By Barbara Wood

Special to the Almanac

The town of Atherton and its police department, operating without a contract since Sept. 30, have agreed on a tentative three-year contract that will come before the City Council at its Oct. 16 regular meeting. The tentative contract would save a significant amount of money for the town, officials said.

The Atherton Police Officers Association represents 22 employees, five of them non-police officers.

In a press release posted on the town's website, City Manager George Rodericks said that the agreement achieves the policy priorities set by the City Council.

Those priorities included eliminating the requirement that the town pay for retiree health-care costs for new hires; establishing a "cafeteria-style" healthcare plan for current employees, who will share some of its costs; setting up a new pension tier with lesser retirement benefits for new hires; and having employees pay a share of their pension costs, which the town had previously paid.

The new contract also changes the way salaries are determined. It does not contain any raises for cost-of-living adjustments during the three-year contract period.

Mr. Rodericks' staff report for the Oct. 16 meeting contains more of the details of the agreement. Newly hired police officers will have their pensions figured at a rate that starts at 2.7 percent (times the number of years served) of their highest salary over a three year period at age 57. Previously pensions were figured on a formula that gave 3 percent (times number of years served) of the highest one-year salary at age 50. New civilian police employees will receive 2 percent (times number of years served) of salary at age 62 instead of the previous 2 percent at age 55.

Pensions for new employees will be capped at 120 percent of the compensation that would be subject to Social Security taxes at the time of retirement (now $132,120). (This is a formula, only. Police do not pay into Social Security.) Annual increases in pensions based on the consumer price index (CPI) will be allowed.

The move to having employees pay a share of their pension costs will take place gradually over the three years of the contract and will be offset, Mr. Rodericks reported, by a 5 percent increase in pay.

The contract also eliminates the requirement in previous contracts that the town pay its police department employees based on a survey of local police agencies. The new contract says the town will continue to make the annual survey but will not have any obligation to base salaries on it. "The Town is no longer governed by what other agencies do with respect to how we compensate our staff," Mr. Rodericks said in his report.

Click here to see the staff report.