The City of Annapolis struck agreements with four employee unions on Monday, giving employees raises and changing their health benefits in retirement.

Mayor Josh Cohen, who will stand re-election next week, said the four-year agreements are a "real feather in Annapolis' cap" and came after 14 months of negotiations with the unions.


City Manager Michael Malinoff said the contracts are "an affordable solution" for the city to shore up its pension and retiree health care programs, which currently are underfunded and have put the city's bond ratings at risk.

Employees will get a series of pay raises: 1 percent retroactive to July 1; 3 percent on Jan. 1; 1 percent on July 1, 2014; 2 percent on Jan. 1, 2015; 1 percent on July 1, 2015; and 2 percent on Jan. 1, 2016.

City employees have not had a raise in four years, union officials said.

There also will be a new program for health insurance for retirees called a Voluntary Employee Beneficiary Association that officials said functions like a 401(k) account for health care costs in retirement. New employees will be required to join the Voluntary Employee Beneficiary Association and current employees will have the option to join it or keep their current retiree health insurance plan.

The creation of the Voluntary Employee Beneficiary Association will reduce the city government's future costs for retiree health care.

Both the city and employees will pay more twoard pensions in order to make sure the pension program is fully funded.

The contracts also create a Deferred Retirement Option Program or "DROP" for police officers and firefighters. The program will allow retirement-eligible police officers and firefighters to keep working for a salary for up to three years while banking their pension benefits for once they retire.

The contracts were negotiated through a process called interest-based bargaining, which involved parties from all sides working to address contract issues.

Alderwoman Shelia Finlayson said she thinks the Annapolis process can be a model for other cities and counties.

"Everyone gave 100 percent of their effort," she said at a press conference Monday that was attended by city officials and leaders from United Food and Commercial Workers Local 400, International Association of Fire Fighters Local 1926 and American Federation of State, County and Municipal Employees Locals 3406 and 3162.

The Annapolis City Council ratified the contracts on a unanimous voice vote on Monday night, though some aldermen expressed concerns about the lack of time to review the contracts. A motion to delay the vote failed.

During public comments at the start of the meeting, Republican mayoral candidate Mike Pantelides said the vote should be deferred.