Palo Alto's debate over the rising costs of employee benefits is about to get much more public.
The City Council on Monday scheduled a public hearing for September to discuss the city's rising pension and health care costs and to formulate a "benefits strategy" aimed at curbing these costs. The idea was prompted by a colleagues memo from Vice Mayor Greg Scharff, Councilmen Pat Burt and Greg Schmid and Councilwoman Karen Holman, who wrote in the memo that "the cost of employee benefits and pensions has risen dramatically for the City of Palo Alto, reducing the funds available for our community's necessary and valued services and infrastructure."
The council members pointed out in the memo that the proportion of dollars paid for benefits to salaries went up from 23 percent in 2002 to 54 percent in 2010. The city projects that benefit costs will exceed salaries by 2022.
In the memo, the council quartet poses 14 questions that will spur a public discussion in September. These include, "How should the costs of pensions be shared between employers and employees?" and "How do we establish fair criteria for retirees' contributions to health benefits?" Other questions center on such topics as fixed health-benefit contributions and the relationship between labor negotiations and adopting a budget.
Holman said one purpose of this approach is to educate the community about the challenges the city is facing in meeting the rising benefit costs and the legal obstacles that hinder the council's ability to cut these costs. Holman said many residents underestimate the legal constraints the council faces in making reforms.
She also said the discussion will include consideration of ways to improve employee retention and job satisfaction of city workers.
Scharff said the September discussions will allow the council to discuss publicly the types of issues that normally come up only in closed session, when the council discusses labor negotiations. Those discussions, he said, are typically focused on the particular issues in dispute.
"This is a rare opportunity to think about this in a more holistic approach," Scharff said.
The council voted 8-0, with Gail Price absent, to schedule a public discussion before the end of September to discuss the questions posed in the memo.