Palo Alto labor unions struggle in tough economy

City workers forced to deal with benefit cuts, uncertain future

Palo Alto and Wisconsin are thousands of miles apart -- geographically and politically -- but one wouldn't guess that by talking to the local labor leaders.

The high-tech hub and the cheese-loving state have seen their financial fortunes fall over the past three years. Each has responded by zeroing in on labor unions, though in drastically different ways.

Wisconsin made national headlines earlier this year when its Republican legislators passed a law curtailing the collective-bargaining rights of state employees.

In Palo Alto, the cost-cutting effort has been far less dramatic but, to union members, no less real. Since 2009, the City Council and City Manager James Keene have made a commitment to extract concessions from each labor union, including permanent "structural" changes to pension and health care benefits. The council also voted in July to place a measure on the ballot that would eliminate binding arbitration for disputes between the city and its public-safety unions. These efforts have prompted some labor leaders to cry foul and compare the city's reform efforts to Wisconsin's.

The council's drive to slash benefits has made many City Hall employees unhappy, though, to paraphrase Leo Tolstoy, each labor group has been unhappy in its own way. The city's largest union, the Service Employees International Union (SEIU), Local 521, initially rallied against the reforms but has been largely silent since the city imposed the new conditions on its roughly 630 members in October 2009. Last year, the union voted to extend a contract that includes a two-tiered pension plan (with newly hired employees subject to a less generous formula) and a cost-sharing arrangement for medical expenses -- moves that the union had fiercely resisted in 2009.

The management-and-professionals group -- the only major labor group that's not a union -- began giving serious thought to becoming one. Last year, the group briefly flirted with joining the Teamsters. Meanwhile, two subgroups of employees splintered off to become their own, more specialized unions. The Palo Alto Police Managers Association, which represents police captains and lieutenants, was born in fall 2009. The Utilities Managers Professionals Association of Palo Alto, which includes 45 members of the Utilities Department, officially sprung into existence in June. Both small unions were formed out of general frustration that their particular concerns aren't being met, members said.

Public-safety unions have also been grumbling. Two years ago, Palo Alto's largest police union, the Palo Alto Police Officers Association, offered to forego its members' negotiated raises to help the city close its budget deficit -- a gesture that reduced the city's expenditures by about $800,000. Now, the union finds itself fighting to keep the city from chopping away at its benefits.

City Manager James Keene made it clear he would seek the type of concessions from the officers as were imposed on the SEIU workers. The city's contract negotiations with the police union formally launched in June, but the union could lose much of its negotiating leverage in November if voters approve Measure D and repeal the binding-arbitration provision from the city's charter. Sgt. Wayne Benitez, president of the police union, said many in the union are disappointed by the council decision to place the measure on the ballot.

"What the city has done is they created an atmosphere of a lot of unhappy people," Benitez said when asked about the impact of recent negotiations. "In general, people are appreciative that they have jobs in the city. It's a nice city to work for. But, in general, most people feel very underappreciated, and they don't feel like the City Council or the city manager is truly backing them."

The most heated battle, and one with perhaps the greatest implications for both the city budget and labor relations, is the two-year jostle between management and the city's firefighters union, Palo Alto Professional Firefighters, Local 1319. Unlike other labor groups, whose complaints have generally remained behind closed doors, the firefighters' feud with the city has been public, political and litigious. The union last year sponsored a measure that would have frozen staff levels in the Fire Department and required the city to hold an election before it could reduce Fire Department staff or close a fire station. The measure lost overwhelmingly, with more than 70 percent of voters rejecting it.

The firefighters union is also the main driver behind the council's decision to place Measure D on the ballot. The Fire Department's budget has risen by 37 percent between fiscal years 2006 and 2010. So far, the city's firefighters have not had to face the type of benefits cuts that the city has imposed on SEIU workers and managers.

To explain the escalating expenditures in the Fire Department, some on the council point to the city's binding-arbitration provision. The provision, which voters added to the City Charter in 1978, enables a panel of arbitrators to settle disputes between the city and its unions. Unlike most of the other employees (with some exceptions in Utilities and Public Works), police and firefighters are barred by law from striking. The provision was meant to ensure that despite this restriction, police and firefighters would have some leverage in their negotiations with the city.

The main proponents of Measure D, Councilman Greg Scharff and Councilwoman Karen Holman, have argued over the past two years that the provision restricts the council's ability to balance its budgets and creates a disparity between public-safety employees and all other city workers.

Scharff said at the July 18 meeting that the mere threat of binding arbitration prevents the council from making important budget decisions. Holman said the provision's presence has forced the City Council to "settle for something less than where we needed to be."

In fact, even though binding arbitration has been used six times and the verdicts have been split fairly evenly, the arbitration panels have consistently sided with the unions on the major issue of pension reform. In 1980, the panel rejected the city's attempt to add a second tier in the pension formula for new employees in the fire union. The panel also sided with the police union in 1983, when it ruled that the city should pay both the employer's and the employees' share of pension contribution.

For the public-safety unions, the implications of Measure D are potentially dire. If the measure were to pass, the council would have the power to impose on its police officers and firefighters the types of concessions it has extracted from the SEIU and the managers. The firefighters union responded to the council's decision to place the item on the ballot by filing an "unfair practice charge" against the city with the state's Public Employment Relations Board and by seeking an injunction that would have blocked the measure from appearing on the Nov. 8 ballot. The board rejected this request.

Tony Spitaleri, the president of the firefighters union, immediately described the council's action as "another attack on the basic rights of workers, just like the attacks on collective bargaining we have seen this year all around the country." He also predicted that city voters would reject Measure D.

"Palo Alto is no Wisconsin," Spitaleri said. "Unlike the City Council, Palo Alto voters value fairness."

Other union leaders were less blunt, but they also said they see the recent reforms in Palo Alto as part of a broader national response to the economic downturn and the populist anger against public workers that this downturn has engendered. Benitez and Lt. Ron Watson, president of the Palo Alto Police Managers Association, both said they accept the fact that the city is struggling financially and that their unions will need to contribute. But in their view, as in the view of many city workers, the cuts are also shaped in some part by the philosophical debate taking place across the nation about public workers.

"There's a national tide against workers," Watson said. "We kind of fly under the radar in good times and then pop up in bad times."


Palo Alto is far from the only place where labor unions are seeing their fortunes decline. The economic downturn that shook the globe in 2008 continues to linger. Plummeting sales-tax revenues have taken a bite out of local and state budgets across the nation, prompting lawmakers to slash budgets and take a fresh look at employee expenditures.

In Ohio, much like in Wisconsin, a newly elected Republican governor passed a law this year severely curtailing the collective-bargaining rights of state employees. In New Jersey, Gov. Chris Christie's opposition to public unions has made him a political rock star among fiscal conservatives and Tea Party stalwarts.

Public employees have also been feeling the pinch on the local level in California. Budget woes have prompted San Jose and Oakland to whittle down their respective police forces. San Jose voters also passed a ballot measure last year that reformed the city's binding-arbitration provision, empowering a retired judge to settle disputes between the city and its public-safety workers. Voters in Vallejo, which went bankrupt in 2008 after failing to win union concessions, narrowly passed a ballot measure last year abolishing binding arbitration for police and firefighters. In August, voters in San Luis Obispo did the same thing through a mail-in ballot. More than 70 percent voted for the repeal.

But Palo Alto isn't Oakland, Vallejo or San Luis Obispo. Though the city's tax revenues have dipped as a result of the global recession, its fortunes have been slowly picking up over the past year, and officials expect revenues to increase by $2.5 million between 2011 and 2012. Politically, the city's leadership is about as far from the Wisconsin Legislature as it is geographically. The council, while nonpartisan, leans heavily to the left. The city's elected representatives in Sacramento and Washington, D.C., are all Democrats, and 53 percent of the city's voting population are registered Democrats (compared to 17 percent who are Republicans). And unlike Govs. Christie, John Kasich and Scott Walker of New Jersey, Ohio and Wisconsin, respectively, Palo Alto officials have been careful not to frame their recent reforms as ideological stances on labor unions but as necessary steps to balance the books.

On July 18, as the council was preparing to vote on placing the repeal of binding arbitration on the ballot, several members went out of their way to point out how much they value city workers. Five members said they oppose the repeal (though one of the five, Vice Mayor Yiaway Yeh, voted with the four who support the repeal to place the item on the ballot). Council members Nancy Shepherd and Gail Price stressed their support for the labor movement and for collective bargaining, while Mayor Sid Espinosa, addressing city workers, told them that the city appreciates them and values the work they do.

"This policy should not be seen as not valuing the significant contributions you make every day -- putting your lives at risk to save citizens here," Espinosa said -- a comment one might find hard to imagine coming from Christie or Walker.

Despite these caveats, union officials were quick to link Palo Alto's reforms and its drive to repeal binding arbitration to the sea change taking place nationwide. Spitaleri wasn't the only union member to make the Wisconsin comparison. The Santa Clara County Democratic Party sounded a similar note earlier this month when it took a formal position against Measure D.

"Just like the attempts to take away the collective bargaining rights of workers in Wisconsin, Measure D aims right at the heart of working people," party Chair Steve Preminger said in a statement.

Like other labor and party officials, the party is keeping a close eye on the Palo Alto election. Preminger said in a recent interview that while the Palo Alto council bears little similarity to Wisconsin lawmakers, both bodies have turned public workers into scapegoats during the economic downturn. Preminger, himself a former Palo Alto employee and a former SEIU representative, said he hopes the city's leadership would sit down with the unions and reach a "mutually beneficial relationship" after the November election.

"This is significant because Palo Alto is a unique community and it's a large community -- larger than some of the other cities that have done this," Preminger said. "I hope that the voters, when they vote for this, really understand the issue and aren't just paying attention to folks who say we can't afford it (binding arbitration) and that it's bankrupting the city and all that.

"The Wisconsin comparison is really a comparison about attacks on public employees," he added.


When City Manager James Keene talks about the recent labor reforms, the focus is usually on the numbers, not ideology. Pension costs in Palo Alto, as elsewhere, have been going through the roof and are expected to continue their ascent over the next two years. According to the city's Long Term Financial Forecast, pension obligations are expected to jump from about $19.5 million this year to about $28.9 million in 2015.

Medical costs are also skyrocketing. Staff projects the city's medical expenses for active employees and retirees to increase from about $23 million in the current fiscal year to $30 million in 2015, according to the forecast.

"What we've tried to do as a city is to try to tackle these root issues to try to make systemic ongoing solutions so that we can ultimately come out of it faster and better than others," Keene said.

It was these twin trends, along with continuing uncertainty over the economy, that have prompted the city's recent reform movements, Keene told the Weekly. He acknowledged that these changes have hit the unions hard but maintained that they are necessary to ensure the city can meet its long-term commitments.

"The things that have driven our need as a city to make systemic changes in our long-term cost structure have been extremely difficult," Keene told the Weekly. "They've required sacrifices by our employees, and they've required concessions from our labor unions. That is difficult, and it's impossible for those sorts of changes to not have an impact on morale."

The four council members who support the repeal of binding arbitration -- Scharff, Holman, Pat Burt and Greg Schmid -- have also couched their support for Measure D largely in financial, rather than philosophical, terms. Scharff noted at several meetings that the city's 2012 budget assumes $4.3 million in concessions from the two major public-safety unions. Without binding arbitration, the city could've made the necessary cuts sooner and would not have a gaping hole in its budget, he said.

Schmid called the city's budget situation -- namely, rising expenditures and falling revenues -- the "single most pressing issue I've run into consistently over four years." The time is ripe, he said, to scrap binding arbitration.


The recent strife over salaries and benefits, and power, has taken its toll on the entire staff -- not just on the union workers bearing the brunt of fiscal cuts. The city's reforms, particularly its recent requirement that workers chip in for medical care, have prompted an exodus of employees from City Hall. The flight came in three waves roughly corresponding to the reforms and has left top management and the remaining staff in a logistical pickle. It doesn't help that between 2009 and 2011, the city reduced the number of full-time employees supported by the city's general fund from 652 to 580.

To deal with the smaller staff size, the city has turned to familiar faces -- its recent retirees. According to a report the Santa Clara County Grand Jury released earlier this year, Palo Alto had a higher percentage of employees who are rehired retirees -- 5.8 percent -- than any other city in the county. The other cities in the county averaged 1.6 percent.

Keene acknowledged that the city's actions in bringing its finances in order had accelerated the workers' departure and put the city "in a bit of a predicament."

Keene said the city is currently actively recruiting for 45 positions -- nearly 5 percent of the workforce. The turnover, he said, has had a major impact on City Hall, forcing staff to work much harder in both filling vacancies and in performing the day-to-day functions of keeping the streets safe and the electricity flowing. But Keene also said the turnover is creating an opportunity to bring fresh talent into the organization.

"It's undoubtedly a very stressful time for all of us," Keene said. "But there are good aspects to the stress along with negative ones."

Just about every department is feeling the pinch these days. In June, Utilities Director Valerie Fong said one of the greatest challenges Utilities is facing is retaining employees. The department is now busily training employees about how the various utility systems function and what to do if one goes down.

Police officers who are eligible for retirement are also heading for the exit, in many cases to protect their lucrative health care arrangements, Benitez said. Palo Alto officers, he said, have traditionally been among the lowest paid in the region. What made the job lucrative, he said, was the city's benefits, particularly its willingness to pay 100 percent of employee medical costs. The prospect of losing this benefit has left many in the union disappointed and looking for other jobs, he said.

Benitez said he knows at least three people in his union who are looking for jobs out of state. He said the department expects the "floodgates to open up in law enforcement" around California in 2014. Statewide, Benitez said, about a third of the people working in law enforcement are expected to leave their jobs in the next decade.

In the small and nascent police manager's union, the changes are particularly dramatic. The union formed in 2009, largely in response to the city management and professionals group's effort to join the Teamsters. At that time it had seven members -- two captains and five lieutenants. Watson said three of these lieutenants retired this summer. Of the four people left in the union, two are eligible for retirement and will likely leave if they deem it financially advantageous.

"Each person looks at their own financial situation and makes a decision," Watson said. "They look at what they'd make if they retire today, based on their salary, and what they'd get for their medical benefits. Then they consider what they'd get if they retire later."

Police officers, Watson said, expect to chip in to help the city overcome its recent financial struggles. What bothers them, he said, is not knowing what type of cuts the city will seek next.

"I personally don't have a problem with the 90-10 or some different versions of that," Watson said. "But it's a little hard for folks when they don't know what's going to come."

The retirements of police managers could have deep implications for the department. The city's Independent Police Auditor Michael Gennaco alluded to the anticipated retirements in his latest report, which came out last week.

"This will pose a significant challenge to the continuity and continued high quality of internal affairs and citizen-complaint investigations," Gennaco wrote, referring to the retirements. "We are hopeful that the Department gives thoughtful consideration to these issues when developing a transitional plan so that this important function is not undermined."


Most labor leaders remain somewhat hopeful that the recent union struggles, in Palo Alto and elsewhere, could reverse. But they believe that this can only happen if the economy picks up or if the national conversation shifts from cutting costs to adding revenues. Few expect this change to happen soon, particularly given the national sentiment and the Tea Party's rise. Even if the economy were to improve, it would probably take a few years before unions see any benefits, Preminger said.

But he said he remains optimistic that the conversation could shift. He pointed to President Barack Obama's recent proposals to raise taxes for high-income residents as a step in that direction.

"There's nothing like a recovering economy for problems to go by the wayside," Preminger said. "But I think there really are problems when people look for scapegoats."

Even if the economic outlook brightens, the traditional power of unions has already taking a beating. The SEIU is no longer flexing its muscles. The management group has fewer members and, as a result, even less leverage. And if Measure D were to pass, the police and firefighter unions would no longer have a mechanism in their favor for settling disputes with the city.

Keene, for his part, said he hopes that once the city approves the new police and fire contracts, the most difficult part of the structural adjustments will have passed.

"I think the city has had to take the necessary steps for the long-term good of the city but also for the long-term good of employment in the city," he said. "We're hopeful that once we conclude this round of negotiations with public safety and we look at these pension issues, we will turn the corner for the most part, barring some new round of devastating economic news."

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Like this comment
Posted by Stepheny
a resident of St. Claire Gardens
on Sep 30, 2011 at 9:38 am

YES on D will help Palo Alto restore fiscal responsibility.

Compensation features won through binding arbitration has escalated city costs for public-safety employees beyond long-term affordability:
- average fireman wage now $140,000 per year, total compensation is $205,000
- benefits add 50% to wages, about double the benefits offered by private industry
- 100% medical coverage for life, including dependents
- may retire with full benefits at age 50
- pensions are 90% of highest year's salary
- featherbedding rules: same number of firemen on duty 24 hours per day regardless of need

The repeal of binding arbitration is a necessary step toward gradually reducing the pressure on future Palo Alto budgets, and the tax burden on future Palo Altans.

YES on D.

Like this comment
Posted by Wow
a resident of Crescent Park
on Sep 30, 2011 at 10:04 am

Really interesting article. I'll try not to jump into the political and union fray or bash any group as it seems these threads often do, but there are some real impacts here for us in the community.

The loss of employees in some cases will hurt City services for years to come. I hope they are successful in filling some of those vacancies soon and of course downsizing where possbile.

Who knows how many fire and police employees we will lose. Losing 3/4 of the police managers can't be good.


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Posted by Cut the Fat First
a resident of another community
on Sep 30, 2011 at 10:09 am

First, get rid of the extra pounds of management fat at City Hall!

Begin in the City Manager's Office.

Next go department by department, lopping off the unneeded managerial pounds beginning with the Director and Deputy director in each department.

After that trim from the muscle and bone of rank and file worker bees if any trimming is need after the managerial fat has been lopped off.

Put City Hall management on a bureaucratic blubber melting diet that is long overdue!

Like this comment
Posted by steve johnson
a resident of Menlo Park
on Sep 30, 2011 at 10:20 am

There is know way we can keep giving these people full medical,full retirement at 50 buy them takeing 8 weeks the last year,10 sick days the last year it is absolutely ridicules, tell you the truth the TAX PAYERS SHOULD BE THE ONE VOTING ON THERE CONTRACTS not the FOX that is guarding the hen house ,.wake up

Like this comment
Posted by Carroll Harrington
a resident of Community Center
on Sep 30, 2011 at 10:41 am

Why should police and fire employees in Palo Alto have special privileges that other city employees don't have? What's fair and equal about that? Palo Alto police and fire employees should have to negotiate like all other city employees. There should be no special privileges. I'm in favor of repealing binding arbitration. Check out for more information.

Like this comment
Posted by Mark Weiss
a resident of Barron Park
on Sep 30, 2011 at 10:48 am

Your own "Info Palo Alto" states that total assessed value of commercial and industrial space went from valuation of $3.85 billion in 1984 to $22.54 billion in 2011, an increase of nearly $20 billion, and that's billions not millions. And who benefits from that? Is it good for our community or only certain property owners?

Might we look elsewhere -- like that $20 billion windfall or capital gain or paper gain or what not -- to solve our numbers so-called problem and not scapegoat the workers, in our $147 million budget and five or eight per cent fluctuation? What about real estate transfer tax or some other creative ways to work with the real estate stakeholders -- public private partnerships, like at Lytton Plaza -- and not bash bash bash our rank and file?

I am NO on D.

As one of them said recently at Council, a propos of parking, (and not to jump from overall to downtown per se, confusingly), there are 4 million square feet downtown and only 10 entities own 60 percent of that: what are those people doing for our community, besides collecting rent?

The butler did it. I mean the meter guy, the last-hired firefighter, the public safety worker with a three-hour commute, the librarian who we won't help pay to finish college, yeah, that's the lime zone I mean lame zone ticket.

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Posted by Retired Staffer
a resident of another community
on Sep 30, 2011 at 10:51 am

One of the problems in the Utilities world is that the employees can't afford to live nearby. They tolerate the commute from the Central Valley because of the benefits for their families. Without those benefits they'll get their training here and then switch to employers that are closer to home. That leaves holes in the skills roster of the Utilities department. It costs $6,000 to train a heavy equipment operator, but Palo Alto chooses to spend millions on "anaerobic digestion" instead of employee retention.

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Posted by Mark Weiss
a resident of Barron Park
on Sep 30, 2011 at 11:09 am

I find your cover offensive. "Less Perfect Union..." etc.

Are you mocking the preamble to the U.S. Constitution? For reference sake, let me remind my fellow readers the exact words that your cover story seeks to twist, play upon and pun:
We the People, of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defence, promote the general welfare and secure the blessings of liberty, to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

It’s hard to tell from your cover which side you would have been on in 1776. Or, who is it that is struggling to stay relevant?

Like this comment
Posted by Phillips C
a resident of Old Palo Alto
on Sep 30, 2011 at 11:12 am

Binding arb is an outdated relic that gives preferential privileges to fire and police employees. It has resulted in ridiculous compensation packages and work standards for police and fire. Although these are public employees, being paid for by you, the taxpayer, they have taken the taxpayer to the cleaners and we, the taxpayer, have outsourced our negotiations to an outside arbitrator. Binding arb is simply bad governace and that is why less than 5% of California cities have it and those that do are taking steps to repeal it. The unions that represent these employees are not interested in the health of Palo Alto-they are only interested in protecting these obscene comp packages. Let's level the playing field and treat all our valable city employees equally.

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Posted by Alice Schaffer Smith
a resident of Green Acres
on Sep 30, 2011 at 12:16 pm

Alice Schaffer Smith is a registered user.

Why I am voting NO on Measure D.

The public safety workers have not used binding arbitration since 1980. So why now has the city council, by a 5 to 4 vote joined the Wisconsin mentality to attack the rights of unions to have a form of arbitration when there are disagreements? For 30 years the negotiations have proceeded, the city council members have been able to resolve through negotiations the public safety workers' terms and conditions.

It seems only fair to me to have arbitration if the parties can't come to an agreement.

Let's protect the rights of the public safety officers who work so hard to make Palo Alto a safe place to live.

As a Palo Alto Certs' Volunteer, I can attest to the competence and dedication of the staff.
I have worked first hand with the firefighters and police to prepare Palo Alto for disasters, to educate the public and to work with our safety officers.

Support them by voting NO on D. I don't want Wisconsin thinking in Palo Alto.

Like this comment
Posted by Hmmm
a resident of Green Acres
on Sep 30, 2011 at 1:05 pm

The problem is that, apparently, the "arbitration" has sided with NOT reducing future costs that have been attempted several times. Makes me not trust the "arbitration process"..Tempted to go against arbitration as a result.

We, the employers, have tried to lower our future costs by tiering the pensions, but have been blocked by "binding arbitration". Time for we, the employers, to take back some power. Though I see the point made by Ms. Smith,and I in no way whatsoever want to see any grief fall on our city employees, I also have to say that we must defend ourselves and our future from any built in uncontrolled expenses.

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Posted by Michael
a resident of Crescent Park
on Sep 30, 2011 at 1:07 pm

Any worker can walk away from the job if they don't like what the city (and, by extension, the people of Palo Alto) offer them. We should not be under any obligation to use taxpayer money to pay anyone more than what they are worth, and that should be decided by the market and not by a self-serving union and a third party arbitrator who is not on the hook for the effects of his ruling (that burden falls to the taxpayers).

When there are hundreds of qualified applicants for every vacancy, for example, the market is saying the job is overpaid.

The relative lack of use of binding arbitration is misleading. The threat of it forces the city and its taxpayers to overpay relative to what the market will carry. This is unacceptable. No class of workers is entitled to privileged treatment on the backs of another class. Plus, as has been pointed out many times, if proponents of keeping binding arbitration point to its lack of use, then that same lack of use means they won't miss it when its gone.

Its a shame that our public unions have devolved into the most damaging special interest in PA politics -- they'd love to lay claim to all of my children and grandchildren's taxes to fund bloated pension obligations. Its about time we say "enough is enough," and start treating our public sector like everyone else (market rate pay, pay for performance, termination for underperformance, enfored productivity gains, etc.)

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Posted by Hmmm
a resident of Greenmeadow
on Sep 30, 2011 at 1:12 pm

Darn, I got all excited about the 45 positions the City needs to fill, and went immediately to the HR page to see if there was a job for me..but can only find 11 positions, none of which are my field. Engineering and IT look good, but I am far from that.

Where are the other positions listed?

Like this comment
Posted by Kim S.
a resident of Old Palo Alto
on Sep 30, 2011 at 1:31 pm

Absolutely Yes on D!

Retirement at age 50, full health benefits, pension spiking. The public working sector is so far ahead of the private sector in terms of pay and benefits that something has to give.

Like this comment
Posted by Cut the Fat First
a resident of another community
on Sep 30, 2011 at 1:47 pm

Michael has conventional eocnomic ideology to fall back on - until his own job is outsourced in the foolishardy race to the bottom America has signed up for these days. What's the outcome going to be? The top 5% with 95% of the wealth?

Instead reward productivty. Get some actual work done. Get rid of the bloated management at City Hall. The workers who actually do the work won't even miss the managerial bureaucrats who are shown the door.

Like this comment
Posted by Michael
a resident of Crescent Park
on Sep 30, 2011 at 2:09 pm

I'm all for getting rid of all government bloat. I agree there is plenty of fat to cut in City Hall, and if that's a good place to start than so be it, but isolating a few public employees for scrutiny (management) when the problem of overcompensation is system-wide is a non-starter.

We are all constantly in a struggle to improve our productivity to stay ahead of external competition. In my case I've had to work to continue to improve my skills and productivity to make sure I'm more than 2X as valuable as an engineer in India who will attempt do my job for half the cost, because at the end of the day my employer will do what is best for the company.

Why should government workers be any different? Why do they deserve to be exempt from the continual need to improve efficiency and productivity that the private sector deals with? If hundreds of qualified workers are willing to fight for a firefighter job at half the current compensation, why should the city and its shareholders (the taxpaying public) be forced to go with the less productive option at the expense of roads, schools, parks, libraries, or lower taxes?

It'd be nice is we magically subsidize comfortable upper middle classes for everyone, but using the tax dollars from the productive private sector to subsidize an out-of-market lifestyle for their public counterparts is simply wrong. The taxpayers deserve the most effective and efficient solutions for their money, nothing less. The public sector, through its unions, has devolved into a self-serving entity of its own, which consumes tax revenue recklessly with little control or accountability to the value it delivers in return for that revenue.

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Posted by Michael
a resident of Midtown
on Sep 30, 2011 at 2:33 pm

I find it remarkable that you wrote this lengthy article about city salaries and benefits and not once did you mention their actual salaries. Why don't you give just a few examples of what they make so that we can see for ourselves if the salaries are in line or not?

Like this comment
Posted by SPH
a resident of Barron Park
on Sep 30, 2011 at 2:44 pm

Phillip C...police and fire are taxpayers too.
Carroll why should they get special treatment? When was the last time you had to fight someone and if you lost it ment your life? Why should other unions be able to strike but not Public safety unions? How is that fair?

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Posted by Jake
a resident of another community
on Sep 30, 2011 at 3:02 pm

I see a fair amount of people making and or repeating completely false statements about binding arbitration. I suggest doing a little reading about what exactly is involved in the process before jumping to conclusions. If binding arbitration is the golden handcuffs so many people think it is then one would think the PAFD and PAPD would be at the top in salary and benefits in Santa Clara County and or Bay Area. Or that it would have been used way more often than the few times it has in over 30 years. In my opinion the City Manager and City Council are attempting to dodge any responsibility/accountability for the present economic situation the city and or area is in. Blame the Unions seems to be the flavor of the day. Union membership in America is at an all time low and there are still those who use an isolated example someplace as fuel to demonize unions. Everyday you hear and see that the middle class is shrinking. People work longer hours, less vacation, less time with family, etc. While those at the top, CEO's etc get richer and richer every year. Profits go up and up, jobs go overseas, people barely make it in two earner households. Those at the very top are rich beyond what most people can imagine and they have the working class turning on eachother! Look at the recently booted HP CEO as an example, 11 or so months at the helm at now he walks with millions upon millions for what most people would consider a terrible job while in charge. How many HP average worker/retiree could have health benefits, retirement or even a job still with the amount of money the ex CEO was given? Instead the elite have done a excellent job of blaming union workers. Funny, when a US company ships jobs off overseas they cut their labor costs bigtime, but for some reason the retail price never seems reflect the reality of reduced production. But the profits and executive pay goes up.
For an generaly well educated community one would think people would read between the lines when it comes to the local press and elected officials statements to see the reality of where we are. Instead it appears many people drank the punch handed out. How many Wall Street thugs are doing jail time for their part in all of this? most of us would do more prison time for robbing a hot dog vendor of $80.00. Millions of peoples lives were ruined and or they lost everything because of the crimes committed by many of those on Wall Street. White Collar crime seems to indeed pay. I would rather be roughed up and have my wallet taken than have my lifes savings and or retirement fund erased, home equity wiped out, etc. The person who punched me in the nose and took my $80.00 would probably do more time than those responsible for ruining peoples futures and lives. Union workers are a small minority of the general population, and as has happened since the begining in this Country be made out to be the cause of other peoples woes. Things never seem to change. Have you hugged a CEO today?

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Posted by Hotopic
a resident of College Terrace
on Sep 30, 2011 at 4:12 pm

Kim has got it right. It's outrageous for taxpayers who enjoy none of these incredible benefits to continue paying for them.

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Posted by Michael
a resident of Crescent Park
on Sep 30, 2011 at 4:37 pm

Jake says: " Everyday you hear and see that the middle class is shrinking. People work longer hours, less vacation, less time with family, etc."

This is correct. This is the reality of a competitive global market we live in. Where you are wrong, however, is to expect the same burdened middle class taxpayer that you just described to support out of market compensation and extremely out of market pension and retirement benefits for the "public" class. How many private sector taxpayers would you bleed out of the middle class to prop up your favored public sector workers, who you deem more deserving?

I also don't think the pro public union crowd has figured out yet that painting the entire private sector with the "Wall Street CEO" brush is going to win the union a lot of votes. Wasting a dollar overpaying a public employee is the same as wasting a dollar bailing out a wall st. bank.

I loathe all government waste equally, and overpaid public sector workers are a huge source of this waste. I'm sorry that economic reality has called this into the spotlight -- maybe there was a time when we couldn't hire firefighters and other public sector workers for much what they are making today (with regular, defined contribution pensions to boot) but those times are long gone.

I work hard for a living and don't take handouts from anyone, and I likewise want to get what I pay for with my tax dollars, without an "overpayment premium" taken off the top.

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Posted by Anonymous
a resident of Crescent Park
on Sep 30, 2011 at 9:56 pm

It is a shame more of you do not do your research. 1st of all, with regards to retirement, your children and grandchildren will not be paying for the current public safety officer's retirement unless that officer is still working. Palo Alto contributes to PERS, for CURRENT employees only. They do not contribute to the retirement once they retire, it is solely funded through PERS (which is so financially stable, past governors have tried to "borrow" from PERS). So, yes it is true that we contribute a certain percent of their yearly salary to PERS WHILE they are working, we do not contribute or pay anything further after they retire.

The other misconception, is that public safety officers get a full retirement at the age of 50 years. It is true that they get to retire at 50, but they only get 90 percent if they started working age 20 years (after 30 years of working for the public). Right now, public safety receives 3 percent for each year that they work. So if you work 20 years, you can retire at 60 percent. This is what most departments pay. The cities that are having financial trouble, such as San Jose (who is non PERS), are lowering this and they are losing a ton of good public safety officers.

Let's be honest. We are not giving our public safety officers an exorbitant lifestyle. How many can afford to be your neighbor? I don't believe any PAPD officers can afford to live here (which creates problems in itself, but that is for a later time). They have to commute in. Several have over an hour and a half commute. This makes sense if Palo Alto is paying decent wages (we do not pay the most, but definitely not the least). If we significantly cut their benefits, they will plain and simply go some place else or work for the same amount, closer to home. Again, many of you say, feel free, go. Do you realize how much time and money training takes and how much overtime cost we will incur due to the shortage? They will go and we will be the losers in the end, as we deal with a shortage of well trained public safety officers and the expense of getting more up to par, so that they can leave after we paid to train them as well.

Our public safety employees have not had a pay raise in several years, which is a pay cut in itself as the cost of living has definitely not remained static. They are NOT asking for a pay raise now. They are asking for the right of appearing before a NEUTRAL party to help arbitrate, if negotiations get to that point (usually they do not). We will pass measure D and we will cut their pay and we will pay MORE in the long run.

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Posted by Kim S.
a resident of Old Palo Alto
on Sep 30, 2011 at 10:41 pm

By all means, let's be honest. at over $100K per year, police and fire department employees get to retire at age 50 at ONLY! 90 % if they've been working for 30 years? All of us private sector employees put in over 30 years and don't get a pension or health benefits. There's talk of putting social security payments starting at age 70 (a full 20 years after union employees) for the private sector! If the unemployed private sector had a shot at working for the city with less than the current pay rate and less benefits, we'd jump at the chance. It's time for unions and union employees to wake up!

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Posted by Michael
a resident of Crescent Park
on Sep 30, 2011 at 10:52 pm

The above post makes an incorrect claim -- the taxpayers ARE on the hook for any shortfall in the PERS system - hence the term "unfunded liability". If the PERS system were truly self contained, the taxpayers would not have to stand behind it to bail it out if the unrealistic returns that are baked into the formulas (8% annual returns) or overly burdendsome obligations due to issues such as pension spiking. As such, our children are being left to pay the bill.

Everyone should be on defined contribution plans such as 401K. Why should a private sector employee's retirement be at the market's mercy while that employee remains on the hook to backstop a public sector employee's retirement if the market does not perform? The private sector is being exploited by the current rules and thankfully there is finally enough awareness around the issue to create enough backlash to effect real change.

The police are probably pretty fairly paid, and as such shouldn't be continually cited in the defense of the status quo. Little will change for them when we get our act together and start paying public employees market value for their services. The firefighters and half of the bureaucrats in city hall... that's a different story.

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Posted by Michael
a resident of Crescent Park
on Sep 30, 2011 at 10:54 pm

Clarification -- "above post" refers to the one by "Anonymous". Kim, I couldn't agree with you more.

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Posted by What's real?
a resident of Barron Park
on Oct 1, 2011 at 9:29 am

Kim, Thank you.

..."It is a shame more of you do not do your research. 1st of all, with regards to retirement, your children and grandchildren will not be paying for the current public safety officer's retirement unless that officer is still working. Palo Alto contributes to PERS, for CURRENT employees only. They do not contribute to the retirement once they retire, it is solely funded through PERS (which is so financially stable, past governors have tried to "borrow" from PERS). So, yes it is true that we contribute a certain percent of their yearly salary to PERS WHILE they are working, we do not contribute or pay anything further after they retire."

The continuing fueled attack on public employees is disgusting.

The first year on cuts without medical or other emergency...maybe families can make it - but by the second year for mid level wage earners cushion is gone. Even cutting out vacation, dinners, new car, newspaper, cleaners, clothes, weekends at the beach,,,,NOW in well into the end of the second year it is desperate. Costs of rent, food, and gas have gone up. Total loss to income then equals 15 - 22% this year with increased cuts and costs over the last three years.

A worker earning an average of 70,000 are now after the contributions to benefits and the cost of living will be earning less than sustainability around $58,000. - 55,000 net after taxes and net pay contribution. Many employees while still working full time are being driven into bankruptcy, losing their homes and being forced to work second jobs while still working full time for the city of Palo Alto...and are sickened by the stress and financial burden while working more.

This in one of the richest cities in the country.

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Posted by It's-Just-Reality-Catching-Up
a resident of Another Palo Alto neighborhood
on Oct 3, 2011 at 11:14 am

> Attack on Government workers disgusting.

Well, maybe, but more likely it’s simply reality catching up with an “it’s all free in the library” mentality. The following link points to the growth of government workers over the past six decades:

Web Link

There are now more government workers employed in the US than there are workers employed in the manufacturing sector. Government workers produce little that directly contributes to the GDP .. certainly little that can be compared to their cost. The cost of the salaries and benefits, including lavish pensions, falls heavily on the private sector.

While private sector workers (non-unionized, anyway) generally understand that their jobs, and compensation, depend on their output (productivity), government workers believe that they have a right to “jobs for life”, and no obligation to be productive. Their salaries are generally a function of their length-of-employment, and have nothing to do with their expertise, or output.

As a taxpayer, or business owner, it’s not hard to become unhappy with “governments” having the power to tax without limit, for the purpose of creating a whole class of semi-dependent, and not-all-that-productive employees and want the situation corrected, one way or another.

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Posted by We struggle too
a resident of Another Palo Alto neighborhood
on Oct 3, 2011 at 12:15 pm

And so? It's not just the labor unions struggling in this economy, but also many other people. When will you do articles on average people struggling out there, including in Palo Alto?

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Posted by JT
a resident of Crescent Park
on Oct 3, 2011 at 1:07 pm

It's remarkable that the Weekly can write a long story about salaries at City Hall and not actually list one single salary. If people saw what they were making over there, they'd be hopping mad. Of course that's exactly why the Weekly won't list any salaries.

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Posted by No-Limit-For-City-Salaries
a resident of Another Palo Alto neighborhood
on Oct 3, 2011 at 1:23 pm

> Why doesn't the Weekly print City salaries?

Well, the do, from time-to-time--

Web Link

Web Link

City of Palo Alto 2010 Salaries:
Web Link

Unfortunately for Palo Alto residents, the Weekly too often seems to be more of a stealth PR arm of the City government, rather than a newspaper that is looking out for the best interests of its readers.

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Posted by Jaco P
a resident of Midtown
on Oct 3, 2011 at 2:14 pm

These are the same people posting that were laughing at upper level management in the city making too little money during the bubble. If one of these upper level managers in the city were to walk right across the street to one of the dozens of start-ups downtown during their heyday they would have made 3x or maybe even more.

Now when times are tough people are calling for their heads because they're making too much money! It's called stability people. That's how the city can compete and hire top notch managers against the private sector, which has the cash flow and ability to pay more for the same talent.

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Posted by No-Limit-For-City-Salaries
a resident of Another Palo Alto neighborhood
on Oct 3, 2011 at 2:59 pm

> That's how the city can compete and hire top notch managers
> against the private sector, which has the cash flow and ability
> to pay more for the same talent.

Not even close!

First, define “top notch managers”? Certainly there is little evidence that public sector managers are “top notch”, given how much secrecy, or lack of transparency there is in the operations of government. “Employee rights” makes it very difficult to learn very much about any employee, particularly if he/she is fired.

There is little evidence that very many public sector managers come from the private sector. There is no profit motive in the public sector, so there is little a “top notch” public sector manager can offer a hungry-for-profit company—particularly the startup kind of company that only survives if it pushes its people beyond the breaking point. And then, most of these companies fail before they actually bring any/many product(s) to market.

No, what has happened is that the public sector has created a parallel employment system that does not see productivity, or innovation, as anything of value. Longevity, and passivity (not rocking the boat) become the hall marks of the public sector employee, and management almost always comes from this pool of “talent”.

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Posted by Jaco P
a resident of Midtown
on Oct 3, 2011 at 3:58 pm


I'm referring to when potential managers are in college the only way local governments and cities can compete in hiring 'potential' managers is by offering them these incentives. Being innovative?! How are they supposed to create new developments when NIMBY's like you just sit back and ruin any advancement they try and make?

It's people like you that make their jobs so difficult. Transparency? How about some transparency in the private sector, for they were the ones that got us in this economic mess in the first place. Our city government IMO is very transparent, all meetings where important decisions are made are all public and you can attend anyone you want. You just probably choose not to and instead sit behind your computer bad mouthing other people.

You think the managers are talentless? I'd sure like to see you try and run a city such as Palo Alto being completely 'transparent.' In fact what idea's do you have anyway to improve our city? I'm all ears.

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Posted by No-Limit-For-City-Salaries
a resident of Another Palo Alto neighborhood
on Oct 3, 2011 at 5:30 pm

> I'm referring to when potential managers are in college the
> only way local governments and cities can compete in hiring
> 'potential' managers is by offering them these incentives.

No rational organization hires “potential managers” right out of college. They do hire “entry-level” employees, who might, after training, and evaluation, and some longevity with the organization, qualify, and be promoted into a management position.

> Being innovative?! How are they supposed to create new developments
> when NIMBY's like you just sit back and ruin any advancement they try and make?

This is simply an absurd remark. There is no relationship between NIMBY’s (Not in My Back Yard) residentialists who often are opposed to poorly thought out, and documented government projects, and the financial problems facing governments at all levels.

> It's people like you that make their jobs so difficult.

Again, not a rational comment to insert into this discussion at this point. Hence, no response.

> How about some transparency in the private sector,

For public companies (about 5000 of them), there is the SEC (Securities and Exchange Commission) which forces a fair amount of transparency, as well as the various trade presses. However, the Private Sector does not have the awesome, and often unchecked) power of government. Nor does the Private Sector have the cloak of “Sovereign Immunity”, which offers a lot of protection to individuals operating as elected officials and government employees.

> Our city government IMO is transparent ..

You are welcome to your opinion, but it would not be hard to prove you wrong. Here are a couple starters: when is the last time the City Auditor has actually audited the 1) Fire Department, 2) Police Department, and 3) the utilities?

> I'd sure like to see you try and run a city such as Palo Alto being completely 'transparent.'

Very simply done. Adopt a policy of “sunshine” (see what the City of San Jose has done), and put:’

1) All records on-line in a searchable format.

2) Replace the current search engine with something like Google’s

3) Add a layer of topic indexing, which is over-and-above what Google offers.

4) Put all project schedules on-line.

5) Put all manager’s schedules on-line.

While there is still yet more to do to make Palo Alto’s government as transparent as possible, these very simple projects would go a very long way towards the goal of almost total transparency.

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Posted by John
a resident of Meadow Park
on Oct 3, 2011 at 9:44 pm

The taxpayers are not represented other than as a source of income.

While we are busy WORKING and raising families, the unions and developers are working 24/7 to raise taxes and change zoning for their own interests.

When the taxpayer says enough is enough he/she is called a NIMBY or anti-union.

Do cities really need such highly paid managers? Fill the potholes,
provide fire/police services, cut the grass in the parks. How hard is that?

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Posted by SPH
a resident of Barron Park
on Oct 3, 2011 at 11:06 pm

John: you act as if fire/police and union reps have no families to raise and do not pay taxes. I said it earlier, they pay taxes too. So in a since they are paying part of their own salary.

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Posted by PERSon
a resident of another community
on Oct 4, 2011 at 12:06 am

I see that public employee -bashing is still the favorite sport of this crowd. How many of you would willingly subject yourself to the public criticism and abuse that you so readily dish out?

The irony is, when your stock options were cushy, you called us chumps for working for the government at a fixed salary. Now you resent the fact that we still have jobs.

How about just chilling out and enjoying your beautiful city?

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Posted by Steven
a resident of Evergreen Park
on Oct 4, 2011 at 8:00 am

The argument that public employees pay taxes too is ridiculous. Soaking the taxpayers with above market salaries and pensions is not magically OK because some of the money is then returned to the system. Everyone pays taxes, except those on disability pensions (another often-abused spiking method used by public sector employees).

Like most of the people who pay the salaries of our public servants, I'm not a wall street CEO nor does the private sector rain easy money on me, . The sense of entitlement our public workers (through their unions) have shown in recent years is why my vote has flipped against public employees, and will stay that way until there is some sanity and accountability restored to our government.

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Posted by SPH
a resident of Barron Park
on Oct 4, 2011 at 10:14 am

Steven: Using the argument taxpayers are fed up is also ridiculous because, like you said, "everyone pays taxes."

A since of entitlement? With which public workers? The police have forgone their raises 3 years in a row to help the city. I will grant you fire but do not lump all public workers into one group based on fire's actions.

I love liberals flip all of a sudden. For years republicans have been saying the public sector has too many benefits and arguing against pensions. Now that times are hard you agree. I have always been against corrupt unions. I only mention the taxes because it is fatuous argument when the public workers are also tax payers.

Lastly, we are blaming all the cities woes on fire and police when the departments account for only 23% of budget. We should be scrutinizing the whole budget. The supposed budget shortfalls does not fall on the fire and police shoulders alone.

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Posted by Ernesto USMC
a resident of Ventura
on Oct 4, 2011 at 11:04 am

Steven is right, and the math is simple -- If I'm a public employee, I have every incentive to want taxes to go up. With six private sector taxpayers for each public sector employee, any additional tax that I have to put into my own pot is matched by six more private sector revenue sources. This is why public sector unions always push for more revenue, not less. The union argument is essentially "Everyone chip in to pay me, I'll even chip in too so nobody can complain." The public is not so easily fooled.

SPH: I would caution against characterizing people on the left who are fed up with government waste as capricious flip-floppers. The attitude and entitlement of the unions through the recession, as well as better information about the scope of the waste, are the prime catalysts for the evolving political sentiment, not a lack of voter backbone. I agree that the entire government should be examined very closely for waste. The firefighters are currently getting a lot of attention because they are the most blatantly inefficient sector and their union is the most militant.

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Posted by SPH
a resident of Barron Park
on Oct 4, 2011 at 1:15 pm

Ernesto what incentive did the police have to for go their wage increase multiple times? The police have not acted in a selfish manner and yet we throw them under the same bus.

I will characterize liberals in this fashion because they did not listen and now it is coming back to bite them. Liberals caved into the unions and they act surprised over unions since of entitlement. Protect the worker at all cost until it effects you.

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Posted by Common Sense
a resident of Meadow Park
on Oct 5, 2011 at 5:21 am

Well....double the down on job loss in September..the most lost jobs in 2 1/2 years.

Web Link Granted, some of it military personnel cuts..the rest is private.

Keep killing the jobs with "federal stimulus job plans" and "federal regulation" and "federal taxes" and watch what happens to the tax base for public employees. Locally, keep preventing the building of tax-paying businesses and watch the businesses go to the less difficult areas.

As federal spending/GDP increases, as taxes rise...private jobs decrease, lowering the tax base. As local taxes and regulations prevent businesses...they leave, lowering the tax base.

It is counter-intuitive at first, but the bottom line is if we keep killing off the private jobs, we kill off our tax base, we get fewer taxes. Proven in many countries, and in our own history time after time.

Best solution to increase tax revenue? Take the job killing government out of the way.

Then, once we are back to full-throttle, don't promise more in outlays for the future than we can possibly pay. We, as a nation and as a city, are struggling with "too high of a mortgage" and have to bring it down.

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Posted by S.Coen
a resident of Crescent Park
on Oct 5, 2011 at 10:00 am

Hi Ernesto, so you feel that the firefighters are blatantly inefficient and that they are a militant group? How bazzare to think that way. I am very dissapointed that someone of your calibar ( USMC) would truly feel that way about a professional group who also puts there lives on the line to " serve" all of the taxpayers in Palo Alto. Why don't you take some time and go by your local fire station and talk to them about their jobs. You might find that they are not militant but are just hard working professionals who do put there lives at risk for us. Maybe they are not as busy as New York City or San Francisco but when they do respond on an emergency call they face the exact same problems as any other firefighter. Ask them about there training and hiring tests. Ask them about there continued training that is always changing to keep up to date with the higher level of education and Incident Command Systems training as well as Hazardous Materials training, Rescue and Building Collapse training, EMS/Paramedic training and alot more.
So rather then do the talk do the walk to your neighborhood fire station and say " hello".
Contact their Fire Chief/Police Chief to see if you can watch how they normally train at there Training Station ( Fire Station-6) to see first hand and get to know who your firefighters are. This goes for everyone. Go by your local fire station and say "Hi". Have a great day.

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