Palo Alto is preparing to approve multiyear contracts next month that would include raises and new benefits for its largest employee union, Service Employees International Union, and for its main firefighter union, International Association of Fire Fighters.

The City Council is scheduled to consider both contracts on Feb. 6. Council members had already approved in December a contract with about 200 managers and professionals, the only major labor group that is not represented by a union.

According to Meghan Horrigan-Taylor, the city's chief communications officer, the agreement with the IAFF will include an immediate 12% raise upon approval, followed by additional 4% raises in July 2023 and July 2024. These adjustments, she said, were based on a study of total compensation in other area.

The contract would run for two-and-a-half years, from Jan. 1, 2023 to June 30, 2025.

The agreement, Horrigan-Taylor said in an email, "provides for salary increases based on a highly competitive labor market."

"Retaining paramedics to serve the Palo Alto community is a priority given the demands for this group of highly skilled personnel in the local region which is why the City sought to align our classification specific compensation with other local area agencies," she wrote.

Much like the recent agreement with the managers group, the IAFF contract also includes a "flexible compensation" provision that grants employees $100 in additional monthly pay that they can apply to either their base salary or their health benefits.

The SEIU contract covers 567 employees, or roughly half of the city's workforce. It would be for a two-year term between Jan. 1, 2023 and Dec. 31, 2024. All workers would get a pair of 4% salary increases, one effective Jan. 31 and the other in January 2024. In that sense, it mirrors the city's agreement with the "managers and professionals" group, which likewise includes a pair of 4% raises over two years.

The SEIU contract will cost the city about $14.6 million over the two-year term, which includes $5.4 million general fund spending, according to Horrigan-Taylor. The firefighter contract will cost about $7.5 million over the two-and-a-half-year term, all of it in the general fund, which pays for most city services not relating to utilities.

Both the SEIU and the IAFF had their existing agreements expire at the end of last year, though they continue to be governed by those contracts until a new agreement is reached. The firefighters union notified the city on Dec. 23 that is has approved the new contract, according to Horrigan-Taylor, while the SEIU voted on Jan. 5.

The city remains in negotiations with other labor groups. Both the Utilities Management and Professional Association of Palo Alto, which represents mid- and high-level utilities workers, and the city's largest police union, Palo Alto Police Officers' Association, are among labor groups that saw their existing contracts expire last month.