The Solvang City Council unanimously approved a three-year labor contract on Monday, granting annual wage increases to represented city employees and ending the nearly monthlong strike.

The city and Teamsters Local 986’s three-year memorandum of understanding includes cost-of-living increases of 6%, 5% and 4% by each year, effective Oct. 15. The agreement comes after months of failed negotiations and 22 days of striking.

According to Administrative Services Director Wendy Berry, the 6% cost-of-living increase is effective beginning Oct. 15, followed by the 5% becoming effective by July 1, 2027, and the 4% effective by July 1, 2028. 

The staff report states that the fiscal impact of the new MOU is anticipated to be $93,422 through the end of the current budget year. 

Included in the MOU are designated paid holidays at the end of December for represented employees.

The city and Teamsters Local 986 attempted contract negotiations for months. The union represents 31 of the city’s 42 employees. 

In June, union representatives notified the city that the latest offer was rejected by the employees. On Sept. 12, the Teamsters proposed a three-year agreement with yearly salary increases of 4%, 6% and 6%; the city countered with 6%, 4% and 4%. The union rejected that offer, which also included end-of-year holiday days off, and declared a strike. 

On Sept. 30, the parties returned to the bargaining table, and the union proposed yearly salary increases of 6% for three years, as well as removal of the holiday week closure and associated paid holidays. 

On Oct. 1, the city countered with 6%, 5% and 4% salary increases and removing the holiday closure. The union rejected that and counter-offered including the holiday closure. The city agreed on Oct. 12, with the cost-of-living increases becoming effective the day employees ended the work stoppage. The union members ratified the agreement on Oct. 14, ending the 22-workday strike.

“This agreement is a testament to the determination and solidarity of the hardworking men and women who serve the City of Solvang,” Jeff Lee, business representative for Teamsters Local 986, said in a statement when the agreement was announced. 

“This is good news for our employees and our community,” Mayor David Brown said in a statement at the time. “We are grateful to everyone who helped us get here, and we are glad to move forward together in service to Solvang.”