In an unprecedented move here, the city this year has imposed contracts on three of its four employee unions.

The one-year contracts freeze salaries, increase health care and retirement contributions for current staff and set up a two-tier system of less generous benefits for future employees.

The city's management group, its Police Officers Association and the public works group have had contracts imposed; the contract with the remaining employee group, nonmanagement City Hall employees, expires Oct. 31.

During negotiations, employees argued that benefit cuts should be smaller because the city has $10.5 million in its reserve fund. But the council members maintained shrinking sales tax revenue and rising medical and retirement costs have made the existing benefits structure unsustainable. Salaries and benefits make up nearly three-quarters of Pleasant Hill's general fund expenditures.

Although he knew contract negotiations would be tough this year, Mayor David Durant said he hoped the city could reach agreements with the unions. Still, Durant says he was prepared to impose.

"Bluntly, it's a horrible position. I think all the council members would say nobody wanted this," Durant said.

Although he sympathizes with employees, he's resolute about the need to change the benefits structure to bolster the city's long-term fiscal health.

"Expectations have to adjust because the world is different," he said.

Durant acknowledged that relationships with employees are strained, a situation he regrets.

"We're going to have to look at what we can do to improve morale again. But it can't just be putting dollars in people's pockets."


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The tepid economic recovery has strained city and county budgets across the Bay Area, leading many agencies to seek concessions at the bargaining table. But employees worried about their own finances have been in no mood to give up pay. After reaching an impasse, Pinole recently imposed contracts on its police and firefighters; and San Ramon imposed on its maintenance workers. Contra Costa County threatened to impose a contract on midlevel managers before reaching a last-minute deal.

Labor experts say public employee unions across the country face a harsher bargaining climate -- as proof they point to the curbing of collective bargaining rights in Wisconsin and Ohio. In California, some of the push at the local level to cut benefits has taken place in wealthier, more conservative suburbs that are under less fiscal stress, said Ken Jacobs, chairman of the UC Berkeley Labor Center.

In the future, Jacobs expects public sector employees will have to contribute to their pension funds. As long as health care costs keep rising, the issue of who pays will be a continued source of conflict between workers and municipal governments, he added.

"The longer the economic downturn lasts, the more likely we are to see longer-term changes," Jacobs said. "To the extent that revenues come back up, that stocks come back up, that the worst of these problems get resolved, I think you're going to see the pressure decreased."

Pleasant Hill workers had been paying $55 per month for family medical coverage that cost the city as much as $28,000 per year. The city also picked up the entire employee contribution to CalPERS, the state-run retirement system. Beginning this month, management employees are paying 25 percent of their health care premium; police officers, dispatchers and public works staff now pay 10 percent of the cost.

The managers have reopened negotiations with the city, but Durant declined to reveal any details of those talks and the management group leader did not return calls seeking comment. Durant conceded that the short time window to reach a deal before the managers' contract expired played a role in the outcome.

"Do we want folks to contribute at a higher level? Absolutely. Did we come out of the block asking for something that, in retrospect, is something that nobody can bear? Probably so," Durant said.