Labor negotiations to start for Monterey city employees.

With contracts for all seven Monterey city employee unions expiring on June 30, the city will soon look to revamp its labor agreements across the board. Every city employee is part of a union, from laborers fixing potholes on city streets to department managers, police and firefighters. The only city workers not covered, aside from temporary hires, are City Manager Mike McCarthy and City Attorney Christine Davi, both of whom report directly to City Council.

“It’s been a strange period of time where employee groups have agreed to concessions,” McCarthy says. “We’ve kept the negotiations as simple as possible, but frankly I think it’s about time to update all the contracts.”

Of the seven unions, six are working on contracts that have been extended well past their original expiration dates. The Monterey Firefighters Association and the Fire Management Association are working off a contract originally enacted on Jan. 1, 2007 and that expired Dec. 31, 2009, but has been extended for the past six years, according to information available on the city of Monterey’s website.

The city spends about 70 percent of its budget on employee compensation, which is pretty standard for cities, McCarthy says. Negotiations with the unions won’t take place until an independent consultant completes a study on pay and benefits for the city.

As the city and unions gear up for negotiations, McCarthy announced a $1.6 million surplus for the fiscal year ending June 30. Both Mayor Clyde Roberson and McCarthy say they’d like to set aside the surplus in a “rainy day” fund, but labor groups would like to see some of that revenue shared with them.

“We’re well aware of the $1.6 million and the plan to put it into a ‘rainy-day fund,’” says Ryan Heron, labor relations representative for General Employees of Monterey (GEM) and United Public Employees of California (UPEC), which represents about 250 city workers. “Employees need raises to keep up with the increased costs of living. Right now, many are struggling to get by.”

Unions aren’t opposed to a set-aside to cushion the ever-present threat of shortfalls in the face of another economic downturn, Heron says, but the city must find a balance.

Following two consecutive record years of tourism revenue, the city expects a slowdown this year with the Monterey Conference Center remodel hampering hotel and sales tax revenue. With an ongoing surplus, the city should look to share revenues with its 480 employees, McCarthy says, but with one-time surpluses generated by a spike in tourist revenue, the city should be cautious with extending its financial commitments.

“We’re going to make data-based decisions,” says McCarthy. “We need to come up with agreements that work both for the city and the employees.”

Steve Allen, a labor relations manager with UPEC, is more willing to talk about the difficulty that might be found in reaching an agreement.

“Negotiations are always an adversarial process,” Allen says, “but it’s also a democratic process. Employees decide their goals.”