As medical costs continue to soar, Palo Alto officials are exploring ways to revamp the health care plans the city offers to its employees and retirees — an effort that is already creating anxiety and threats of lawsuits from labor unions.
The Palo Alto City Council discussed the deeply contentious topic of rising health care costs at length on Monday, Feb. 4. And while members didn't adopt any changes, they directed staff to explore the city's options for health plans, including a "flexible benefit plan" (also known as a "cafeteria plan") in which an employee can choose from a menu of benefit options.
The Monday conversation was the latest installment in a series of meetings the council set up last year to tackle the complex and contentious problems of rising pension and health care costs. According to a new city report, the city's health care expenses in fiscal year 2013 totaled $27.3 million, up from $11.5 million in 2003. The report from City Manager James Keene states that health care costs "will continue to rise at an estimated rate of 6 to 7 percent in 2013 for active employees, retirees, and their dependents, consuming a greater portion of the general-fund budget."
The city's proposal to revamp health care for employees and retirees hit a speed bump last year, when the Palo Alto Police Officers Association signed a new contract that offered various concessions on pensions and health care. But the union also vehemently rejected changing health care benefits for future retirees.
Evelyn Gutierrez, an organizer for Service Employees International Union, Chapter 521, challenged the city's proposal, claiming in a letter that a "cafeteria" plan would "selectively cut retirement medical benefit for long-term employees while leaving it intact for newer employees."
Palo Alto seeks funds to revamp transit center
While Palo Alto wrestles with a massive proposal by John Arrillaga to build an office complex and theater at 27 University Ave. and to redesign the busy and outmoded transit center downtown, city planners are also pursuing an alternative to pay for the dramatic transit improvements.
The City Council plans to consider on Monday night, Feb. 11, a list of projects that could qualify for the One Bay Area Grant, a program that distributes funds from the regional Metropolitan Transportation Commission to local jurisdictions for projects promoting transportation, bike and pedestrian improvements. In Santa Clara County, the MTC funds will be administered by the Santa Clara County Valley Transportation Authority (VTA), which has a total of $71.3 million available for distribution.
According to a new report, Palo Alto plans to submit 10 projects for possible consideration, including two having to do with the University Avenue Caltrain station. The first involves extending the existing Urban Lane Transit Mall south and building a parking structure to support Caltrain — a project estimated to cost up to $15 million. The city is requesting $10 million for the project, with the city footing the rest of the bill.
The second project would reconstruct the transit station to achieve a similar design offered by Arrillaga, which would raise the number of transit stops and layover stations from 21 to 32. This ambitious proposal would cost about $34 million, about $24 million of which the city hopes to get in grant funds. If the city receives this grant — a bit of a long shot given the amount of the request and the total pool of funds available — the city would then have to find a way to raise its matching share of $10.2 million.
The city is also seeking grant money for a series of other projects, ranging from a bike-and-pedestrian bridge over U.S. Highway 101 at Adobe Creek to traffic-signal upgrades.
Arson suspect deemed unfit for trial
Damon Luce, the man accused of setting several fires at the Arastradero Preserve in Palo Alto, was found mentally unfit to stand trial after a doctor's testimony Feb. 6.
Proceedings against him will be suspended while Luce is sent to a state psychiatric facility to restore his competency until he is fit to stand trial. Duffy McGilligan, Santa Clara County deputy district attorney, said Luce could be in the facility for as long as three years.
Luce allegedly set five fires in the Arastradero Preserve on Aug. 8, 2012. He was charged with five counts of felony arson.
McGilligan said the testifying doctor evaluated Luce as having a psychotic disorder not specified. The court's finding meant that Luce was of a mental state in which he was either unable to understand the nature of the proceedings against him or unable to rationally assist in his defense.