FALLBROOK -- The Rainbow Municipal Water District's board has approved two new contracts opposed by its two employee unions that give workers a 2.5 percent cost-of-living increase, but require them to help pay for family health care benefits.

The one-year contracts cover the Rainbow Association of Supervisors and Confidential Employees union, which represents seven district staffers, and the Rainbow Municipal Water District Employee Association, whose 26 members account for most of the rural water district's employees.

The board voted 4-0 to approve the contracts during its meeting Tuesday at district headquarters in Fallbrook.

The Rainbow district declared an impasse with the unions last year, after about 10 months of contract negotiations stalled. State law says the district can impose its "best and final offer" on the unions once an impasse is declared. Both unions turned down the final offer in December.

Sherry Mullenix, president of the supervisors union, declined to comment Wednesday. Mark Cline, president of the larger employees association, could not be reached for comment.

Both contracts run from Jan. 1 to Dec. 31 and include the cost-of-living increase, retroactive to Nov. 1. The contracts require employees to pay 5 percent of health care costs for family members, starting in March.

Because the contracts will expire in roughly nine months, a new round of negotiations will begin soon, district officials said.

District 5 Director and board President Rua Petty said Tuesday that employees know that the current deal is a "starting point" in upcoming negotiations.

"I think it's important that we come out with a memorandum of understanding (agreement) with the rest of our employees before the end of this year," Petty said. "We can negotiate in a different manner that can bear much better results."

A letter from union leaders, inviting district representatives to the next round of contract talks, was also read at Tuesday's meeting.

"Our intention is to meet and confer in good faith towards a better solution," the letter stated. "We would like to find a common ground in which both parties can be satisfied and begin with a brand new start."

Also on Tuesday, the Rainbow board gave final approval to a three-year contract with five, senior-level water district employees who are not represented by either union.

Those employees -- including the district's operations manager, finance manager, engineer, assistant operations and maintenance manager, and human resources manager -- bargained collectively and reached a verbal agreement with the district during negotiations in October.

Their contract runs from July 1, 2006, through June 30, 2009, and includes a 2.5 percent cost-of-living raise for each year, retroactive to July 1. It also allows employees who are receiving a $500 per month vehicle allowance to continue to receive that perk.

The district's board initially approved the contract during a closed session Dec.15, before giving final approval Tuesday.

Rainbow Municipal provides water to more than 7,200 customers and sewer service to more than 1,900 customers in a 78-square-mile region that includes the unincorporated communities of Rainbow and Bonsall, plus parts of Fallbrook and parts of Vista.

- Contact staff writer Lorell Fleming at (760) 731-5798 or lfleming@nctimes.com.