Although the changes were unanimously approved, it was the majority of Mayor Bill Widmer, Jim Dobbie and retiring member Kathy McKeithen who pushed the matter forward, saying the town needs to address its unfunded liability related to retirement benefits and must now require non-represented employees to take responsibility for more of their own benefits costs. Recent estimates show the town has some $15 million in unfunded liabilities for retirement benefits.
Even though the reforms are long overdue, in most cases they will impose a hard-to-take-loss of thousands of dollars annually on some of those impacted, mostly senior management staff such as the city clerk, public works supervisor and three management staff members in the police department. Even though council members Elizabeth Lewis and Jerry Carlson supported the measure in closed session meetings of the council, both indicated that they will ask for a reconsideration of the measure at the December meeting, when new member Cary Wiest will be seated. In addition to the compensation cuts, the council imposed an unpaid furlough for "non-essential" employees between the Christmas and New Year's holidays.
As indicated by many of those who spoke at the meeting, the major problem with the measure is not the shift of benefits costs to employees, but the schedule of the changes' implementation, which now is set to start Jan. 1 of next year. But if final action is put off until Mr. Wiest is seated in December, outgoing member Ms. McKeithen said, it could take him many months to get up to speed on the town's complicated finances, and thus delay the savings the town hopes to accrue.
This is a loss that the town can afford. While we agree that the town needs to begin reducing its funding obligations as soon as possible, delaying this package will not break the bank, and will show employees that the council does hear their concerns. As suggested, it makes much more sense to spread implementation of the shift in costs to employees over three years, rather than the 18-month period now in the plan — a schedule that would be a real hardship for some of the staff members affected.
An undercurrent in the process, or "elephant in the room" as Ms. McKeithen put it, is the soon-to-begin contract talks with the Atherton Police Officers Association, which played an active role in the Nov. 6 election, supporting Ms. Lewis and Mr. Wiest, the winning candidates. Union president David Metzger spoke against the compensation changes, and had earlier issued a statement highly critical of the "lame duck" council for considering the plan before Mr. Wiest takes his place at the dais.
The APOA is thought to be concerned that rollbacks taken in this measure could be forced on its members, or worse, leading the council to outsource police services to the county sheriff. Mr. Widmer claims the council has never discussed outsourcing the police department, but it would be unusual if the council did not look for the APOA to contribute to reducing the town's unfunded liability.
With 55 to 60 percent of the town's budget devoted to law enforcement, any effort to bring the budget into line will of necessity have to include the police force. The APOA members have enjoyed a long run of regular increases in salary and benefits, including the right to retire at 50 with up to 90 percent of their highest pay.
Part of the new compensation package will eliminate spiking in pensions, a measure that also should apply to retiring police officers. It also puts in place changes for new hires, including a two-tier pension formula and elimination of post-retirement health care.
Although uncomfortable for some, changes are necessary in the Atherton pay structure for non-represented workers, but the council should make a good-faith effort to spread the pain over a longer, three-year period, rather than forcing it through in just 18 months. Such a delay will not be of great consequence to the town, but would be extremely helpful for some of the town's top employees.