City and Union Find Compromise to Avoid Layoffs

The agreement must be ratified by 22,000 city workers

Updated 2:30 PM PST, Fri, Jun 26, 2009

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City and union officials agreed "in concept" Friday to a deal that would save the cash-strapped city an estimated $500 million over two years, possibly with no layoffs or furloughs.

The agreement, which must be ratified by 22,000 city workers represented by a coalition of unions, would save money primarily through an early retirement incentive program and a delay in scheduled pay raises.

To ensure that early retirements do not overburden the pension system, workers would cover their net cost.

The city, in turn, agreed to cancel plans for mandatory furloughs. It also agreed not to lay off any of the Coalition's 22,000 members, except as a last resort.

The same protection does not apply to city employees who are not members of the Coalition, including members of the Engineers and Architects Association, and EAA Executive Director Robert Aquino today threatened to file a lawsuit to block the agreement.

Under the deal, coalition members would defer all raises and cost of living adjustments in 2009 and 2010.

However, the city would make up for it by increasing their salaries every six months for three years. Workers would receive a 2.25 percent increase every July from 2011 through 2013 and a 2.75 percent increase every January from 2012 through 2014.

They would also receive cash bonuses equivalent to 1.75 percent of their salaries in November 2011, November 2012, and July 2013.