Civil Service Reform: When to vest lifetime health benefits?

One-year implementation of Civil Service reform is explained by Phil Ginsburg at right, director of the Human Resources Department. Mayor Newsom projects six-month to one-year continuing labor negotiations may contain spiraling retire health care costs.
Photo(s) by Luke Thomas

By Pat Murphy and Luke Thomas

June 12, 2006

Continuing labor negotiations may reduce the projected 20% annual jump in City retiree health care costs, the San Francisco mayor reports.

With 46% of City workers over the age of 50, the coming surge of retirements represent health care costs too great for the City to bear, maintains Mayor Gavin Newsom.

Unions represent 98% of the 27,000 City managerial and employee work force. City government is the largest employer in San Francisco.

The City paid $30 million in 2000 for retiree health care compared to $100 million it will have paid out in 2006.

At issue in continuing negotiations is the number of years City employees must work to gain lifetime health care benefits.

Currently San Francisco vests City workers with lifetime health benefits after five years of employment.

The Newsom administration aims to raise the number of years required for vesting, although negotiating the exact number of years is projected to last six to 12 months.

It is among the last unresolved issues in City reform of the Civil Service System, Newsom briefed City Hall reporters Thursday.

Newsom gave his report on the one year anniversary of his announced intention to reform Civil Service

He was joined by Phil Ginsburg, director of the Human Resources Department, who implemented reform measures.

Phil Ginsburg

"Right now we are fully funding retiree health care benefits after five years of employment," detailed Phil Ginsburg.

San Francisco is one of the few cities in the country which vest lifetime benefits that soon, Newsom asserted.

"We can't afford to maintain that practice - nobody can. Retiree health care benefits are increasing approximately 20% a year," contended Newsom.

"Say you're 19-years-old. You leave the City because you're moving to Wisconsin at (age) twenty-four.

"When you retire, even though you're in Wisconsin, San Francisco will take care of your family forever and you'll have the best benefits in the world," Newsom stated.

"I would argue the biggest discussion that needs to be made in this City is the cost of health care.

"I think it is the greatest domestic challenge that we face in this country, outside of global warming, and we as a City have to reconcile that soon."

On related issues, Newsom announced he will not veto a ban on corporate political donations unanimously passed last week by the Board of Supervisors.

And new consideration of requiring labor representatives to register as political lobbyists is "not high on my agenda."

The ban on corporate donations "passed unanimously," Newsom noted.

"I respect the wisdom of the board.

"I'm not going to veto it."

The mayor recalled he once proposed labor representatives be required to register as political lobbyists.

"I brought that up once when I was member on the Board of Supervisors.

"Boy, did I get blowback. I think I had posters all over town when I brought that up. Supervisor (Barbara) Kauffman and I brought that up.

"I just got on the board - youthful exuberance.

"Barbara, (who) was trying to mentor me at the time, said 'Do you really know what you're doing?'

"I said, 'Well Barbara what is this? It just seemed to make sense,' " Newsom laughed.

The issue is not a high priority for the mayor, he added.

"That's not high on my agenda," continued Newsom.

"I could be persuaded to have a real discussion on that, but... frankly that's not high on my agenda - that topic of registering labor as lobbyists.

"I haven't seen it in the last six or seven years of being a substantial issue.

"I mean it's not to me a big problem so I really don't have a strong opinion."

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