The agreement was reached through binding arbitration that began in late September and concluded last Friday. It takes effect immediately and doesn't need to be approved by AC Transit's board or by the members of Amalgamated Transit Union Local 192.
Clarence Johnson, the spokesman for AC Transit, which serves parts of Alameda and Contra Costa counties, said the ruling by the three-person arbitration panel calls for workers to contribute to their health and benefit plans, changes work rules, and eliminates one paid holiday.
That holiday is Veteran's Day, which is this Thursday.
The changes will help the district reduce its projected $56 million budget deficit by $38 million over the next three years, Johnson said.
"There are no winners or losers in this arbitration," AC Transit Interim General Manager Mary King said in a prepared statement. "Both AC Transit and the union focused on what is best for the riders and taxpayers of this district and what is in the long-term interest of maintaining public transit for the people we serve."
ATU Local 192 chief negotiator Claudia Hudson said the union was willing to make some concessions but was able to maintain many work rules.
"There are a few changes to our contract but nothing drastic like AC Transit had intended," Hudson said.
She said workers will make a $10 co-payment for their medical appointments and are taking a 6 percent pay cut in the first year of the contract, 5 percent in the second year, and 3 percent in the third year.
The contract is "a win for my members and a win for the public," Hudson said.
Johnson said one work rule that was changed is that AC Transit will now only have to pay overtime when employees work more than five days and 40 hours in a week. Previously, employees were paid overtime if they worked more than eight hours in one day, even if they worked less than a total of 40 hours in a week.
AC Transit and ATU Local 192 began negotiating a new contract in April, but talks collapsed and the old contract expired on June 30.
The bus agency's board voted that night to imposed a new contract that went into effect on July 18. It called for work rule changes, co-payments for medical care and employee health insurance, and a two-tier health insurance system.
Union members objected to the changes, and management alleged that up to 20 percent of employees called in sick the first few days after the contract was imposed. Hudson, however, denied that workers were engaging in a sickout.
A judge later ruled that AC Transit had to honor the terms of the old contract while the two sides engaged in binding arbitration aimed at reaching a new contract.
Although the new contract averts the service cut that was planned for December, it doesn't restore service cuts that were made in March and October.
"We are not out of the woods when it comes to having sustainable long-term financial stability," King said.
But she said the agreement "stalls the need for immediate cuts in December."