SF voters may face dueling pension-reform ballot measures 

Labor union leaders say they expect to reach consensus on a pension-reform ballot measure with Mayor Ed Lee soon – even sometime this week - although it may not be enough to prevent Public Defender Jeff Adachi from pushing a competing measure.

“We are days away from a handshake” with the mayor, said fire union leader Tom O’Connor.

Leaders from various public employee unions presented Lee last Thursday with their latest proposal. Christine Falvey, a spokeswoman for Lee, said she expected the mayor to offer a counterproposal this week. “We’re not there yet,” she said.

Lee is working against the clock to come up with a consensus November ballot measure to reduce The City’s pension bill, which is expected to double to nearly $800 million in 2014. There are about three weeks left before Lee must submit a proposed measure to the Board of Supervisors.

Meanwhile, there looms the possibility of Adachi's measure going on the ballot. Adachi has said he would withdraw his measure if the unions’ proposal goes far enough to solve the problem.

While union officials declined to reveal specific details of their recommendations, they appear to fall below the bar set by Adachi. For instance, pension contribution rates for employees, one of the biggest debates, are below what’s proposed in Adachi’s measure, which is influencing the debate.

O’Connor said that “there is a sliding contribution rate similar to what Adachi proposed but it’s not as draconian.” O’Connor said the proposal, like Adachi’s, would exempt those earning under $50,000 from pension rate increases above the base. City workers pay 7.5 percent of their paychecks into the pension fund, and newly hired public safety workers pay 9 percent.

Adachi’s ballot measure would increase city workers’ pension contribution rates based on the city’s contribution rate and how much an employee makes. A city worker who earns between $100,000 and $149,999, for example, would have their rate likely increase by 6 to 7.5 percent in the coming years.

Labor’s proposal includes the controversial proposal to “smooth” out the recovery of pension fund investment losses over a greater period of time than the current policy of five years.

Adachi said increasing the length of time to recover the losses is just “artificial savings” and an “accounting gimmick.”

Steve Stallone, spokesman for Service Employees International Union 1021, which is the city’s largest union, said increasing the five-year smoothing is the “responsible way” to prevent severe budget cuts. And he said workers shouldn’t have to shoulder all the burden of the Wall Street speculation. The City’s pension investment fund value declined by $3.5 billion in fiscal 2008-2009.

But Adachi sounded unconvinced. “I remain concerned about the direction the so-called consensus proposal is going,” Adachi said.

By the numbers

$40 million: Savings from 2 percent city worker pension rate on $2.15B payroll
$422 million: City’s Pension contribution FY2011-12
$756 million: City pension contribution projected in FY 2014-2015
$306 million: City deficit in FY2011-12

Source: City Controller’s Office

jsabatini@sfexaminer.com

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