With retroactive pay in the cards for them, most non-safety employees in Atherton will be returned to a perch on the pay scale that ensures that their paychecks will be higher than average when compared with those of employees of comparable towns in the area.
The City Council on Nov. 17 unanimously approved a labor contract for represented miscellaneous, non-police and non-management employees, and a resolution for management staff, which is not represented, giving both groups a boost in salary but requiring them to pay more of their medical benefit costs. The employees had been working without a contract since July 2009.
The two-year agreements for both groups cover the 2009-10 and 2010-11 fiscal years. They provide no increase for the first year, and a small increase for the current year, retroactive to July.
For both groups, the agreement will boost their pay to a level representing the 70th percentile of the pay range for comparable positions in other specified towns.
The agreements cover all but non-management police officers, and three employees who are in the "confidential" category. An agreement with the confidential employees will come before the council at its December meeting. The police officers have a contract that expires June 30, 2013.
The council has been struggling to rein in employee costs, which represent nearly 80 percent of the town's budget. The agreements make some headway in this area, requiring management staff to pay 3 percent of their medical coverage, beginning Jan. 1. The town now pays 100 percent of that cost.
The non-management employees, represented by the Teamsters Union, will begin paying 6 percent of their medical benefit costs, beginning Jan. 1 -- up slightly from the 5 percent they now pay.
New employees in both employee groups will be brought in on a new retirement vesting formula that will shrink the town's portion of costs for post-employment medical benefits, and eliminate coverage for retired employees' dependents, according to Louise Ho, the town's finance director.
Ms. Ho said she is working on a calculation of the town's savings on retirement costs under the new vesting schedule.
Under the new agreements approved last week, current non-management employees will receive an average 2.4 percent increase. The estimated cost of the increase is $52,000 for this fiscal year if all positions are filled.
Management staff would average a 5.4 percent increase. If all positions were filled, the estimated cost of the increase would be $72,000 this fiscal year. But the town is likely to realize some savings with the vacancies in some key positions: The assistant city manager left her post in October, and the building official resigned effective mid-September.
Because the newly approved agreements expire next June, more employee cost-cutting is likely, beginning in the 2011-12 fiscal year, as the council comes under increasing pressure to tackle a $1 million structural deficit.