City Retiree Deal May Hurt Taxpayers: Critic - NBC 7 San Diego

City Retiree Deal May Hurt Taxpayers: Critic

Proponents say agreement avoids costly litigation



    A handshake deal to reform retiree health care for San Diego city workers was announced to great fanfare Friday.

    But a leading City Hall critic claims the taxpayers are being shortchanged on potential savings.

    The tentative agreement involves the city's white-collar and firefighter unions, and three others are expected to come around next week.

    The police officers' union, which took the city to court and lost, seems likely to appeal.

    City Retiree Deal May Hurt Taxpayers: Critic

    [DGO] City Retiree Deal May Hurt Taxpayers: Critic
    Organizations have avoided costly litigation by agreeing to a deal that, one critic says, shortchanges the taxpayers on savings.
    (Published Saturday, May 7, 2011)

    As for the others, says City Attorney Jan Goldsmith: "Each of them do have the ability to file their own lawsuits, and I want to make that really clear. I understand that, and I respect that. I still think we'd probably get to the same result. But there's no guarantees in litigation."

    Added Mayor Jerry Sanders, addressing a mid-morning news conference in his office: "We can either do the political thing, which is litigate. Or we can do the common-sense thing, which is to provide stability and avoid litigation into the future -- and take responsibility for what we think is the right thing for the city."

    Last week a lawsuit brought by the San Diego Police Officers' Association ended in a judge's ruling that retiree health care is not a "vested benefit."

    If the POA appeals and loses, Goldsmith indicated, the cops are out in the cold.

    If the officers go along with the program, the agreement stipulates their terms won't exceed the others'.

    "No comment," is how a POA vice president instructed the union's receptionist to respond to a question about how the POA will proceed.

    Leaders of the Municipal Employees Association signed onto the deal, as did those for International Fire Fighters Local 145.

    Negotiators for blue-collar workers, lifeguards and deputy prosecutors are said to be close to joining in.

    The agreement calls for employee contributions to health costs and a reduction in city benefits.

    Projected taxpayer savings: $714 million over 25 years.

    "As significant as this appeal is, it won't be good enough for some. We know that," noted Councilman Kevin Faulconer. "Some will criticize with inflammatory rhetoric. But I'm not interested in rhetoric, I'm interested in results."

    Councilman Carl DeMaio made good on Faulconer's prediction, arguing that the agreement gives city retirees much better benefits than private sector plans.

    "This deal gives up 340, at the least, and as much as $530 million in potential savings over the life of the agreement," DeMaio told reporters shortly after the mayor's news conference.

    "We have a city government that is in essence using public monies to benefit around 10,000 city employees at the expense of 1.5 million taxpayers," De Maio said. "And that is really a problem, the cultural problem we're having here in city government."

    The deal, which DeMaio and Lorie Zapf opposed on the losing end of a 6-2 Council vote in closed session, still has to be ratified by the unions' memberships.

    As for the deal's potential impact on future city budgets, it'll be three years before the annual savings top $3 million and start to grow exponentially to $60 million by 2036.