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City outlines $8.1 million minimum annual cost if AFSCME 12% wage proposal extended
Summary
The city administrator told the Ann Arbor City Council that AFSCME’s 12%,12%,12% wage proposal would add at least $8.1 million per year to city costs and that some elements (retiree health care) could create additional, uncalculated liabilities; mediation is scheduled for June 30.
The city administrator told the Ann Arbor City Council on June 15 that negotiations with AFSCME Local 369 have been ongoing since the union formally requested bargaining in September 2025 and that the first bargaining session occurred in October 2025. The administrator said the city pursued an interest‑based approach and remained available to meet despite scheduling constraints from the union’s business agent.
“AFSCME’s proposal of 12%, 12%, 12% would add at least $8,100,000 in annual cost to the city based on the economic proposals that could be quantified at the time,” the city administrator said, adding that estimate excludes items that could not be reliably costed without further detail.
Staff described the $8.1 million figure as a wage‑only, minimum estimate and warned that other proposed changes — including additional wage steps, expanded shift premiums, leave enhancements and a proposed reinstatement of retiree health care — could create long‑term liabilities requiring actuarial analysis before a complete cost estimate is available.
The administrator also explained why some workers saw increases in 2025 despite a 0% cost‑of‑living adjustment: approximately 84% of AFSCME positions were eligible for step increases or contractual progressions that year, producing typical step increases around 2.3% for many employees.
Councilmembers and union representatives in public comment highlighted worker recruitment and retention challenges tied to pay. Ian Robinson, president of the Huron Valley Area Labor Federation, said revenues have grown substantially since 2012 while purchasing power for represented workers has fallen. David Castner, president of Ashby Local 369, said his members will “not be rushed into a cheap settlement” and urged the council to direct the administration to negotiate fairly.
The city said mediation is scheduled for June 30 and that the administration will continue bargaining in good faith. The update did not include a final settlement or council direction to ratify any agreement; any formal contract would come back to the council for required approvals.
