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Union, City Agree Menlo Park Workers to Get Retirement Boost

July 3, 2008

By Banks Albach, Palo Alto Daily News, Calif.

Jul. 3–The city of Menlo Park expects employee retirement benefits to increase by $817,000 a year due to a recent change to the union agreement.

On Tuesday night, the city council amended an agreement with Service Employees International Union Local 521 and with American Federation of State, County and Municipal Employees Local 829 to boost retirement from 2 percent of salary per year at age 55 to 2.7 percent. The increase, which affects 203 employees and 16 middle- and upper-level managers, will take effect in March 2009 and raise the city’s annual liability, not counting police, to roughly $2.26 million. Employee retirement contributions will also rise from 7 to 8 percent.

The initial contract took effect in October 2006 and expires in October 2009. In 2006, the unions agreed to smaller salary increases to compensate for the pending retirement boost. As a result, employees received no salary increase in 2006-07, 1 percent in 2007-08 and 2 percent in the current fiscal year.

Tuesday’s council decision marks an effort to keep city employees from moving to better-paying agencies, personnel director Glen Kramer said. That was the reason police salaries recently were increased by 25 percent, or $1.7 million, over three years. City officials say that until April about 30 police officers had left in the past three years.

In a recent comparison of retirement benefits in 20 similar cities, the city found that 11 of them offered between 2.5 and 2.7 percent of salary at age 55 for non-public safety employees.

Of the 203 union employees eligible to vote, 165 cast ballots and only three went against the agreement change. Middle and upper management, which includes department heads, are not unionized, but still get the same benefits and salary adjustments, Kramer said.

E-mail Banks Albach at balbach@dailynewsgroup.com.

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