The Vallejo City Council and the Vallejo Confidential Administrative, Managerial, and Professional Association agreed to a renegotiated contract that will reduce the city’s labor costs and ensure the labor union cooperation with the city’s bankruptcy filing.
CAMP is the second of four Vallejo employee unions to agree to contract revisions ahead of a decision by U.S. Bankruptcy Court Judge Michael McManus on a city motion to reject its collective bargaining agreements. The case was argued last week, and the judge may rule at any time.
The Vallejo Police Officers Association last month agreed to a settlement. The Independent Association of Firefighters and the International Brotherhood of Electrical Workers continue to negotiate with the city and to contest its eligibility for bankruptcy protection.
Vallejo last May filed the biggest municipal bankruptcy since Orange County, Calif., in 1994. The San Francisco Bay Area city of 117,000 claimed it could no longer afford contracts with its municipal employee unions.
In September, McManus ruled that the city was indeed bankrupt. Some city workers have appealed that insolvency ruling, and the Bankruptcy Appellate Panel of the Ninth Circuit Court of Appeals will hear the case Feb. 19.
The agreement with CAMP — the city’s smallest labor group — will save an estimated $508,000 for Vallejo’s $77 million general fund in the current and upcoming fiscal year, compared to contracted rates in the union’s contract. The city has not been paying those rates under the bankruptcy court’s protection, and the union waived any right to damage claims in the bankruptcy proceeding.
The deal is even tougher than the bargain agreed to with police officers last month. The revised contract freezes managerial workers’ salaries at the level the city has paid under the bankruptcy through June 2010. It promises managers a pay increase of 2% or inflation, whichever is less, in 2010 and 2011. They will get a 2% to 4% increase in 2012, with the exact number dependent on the inflation rate.
The agreement also caps medical benefits for employees and retirees, reduces cash-out sick leave payments, reduces longevity pay for current employees, and eliminates longevity pay for future workers.
