San Diego Wins Third Worker Union Pact

May 17, 2005 ( - A week after beleaguered San Diego worked out an agreement with one of its unions predicted to generate $200 million in savings for the city's pension shortfall, officials announced a three-year pact with a second union group.

The tentative agreement reached Monday by the city and Local 127 of the Association of Federal, State, County and Municipal Employees includes a three-year benefit freeze as well as a 1.9%-salary cut for the first and second year and a 4%-salary hike during the third year, according to a report on the Web site.

Agreements that call for wage and benefit freezes were reached last week with the San Diego Municipal Employees Association (See  Critics Blast San Diego Labor Deal ), which represents about 6,000 workers and with San Diego Firefighters Local 145. San Diego has now reached tentative agreements with all but one of the city’s four major municipal worker unions.

Outgoing Mayor Dick Murphy has said that if the unions buy into wage and benefit freezes, San Diego could reduce its $1.37-billion pension deficit by about $350 million.

Under the terms of the latest pact, employees hired after July 1 would be excluded from the deferred retirement option program (DROP), and could not purchase credits toward years of service.

Working out a deal with the city’s police officers could be a tough sell. San Diego police officers Monday rejected the city’s most recent one-year offer, which called for a wage freeze and increased police officer contributions into the pension system; reduced benefits for new officers, including the elimination of DROP; and the purchase of service credits.