Awaiting consensus - Page 2

The long-anticipated compromise pension reform plan still has a couple of key critics

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"SEIU is right that Mayor Lee's proposal is inequitable," Adachi added, noting that Measure B was criticized for being unfair to lower-income workers. "That's why my new proposal increases pension contribution rates in $10,000 graduations. But under Lee's plan, a person who earns $100,000 contributes the same rate as someone who makes $50,000."

He criticized Lee's plan for requesting only modest increases from safety workers. "Police and fire cost two to three times as much as everyone else's retirement. They pay 17 percent of what's in the fund and take out 36 percent. So that means SEIU folks are subsidizing the costs of safety workers' retirement."

Adachi acknowledged it would be better to have one measure everyone can support. "But I don't agree that we should put ineffective reform on the ballot," he said.

Adachi took a lead role on the issue in 2010 when he qualified Measure B mostly with backing from a few wealthy sponsors, including venture capitalist Michael Moritz, a financial supporter of Republican Ohio Gov. John Kasich and the Ohio Republican Party. Adachi took lots of political heat for the move, but he shrugs off the criticisms.

"It comes down to making sure people understand the issue," he said. "A year ago, no one was acknowledging that it was a problem, but now everyone does. I'm hoping the board strengthens the proposal. It's going to take supervisors really looking at this to see if works, not just jumping on the bandwagon."

According to the Department of Human Resources, Lee's plan would yield an estimated savings of $800 million to $1 billion over 10 years, with the bulk coming from increased employee retirement fund contributions of up to 6 percent for future and current employees. The proposal raises the retirement age from 62 to 65 for most city workers and from 55 to 58 for public safety workers. It also imposes caps on pensions for new employees.

Lee's proposal must now make its way through the Rules Committee and win the approval of the full board by July 12, the deadline for supervisors to submit charter amendments. According to the Department of Human Resources, 89 percent of San Francisco's 26,000 city workers earn more than $50,000. That means only 3,000 city workers fall below the $50,000 cut-off that exempt them from paying extra, under Lee's plan.

But Larry Bradshaw, a bargaining unit member of SEIU 1021, said that members who make slightly more than that threshold will face pay cuts under the plan, on top of the pay cuts they took last year to avoid being laid off by Mayor Gavin Newsom.

For certified nursing assistants, the shift would amount to a roughly $12,000 annual pay cut, Bradshaw said. Security guards would face an estimated $5,000 per year cut, and clerical workers could face anywhere from $1,000 to $11,000 per year.

These workers faced getting fired and rehired at lower-paid classifications to make up for a revenue shortfall, but the union reached an agreement to stave off the worst pay cuts for those "de-skilled" employees by imposing a one percent across-the-board cut for all members in order to restore the salary cuts.

As SEIU workers take the pay cut to fund pensions, he said union members won't be able to continue subsidizing the salaries of these deskilled workers.

"So we're not going to have that option of asking our members to keep funding these workers who have taken this 20 percent pay cut," he said. "And these are primarily women and people of color."

But Sup. Sean Elsbernd and other supporters of the pension deal say the plight of these workers is an unrelated issue. "They aren't a pension issue, so wouldn't it be more appropriate to discuss them in the collective bargaining context?"

Elsbernd believes Lee's measure is "fair and equitable," partly because employees' pension contributions would be reduced in boom years when tax revenue and stock market gains swell the city's coffers.

Comments

The Mayor's plan doesn't go far enough. On Bay Citizen, both Mayor Lee and Warren Hellman claimed that $300 million or more savings per year was necessary. Now they put up a measure that saves $60 million a year and claim it's a solid measure? I'd stick with the Adachi plan.

I usually appreciate Elsbernd for being a watchdog over the City's finances, but he's dropping the ball here. His legal argument seems to be that both the Mayor plan and the Adachi plan may affect vested rights, but the Mayor's plan sort of affects them less. His reasoning is weak. In the union's lawsuit over Prop B last year, the court acknowledged that the solvency of the system can be a material factor in whether vested rights can be affected -- it doesn't do any good to preserve benefits when those benefits crater the pension fund and there's no money left for anyone.

Adachi's plan saves more money. And it's more equitable for lower paid workers.

Posted by The Commish on May. 31, 2011 @ 8:29 pm

You omitted this critical fact, Lee's absurd $195,000 pension cap, in the chart provided.

Adachi's plan is superior and Elsbernd (Lee) is out to lunch:

(1) Adachi's plan generates far more savings and therefore, avoids more layoffs and more cuts to critical City services. How can Lee even claim this is enough when at the same time, claiming we need a bond to repair potholes?

(2) Adachi is right - SEIU employees need to stop subsidizing the very generous pensions of police and fire. If any reporter would bother to read the City Charter, police and fire were legally required to increase their pension contributions a long time ago.

3) Elsbernd is making stuff up about the "legal roll of the dice." The "commensurate benefit" employees receive is the solvency of their own pension system. Otherwise, all employees are at risk of losing some portion (or all) of their pension because it is currently between $2.5 billion and $6.5 underfunded. San Jose is taking more drastic action right now than Adachi is. A huge flaw in Lee's proposal is that reducing employee contributions in "boom years" is EXACTLY the type of thinking that got us into this mess in the first place.

4) Lee's plan is not the "Business Plan." If one researched, you would see that the Chamber of Commerce receives funding from the City and therefore has a clear conflict or ulterior motive to support Lee's plan. A real survey of businesses would reveal they would support Adachi paln as it generates more savings to preserve critical CIty services.

5) Adachi caps pensions at $140,000- Lee\Elsbernd at $195,000.

6) Adachi's plan is more equitable for lower paid workers.

As has been posted, Lee originally said in February his goal was $300 million in annual savings. He failed and is now touting his "serious" proposal. Lee didn't move the goal posts, he took them down.

...This is BY FAR the best reporting on the pension issue by SFBG. I hope we can continue to see solid reporting on this important topic.

Posted by Guest on May. 31, 2011 @ 9:31 pm

I also agree with the last two sentences. This was a good article.

Posted by The Commish on May. 31, 2011 @ 9:47 pm

So, Supervisor Campos,

You are "intrigued" by the Mayor's plan? Like a rat looking up at a weaving cobra I'd guess. Hey, a guy's gotta pay is mortgage right?

Adachi's plan is more fair to all. As Joe O'Donoghue is wont to say: "Figures don't lie, but liars can figure.". The Hellman group are liars 'figuring'.

If Adachi or Gonzalez or both don't enter the race for Mayor because of this bullshit then they have holes in their heads. San Francisco needs a Mayor who'll tell them the truth and the remedies, not just someone looking to kiss Gabriel Haaland's upturned patooie at every opportunity.

Giants playing in my hometown (St. Louis) and every win is a loss and every loss is a win on both sides. Kind of like true love.

h.

Posted by Guest h. brown on May. 31, 2011 @ 9:43 pm

"Avalos, who described Lee's proposal as "a sensible approach" and "the right way to go," has said that if SEIU's concerns aren't adequately addressed, he'll withdraw his sponsorship."

Why is the city paying Avalos's salary?

Shouldn't the SEIU being paying it?

It's comical that the Bay Guardian thinks it is some sort of modern day muckraker when they line up behind these owned lackeys.

Posted by matlock on May. 31, 2011 @ 9:58 pm

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