Almanac

News - November 9, 2011

Menlo city employees union signs on to benefit cuts

by Sandy Brundage

A proposed two-year contract with the American Federation of State, County and Municipal Employees (AFSCME) in Menlo Park freezes pay for 35 city employees and brings new hires in under a two-tier, "2 percent at 60" pension system based on the average of three years' highest pay.

According to the staff report produced after the council concluded a closed session with negotiators on Nov. 1, the contract also swaps a cap on employee contributions to health benefit premiums with a fixed city contribution equal to that approved for the police unions. As for CalPERS, the city employees would pay an additional 0.376 percent of their salaries post-tax into the pension system.

Retiree health credits for supervisors hired after Oct. 22 got the ax, as did an award for using fewer than three days of sick leave per year. However, the city would agree to pay $20 more per month per employee for dental insurance and increase coverage limits.

The staff report states that the city has aligned the wording of Measure L, the pension reform initiative passed by voters in 2011, with the CalPERS "2 percent at 60" plan.

However, the initiative remains under fire in the court system, because of a clause requiring voter approval for all benefit increases, a decision that used to rest with the City Council.

That policy is the foundation of the lawsuit filed by Olson, Hagel & Fishburn, the firm representing Service Employees International Union (SEIU) and AFSCME.

In May, the council had imposed pension benefit limitations on SEIU employees that raised the retirement age for new non-police city employees from 55 to 60, and decreased pension benefits from a maximum of four-fifths of annual salary to three-fifths.

Henry Riggs, who helped lead the Measure L campaign, called the new AFSCME agreement a good first step and gave credit to the negotiating team for making it happen.

"My impression from the staff summary is that the city's focus is on long range savings as prescribed by Measure L, primarily in establishing the '2 at 60' second tier; also per Measure L, this requires that employee contributions to their retirement rise as CalPERS inevitably raises the payment schedule. Of course, this is welcome."

He also noted that the contract does provide a modest increase in benefits for current employees despite the current economic climate, with a total added cost to Menlo Park of approximately $19,000 annually. "Future employees will have benefits more in keeping with the time," he said, since they'll be hired under the revised terms.

MEETING

The council is scheduled to vote on the contract on Tuesday, Nov. 15. The meeting starts at 7 p.m. in council chambers at the Civic Center at 701 Laurel St. in Menlo Park. "That means it's time for you, the public, to evaluate this contract," Mayor Rich Cline said.

> Go to tinyurl.com/3t8vese to review the staff report.

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