Business Group Withholds Support for Pension-Reform Deal
Chamber of Commerce says "voters deserve one clear and comprehensive measure"
Updated June 9, 2011 at 5:15 p.m. with a comment from the mayor's spokeswoman
On Tuesday, the public policy committee of the San Francisco Chamber of Commerce invited Sean Elsbernd, a supervisor, in to talk about the pension reform plan that City Hall announced on May 24, after months of talks with union- and business leaders. That plan would save the cash-strapped city about $60 million in pension costs next year.
Also invited in, to present separately, was public defender Jeff Adachi, who has introduced his own pension-reform plan, one that he says will save the city about twice what the City Hall plan would.
Both camps very much want to be endorsed by the group, which represents 1,500 local businesses that employ 200,000 people. Last year, when Adachi's first pension-reform proposal, the controversial Proposition B, was on the ballot, the Chamber remained neutral.
On Thursday morning, the Chamber of Commerce's executive committee met to talk over its options. Mayor Edwin Lee had included Steve Falk, the group's president, in the "consensus" group formulating the City Hall proposal, and he clearly wants Falk and other members of what Lee likes to refer to as the "City Family" to publicly endorse his plan.
But instead, the Chamber issued a call for both sides to meet and hammer out a single proposal, so that voters would have only a single option come November.
"This city deserves one ballot measure," Falk said in an interview Thursday afternoon. "We need serious pension reform." He would like the Mayor and City Hall officials to amend the City Family plan released on May 24 to make it palatable enough for Adachi to drop his effort.
That appears extremely unlikely. When asked the status of the Mayor's efforts to strike a deal with Adachi to that end, his spokeswoman, Christine Falvey, indicated that there has been no official City Hall communication with Adachi on this matter since May 23. Nor, apparently, will any invitation be extended, despite the Chamber's plea. "Mayor Lee has an open door if Mr. Adachi would like to speak about the pension measure that is being put on the ballot in November," Falvey said via email Thursday evening. The Mayor "relayed this during their last meeting."
Adachi, in an interview Thursday afternoon, said that while he had not heard from anyone from Mayor Lee's office, he has been meeting with most of the supervisors. Adachi said that he is stressing to them that "it is very important that the supervisors, in reviewing the Mayor's proposal, honor their duty to ensure this is a good deal for the city, and a good deal for the people. That has to be the focus. That's why they call them 'supervisors.' They are supposed to supervise, instead of just using a rubber stamp."
Adachi said that Mayor Lee presented the City Family plan to him on May 23 as "set in stone" and not open for negotiation. And in his meetings with individual supervisors, Adachi says that he hears from them that the Mayor's plan is that it will be placed on the ballot by the Board of Supervisors as originally submitted.
If the Chamber's prodding doesn't yield anything, Falk said that his group could possibly endorse both measures, or neither, or either, or remain neutral. But the confusion of two measures, he said, could cost the city dearly. "We support the consensus plan. I was personally involved" in the group that produced it, which also included Warren Hellman, chairman of the Bay Citizen. "The Board could change it, make it better or worse, depending on your point of view. The board always makes me nervous."
On the other hand, "Jeff Adachi's plan saves the city more money," though the City Family has been circulating the notion that Adachi's plan, if passed, would not survive a challenge in the courts. Still, said Falk, "The folks involved with this Chamber think the city needs every dollar of savngs it can get its hands on."
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Howard Epstein
Its see common sense being added to the mix. Steve Falk for Mayor.
Seej Cane
Why should Adachi compromise with Lee/Elsbernd's tiny pension reform plan? Pension costs are increasing $600 million over five years and it saves $60 million?? Are you kidding me? It's another standard issue fig leaf "first step" we always get from the unions/City Family and we still can't get potholes fixed.
Can you please report:
(1) The Chamber of Commerce (i.e. Mr. Falk) receives City funding and therefore has a conflict in this matter- he is loathe to go against his funders.
(2) The judge ruled in the Prop B case last year:
"California law permits increases in pension contribution rates by employees after they have been hired if there is some commensurate or ‘comparable’ advantage to the employees and such and ‘advantage’can be in the form of preserving or protecting the financial integrity of the pension system.”
Preserving the integrity of the pension system is the EXACT intent of Adachi's measure - the pension system is anywhere between $2 and $6 billion underfunded depending on the investment return rate employed. This "would not survive a challenge in the courts" bs from the City Family is a desperate retort from an inferior proposal.
Steve Falk
The SF Chamber receives no funding from the City. S. Falk
John Smith
No, Adachi's intent is to make a political name for himself and stay in the good graces of billionaire Michael Moritz, his financial backer.
Gordon
Hah! The whole City budget is gonna blow up at some point in the very near future, since the "City Family" can only see as far as how much money is in their pocket right now. They fail to realize they are jeopardizing a lot of pensioners down the road that will have to scramble when their pensions are cut. The laws and rules will be changed at some point, and the longer we wait the more severe they will be...
Rob Anderson
The "City Family" that Lee and Elsbernd represent got the city into this trouble in the first place. As his support for the high-speed rail fiasco shows, Steve Falk isn't a leader; he's just another lemming in a city governed by lemmings, aka the "City Family."
http://www.voterguide.sos.ca.gov/past/2008/general/pdf-guide/suppl-complete-guide.pdf
John Smith
Hight Speed Rail is one of the few bright spots of progress that is being made by Government in the whole US. The bigger picture shows that it is going to be a huge beenfit to CA and the Bay Area (even if NIMBY's in Atherton don't support it). You need to re-evaluate what a fiasco is, not building HSR would be a fiasco. Driving down I-5 in tons of traffic is a fiasco, flying down to LA is a fiasco . . .
Rob Anderson
If the high-speed rail project in California is such a great deal, why does our State Treasurer say he can't sell the bonds because it has no sensible business plan?
http://district5diary.blogspot.com/2011/06/state-treasurer-on-high-speed-rail-so.html
John Smith
"The high-speed rail system is expected to make money and attract private investment – similar to systems in Europe and Asia. Twenty-two different funds have shown investment interest in financing part of the system’s capital costs. Demonstrating our commitment by beginning major construction and finalizing all the approvals will minimize investor risk and net the best terms for the taxpayers."
Read about it more here: http://www.sacbee.com/2011/06/07/3681606/case-for-high-speed-rail-grows.html
And here's a great article on why high speed rail will work in California: http://www.sacbee.com/2011/05/22/3642782/pull-plug-on-high-speed-rail-why.html
Rob Anderson
The mayors fail to address a single serious issue raised by the Legislative Analyst. They're mostly concerned with keeping the federal money flowing into their cities.
http://www.lao.ca.gov/reports/2011/trns/high_speed_rail/high_speed_rail_051011.pdf
Look at the numbers just to get the system built:
Federal Grants: $17-19 billion
State Grants: (actually Prop. 1A bonds) $9.95 billion
Local Grants: $4-5 billion
Private Funding: $10-12 billion
The mayors like the $3 billion the state has received from the feds so far. How likely is it that the feds are going to give us another $16 billion? Lockyer has told us the state bonds are unmarketable. Is Mayor Lee going to chip in for SF with some "local funds"? And there has been no "private funding" to build the system, since Prop. 1A forbids the state from subsidizing the system, which means no profit guarantees for investors. Thats' why Lockyer can't sell the bonds.
http://cc-hsr.org/assets/pdf/CHSR-Financial_Risks-101210-D.pdf
John Smith
Rob, it's funny because the LAO report still supports moving forward with the project and actually suggests improvements to how it will be implemented to make success more likely. You referred to CA HSR has the "high-speed rail fiasco" which sounds like you don't support the project at all. Was I wrong in making the assumption?
Rob Anderson
Yes, I don't "support the project at all" because it's a bad deal for the people of California as the facts show. The recommendations in the LAO's report are the weakest thing about it. As if turning the project over to Caltrans would make any difference! But the report also recommended that the legislature not give the CHSRA the $180 million it's asking for, instead recommending that it provide a mere $7 million to keep the project on life-support.
Renegotiating the "train to nowhere" in the Central Valley is apparently a non-starter with the feds.
The reality is that, when you look at the numbers I provided earlier, there's no way the feds are going to come up with the money needed to build the system. Ditto for all the rest of the alleged sources of capital. It's not going to be built, which is good news. The bad news: how much more money is going to be wasted on a project that will never be built.
The only question now is whether Governor Brown is going to follow the sensible lead of the governors of Wisconsin and Florida and pull the plug on this misbegotten project.
John Smith
Ok so you are cherry picking parts of the LAO report to say that high speed rail is a bad project and ignoring the parts that say it is viable and worth pursuing. You also say that you support the "sensible lead of the governors of Wisconsin and Florida". Those Governors being Tea Party/Republican's Scott Walker and Rick Scott, both have been disasters to their states. Not the model I want to follow here in CA.
John Smith
You wouldn't by any chance be the Rob Anderson who sued the city to stop the bike plan?
http://www.sfweekly.com/2009-05-27/news/ironically-bike-hater-rob-anderson-advances-cause-of-cycling-in-s-f/
Rob Anderson
Yes, the very same. The Bicycle Plan is another "family" deal city voters will never get a chance to vote on.
http://district5diary.blogspot.com/2006/11/judge-buschs-decision.html
Matt Smith---any relation?---is a bike guy, and he flipped out when we got the injunction.
http://district5diary.blogspot.com/2006/06/mr-mean-replies-to-mr-dumb.html
Rob Anderson
I'm a Democrat, but Walker, Scott, and Kasich understood that, if they took the federal money, their states would have to pay for the inevitable construction cost overruns and to operate the system after it was built. As Republicans it was easier for them to reject the money and stick it to the Obama administration, but they were right about about HSR. I like Obama, but he's getting bad advice on HSR, which created the opportunity for the Republicans to make him look bad.
Mission Rosalind
Here's an interesting calculation of just how much government pensions are costing taxpayers:
"So when you hear that government workers now make, on average, 30% more than private sector workers, you are not getting the full story. Government workers make more than twice as much as private sector workers, on average, when you include the net present value of their pensions."
http://blogs.forbes.com/digitalrules/2010/06/the-millionaire-cop-next-door/
It's becoming all too clear that nothing will change "progressive" budgetary madness unless the City is forced into bankruptcy or defaults on some bonds. Then we'll have an outside financial control board imposed on us, just like Washington DC did in the 90's, that will finally accomplish what SF voters and politicians have been unwilling to do for so many years.
http://www.washingtonpost.com/wp-srv/local/longterm/library/dc/control/controlqa.htm
John Smith
An op-ed written by the publisher of Forbes with no data to back up his outrageous claims cannot be taken seriously. Especially when all real study's of the issue show the opposite that public sector workers actually make less than similar private sector workers even when you include benefits such as pensions.
The fact is that "Benefits make up a slightly larger share of compensation for the state and local sector. But even after accounting for the value of retirement, healthcare, and other benefits, state and local employees earn less than private sector counterparts. On average, total compensation is 6.8% lower for state employees and 7.4% lower for local employees than for comparable private sector employees."
You can read more about the facts here:
http://www.nirsonline.org/index.php?option=content&task=view&id=395
The Commish
Is this a study regarding San Francisco benefits? No.
Is the study sponsored by a center that promotes public employees? Yes.
I'll stick with Forbes and its "outrageous claims."
John Smith
????????
"The National Institute on Retirement Security is a not-for-profit organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers, and the economy through national research and education programs. NIRS seeks to encourage the development of public policies that enhance retirement security in America. "
"Located in Washington, D.C., the organization has a diverse membership of organizations interested in retirement security issues such as employee benefit plans, state or local agencies that manage retirement plans, trade associations, financial services firms, and other retirement service providers. "
http://www.nirsonline.org/index.php?option=com_content&task=view&id=30&Itemid=66
The Commish
The study was sponsored by the "Center for State & Local Government Excellence", whose mission is:
"Helps a new generation build a career in state and local government by raising awareness of public service opportunities and needs."
John Smith
I'll take this lst of experts any day over the person unfounded opinions of the publisher of Forbes magazine(BTW what study was he quoting to support his claims?):
The National Institute on Retirement Security's Academic Advisory Board works to ensure NIRS research continues to meet the highest standards. Members include the following experts in the fields of retirement policy, economics, law, and actuarial science:
Dr. Brad M. Barber, PhD, Professor of Finance, Graduate School of Management and Director, Center for Investor Welfare and Corporate Responsibility, University of California Davis
Mr. Ron Gebhardtsbauer, FSA, MAAA, Faculty-in-Charge, Actuarial Science Program, Smeal College of Business, Pennsylvania State University
Dr. Teresa Ghilarducci, PhD, Irene and Bernard L. Schwartz Professor of Economics, Director, Bernard Schwartz Center for Economic Policy Analysis, New School for Social Research
Dr. Jacob S. Hacker, PhD, Stanley B. Resor Professor of Political Science at Yale University, and a Resident Fellow at the Institution for Social and Policy Studies. He is also a Fellow at the New America Foundation in Washington, D.C., and a former Junior Fellow of the Harvard Society of Fellows.
Dean Regina T. Jefferson, JD, LLM, Professor of Law, Columbus School of Law, Catholic University of America
Dr. Alicia H. Munnell, PhD, Peter F. Drucker Professor of Management Sciences, Carroll School of Management, Director, Center for Retirement Research, Boston College
Dr. Jeffrey B. Wenger, PhD, Associate Professor, Department of Public Administration and Policy, University of Georgia.
h. brown
What was it Joe O'Donoghue always says?
Oh yeah:
"Figures don't lie but liars can figure."
Go Giants!
h.
Garry Bieringer
So Adachi is bellyaching about the supervisors doing their job; why hasn't anyone raised questions about the public defender not doing his job? He was elected to serve as public defender; he was not elected to deal with budgetary issues. Who's minding the public defender's office while Adachi is spending all his time meeting with the supervisors and with his Republican backers? Maybe Adachi believes that going on TV once/week is all that is required to do his job. Where the investigation into this?
The Commish
He is allowed to spend his free time as he wishes, including his Constitutional right to petition. Moreover, under your reasoning Leland Yee should not be allowed to run for Mayor because he currently has a day job as state senator, David Chiu, Dennis Herrera, and John Avalos shouldn't be allowed to run either, because they currently have jobs as supervisors, etc. Should there be an investigation into all of them?
John Smith
Garry makes a good point. Adachi is the public defender who is not an expert on pensions and should be doing something else with his time.
The Commish
But the head of the police officers' union, the head of the firefighters' union, Warren Hellman and their spokesperson, Nate Ballard, are "experts on pensions"?
John Smith
you forgot the Mayor, board of sups, the budget analyst, the consultants that Hellman hired to study the issue, etc.
The Commish
Oh, you mean "the City Family"?
And you are missing the point. The "City Family" put together it's own pension measure. That City Family included heads of the public safety unions. What makes them experts? In accordance with your post, why wasn't the City Family's measure just put forward by the Mayor, the Supes, the Budget Analyst, and the consultants if they are the experts?
And in accordance with your post, shouldn't the public safety employees "be doing something else with their time"?
voltairesmistress
Could anyone here refresh my memory? Does Adachi's or Lee/Labor's measure have to pass by a 50%+1 vote or by a 2/3's vote? Thanks for any info.
Seej Cane
50% +1. If they both pass, then where there is a conflict in the respective legislation whichever gets the most votes prevails...
John Smith
However, Supervisor Sean Elsbernd slammed Adachi’s pension reform measure as likely being illegal during an editorial board meeting with The San Francisco Examiner so even if Adachi's measure passed it will still get thrown out in court.
The Commish
He's wrong. That's Elsbernd's talking point as he tries to defend his own measure and explain why the voters should vote for the "City Family's" measure when it saves so much less than the Adachi measure.