Adachi's plan has no niceties of this sort. It raises police and firefighters' contributions from 7.5 percent to 10 percent right off the top. It then proffers a more aggressive sliding scale — it only goes up, demands more from city workers, and much more of the city's six-figure earners. He claims his plan also has a commensurate benefit: the continued fiscal viability of the pension system and solvency of San Francisco.


This is a rather apocalyptic argument, and a gift workers will likely appreciate less than socks on Christmas Day. It is not unprecedented, however. Courts have specifically found that dinging workers for higher contributions is permissible if it ensures the solvency of the system. Yet there is a rich history of cities and states attempting to use their lousy finances to justify modifying workers' vested rights — and failing. If Adachi's plan took up this challenge, it would ostensibly have to pass the nigh-unbeatable court test that it's "the least drastic" solution to San Francisco's problem.

So, unlike the city plan, which was engineered to tap dance around existing precedents, Adachi's proposal really is more of a battering ram meant to go through them. "We're pushing the envelope," says Supervisor Sean Elsbernd, one of the heavy lifters behind the city plan. "Jeff is blowing it up."

Whether Mayor Ed Lee uses his popularity to push his pension measure or his pension measure to push his popularity, he’s dealt himself a formidable hand.
Charlie Powell
Whether Mayor Ed Lee uses his popularity to push his pension measure or his pension measure to push his popularity, he’s dealt himself a formidable hand.
The odds of a political slugfest jumped when Supervisor Sean Elsbernd ensured the contest between the dueling pension measures would be winner-take-all.
Charlie Powell
The odds of a political slugfest jumped when Supervisor Sean Elsbernd ensured the contest between the dueling pension measures would be winner-take-all.

The seminal decisions the state Supreme Court made in the 1950s and '70s have little relevance today, Adachi maintains. With the court system itself crippled in the budget process this year, a number of government voices feel this is an opportune time for cities to press that pensions are bleeding them dry — strike while the iron is broke, in other words. If this is your mindset, California's mountain of case law doesn't amount to a hill of beans. "I wouldn't put too much stock in any of those cases," says Drexel University law professor and pension authority Norman Stein. "The law changes. You have a very different Supreme Court than you had in California in 1978. ... Right now, the law is probably in flux."

That a judge will be the ultimate arbiter of either measure seems all but certain. And though the city's plan was crafted in concert with labor leaders, it is not immune from legal challenges. It takes only one disgruntled person to sue — and the Fairness Float will disgruntle more than one person. Aforementioned projections establish that for the foreseeable future, workers would only pay more and never less. Even employees in early stages of their careers would never derive tangible benefits from this "commensurate benefit." Case law has established that, in determining if disadvantages to workers are truly offset, courts must focus on the particular employees who are disadvantaged — and whether they, as individuals, will gain from the potential pension plan changes. A benefit that doesn't provide benefits may be a hard sell. Yet locating litigants and lawyers willing to take on not only the city but the entire labor establishment may be a hard sell as well.

Voters are left with an intriguing — and not entirely enviable — decision. The city plan would admittedly save less than Adachi's. But it does so in a conventionally legally defensible manner. It also establishes bonhomie with labor — not a trifling matter with a number of contracts due to be negotiated in the near future, and the ever-present specter of litigation. Adachi's plan, meanwhile, would save the city more — and could serve as the legal bombshell to immolate the state's vested-rights doctrine. But it might blow up in the city's face — both plans were crafted to generate savings in the short-term, which neither will do if it's tied up in court or invalidated. Years-long legal battles would cost the city a fortune — but that expenditure will be dwarfed by the pension dollars the city bleeds while the measures meant to avoid just such a situation are litigated.

The city and its residents are on the cusp of a high-risk, high-reward gamble. Do you feel lucky? Well — do you?


Asked whether it was more important if his pension measure pass or he win the mayoral race, Adachi quickly answers, "Both." It's a fitting reply for a man who is both a lawyer and a politician, who rarely says more than he means to say, and who remains an enigma to his fellow elected officials, labor representatives, power brokers, and bureaucrats comprising the "city family" — which has essentially disowned him. But Adachi's leap into the mayoral fray was painted as anything but enigmatic by his political opponents. This, they said, was proof that the public defender always meant to leverage his 18-month pension crusade into a springboard for personal gain at the behest of billionaire Michael Moritz and other well-heeled backers.

"The pieces now fall into place," Elsbernd says. "In the end, what Jeff is really all about is Jeff."

While contributions to candidates are capped at $500 a pop in San Francisco — and no individual may give more than $1,500 total — donations toward ballot measures are unlimited. With a billionaire or two in his corner, Adachi can use his pension measure to generate serious money and name recognition. Of course, he isn't the only mayoral candidate pushing a pension plan and capable of tapping wealthy backers to generate piles of soft money. So is Mayor Ed Lee.

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16 comments
Alferdonito4
Alferdonito4

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Barbra Barr
Barbra Barr

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Guest
Guest

The City Family Plan is so corrupt it is a joke, what we have are people nearing retirement who are not willing to give up anything, and expecting to walk away with the golden parachute and leave the tab on newer employees. I really hope the voters can be more responsible in this election because the budget crisis caused by these incredible pensions is going to explode at some point, and then they will all lose. But the greedy people at the top just can't see that happening...

BTW - I would love to see an investigative article chronicle the past 20 years of City personnel costs, compare the number of employees, the benefits and pension changes they have received. In particular I would like to see how police/fire have been able to gain insane increases to the point that we are paying double here in SF to what NYC, and all other major cities in the US pay for police/fire. Does any journalist have the guts to take on that story?

Outland10
Outland10

Great story (and illustrations)! The relative size of the two measures tells a lot--one is stuffed in typical City Family style-- to put off the reader from unpleasant details like the Police and Fire deals. A lot of City workers would be happy to keep their jobs and pensions and contribute. The managers and Unions, who feed off the City workers, just want to hang on at everyone else's expense. SF needs someone who looks hard at the numbers and has integrity. Go, Jeff!

Coffee a
Coffee a

nice of you to refer to the mayor as 'elfin'; and that reference to Kurt Cobain is seriously dated, but I guess Amy Winehouse is too soon?

Pointmade
Pointmade

Which is it 'politics makes strange bedfellows' or 'it's complicated' In truth, it depends on who will say what they mean and do what they say.

Joe
Joe

Jeff Adachi and all the other talking heads could make this easier than it has to be. Move current workers into 401(K) plans and then taxpayers and public workers would be happy. But they can't because the City would still be on the hook for all the CURRENT retirees. So they can't have workers putting their own money into their own private accounts, no they need that money going to fund the pension for current retirees. City workers know there wont be a pension in 30 years when they try to retire and think it's a shame to have to pay money into a fund that you have no control over and then in 30 years there's the "Gotcha" moment. Gotcha! the pension is bankrupt and you have no retirement....

RBOrbust
RBOrbust

Sorry- this is just awful journalism from the usualy sharp Eskenazi.

No one has written more about how historically wrong the Controller's estimates have been regarding employee benefit changes on the ballot. (Anyone remember that "cost-neutral" DROP program?) And here Eskenazi just cites the Controller's figures as if they're gospel WITH NO CAVEATS. No journalist even bothers to disclose the direct financial conflict the folks in the Controller's office have in this matter-paying more out-of-pocket under Adachi's plan.

Instead we get the all the requisite quotes from the City officials who got us into this mess.

The Controller's assumptions for the comparitive savings between the two ballot measures (Prop C and Prop D) are grossly negligent with the clear intent of narrowing the generated savings gap between the two measures.

How about some journalism?

Joe Eskenazi
Joe Eskenazi

RB --

Thanks for the compliment in there.

The 10-year numbers generated by Adachi's camp are almost exactly the same as those put forth by the Controller. What's more, Adachi is happy to cite the controller's numbers.

Unlike the designations of cost-neutrality RB is referencing, the 10-year projections are meant to simply show how each plan would perform in an admittedly contrived set of circumstances. This story takes pains to note that the promises of savings are "estimates" derived from what is essentially financial modeling.

Conspiracy theory-mongering about how City Hall officials would have to pay more under the Adachi plan and therefore must be involved in a plot to sink it is awful commenting from the usually sharp RBorBust.

Best,

Joe Eskenazi

RBOrbust
RBOrbust

Joe-

You are not correct. Trust me - I think you're the best local reporter on this topic but you fell short here imo.

Adachi being "happy" to cite the Controller's numbers is simply not true. What other option does he have? Could he generate different numbers internally with the same patina reporters seem to grant automatically to the Controller as you have done with this piece.

What's interesting is that you've done a really good job of reporting on questionable Controller Statement practices after the fact, but here before the fact we don't see the same scrutiny or skepticism

Also interesting that you don't find the financial conflict material in light of the many historical Controller Statements that erred to the benefit of employees. You're working on a project that one way or another is going to cost you $10,000- seems material, "conspiracy theory mongering" talking point aside. That doesn't necessarily mean Controller should not write the Statement (though independent analysis from CPA would be better imo) but it would be more transparent to disclose the conflict, i.e. better governance.

Peace.

RBOrbust
RBOrbust

JE,

There is too much to get into here but don't really disagree in general- but I did want to ask you one question. As you know, the last time the City put a pension reform plan on the ballot (Prop D 2010) the Controller analyzed the cost savings over 25 years. Why then, with Prop C 2011 did the Controller reduce the time frame significantly to 10 years for its cost savings analysis?

http://www.smartvoter.org/2010...

RB

Joe Eskenazi
Joe Eskenazi

RB --

Again, the 10-year numbers generated by Adachi's camp were just about exactly what the Controller put out. There's no argument here, and there's no "grossly negligent" behavior.

Prop. D proponents would have liked a longer window -- the dire city contribution rates projected a decade and change in the future favor Adachi's plan. Your point about the controller's past performance is well-taken, but internal numbers from a campaign aren't sacrosanct either.

Also, there is a big difference between projecting whether a measure will be cost neutral or not and setting up a pair of 10-year fiscal models and running Adachi's plan and the city plan through them. The controller was flat-out wrong about the impact of Prop. H and other measures. In this case, however, this was an exercise based on actuarial projections. If the future doesn't work out that way, the numbers will be different -- but, again, the point here wasn't so much to predict the future, but to measure how the dueling pension measures stack up against each other hypothetically.

In the end, I can only return to the point we made in the story:

Voters are left with an intriguing — and not entirely enviable — decision. The city plan would admittedly save less than Adachi's. But it does so in a conventionally legally defensible manner. It also establishes bonhomie with labor — not a trifling matter with a number of contracts due to be negotiated in the near future, and the ever-present specter of litigation. Adachi's plan, meanwhile, would save the city more — and could serve as the legal bombshell to immolate the state's vested-rights doctrine. But it might blow up in the city's face — both plans were crafted to generate savings in the short-term, which neither will do if it's tied up in court or invalidated. Years-long legal battles would cost the city a fortune — but that expenditure will be dwarfed by the pension dollars the city bleeds while the measures meant to avoid just such a situation are litigated.

Best,

JE

supertamsf
supertamsf

Excellent in-depth article. Good writing from Joe Eskenazi.

JanetteT
JanetteT

It is a total disgrace that benefits to govt workers we can't afford are burned into city charters and state constitutions. What private sector has such protection. What about equal protection under the law in the US constitution?

intelligencer
intelligencer

Great article. But wrong slant on the Health Service Board. The composition of the Board was changed in 2004 to a member-elected majority is because employee health benefits (and the hundreds of millions of dollars used to pay for them) had a long history of being woefully mismanaged by a Board that prior to 2004 had a majority of political appointees. Ask for meeting records and financial records for this Board prior to 2004... there are practically none. No vendor management, no routine financial reporting, no audits, no paper trails, no reliable documentation of Board meetings and so on. But plenty of opportunities for healthcare lobbyists to flow money hard and soft to influence decisions. The current member-majority Board has operated with a much higher level of integrity and fiscal responsibility - monthly budget reports, annual third party audits, vendor performance guarantees with financial penalties, meticulous meeting notes, online audio and video of meetings. The "fox in the henhouse" argument is a red herring. The reorientation of the Board in Prop C is a politico power grab to return this Board to politics as usual, with the usual financial hijinks. Especially in light of the little noted provision in Prop C that will also expand the Board's spending authority over the Health Service Trust Fund. (Currently they are limited to spending only on purchasing, and communicating about, plan benefits.) I shudder to think of all the boondoggles that are likely to result from Health Service money being funneled to politico pet projects.

JanetteT
JanetteT

The current board has an employee majority. They could care less about the private sector taxpayer. You want premium HC for life and dependents paid for by people that will be lucky to get any care from Medicare? F*ck You and the horse your rode in on civil servant scum.

 
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