Police and Fire Pension Deal Could Cost City $61 Million

Categories: Government
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This morning, the Examiner reported an eye-opening facet of the police and fire unions' latest deal. Should the city-backed pension plan be voted into law, cops and firefighters will begin paying augmented pension rates in 2013, like everyone else. But if voters choose Jeff Adachi's plan, public safety workers won't have to begin making higher payments until 2015.

This came as a revelation to many -- but not the city's number-crunchers. That public safety workers were exempt from the Adachi plan for its initial two years was one of myriad factors used to tabulate its estimated savings to the city. Even with cops' and firefighters' intriguing deal, Adachi's plan still saves between $279 million and $364 million more than the City Hall plan over 10 years. (Whether Adachi's measure can stand up to legal scrutiny or will inexorably ruin the labor-management relationship is another matter).

The question is raised, however: How much money has the city potentially given away in the pursuit of the $31 million in savings this union deal brought about? According to the city controller's office, between $53 million and $61 million.

That's the sum one gets after Leo Levenson juggles some figures on the biggest spreadsheet you've ever seen ("There are sooooo many numbers on here," he says while rapidly typing.)

The controller's director of budget and analysis simply alters the scenario from only "miscellaneous" employees contributing the augmented Adachi pension rates in 2013 and 2014 to all employees doing so. If this had been the case, the Adachi plan's estimated savings over 10 years would rise from $1.247 billion to $1.3 billion in a rosy scenario and $1.65 billion to $1.711 billion in a dour one. Those gargantuan numbers are distracting, but this is a matter of scores of millions of dollars -- and in just a two-year period. 

Why would the city do this? SF Weekly was by no means privy to intense labor negotiations. But, it warrants mentioning, that the public safety unions were under no obligation to open up their contracts and save the city money. They will definitely give up $31 million. But the city only might pick up the additional $53 to $61 million in pension costs -- this point is moot if Adachi's measure is defeated. When Police Officers Association vice president Kevin Martin told the Ex that the city needed "to make some concessions in our favor," this qualifies as a concession.

Other unions' contracts, meanwhile, will soon be up for renegotiation. It will be interesting to see what pension devils are written into those forthcoming details.

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4 comments
Sales
Sales

Ed Lee is such a wuss and liar and ditto Newsom stooges like Sean Elsbernd.Remember, these "city family" crooks applauded themselves for this deal.

"Ed Get's it Done"........yeah for the unions.

Insider
Insider

Ed Lee, the mayor, did negotiate a deal with POA to extend their MOU out 3 years. Fire is expected to follow the same path.  It was a very clever defensive move on the part of the POA and the mayor. It is  estimated $100 million over the next 3 years in additional contributions that Safety will avoid paying into the pension fund.  They will receive their pay increases as included in the MOU negotiated years ago. No one in Safety agreed to forego pay increases or even defer it.  They wanted to be paid now.The mayor gave them what they wanted. It is good thing we have a press such as Joe E. that reports on these deals. It is just too bad, that many more of these back room deals continue to happen without any public awareness.

Trueblue
Trueblue

While it may be true "the public safety unions were under no obligation to open up their contracts and save the city money", it would be the decent and honest thing to do.  As a union member (not public safety) working with other members to find a more responsible and reasonable solution for our pension.  We are furious with those who created and ok'd the unsustainable pension plans and the nefarious proposition 13.

Sales
Sales

The problem is the city officials that overpaid them starting about 10 years ago. Pols wrote a check they can't honor. I am sick of unions "giving back" when pay for play politics overpaid them to begin with!!!

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