WALNUT CREEK -- After a state mediator stepped in, the City Council and the city's largest employee group have agreed to a three-year contract which gives workers small raises but requires them to pay more of their health care costs.

The Walnut Creek Employees Association, the largest bargaining unit in the city, represents more than 110 employees, with rank-and-file staffers ranging from parks workers and mechanics to administrative support staff.

In November, after 17 meetings and months of negotiations, city management and the WCEA agreed to state mediation after an impasse.

The new agreement, passed in a 4-1 council vote Tuesday, gives workers a 2.5 percent raise (similar to what other bargaining groups received last year), a small increase in the employer contribution of a 401 Money Purchase Plan and an increase in general leave plan accrual rates for employees with 20 or more years of service.

"After a long and arduous process we are pleased to finally have come to a conclusion and to move forward," said Shawn Delaney, president of WCEA.

"This is an opportunity to give the council some stability and for the employee groups to have some stability. We were the last batch of two-year contracts, so three years should give them some predictability and they can now make tough decisions."

Those decisions he alludes to are based on the upcoming two-year budget and longterm financial plan, which show multimillion dollar deficits over the next several years.

Delaney admits the new contract will be a benefit for most employees, but those with families may take a small hit. That's because under the new contract employee health care costs will be based on 12.5 percent of premiums rather than a percentage of salary.

To help with the higher health care costs, the city agreed to give each employee a $700 one-time payment.

The deal will cost the city $1.2 million over three years.

Councilman Justin Wedel, the lone "no" vote on the contract, said while he supports employees, the city can't afford this contract.

He had the same reasoning in voting on other employee contracts last year.

"To continue to spend in hopes that the community will buy into and support and pass a tax measure just goes against any type of good public policy and is something I cannot support," Wedel said Tuesday, alluding to a possible tax measure that has not been proposed publicly.

But Councilwoman Cindy Silva said the employee agreement shows "givebacks" by the employees, as they have done since 2009. All council members are aware of the fiscal problems and the tough choices that lie ahead, she said.

"We must and will pass a balanced budget ... and it may have some significant pain to programs we all love as a result," she said. "But it is also important to pay our employees a fair wage while they are giving back and continue to do so." she said.

Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.

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