Watertown City Council Approves 3.5% Raises and Bonuses for Union Employees

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Northeast Radio SD News - Watertown, SD - The Watertown City Council unanimously approved two major collective bargaining agreements at its meeting tonight, securing a 3.5% wage increase for 2026 for employees represented by the American Federation of State, County, and Municipal Employees (AFSCME) and the International Association of Firefighters (IAFF).

The agreements finalize the city’s negotiation cycle with its three primary unions, following a similar contract approved for the Police Officers Association earlier in December.

The contract with AFSCME, which represents staff in solid waste, wastewater, and various street departments, includes several key provisions:

· Wage Increase: A 3.5% increase for all union members in 2026.

· Health Insurance: No increase in employee health insurance contributions for the year, ensuring employees realize the full benefit of the raise.

· Long-Tenure Bonus: A one-time $1,000 bonus for seven employees who have reached the end of the union’s pay grid due to their long tenure with the city. This bonus will be subject to state pension contributions.

· Retirement: An increase of $25 per month in the city’s matching contribution on the supplemental retirement plan.

· New Job Trial Period: An agreement was reached allowing employees an 80-hour (two-week) trial period when changing to a new position within the city, providing leniency for internal movement.

The contract with the IAFF also included the 3.5% wage increase for 2026 and an amendment to the city’s matching contribution for the supplemental retirement plan, increasing it by $300 per year. The difference in retirement provisions was noted, as firefighters are not subject to FICA (Social Security and Medicare) taxes.

Both the AFSCME and IAFF agreements included uniform language regarding the closure of City Hall. This provision ensures that if the City Manager were to close City Hall and grant time off to City Hall employees without requiring vacation or unpaid leave, all other union employees would also receive pay for that day. City Manager Alan Stager noted this provision was added for the sake of fairness, but characterized a scenario requiring its use as “extraordinary.”

Councilman Kyle Peters commended the Finance Team and the city’s leadership, noting that the 3.5% raise was significant, especially given the current trend of 0% state-wide raises.

City Manager Alan Stager publicly thanked the representatives of all three unions for their collaborative approach during his first negotiation cycle, calling them a “great group of representatives.”