YANKTON, S.D. (AP) — Unionized city employees in Yankton have rejected a contract offered by the southeastern South Dakota city.

Union Local Executive Director Matt Miller tells the Yankton Daily Press & Dakotan newspaper (http://bit.ly/1hFe6Cl ) that the proposed cost-of-living increase in the contract was the main reason it was voted down Tuesday night. He says that with the proposed half-percent increase, city employees would actually be agreeing to a pay cut.

City Manager Amy Nelson says negotiations will start over. The previous contract approved in 2010 will remain in effect until a new deal is reached.

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