City seeks help paying benefits 

Another attempt is under way to ensure The City curbs the ballooning costs of pension and health care by requiring workers to contribute a greater portion of their pay.

As San Francisco incurs budget deficits for the next several years and employee costs increase by more than $100 million annually, tackling worker costs has become a focus for city leaders.

The latest effort is a charter amendment for the November ballot that would increase city workers’ contributions to pension costs and health and dental benefits.

“The City’s cost of pension fund contributions and health insurance for active and retired employees is projected to exceed $1.4 billion by fiscal year 2012-2013. These costs will severely affect the city’s ability to provide basic services to its residents,” said the document filed with the Department of Elections by Public Defender Jeff Adachi and Craig Weber, who chaired the grand jury committee last year on The City’s pension costs.

A city attorney decision is expected today on whether gathering signatures to place the measure on the ballot can proceed.

The proposal would mandate all city workers’ pension costs increase to 9 or 10 percent from the current zero to 7.5 percent. It also would require that The City “pick up” no more than 50 percent of the costs of health benefits for city workers’ “dependents,” such as spouses and children.

And for dental benefits, The City would only contribute 75 percent of the costs for an employee and 50 percent for the employee’s dependent. Currently, The City pays the entire dental contribution. Health- and dental-premium contributions total $313.9 million this fiscal year.

If the measure makes it onto the ballot and is approved by voters, the requirements would all become effective in January 2011.

Among the efforts to reduce labor costs, a measure was placed on the June ballot to draw down pension costs. It would, among other steps, increase newly hired public safety workers’ retirement contribution and change the formula for pension payouts for those hired after July 1. The measure would save The City between $300 million and $500 million during the next 25 years.

And, Mayor Gavin Newsom reached an agreement with labor unions for 12 furlough days for the next two fiscal years for a savings of about $200 million.

Pension and benefit price spiral

In June and again in November, ballot measures will ask voters to take steps to curtail the ballooning costs of The City’s benefits for its workers.

Costs of city’s retiree pension and health insurance for workers:

2004: $419 million

2009: $776 million

How city workers’ salary and benefits are projected to increase:

                     Salary                            Medical

Fiscal year    increases    Retirement      benefits        Total

2010-11        $52.5M       $52.0M          $15.1M      $121.4M

2011-12        $65.3M       $39.8M          $25.5M      $133.8M

2012-13        $63.6M       $36.2M          $17.2M      $120.9M

Source: City controller

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