The staff in Portola Valley's Town Hall, reportedly among the lowest compensated in the county in terms of retirement benefits, will retain free health coverage for their dependents, a majority on the Town Council decided at its April 13 meeting.
The council discussed a recommendation by the town's Finance Committee that employees contribute 12.5 percent toward dependent health-insurance cost.
Having employees contribute was a philosophical position, said Michelle Takei, chairwoman of the Finance Committee, which voted 4-1 for the recommendation. "We thought that the town's citizens would probably be supportive of the employees paying a little," a concept common in the private sector, she told the council.
Portola Valley's budgets are consistently in the black. With 13 full-time and two part-time employees, the town would save $900 a month, Town Manager Angie Howard said in defending the status quo. "This amount will not impact our town in any way" but could hurt some employees who can ill afford a $130 hit to their take-home pay, she said.
"We do have to live on the Peninsula and, as you all know, it's not inexpensive," she added.
Of the 20 cities and towns in San Mateo County, Portola Valley's employees are apparently among the least compensated in retirement. Their pensions are based on 2 percent of the average of their last three annual salaries, one of two municipalities that use that formula, Councilman Steve Toben said. The average is 2.7 percent, he said.
Five cities offer 2 percent, four calculate based on a three-year average instead of the last year's salary, and six, including Portola Valley, do not offer health benefits in retirement, according to a compilation by Stacie Nerdahl, the town's administration service officer.
"Portola Valley's employment package simply does not provide a 'go to' example of a generous public employment benefits package," Ms. Nerdahl told the council.
In arguing for leaving the benefit package as it is, Councilman Steve Toben acknowledged the private sector trend but argued that the comparison is not accurate.
"The reality is that a great many of our employees are specialists in public sector business," he said. "We have specialized skills within our workforce. Thus, the appropriate comparison of work skills is with other public agencies."
Mr. Toben said he is not opposed to examining benefits, but that it should be done in a comprehensive way, not by chipping away at them.
Councilman John Richards agreed with Mr. Toben's take. "We're clearly not being lavish in terms of the rest of the communities," Mr. Richards said. "I don't see where we have a problem. I don't see any real point in addressing a non-issue."
In dissent, Councilwoman Ann Wengert praised the town's employees and asked them not to take her remarks personally. "You guys are the best," she said. Including staff behind the dais, there were eight employees in the room.
Public sector compensation is "no longer so separate from the private sector," she said. "The impact of health care costs on everyone across the entire world is dramatic."
"To me, the writing is on the wall that these (public sector) plans won't be sustainable," Ms. Wengert said.