Almanac

News - August 9, 2006

Carpenter: Pension costs unsustainable

• Fire board member Peter Carpenter calls on the public to comment on the growing problem of pension costs.

by Renee Batti

A Menlo Park Fire Protection District board member who wants to revamp the district's pension commitments to its future firefighters has successfully pushed to have such contract issues aired at a public board meeting, even as closed-door contract negotiations are in full swing.

Board member Peter Carpenter wants the public to have its say -- before negotiations over new contracts with firefighters and district managers are completed -- about whether the district should continue to fund pensions at the current level, which he says could lead to "mortgaging the future of the district."

Although specifics about the ongoing negotiations can't be disclosed publicly, the August 15 board meeting agenda will include a period for the public to state their views on pension benefits, health care programs and wages, according to board President John Osmer.

District firefighters and higher-ranked staff receive the highest pension benefits allowed under the California Public Employees Retirement System (CalPERS), as do a majority of fire and law enforcement workers in the state. That formula allows an employee with 30 years of service to retire as early as age 50 with 90 percent of his or her highest salary annually until death.

The formula was agreed to in the five-year contract that just expired. Prior to July 2002, firefighters with 30 years of service could retire at age 50 with 60 percent of his or her highest salary.

The cost of pensions for the district has risen dramatically over the last few years. In fiscal year 2001-02, the cost was $290,000. By 2005-06, that figure had risen to $3.5 million -- or about 18 percent of the district's $19.3 million budget. The costs under the current plan are expected to continue rising.

Mr. Osmer noted that the public has always been free to comment on any topic, including employee compensation, during the "public comment" period of the board's regular meetings. But at Mr. Carpenter's request, the board agreed to put the specific matter on the agenda to try to make district residents aware of the current labor negotiations and encourage their input.

Mr. Carpenter said he hopes members of the public will discuss the criteria and priorities they want the board to consider in negotiating new contracts.

Labor contracts with firefighters and "line management" -- battalion chiefs and higher-ranked officials -- expired June 30, and ongoing negotiations between the district and the two employee groups have been "constructive," Mr. Osmer said last week.

Mr. Carpenter said he pushed to have the discussion placed on the agenda because the new contracts "will be the single biggest financial commitment that this board will make over the next few years."

Two-tier system

While campaigning for re-election last fall, Mr. Carpenter called the district's rising pension costs "unsustainable," and said he would work to reduce the pension rate for new hires.

In a recent interview with the Almanac, he said that he wants the district to honor its commitments to current employees, but believes a two-tiered system, which would offer reduced pension benefits for new employees, to be fair and necessary.

Labor unions have generally opposed two-tiered benefit packages as unfair, arguing that all employees are entitled to equal compensation packages for performing equal work.

INFORMATION

The Menlo Park Fire Protection District board meets at 7 p.m. Tuesday, August 15, in the board room of the fire district headquarters, 300 Middlefield Road in Menlo Park. A copy of the five-year firefighter contract that expired in June can be found at menlofire.org; click on the "District Documents" link in the left-hand column. For information, call 688-8400.

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