NEW YORK (Reuters) - New York City has signed a tentative contract with the city largest public sector labor group, District Council 37, Mayor Bill de Blasio said on Wednesday.
DC37 represents more than 120,000 city employees in jobs such as hospital workers, schools aides, construction workers and administrators.
City officials said the agreement, which runs through 2018, would cost the city a gross $1.75 billion and $995 million when healthcare cost savings are taken into account.
Members still need to vote on the on the terms of the agreement.
The agreement conforms to the broad pattern laid out in a deal with city teachers that before healthcare savings is expected to cost the city nearly $20 billion through 2021 when applied to all 300,000 city workers, according to an estimate by the city Comptroller's office.
The city is wrapping up contract talks with all city unions following the agreement with the United Federation of Teachers (UFT) at the end of April. The City uses a system of pattern bargaining with labor unions where the first contract is expected to be a blue print for others.
"This tentative agreement with DC37's over 100,000 impacted employees marks a landmark first contract with the group of unions that settled in the 2008-2010 round of collective bargaining, but has been without new contracts since 2010," the mayor's office said in a statement.
Some investors who hold the city's over $100 billion debt have complained that the deal with unions was too generous. Still, the city, seen as a high quality credit, has been able to sell debt easily in the $4 trillion municipal bond market.
In the city's first debt sale since the agreement with the UFT, the city was able to borrow at a yield of 3.87 percent - 30 basis points lower than it did in March, when the same 2034 maturity sold with a 4.17 percent yield.
The city's contract dispute was a legacy of the previous mayor Michael Bloomberg, who wanted to impose pay freezes on city workers. When de Blasio took over on Jan. 1 all of the city's employees were working under expired contracts.
(Reporting by Edward Krudy)