News

Divided council takes no official position on pension-reform initiative

This is an expanded version of a previously posted article.

Two council members have forcefully declared their support for the citizen-driven pension reform ballot initiative, but the Menlo Park City Council will not offer a ballot argument for the measure, set to go before voters on Nov. 2.

Councilmen John Boyle and Andy Cohen said at the July 20 council meeting that they support the pension measure, which would increase the retirement age for new, non-police employees and decrease the pension payments they receive.

Arguing for the initiative and urging his colleagues to take an official position in support of it, Councilman Boyle said that he would not have voted in 2007 to enhance retirement benefits for city employees if he had had more information.

In hindsight, he said, the city is now burdened by the "unintended consequences" of that decision. "It didn't turn out the way we thought it would."

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With staff analysis suggesting it would save the city money, the council approved the multi-year labor contract in 2007 with the provision that employees would agree to a lower wage increase in exchange for the enhanced retirement benefit, which would take effect in 2009.

As of March 2009, non-emergency employees can retire at 55 with 2.7 percent of their highest wage, multiplied by every year they've worked. That allows an employee who has worked for 30 years to retire at 55 with 81 percent of his or her salary. The prior formula limited the benefit to 2 percent at age 55.

The ballot measure, sponsored by the grassroots Citizens for Fair and Responsible Pension Reform, would among other things change the formula for new hires to 2 percent at age 60, which would allow a 60-year-old, 30-year employee to retire with 60 percent of the average of his or her three highest consecutive annual salaries.

At the meeting, council members considered whether to offer to write a ballot argument in support of the initiative; the supporting argument would typically be written by the sponsoring citizens group, headed by residents Henry Riggs and Roy Thiele-Sardina.

Before the vote on supporting the measure was taken, the discussion centered on the merits of the initiative, with Councilwoman Kelly Fergusson speaking out most strongly against it as being "flawed," counterproductive, and "ideology-driven."

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"This could end up costing us more ... than the more measured approach the council is taking," she said, citing information in the staff report that said a retirement plan dictated by the pension initiative may force the city to move its retirement program for new hires from CalPERS to another system with higher administrative costs and lower investment returns.

The city's approach involved imposing a two-tiered "2 percent at 60" formula for new hires on one employee group when its contract was up for renewal earlier this year, she noted.

But Councilman Boyle countered that the imposed two-tiered system for new hires hasn't gone into effect, and might never do so because a second employee group will have to agree to it, or also have it imposed.

Also, he noted, another City Council could overturn the two-tiered system -- not an option under the pension ballot initiative.

Although Mr. Boyle supports placing limits on future councils' ability to enhance pensions, as the initiative would do, Mayor Rich Cline said he's troubled by such restrictions on future councils' authority. Still, he said, he leans toward supporting it, "but I don't think I want to be the author of a ballot argument."

Noting that he began waving the red flag about the economy and urging pay cuts several years ago, Councilman Cohen said: "I support this initiative (even though) it doesn't go far enough. ... Private industry has taken voluntary cuts; other cities have taken them. Let the voters speak."

The council rejected Mr. Boyle's motion to offer the citizens' group a ballot argument showing council support, with Mr. Boyle and Mr. Cohen supporting the motion, Mayor Cline and Councilman Heyward Robinson opposed, and Ms. Fergusson abstaining.

Asked later why she abstained, Ms. Fergusson said, "I wouldn't read too much into it."

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Divided council takes no official position on pension-reform initiative

by / Almanac

Uploaded: Fri, Jul 23, 2010, 11:56 am
Updated: Fri, Jul 23, 2010, 6:10 pm

This is an expanded version of a previously posted article.

Two council members have forcefully declared their support for the citizen-driven pension reform ballot initiative, but the Menlo Park City Council will not offer a ballot argument for the measure, set to go before voters on Nov. 2.

Councilmen John Boyle and Andy Cohen said at the July 20 council meeting that they support the pension measure, which would increase the retirement age for new, non-police employees and decrease the pension payments they receive.

Arguing for the initiative and urging his colleagues to take an official position in support of it, Councilman Boyle said that he would not have voted in 2007 to enhance retirement benefits for city employees if he had had more information.

In hindsight, he said, the city is now burdened by the "unintended consequences" of that decision. "It didn't turn out the way we thought it would."

With staff analysis suggesting it would save the city money, the council approved the multi-year labor contract in 2007 with the provision that employees would agree to a lower wage increase in exchange for the enhanced retirement benefit, which would take effect in 2009.

As of March 2009, non-emergency employees can retire at 55 with 2.7 percent of their highest wage, multiplied by every year they've worked. That allows an employee who has worked for 30 years to retire at 55 with 81 percent of his or her salary. The prior formula limited the benefit to 2 percent at age 55.

The ballot measure, sponsored by the grassroots Citizens for Fair and Responsible Pension Reform, would among other things change the formula for new hires to 2 percent at age 60, which would allow a 60-year-old, 30-year employee to retire with 60 percent of the average of his or her three highest consecutive annual salaries.

At the meeting, council members considered whether to offer to write a ballot argument in support of the initiative; the supporting argument would typically be written by the sponsoring citizens group, headed by residents Henry Riggs and Roy Thiele-Sardina.

Before the vote on supporting the measure was taken, the discussion centered on the merits of the initiative, with Councilwoman Kelly Fergusson speaking out most strongly against it as being "flawed," counterproductive, and "ideology-driven."

"This could end up costing us more ... than the more measured approach the council is taking," she said, citing information in the staff report that said a retirement plan dictated by the pension initiative may force the city to move its retirement program for new hires from CalPERS to another system with higher administrative costs and lower investment returns.

The city's approach involved imposing a two-tiered "2 percent at 60" formula for new hires on one employee group when its contract was up for renewal earlier this year, she noted.

But Councilman Boyle countered that the imposed two-tiered system for new hires hasn't gone into effect, and might never do so because a second employee group will have to agree to it, or also have it imposed.

Also, he noted, another City Council could overturn the two-tiered system -- not an option under the pension ballot initiative.

Although Mr. Boyle supports placing limits on future councils' ability to enhance pensions, as the initiative would do, Mayor Rich Cline said he's troubled by such restrictions on future councils' authority. Still, he said, he leans toward supporting it, "but I don't think I want to be the author of a ballot argument."

Noting that he began waving the red flag about the economy and urging pay cuts several years ago, Councilman Cohen said: "I support this initiative (even though) it doesn't go far enough. ... Private industry has taken voluntary cuts; other cities have taken them. Let the voters speak."

The council rejected Mr. Boyle's motion to offer the citizens' group a ballot argument showing council support, with Mr. Boyle and Mr. Cohen supporting the motion, Mayor Cline and Councilman Heyward Robinson opposed, and Ms. Fergusson abstaining.

Asked later why she abstained, Ms. Fergusson said, "I wouldn't read too much into it."

Comments

compensation professional
Menlo Park: Sharon Heights
on Jul 23, 2010 at 1:08 pm
compensation professional, Menlo Park: Sharon Heights
on Jul 23, 2010 at 1:08 pm
Like this comment

Voters: we should all remember who took which positions on this very important issue.


It's politics
Menlo Park: Central Menlo Park
on Jul 23, 2010 at 2:59 pm
It's politics, Menlo Park: Central Menlo Park
on Jul 23, 2010 at 2:59 pm
Like this comment

Obviously council members Robinson and Cline, the incumbents who will run for re-election, have now voted NO against the grass roots pension reform effort. They have obviously decided they need the help of the public employee unions more than that of the residents of Menlo Park. Good luck, guys. Personally I now know who NOT to vote for!


Joseph E. Davis
Woodside: Emerald Hills
on Jul 23, 2010 at 10:09 pm
Joseph E. Davis, Woodside: Emerald Hills
on Jul 23, 2010 at 10:09 pm
Like this comment

[Post removed; disrespectful language violates terms of use]


take a deep breath
Menlo Park: Allied Arts/Stanford Park
on Jul 24, 2010 at 7:13 am
take a deep breath, Menlo Park: Allied Arts/Stanford Park
on Jul 24, 2010 at 7:13 am
Like this comment

The issue, it seems, was whether the council should write the ballot argument (or offer to, since the citizen group would have to permit that), not the merits of the reform initiative. Kelly seemed to want to turn it into a debate on the initiative itself, even though she ended up abstaining on the vote (???) So a vote against the motion didn't mean the individual council members oppose the initiative, although it's clear that Kelly does. It sounds as if Rich actually supports it.


Peter Carpenter
Atherton: Lindenwood
on Jul 24, 2010 at 7:49 am
Peter Carpenter, Atherton: Lindenwood
on Jul 24, 2010 at 7:49 am
Like this comment

It is strange that the Council would vote to place this on the ballot, at considerable expense, and then stand silent. There is no reason why some Council members could not write the supporting argument and others could write the opposing argument - based on their individual beliefs. Of course this would mean that each of the Council members would have to explicitly declare themselves for or against this initiative.


Interested
another community
on Jul 24, 2010 at 11:38 am
Interested, another community
on Jul 24, 2010 at 11:38 am
Like this comment

[Portion removed; statement cited has already been removed for disrespectful language.]

What a shame that what should be an adult conversation about the tax payers ability to continue to fund public pensions should degenerate into such bile.

I doubt Mr. Davis has the intestinal fortitude to call a Public Employee a "thief" to their face.


Blue Collar Public Worker
another community
on Jul 24, 2010 at 5:08 pm
Blue Collar Public Worker, another community
on Jul 24, 2010 at 5:08 pm
Like this comment

Obviously not everyone in Menlo Park supports pension reform . Oh I already said that I guess now you guys will get it. One last thing the supporters should foot the bill not the tax payers as not all agree, this is a miss step.


Menlo Voter
Menlo Park: other
on Jul 24, 2010 at 5:11 pm
Menlo Voter, Menlo Park: other
on Jul 24, 2010 at 5:11 pm
Like this comment

Blue Collar:

the only "miss step" here is the unions' stupid attempt at disenfranchising the voters of Menlo Park.


Almanac Observer
Menlo Park: Central Menlo Park
on Jul 26, 2010 at 8:56 am
Almanac Observer, Menlo Park: Central Menlo Park
on Jul 26, 2010 at 8:56 am
Like this comment

Do you notice how the Almanac has a double standard for censorship. It is far more lenient with regard to blogs from the left and is very quick to censor moderate and conservative opinions.


joan
Menlo Park: Central Menlo Park
on Jul 26, 2010 at 9:17 am
joan, Menlo Park: Central Menlo Park
on Jul 26, 2010 at 9:17 am
Like this comment

Almanac observer, what do you mean when you say "blogs from the left"? These are posts from people, not blogs, aren't they? I'm having a hard time understanding your post. Clarity would be most welcome.


Almanac Observer
Menlo Park: Central Menlo Park
on Jul 26, 2010 at 9:32 am
Almanac Observer, Menlo Park: Central Menlo Park
on Jul 26, 2010 at 9:32 am
Like this comment

[Post removed; focus on the issue, not perceived flaws of other posters]


Fiscal conservative
Menlo Park: other
on Jul 26, 2010 at 10:09 am
Fiscal conservative, Menlo Park: other
on Jul 26, 2010 at 10:09 am
Like this comment

It was smart for the City not to write a ballot argument, and drag itself into an expensive lawsuit about this misguided though well intended pension initiative. The Council did the right thing to impose, and they got other concessions that actually get fiscal savings for the City in much shorter order than the measley 20 year-future savings that a two tiered 2 at 60 alone (as in the pension measure) would get. The City imposed 2 at 60 too...

This is a tempest in a teapot. Keep eyes on the big picture, and where the REAL savings are, folks, and savings that don't diminish our level of service.


Peter Carpenter
Atherton: Lindenwood
on Jul 26, 2010 at 10:13 am
Peter Carpenter, Atherton: Lindenwood
on Jul 26, 2010 at 10:13 am
Like this comment

BCPW states:"One last thing the supporters should foot the bill not the tax payers as not all agree, this is a miss step."

1 - BCPW has a strange new idea of democracy wherein EVERYONE has to agree in advance before anything is voted on - a logical impossibility as how can you know how many people support something unless you take a vote.

2 - BCPW has yet to explain why the unions should have the right to deny the voters the opportunity to decide this issue.

Sounds like the union's motto is My Way Or The Highway


Henry Riggs
Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Jul 26, 2010 at 12:29 pm
Henry Riggs, Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Jul 26, 2010 at 12:29 pm
Like this comment

It's important to remember that an "imposed" second tier is only a city position as part of the bargaining process. This council or any future council can rescind the "imposed" conditions at any time in the next year before the second tier (2% @ 60 for new employees) takes effect.

Only a voter initiative blocks a reversal by council without concurrence of the voters.


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