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City, Unions Celebrate Deal on Pension Reform

With backing from much of San Francisco's "city family," plan now headed to Board of Supervisors and the fall ballot

Flanked by nine of the 11 San Francisco supervisors, the heads of the city's biggest labor unions and investor Warren Hellman, Mayor Edwin Lee on Tuesday declared victory in the months-long effort to reach a consensus proposal to address the city’s ballooning pension and benefits costs.

“This is truly a historic day for San Francisco," said Hellman, who six months ago convened the first meetings with labor leaders and city officials  that ultimately led to Tuesday’s proposal. “This is a huge nationwide problem,” said Hellman. It is “really a feather in the cap of San Francisco” that various city factions could strike a deal. “I’m thrilled, really happy to be a part of it.”

The plan, which will be formally sent to the Board of Supervisors today for a month-long review process, will require new and existing employees to pay more toward their pension benefits. The savings will amount to $800 million to $1 billion, Lee said.


In the near term, Lee said that the plan would yield a modest $60 million in annual savings for the 2012-2013 fiscal year. The larger, $1 billion figure is an estimate of how much will be saved over the course of a decade. Lee told a group of Bay Citizen reporters and editors in February that a viable plan would need to save around $300 million to $400 million annually. Otherwise, he said at the time, the city could be bankrupt in five to 10 years.

Still, Lee seemed confident Tuesday morning that the current plan would leave everyone “with a solvent city, able to make city services intact.”

Barring a catastrophic collapse in the next several months, the proposal will head to the November ballot with the strong support of nearly every major political interest in San Francisco, including Lee’s administration, most of the unions, the Chamber of Commerce and many of San Francisco’s leading mayoral candidates.

Lee urged Jeff Adachi — the city public defender whose unsuccessful effort to pass Proposition B last fall touched off the whole pension-reform debate — to drop the issue and abandon putting another competing measure on the ballot.

“Our consensus approach here is the right thing to do,” Lee said. “I leave Mr. Adachi to his viewpoint, but I’m sure that he has to recognize that this is the official city family and he doesn’t represent that.”

Adachi, who met with Lee and his senior staff Monday afternoon, said that since Lee did not have near-term cost savings projections on Monday, he could not evaluate the City Hall plan. Adachi has said that his plan would save the city $90 million to $120 million annually.

For the interim mayor, Tuesday’s press conference capped a month during which he has ticked off the top priorities of the agenda he laid out in January, when he was appointed to Room 200 to finish Gavin Newsom’s term.


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