Menlo Park decreases pension benefits for newly hired city workers

The Menlo Park City Council on Tuesday approved a two-year contract with the American Federation of State, County and Municipal Employees (AFSCME) that continues a freeze on salaries and offers reduced pension benefits to new hires.

Menlo Park City Manager Glen Rojas discusses Tuesday's city council meeting agenda with Mayor Richard Cline. (Photo: Liu (Laura) He/ Peninsula Press)

The council’s 3-1 vote affects all unionized workers except for police officers, who are represented by their own union.

Valid until Oct. 31, 2013, the new contract also replaces a cap on employee health benefit contributions with a fixed city contribution equal to the amounts recently negotiated with the police officers’ union.

In addition, it eliminates a reward for non-usage of sick leave. AFSCME-covered workers who use fewer than three days of sick leave per year will no longer be able to carry over comp or sick time into the next fiscal year.

Council Member Peter Ohtaki voted against the agreement, saying his opposition to the sick leave provision was strong enough to override his support for the contract as a whole.

“When I add up all of the leave considerations, I’m concerned it is considerably outside the norm,” Ohtaki said, referring to the practices of other municipalities. “In my opinion, we should go back. But that’s gonna be my opinion. That’s why I’m voting against it.”

A two-tier pension system in the contract was designed to conform with Measure L, a pension reform initiative passed by Menlo Park voters in 2010. Measure L changed the retirement age of new city employees from 55 to 60, excluding police officers.

Prior to the adoption of Measure L, an employee who retired at age 55 could receive 81 percent of his or her salary at maximum. The measure, instead, allows a new hire to earn no more than 60 percent at age 60.

Rather than calculating retirement benefits based on an employee’s highest-salary year, the new system takes an average of the three highest-earning years, according to City Manager Glen Rojas.

Mayor Richard Cline, Mayor Pro Tem Kirsten Keith and Council Member Kelly Fergusson voted for the agreement. Ohtaki was the lone no vote, and Council Member Andrew Cohen was absent. There were no public comments on the issue during Tuesday night’s council meeting.

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