Almanac

News - May 26, 2010

Menlo Park pension initiative will go on ballot

by Sean Howell

On May 18, the sun went down on Menlo Park. Dinner tables were cleared, teeth brushed, kids put to bed, the night swallowed up by crickets ... and yet a devoted cadre of people remained in the City Council chambers, waiting with varying degrees of patience as council members debated daylight planes and setbacks.

The council spent over two hours during its weekly meeting trying to redesign a second-story addition to a house, eventually failing to reach a solution. The 13 or so hearty souls who waited for their item, which the council took up shortly after 11 p.m., had an equally daunting task: trying to convince council members that they shouldn't trust themselves to negotiate pension benefits with employee unions.

The people were there to show support for a "pension reform" initiative, which would reduce pension benefits to future (non-police) city employees — and prevent the council from increasing those benefits in the future without voter approval.

The council declined to adopt the measure outright, electing instead to send it to the November ballot. It might not have had much of a choice either way: It was required by law to either adopt the initiative or put it before voters, and City Attorney Bill McClure said it may have been illegal for the council to adopt it, because state law requires cities to attempt to negotiate new terms with workers. He said he didn't think that portion of the law applied to voter initiatives, however.

While several people urged the council to adopt the measure, Henry Riggs, a leader of the pension reform group, said he was glad the council decided to send the issue to the ballot

"It does mean we have more work to do, we've got a lot more work to do — instead of a six-week effort, it's a five-month effort," he said in an interview. "But it was the right thing to do, so that the full city votes on this issue."

The council will eventually consider whether to take a formal stance on the initiative, but some of them offered preliminary views at the meeting.

Councilman John Boyle acknowledged, to some extent, arguments by pension reform advocates that the initiative would take some of the pressure off council members in negotiations with labor unions. Council members Heyward Robinson, Rich Cline and Kelly Fergusson all voiced fears, to varying degrees, that the initiative could make hiring difficult.

"I'm really worried about ballot box budgeting," Ms. Fergusson said. "I'm really worried that this initiative would have a detrimental impact on the City Council's ability to take the responsibility for balancing the budget every year, and putting that in the hands of the voters in a way that could be similar to the dysfunction in the state of California."

Mr. Riggs argued that the city should advertise jobs more widely — not just to municipal workers — and noted that all it would take to again increase pension benefits in the future is a simple majority vote of the people. (City Manager Glen Rojas said in an interview that the city "is open to receiving applications from private sector workers," and that its advertising practices don't preclude that.)

"This is almost like global warming," Mr. Riggs said in the interview, maintaining that it's obvious the city and state are in for a bleak economic future if they don't address pension costs now. "The commitment to fiscal responsibility is not there when a councilman says, 'we need the flexibility to again offer (higher benefits).'"

The city's costs for pension benefits have risen from about $1.75 million in the 2004-2005 fiscal year to about $4.25 million in the current fiscal year, a figure that represents nearly 13 percent of the city's budget. Those costs are expected to rise to about $5.75 million in the 2014-15 fiscal year, though Personnel Director Glen Kramer notes that that estimate is very tentative.

The initiative would not reduce pension costs in the short term, and Mr. Riggs acknowledged that even with the initiative, the city's costs won't be sustainable in the long run.

The initiative would not affect pension payments to police officers and sergeants, the total costs of which are slightly higher to the city than costs for non-police employee pensions — despite the fact that police represent less than one-fifth of the city's workforce. Salaries and pension benefits for police have shot up over the past decade as Peninsula cities competed with each other to hire officers.

Mayor Rich Cline said he was skeptical that other cities would quickly follow suit in instituting a two-tier pension system, or that an action by Menlo Park voters would have an effect on the state's pension policies.

The statewide system "has got to be fixed," he said in an interview. "Unfortunately, in Menlo Park, we have people who think it needs to happen here. I don't know where that comes from."

Regarding hopes that the initiative will catch on like a wildfire in other cities, Mr. Cline said: "Our responsible (general fund) reserve policies haven't caught on like a wildfire. You know why? Because we're a small town. If we were Berkeley, Oakland, San Francisco, I would say, yes: this is a structural shift. But the odds are against it."

While the council was still stuck on the issue of whether to grant a use permit to a homeowner at the meeting, debating whether to require plantings and preclude storage of anything other than vehicles in the applicant's garage, advocates of the initiative knitted, worked on laptops, and walked around outside the council chambers to get some fresh air.

While some of the audience members got wrapped up in the hot debate between neighbors over the use permit, sighing and groaning at every revelation and reversal, one man — the husband of a former council member — sat very still with his head in his hands.

"I was not comfortable in that meeting, at any given time," Mr. Cline said. He said he considered re-jiggering the agenda, but didn't want to make the people there for the use permit issue wait, because they had already sat through two long Planning Commission sessions. He was well aware that the sighs of frustration were coming from people who don't much trust the council to begin with, but it couldn't be helped.

"I'm embarrassed for having suggested that you be here, but thank you so much," Mr. Riggs said to the people who were still in the council chambers when his turn to speak finally came around.

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