A proposed labor agreement for San Francisco Police Department employees that contains reduced pay for new recruits, a multiyear 5 percent pay raise and continued ability to cash out sick time moved closer to approval Thursday.

The agreement with the San Francisco Police Officers Association, which would expire in June 30, 2018, covers 2,502 positions currently valued at $415.1 million in salary and benefits.

A City Controller's Office financial analysis of the five-year agreement estimates that with entry-level pay reductions of 10 percent there would be $22 million in savings. Under the current contract, entry-level officers receive a salary of $88,842, which decreases to $80,582 under the proposed agreement. The contract also would dedicate $32.4 million to raises in its final three years, with a 1 percent pay hike to be followed by 2 percent pay raises in each of the final two years.

Police rejected a prior version of the agreement in June. The difference was that the initial version eliminated the so-called wellness incentive program, which lets officers cash out accrued sick time. But the new version of the contract continues the program to the end of the contract extension, and that made the difference for department employees, who overwhelmingly approved the pact. In exchange for extending the sick-time cash-out benefit, a collective raise of 6 percent was decreased to 5 percent. The city controller has estimated the cost of the wellness program is $3.8 million annually.

Martin Gran, employee relations director with the Department of Human Resources, called the labor agreement a “win-win,” adding that it would “allow us to aggressively start staffing the Police Department” with the lower start rates for incoming recruits. Gran said the lower pay scale will make three police academy classes possible within the next 12 months, beginning with a class of 50 in early October.

Gran suggested that the “modest” increases in the police contract may serve as a model in other negotiated labor contracts moving forward.

“We believe that's a sustainable model, not only for this department, but potentially for others in The City,” Gran said.

The proposed labor deal was supported by the Board of Supervisors Government Audits and Oversight Committee on Thursday and is expected to receive final approval by the full board Tuesday.

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