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AC Transit reached a deal with its largest union Friday on a two-year contract that gives its 1,800 bus drivers and mechanics a 3 percent raise. 

The contract with The Amalgamated Transit Union Local 192 also calls for AC Transit to contribute $3 million a year to a medical trust fund to help defray health care costs for retired employees. 

AC Transit also reached a one-year deal with the American Federation of State, County and Municipal Employees Local 3916, which represents about 400 management and clerical staff. That contract includes an annual contribution of $300,000 to a medical trust fund for retirees. 

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