Palo Alto has highest rate of disability retirements in Santa Clara County

By Jason Green, Daily News Staff Writer -

Police officers and firefighters in Palo Alto are retiring with disability benefits at a rate that is nearly double the average in Santa Clara County, according to a new civil grand jury report.

And if that trend is left unaddressed, it could result in taxpayers paying more for pensions than if the workers had left with a clean bill of health, the report suggests.

Over the past five years, 51 percent of the 43 public safety workers who called it quits did so because of a job-related illness or injury.

That puts Palo Alto at the top of a list of 12 jurisdictions that were surveyed by the grand jury. Only Gilroy came close with 43 percent.

The average was 27 percent.

The report does not pinpoint the reasons for Palo Alto's disability retirement rate, but notes that jurisdictions with a higher ratio of fire personnel to law enforcement personnel tended to have higher rates. Data collected by the grand jury showed Palo Alto had 121 firefighters and 101 police officers.

"Palo Alto should identify what factors, other than a high proportion of firefighters in their public safety force, account for their IDR (industrial disability retirement) rates," the report concluded. "Palo Alto should develop a plan consistent with city objectives to lower its IDR rate."

Los Altos and Los Gatos, which only have police departments, had rates of 19 and 17 percent, respectively. And no one left the Campbell Police Department with disability benefits.

Police officers and firefighters who retire because of a job-related illness or injury could end up saddling taxpayers with higher costs. In most cases, they collect about 50 percent of their final compensation. But if a retirement account has contributions that are less than sufficient to fund the retirement, the employer's CalPERS annual contribution costs increase.

"The cumulative effect of the unfunded IDRs and other pension fund obligations presents a growing burden to entities, and therefore taxpayers," the report says.

City of Palo Alto spokeswoman Claudia Keith said the city was still reviewing the report as of Friday afternoon, but she offered one off-the-cuff theory for the city's 51 percent rate.

"We have our own paramedics," she said. "Many cities don't. So that may be a factor. Or it may not."

Council Member Pat Burt, a vocal supporter of pension reform who also helped roll back binding arbitration for firefighters in 2011, called the report "disturbing" in a telephone interview.

"We've done a great deal of work to attempt to create a much more sustainable cost structure for our employees, including public safety, and what appears to be excessive disability claims does much to undermine those efforts," Burt told The Daily News.

"I believe that our management and my colleagues are going to want to dive into this issue."

The report is available online at www.scscourt.org/court_divisions/civil/cgj/grand_jury.shtml.