Islip Town officials yesterday signed a memorandum of understanding with the town employees' union on a proposed six-year contract that would give 700 workers a series of raises totaling 10.7 percent and for the first time require new hires to pay for part of their health premiums.
The proposal calls for the town to suspend payments to a union benefit fund and instead divert that money - about $560,000 a year - to pay for raises that the town otherwise could not afford, town and the union officials said.
"We've got what I think is a fiscally responsible memorandum of understanding," Islip Supervisor Phil Nolan said Wednesday. "It's as fair as we can be."
The contract would give employees lump-sum payments of $800 for each of the past two years and a 2 percent raise retroactive to Jan. 1. Starting next year, employees would see raises through July 1, 2013. Compounded, they're equivalent to a 10.7 percent raise, according to Burns.
"We've been to war and I'm really pleased that we can put down the guns and get to business," Burns said. "This is the best that we could have done at this time, considering the economic crisis."
Members voted down a proposed contract in December 2008. The town last year, facing a steep drop in mortgage tax revenue, laid off 39 workers.
The proposal calls for current employees to continue to contribute nothing toward their health plan. Employees hired after the contract's ratification would have to pay between 5 and 15 percent of their health premiums, depending on salary, and also wait longer before accruing vacation days and qualifying for lifetime health benefits.
The union benefit fund that would be affected has grown to $2.5 million. The town currently contributes $750 per employee per year to the fund, which is designated for vision and dental care and is managed by the Local 237. The proposal calls for the town to suspend payments to the fund until its total falls to the equivalent of a year's worth of contributions.
Town officials estimate that they would not need to resume those payments for about four years.