I'm pleased to report that agreements have been reached with two of the City's three bargaining units. Last month, we completed separate contract negotiations with the Lancaster Police Officers Association and with non-uniformed personnel represented by the American Federation of State, County, and Municipal Employees. We appreciate the efforts of these bargaining units to negotiate in good faith to arrive at a mutually agreeable contract. Highlights of these agreements follow.
First, Police union members have ratified a three-year contract that began on January 1st. Medical savings achieved by being self-insured in 2012 and 2013, provided the City with some flexibility in salary negotiations. Thus, the Police contract provides for annual salary increases of 3 percent in 2014; and 2.75 percent in 2015, and again in 2016. The cost of the 3% increase in 2014 is approximately $300,000 and the average salary for a Police Officer in 2014 will be $71,500. Additional salary increases of .25% or .5% in 2015 and 2016 may be awarded if certain medical insurance savings are achieved.
The Police Association acknowledged the continued pressure of medical insurance costs and agreed to higher employer contributions for medical benefits. Police contributions for family medical coverage have increased from zero in 2007 to $520/year in 2009 to $1,344 in 2014. Police employee contributions to medical insurance coverage will increase to 7 percent of the COBRA equivalent beginning in 2015, and 8 percent of the COBRA equivalent in 2016.
Finally, police officers hired after January 2015 will be on a different longevity schedule. This will result in a 40% savings over the current longevity schedule that can add as much as $10,000 to an Officer's base salary each year. The Police Association also agreed to accept the City's Domestic Partner Benefits Policy.
As for our non-uniformed employees, AFSCME has ratified a three-year contract that provides the same salary increases as the Police contract. That is, 3 percent increase in 2014 and 2.75 percent in 2015, and again in 2016.
As of January 1st, changes will be made in the way employee contributions to medical insurance benefits are calculated for AFSCME employees. That is to say, employee contributions will no longer be based on salary ranges. Instead, beginning this year all employees will contribute 5 percent of the cost of medical insurance, or the COBRA equivalent rate. In 2015 and 2016, this contribution could increase to 6 percent if health care costs increase by more than 6 percent in either year.
Again, we appreciate the good faith and cooperative spirit that characterized negotiation of these two contracts. Having these contracts in place for the next three years provides the City with some degree of certainty with respect to labor costs that have such a significant impact on our long-term financial planning. We look forward to equally productive and cooperative discussions with our Firefighters union when those contract negotiations begin later this year.