Friday, May 13, 2005 | Laborious contracts. The San Diego City Council struck a tentative labor deal with the second of its four labor unions Friday evening, agreeing to a one-year contract with the Local 145 firefighters union that includes increased employee contributions into the pension system and a one-year salary freeze.
The firefighters’ deal is tentative pending approval by its membership Tuesday or Wednesday.
The deal also eliminates a number of costly or controversial benefits for future hires, including the Deferred Retirement Option Plan, the 13th check and retiree health care. The city currently owes an estimated $500 million to $800 million in unfunded future retiree health care costs for its current and retired employees.
With a deadline of May 16 looming to complete new labor deals, new contracts still have yet to be worked out with the Police Officers Association and the Local 127 blue-collar workers’ union. In the event of an impasse, the council can unilaterally impose a one-year contract.
The labor concessions are a major cog in outgoing Mayor Dick Murphy’s plan to topple a pension deficit estimated to be between $1.37 billion and $2 billion; however, a raft of critics complain that the labor cuts are too minor to make any tangible impact on the shortfall.
Both of the announced candidates in the mayoral campaign, Councilwoman Donna Frye and former police Chief Jerry Sanders, have embraced rolling back at least some benefits if they are determined to have been granted illegally. Both have said earning concessions from labor unions likely won’t be sufficient.
City Attorney Mike Aguirre has issued a non-binding opinion stating that a bevy of benefits granted in 1996 and 2002 were done so in violation of local, state and federal laws governing conflict-of-interest, spending and other activities.
A tentative deal with the Municipal Employees Association, which represents about 6,000 of the city’s estimated 11,000 employees, was announced late Tuesday night. Aguirre, Sanders and Frye all panned the deal.
Murphy has said that if concessions are won from the four unions, $350 million can be knocked off of the pension deficit. He has said other savings in the deals can be used to fund annual payments against $200 million he hopes to float in pension obligation bonds once the city regains its credit rating.
The MEA’s three-year contract, which also is tentative pending membership approval, includes:
– Salary and benefits freezes in the first two years of the contract, though a pay increase that’s part of the current contract goes into effect June 30, the final day of the city’s fiscal year.
– Increased employee contributions to the pension system in each of the next three years.
– A 4-percent salary increase in the third year of the contract.
– Eliminating the DROP program, 13th check and purchase of service credit benefits.
Undocumented. A former assistant auditor and pension board member at the city was placed on administrative leave this week for failing to fully cooperate with federal subpoenas, sources confirmed Friday.
After a subpoena arrived at City Hall on Tuesday requesting more documents from former assistant auditor Terri Webster, it was determined by city officials that the documents should’ve already been turned over to FBI and U.S. Attorney’s Office investigators as part of earlier requests.
A spokeswoman for City Manager Lamont Ewell said Webster had been placed on administrative leave, but wouldn’t comment further, citing personnel matters.
The subpoena delivered this week seeks documents in connection with the Blue Ribbon Committee, a commission put together by Mayor Dick Murphy when he took office in 2001. The committee was to measure the true state of city finances and judge the feasibility of completing the 10 goals Murphy hoped to complete in his tenure.
Although the report did warn of potential problems with the pension system, some committee members wondered later if they were given accurate information regarding city finances and if city staffers had too heavy an influence on its findings.
Webster was one of the two main staff members assigned with assisting the Blue Ribbon Committee. She also served on the pension board during the time that a controversial funding deal was struck in 2002. The deal is now central to a federal corruption probe.
Webster, who was transferred to the wastewater department earlier this year, played a role in preparing the city’s financial statements from her position in the auditor’s office as well.
Read Voice’s February article on city staff’s influence on the Blue Ribbon Committee’s final report.
– ANDREW DONOHUE, Voice Political Writer
Please contact Andrew Donohue directly at