The City of Sacramento and the fire fighters union have a new preliminary labor agreement. The City says it will create a large deficit by 2018.
The City Council will review the new contract Tuesday night.
If approved by the City Council next week, the four-year contract with Fire Fighters Local 522 would increase wages by about 3-percent annually for the first three years. Employees would also contribute more to pension and healthcare costs.
City Finance Director Leyne Milstein says this contract would account for half of the $16.8 million deficit the City anticipates by the end of 2018.
"The City is going to have to be creative in addressing the challenges that we think are coming. We hope that there is an opportunity to grow some of our revenues to cover some of the costs associated with these contracts."
The City hopes property tax revenues will rebound with an improving economy. If the City is unable to close the deficit, Milstein says layoffs and service reductions may be necessary.
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