Employees in four Delaware city unions have agreed to new three-year contracts that include significant changes in worker contributions to pensions and health care.

Employees in four Delaware city unions have agreed to new three-year contracts that include significant changes in worker contributions to pensions and health care.

Delaware City Council on Oct. 24 approved contracts with AFSCME (American Federation of State, County and Municipal Employees) clerical, AFSCME technicians, Fraternal Order of police office workers, and water and wastewater employees not affiliated with a national union.

Previously, the city was contributing 8.5 percent of the 10 percent required pension payment and employees were paying 1.5 percent. Starting in January 2012, employees will contribute the full 10 percent themselves.

In addition, employees’ contribution to the their health care plan will increase from 8 percent to 11 percent.

The new contracts, which cover 72 city employees, are expected to save the city money compared to previous contracts with the same unions.

“In my 13 years as city manager, this has been the lowest settlement that we’ve had with these groups,” said city manager Tom Homan.

Council member Joe DiGenova, a member of the finance committee, said the agreement will makes his job easier.

“It’s going to help us, inevitably, for the budgeting process for the next three years,” he said.

From 2008 through 2010, personnel costs for the four unions increased by about $524,000. Under the new contract, personnel costs will increase only about $183,500 from 2011 through 2013.

Workers’ pay will be adjusted to compensate for most of their extra pension costs.

A city memo to council notes the contracts mean take-home pay will not change in 2011; it will increase 0.07 percent in 2012 and 2 percent in 2013.

The 2-percent figure is the effective increase in the employees’ overall benefits package, including medical benefits and pension, city council member Andrew Brush said.

Brush, a member of the finance committee, called the contract changes a win-win for the city and for employees.

“The money is still going into the pension fund, but it’s coming out of the employees’ pay,” Brush said.

The change makes sense for the city because, Brush said, if state Issue 2 passes and Senate Bill 5 remains in effect, a city contribution to the pension fund would be illegal.

Employee pensions are “calculated on an average (salary) of a certain number of your highest paid years,” Brush said. “Their pensions will ultimately be better as a result of this move and at the same time, it doesn’t cost the city anything to make this change.”

Ron Broyles, who represents the AFSCME technicians, said the union is happy to be done with negotiations, but would rather have kept its previous contract terms.

“We were without a contract for 10 months, so we’re glad that we can move forward and be set for the next two years,” Broyles said. “Obviously, we would rather it stay the same as it was, but with the economy today, there’s changes ... from every perspective. We did reach an agreement and we’ll move forward from there.”