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Wednesday, March 3, 2010

Rejoice, Voters: You'll Have Pension Reform on the Ballot Come June

Posted By on Wed, Mar 3, 2010 at 12:01 AM

click to enlarge money_rain_big_thumb_400x312.jpg
Is pension reform sexy? No, it is not. But imagine saving $450 million dollars and ... who needs sexy?

Supervisor Sean Elsberd's proposed pension reform Charter Amendment suffered its final legislative slings and arrows Tuesday, passing in watered-down form through the Board of Supervisors via a 9-1 vote -- and landing on your June ballot.

A labor-crafted amendment introduced by Supervisor Eric Mar that would have -- astonishingly -- lost the city some $15 million a year was crushed last week. Yesterday the major drama was about a seemingly niggling point -- that only involved $200 million or so.

Should city workers' pensions be decided by focusing on a two-year

earning period or three? The unions favored the former; Elsbernd the

latter.

While this was initially sold as an "anti-spiking measure" that would prevent pensions higher than workers' salaries as occasionally seen in the police and fire department, that really was never where the savings were. Rather, with thousands and thousands of workers earning a bit less on their pensions, the city would save millions and millions of dollars in the long run.

Pensions are currently calculated by multiplying one's highest salary over a 12-month period by a percentage and the number of years one worked. While either 24 or 36 months would lower this equation and save the city money, Elsbernd had a number of reasons to push for his longer period:

  • Changing our system to two years would require the approval of both houses of the Legislature;
  • It would also require the approval of the California Public Employees' Retirement System (CalPERS), which has never set up a system like this before, may or may not get to it anytime soon, and might impose a cost upon the city for making it do extra work;
  • Per the City Charter, contracts with CalPERS must be cost-neutral -- meaning any unforeseen costs would be picked up not by the city but the workers involved in this plan. D'oh. 
Oh, one more thing: While the two-year plan favored by labor is projected to save the city some $400 million to $450 million over the next several decades, the three-year plan would save 33 percent more. That's a big deal when, even in four years, the city is expected to have to cough up more than $600 million to fund its workers' pensions just four years from now.

The labor-friendly progressive supes, however, offered a collective "meh," to Elsbernd's arguments. With regards to needing approval from both Sacramento and the CalPERS system, Supervisor David Campos noted "This won't be the first time San Francisco does something unique in California. It won't be the last time. I don't have any concerns it won't be feasible." Elsbernd lost his vote, 6-4, with the supes voting 9-1 to place a pension reform plan based on the two-year calculation on the June ballot.

Afterwards, Elsbernd wasn't quote as eloquent as the Rolling Stones ("You can't always get what you want -- but if you try some time, you just might find, you get what you need."). He told SF Weekly his colleagues didn't "have the fortitude to sand up to labor and do the right thing," and bemoaned the savings of this plan were "insignificant" compared to the city's big-picture fiscal headaches.

Even still, "I can look voters in the eye and say, 'Yes, you should vote yes on this because it's better than what we've got today," he said. He pledged to get cracking on another pension-related Charter Amendment that he hopes to place on November's ballot.

We're sure his colleagues can hardly wait.

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About The Author

Joe Eskenazi

Joe Eskenazi

Bio:
Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" was a staff writer and columnist for SF Weekly from 2007 to 2015. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers.

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