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Home / Articles / News / News /  Pension reform: us vs. them
. . . .
Wednesday, Sep 07, 2011

Pension reform: us vs. them

Will ballot measure save San Diego money or just worsen acrimony?

By Kelly Davis
carldemaio Carl DeMaio pitches pension reform in front of a Clairemont Vons on Saturday.
- Photo by Kelly Davis

It’s Saturday afternoon in front of a Vons supermarket in Clairemont. Standing next to a table adorned with large “San Diego Pension Reform Now!” signs and wearing his customary white button-down shirt and brown pants, City Councilmember Carl DeMaio chats up a cameraman from a local TV news station.

“You only have maybe 10, 20 more years until you’re 50 and then you get to retire, right?” DeMaio asks the guy.

“Yeah, I’ll be turning 39 soon,” the cameraman responds, “but—.”

DeMaio jumps in: “Yeah, so, in 11 years, you get to retire at more than your salary, right?”

The cameraman looks puzzled, but laughs. “I wish.”

“Oh, I’m sorry,” DeMaio chuckles, “you’re not a city employee.”

Never mind that such a retirement scenario doesn’t exist; it’s nevertheless become part of the narrative that DeMaio and supporters of a proposed pension-reform ballot measure have crafted: a story of us-versus-them in which city workers are entitled to a pension that far exceeds any private-sector retirement plan. The city’s labor unions, meanwhile, counter that they’ve endured years of pay freezes, are making higher pension contributions—for some firefighters, for instance, close to one-fifth of their paychecks—and that retirement benefits for new employees are in line with private-sector 401(k) plans. It’s the negotiating table, they say, not the ballot box, where significant changes to the city’s pension system have happened.

“Retiree-health reform was agreed to by the unions, and there are significant other examples of the unions and the city working together to address the real fiscal issues that we all recognize we face,” says Mike Zucchet, general manager of the Municipal Employees Association, the union that represents the city’s white-collar workers. “Obviously… the initiative backers weren’t looking for consensus or cooperation. So, rather than going to the bargaining table, they went the campaign route.”

As the Comprehensive Pension Reform (CPR) ballot measure’s proponents make their final push to gather signatures from 94,346 registered San Diego voters by Oct. 14, there’s the looming specter of an expensive campaign, acrimony and potential lawsuits that Zucchet says the MEA is ready to file if and when the measure qualifies. The lawsuits would challenge the only two components of the ballot measure that promise to save any money: a five-year freeze on city employee pay and a change to what portion of an employee’s paycheck is used to calculate pensions.

So, what about that bargaining table?

Travel back to July 22, 2008. It’s a cooler-than-normal, but still pleasant, Tuesday afternoon. In the City Hall concourse, Mayor Jerry Sanders, then-City Councilmembers Donna Frye and Scott Peters and representatives from three of the city’s labor unions have gathered for a press conference. Everyone’s pretty stoked. The mayor announces that, as the city’s lead negotiator, he’d reached a “tentative settlement” with the unions that will keep a pension-reform measure that he’d proposed off the November ballot. That alone will save the city $300,000 and, he adds, “avoid threatened costly litigation.” The compromise, which changed how pensions are calculated, promised immediate and long-term savings.

Up next is Frye: “It was, from the beginning, my strongest desire that this not go to the ballot and that the parties all be able to come together and reach some sort of an agreement,” she says.

So, what’s the difference between 2008 and now? For starters, though the mayor—along with Councilmembers Kevin Faulconer and DeMaio—authored the ballot measure, Sanders is bringing it forward “as a private citizen—not as mayor,” mayoral spokesperson Darren Pudgil explained in an email. If Mayor Sanders (as opposed to private-citizen Sanders) had authored the initiative, he’d have been legally obligated to meet with the city’s labor unions—which is exactly what happened in July 2008. While he wouldn’t have had to accept the unions’ counter-proposals, he’d at least have to entertain them.

“The mayor took this route because the public deserves the right to decide a measure of this magnitude and importance,” Pudgil wrote.

A representative from the CPR campaign didn’t respond to questions by CityBeat’s deadline.

There’s also an election for mayor coming up and no incumbent. On Saturday, DeMaio, who’s running for mayor, seamlessly weaved together the CPR campaign and his mayoral campaign. He was surrounded by volunteers in blue T-shirts with the words “Help Carl DeMaio reform the city’s pension system” on the front, and DeMaio asked folks who signed the petition if he had their vote for mayor.

DeMaio declined to answer CityBeat’s questions on Saturday.

Earlier this year, prior to CPR being introduced, City attorney Jan Goldsmith tried to get all of the city’s labor unions to the negotiating table. Calling it a “global settlement,” he hoped it would “end most, if not all, pension-related litigation” and reduce both the city’s required payments into the pension system and the portion of employees’ paychecks going to cover retirement benefits. The cycle of pension-related lawsuits coming from both sides, he wrote in a Jan. 13 letter to labor representatives, “needs to end.”

The city’s labor unions met once with a negotiator in March and that was the end of it.

“We could have done some good work, but it was not to be.” Goldsmith wrote in an email to CityBeat. “A very experienced labor mediator came down from Los Angeles at his own expense. He volunteered his time to help us get started. After meeting with both sides, he concluded it would not be productive.”

Though they didn’t reach the “global” settlement Goldsmith hoped for, the talks at least provided a launching point for successful negotiations in other areas, like reforms to the city’s costly retiree-healthcare system.

“I think we did some good work, but I am disappointed we were unsuccessful in the larger effort,” Goldsmith said.

Zucchet says the talks fell apart because there wasn’t much of a starting point for discussions.

“We asked the city for a proposal to start the discussions, and the city declined. That was our last meeting.”

Jeff Jordon, a sergeant with the San Diego Police Department and vice president of the San Diego Police Officers Association, says there are “a million different ways to reform the pension system at the negotiating table.” The real obstacle, though, are internal Revenue Service rules, which, for instance, don’t allow employees to “opt-in” to a less-expensive pension plan. Being allowed to do so would save money for both the employee and the city. Jordon says he’d like to see city leaders’ efforts focused on lobbying the IRS, not on a ballot measure with an uncertain future.

“It’ll be litigated to the bejesus, every aspect of it,” Jordon says, “and while it gets litigated, does anything else get done?”


Write to kellyd@sdcitybeat.com and editor@sdcitybeat.com.




 
 
 
 
 
 
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