Menlo Park Pension Reform Initiative, Measure L (November 2010)
Measure L sets the retirement age for city employees at age 60. The current retirement age is 55. The change in retirement age does not apply to current city employees but only to those who are hired after Measure L takes effect. Measure L does not apply to the city's police officers, who will continue to be treated under the old rules.
Under the rules in Menlo Park prior to the adoption of Measure L, an employee could receive 2.7% of his or her salary for each year of service up to 30 at age 55 with a cap of 81%. Measure L, instead, allows a city employee to earn up to 60% percent of an employee’s salary at age 60 or 2% at 60 for 30 years of service. This is known as the "2%@60" retirement formula.
Election results are from the San Mateo County elections division as of November 27, 2010.
"Citizens for Fair and Responsible Pension Reform" is chaired by Henry Riggs, a Menlo Park planning commissioner, and Roy Thiele-Sardina, a venture capitalist. When the signatures were submitted to Menlo Park election officials, Riggs and Thiele-Sardina were accompanied by a group of about 20 supporters.
To encourage a "yes" vote on Measure L, supporters say:
"Vote YES on Measure L if you agree we must protect the future health of our city by reining in pensions for new Menlo Park City (non-police) employees. Every major newspaper has reported on the “pension tsunami”--how public pension benefits are unsustainable, are drowning out government services and creating unfundable future debt. Measure L addresses the problem, while still providing generous pensions for our employees.
Until recently, municipal workers accepted lower salaries than their private sector counterparts in exchange for better benefits and absolute job security. Now salaries AND benefits are higher. A 30-year Menlo Park employee earning $89,000/year can retire at 55 with an annual pension of $72,090, plus inflation. Based on average life expectancy, that’s a pension payout of more than $1.9 million!Pension costs to California cities are skyrocketing because of huge salary increases, retroactive pension increases, and longer life-spans. Worse, if CaIPERS, which manages employee pensions for Menlo Park and most California cities falters, we are legally obliged to make up the shortfall. CaIPERS is notoriously under-funded. We must start reducing our pension obligations and protect the future fiscal health of our city.
Yvonne Gulley, chief steward of the Menlo Park chapter of SEIU, says, "This initiative is absolutely misguided and potentially illegal. Look at the facts. For one, it won’t save the city money as it pretends it would. Even worse, the initiative appears to be a violation of California labor law and will be challenged in court."
To encourage a "no" vote on Measure L, opponents say in the arguments against that they submitted for the official voter pamphlet:
We’re all concerned about rising employee costs. But Measure L threatens Menlo Park’s high quality services to residents by micro-managing city finances and ultimately our ability to attract top quality employees and management. Measure L is not a responsible approach to employee compensation, including retirement benefits.
1) The 2%@60 retirement formula wording in Measure L is flawed, differing significantly from wording under the statewide retirement plan. This means Menlo Park would have to seek judicial interpretation that could force Menlo Park out of the statewide plan for new employees, causing higher administrative costs and lower investment yields.
2) The cost for this judge’s decision will be borne by Menlo Park taxpayers.3) Costs of defending lawsuits challenging the initiative also will be borne by Menlo Park taxpayers. If Measure L passes, city council will vigorously defend the voters’ choice, of course. But there are legal arguments that Measure L is both illegal and unconstitutional. These lawsuits will be expensive.
Path to the ballot
Measure L is sponsored by "Citizens for Fair and Responsible Pension Reform." They submitted about 3,100 signatures to Menlo Park City Clerk Margaret Roberts on May 3, 2010 to qualify the measure for the November ballot. 1,740 valid signatures were required.
SEIU and AFSCME filed a lawsuit on June 22 to stop the initiative from appearing on the November ballot. The lawsuit contended that the initiative violates a state law that prohibits amending retirement contracts via the ballot initiative process.
The lawsuit was assigned to San Mateo County Superior Court Judge George Miram. A hearing on the lawsuit was held in his court on August 12. Judge Miram asked several questions during the hearing about Independent Energy Producers Association v. McPherson.
The City of Menlo Park filed a response to the labor union-backed lawsuit. In its response, the city said, "Among the most powerful rights Californians hold is the ability to direct legislation through initiative. With these first principles of California democracy in mind, the court must scrutinize petitioners' extraordinary request to remove from the ballot, prior to an election, an initiative ordinance addressing a matter of enormous concern -- public employee benefits for future city employees."
Miram said that in their legal filings, the plaintiff unions failed to provide that city councils have the "exclusive" role of establishing compensation. Miram also said that it is still possible that Measure L violates existing state laws but if it does, the proper time to litigate that is after, not before, voters have voted on it. Miram wrote:
- "Because the burden rests with petitioners to make a clear showing of the invalidity of the proposed act in order to justify pre-election review, petitioners have not satisfied their burden....Instead they have identified a significant but unresolved issue that may exist with regard to the validity of the proposed act."
In response to the courtroom victory, Measure L supporter Edward Moritz said, "I think it's wonderful that the citizens who are really assigned the burden of the pensions should decide what the structure of the pensions should be." He also said that supporters would proceed to campaign for Measure L "with gusto."
Text of measure
The question on the ballot:
|Measure L: Shall the ordinance entitled “Measure to limit retirement benefits for new City of Menlo Park employees (Except Sworn Police Officers) and to restrict City Council from increasing benefits in the future without voter approval”, be adopted?|
- "Yes on Measure L," the Menlo Park Pension Reform website
- "No on Measure L," sponsored by labor organizations and concerned citizens
- Impartial analysis of Measure L
- Argument in favor of Measure L
- Argument against Measure L
- Rebuttals to arguments in favor of Measure L
- Rebuttals to arguments against Measure L
- San Mateo Daily Journal, "Pension reform gathers steam," May 4, 2010
- Mercury Daily News, "Unions to file lawsuit to stop Menlo Park pension reform initiative," June 22, 2010
- Mercury News, "Judge to decide whether Menlo Park's pension reform ballot measure should be pulled," August 12, 2010
- Menlo Park Daily News, "Menlo Park defends right of citizens to put pension reform measure on ballot," August 4, 2010
- Daily News, "Judge allows Menlo Park pension reform effort to proceed," August 31, 2010
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.