

29 people like this
Posted by They Do!
a resident of Another Palo Alto neighborhood
on Apr 9, 2016 at 10:09 am

As wealthy as Palo Alto is, this city has had a hard time keeping good workers. The reason is that nearly every other city, even those far less well-off, in the SF Bay Area pays its city workers BETTER!

Just as bad, from talking to a few city workers over the years, Palo Alto does not treat its employees very well, either. Other cities in the Bay Area do not treat city workers like second-class citizens!

39 people like this
Posted by Peter
a resident of another community
on Apr 9, 2016 at 1:52 pm

All for giving raises to keep up with other comparable cities, but it's these out of control pensions that are bankrupting cities across the country. Just read where one major city is over 1 billion dollars in unfunded pension costs. Need to switch public employees to a 401k type of retirement. Time for cities to stop " being on the hook" for 90-100% of an employee's pay when they retire.

8 people like this
Posted by Osprey
a resident of another community
on Apr 9, 2016 at 10:44 pm

Is really sad the as educated as Palo Alto residents are that they still actually know what's going on in their own City. If you want to cut wages, cut the incompetent managers and supervisor that's where all the city money is going. I received a 15.03% raise but at a currently hourly rate of $36.88 an hour. In 3 years that brings me up to $40.50 an hour, at the end of three years!! Minus the 1% more in medical we must pay that's $39.50. Plus whatever else goes up union dues etc. And by the way for the record we don't get Social Security only pers. Which is not a lot. I'd like to see some of the residents try to live on that.And my job have do has a lot to do with the safety of the residents.

Like this comment
Posted by Frustrated
a resident of another community
on Apr 9, 2016 at 10:49 pm

[Post removed.]

16 people like this
Posted by Domaf
a resident of Barron Park
on Apr 10, 2016 at 8:32 am

It's clear that the neo libs of PA don't care about their city employees and in turn their own safety. Oh well. It will all come back to haunt them at some point. Why do PA residents think they are so much greater than anyone else and don't have to show compassion to those that have not struck the geographic or genetic lottery. Sad.

10 people like this
Posted by Frustrated
a resident of Another Palo Alto neighborhood
on Apr 10, 2016 at 11:42 am

The last blogger was completely correct. Have low paid employees do the work Palo Alto residence don't want to do. And who cares that workers have to commute from the Sacramento Valley to work everyday. Trust me none of these employees lives in Palo Alto nor with the changes made to their pension will it allow them to retire in the bay area.Selfish people don't get the gap increase between the rich and the poor. Why not bring back slavery. Go Trump!!!

2 people like this
Posted by Frustrated
a resident of Another Palo Alto neighborhood
on Apr 10, 2016 at 11:54 am

[Post removed.]

22 people like this
Posted by Frustrated
a resident of another community
on Apr 10, 2016 at 2:16 pm

Stop paying the managers, supervisors with GED's and city manager so much money. And you could afford to pay the employees. The emplyees really know the jobs anyway. Not the people making $140-$300 salaries..that's ridiculous.

15 people like this
Posted by Roger Overnaut
a resident of Evergreen Park
on Apr 10, 2016 at 5:50 pm

"Just read where one major city is over 1 billion dollars in unfunded pension costs."

Such gross pension mismanagement is hardly unique to cities. Many companies treat their pension funds as cash cows for general expenses, including funding bloated executive salaries. Guess who gets stuck with the shortfall at retirement time. (Hint: it ain't the people plundering the pension funds.)

6 people like this
Posted by Longtime Resident
a resident of Leland Manor/Garland Drive
on Apr 11, 2016 at 12:19 pm

One city's salary rate ought not to be pitted against another's. Palo Alto ought to simply call the bluff, seeing how many people leave.

This will be a good move, even for other cities whose residents have to pay huge amounts for staff that may or may not be worth the money. City manager's salaries are ridiculously high.

Also no more double-dipping from city to city, or going back to old jobs. When a city employee retires, that should end the government gravy train.

They can welcome retirement, be self-employed or work in another area if they are not retired,hopefully not as a perk from having been a city employee, something too many former city employees have done. A la Developer Arrillaga's newest hires that have an inside to city tracks.

6 people like this
Posted by Kazu
a resident of Downtown North
on Apr 11, 2016 at 3:17 pm

Increases for the firefighters and police are one thing, they do a fantastic job of keeping our city safe. Perhaps we could contract out large parts of the rest of city governement? As a general rule, unions = inefficiency + high cost. Guess whose money goes towards keeping the SEIU infrastructure running?

Unions had their time and place, but that time was long ago and their place shouldn't be in present day Palo Alto.

8 people like this
Posted by Peter
a resident of another community
on Apr 12, 2016 at 8:26 am

To Roger Overnaut: I agree on the mismanagement of pension funds by some cities, but the funding of these pensions is the real issue. How would you like to own a company and you are required to pay 90% of a yearly salary for a employee that has been retired for over 25 years? That's what is going to bankrupt these cities. I can't think of any private companies that do this.

5 people like this
Posted by Anciana
a resident of Old Palo Alto
on Apr 12, 2016 at 12:36 pm

I'm all for unions in the private corporate world. But government unions have too much power and end up bilking the city inhabitants for massive and too early pensions.

1 person likes this
Posted by Roger Overnaut
a resident of Evergreen Park
on Apr 12, 2016 at 3:54 pm

"How would you like to own a company and you are required to pay 90% of a yearly salary for a employee that has been retired for over 25 years?"

Well, Peter, since I negotiated that contract with my eyes open and I signed it, I had better engage a good pension fund manager and make sure I carry out my end of my contract with my employees. You agree that's the honest thing to do, right?

1 person likes this
Posted by Cal
a resident of Mayfield
on Apr 13, 2016 at 8:36 pm

New City workers would have to work 30 yrs to receive 60 % of their highest year wage. 20 yrs for health care vesting Pension reform done.
Contracting out any job has a time and place. There is no substitute for a workers who is just as concerned about doing a job right as they are about who they're doing it for.

Sorry, but further commenting on this topic has been closed.

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