San José has reached a tentative three-year contract with two unions representing as many as 4,500 city employees, averting a potential strike that could have disrupted services across the city. The agreement, announced Oct. 12, covers members of the Municipal Employees’ Federation, AFSCME Local 101, and the City Association of Management Personnel, IFPTE Local 21. The City Council is expected to consider final approval before the end of October. The proposed contract provides 3% wage increases in each of its three years, plus a one-time bonus equal to 1% of pay. Employees could receive another 1% increase in the third year if the city’s general fund meets a specified surplus threshold. The agreement also sets safeguards for the use of artificial intelligence, according to the city and the unions. The unions represent workers in departments and services including libraries, city planning, wastewater operations, animal services and parks. Maintaining those services was a key concern in the negotiations, Mayor Matt Mahan said, alongside ensuring employees can afford to live in the community they serve. The tentative deal follows eight months of negotiations in which wages were a central point of dispute. Earlier public proposals showed the unions sought a 14% increase over three years, while the city offered 9%. After union members overwhelmingly authorized a strike of up to three days in August, the sides entered a fact-finding process involving a panel from the California Public Employment Relations Board. The panel’s recommendations were nonbinding. IFPTE Local 21 said the agreement advances priorities including employee retention and protections related to AI. Carlos Murillo, an airport engineer and member of the union’s bargaining team, said members had stayed committed to making progress toward a stable city workforce. Mahan called the agreement a milestone, saying the city sought to compensate employees fairly while maintaining services for residents. If both unions had walked out, it would have been San José’s largest strike since 1981. The unions and city narrowly avoided a strike during their previous contract negotiations in 2023; those contracts expired in June.