Sullivan administration and biggest city union reach tentative contract deal

Nathaniel Herz

The Sullivan administration has agreed to give the city's largest municipal union a 1.5 percent raise in 2014 and 2015 as part of a new contract, which would also eliminate an performance incentive program -- though only for new employees.

The membership of the 525-person union, the Anchorage Municipal Employee Association, will vote on whether to approve or reject the deal on Thursday, according to President Mark McKee. The union includes nurses, engineers and other city employees.

If the union agrees, then the Anchorage Assembly would have to approve the proposal as well.

The deal would only cover wages, health benefits, and the incentive program; other elements such as holidays and grievance language will still have to be negotiated if the union members approve the deal, McKee said.

It would increase by 3.1 percent the annual labor costs covered under the contract -- about $1.5 million each year, according to a city analysis.

The wage increases are below inflation, but McKee said that members "felt it was the best we could do with this administration."

Mayor Dan Sullivan has made curbing the growth in labor costs a top priority of his administration. Earlier this year, he led passage of a new law that would cap raises for city workers at the rate of inflation plus 1 percent -- though that measure was suspended after municipal unions gathered enough signatures to put it to a public vote.

Sullivan's latest effort is a move to streamline the health plan the city offers its workers, going from nine plans to three.

McKee said his union agreed to the new plan as part of the proposed deal, though in this case the change won't result in significantly reduced costs to the city, which is maintaining its roughly $1,800 monthly health contributions for the union's employees.

Savings from the new health plan would more likely come from agreements with city firefighters and police, who get higher monthly contributions. Their contracts do not expire until next year.

Sullivan said he was happy to eliminate the incentive program for new hires -- which had also been a component of the new labor law.

The program currently offers longtime employees raises as high as 13 percent for meeting criteria that included not missing work, attending safety training sessions, and avoiding disciplinary action, according to McKee.

Sullivan said those incentives didn't do much to encourage higher productivity from union employees -- though he added that the city had never aimed at taking away the raises from workers who had already received them.