AC Transit management and the Amalgamated Transit Union Local 192 (ATU), which represents the agency’s bus operators and mechanics, have agreed to terms of a new labor contract for 1,625 bus operators and mechanics.

The new agreement provides for a wage increase of 9.5% that will be phased in over the three years of the contract. On the matter of ATU employees making contributions toward health care costs, the agency and ATU agreed on a flat monthly contribution of $120 per employee during the life of the contract.

The agreement heads off a threatened strike that that was twice averted — once by reaching a tentative labor agreement and then a second time by a cooling-off period imposed by Gov. Jerry Brown. A walkout by operators would have halted AC Transit bus service for 197,000 daily riders who depend on buses for transportation throughout the San Francisco Bay Area.

AC Transit began bargaining with the ATU in March and has repeatedly re-adjusted its proposals to keep negotiations on track and minimize the chances for an employee work stoppage, according to the transit agency.

“This was a long and often intense negotiation and there are no winners or losers in its outcome,” said AC Transit GM David Armijo. “We are happy we were able to get through the process without any disruption in service and we thank Governor Brown for imposing a 60-day cooling-off period to help make that happen. Clearly both sides focused on what was best for the riders and taxpayers of this District and what is in the long-term interest of maintaining public transit for the communities we serve.”

The contract must now be approved by AC Transit’s seven-member board of directors, which will hold its next regularly scheduled meeting on Jan. 8.