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Though it’s been discussed relatively little, one of the most interesting bits of news that Mayor Jerry Sanders announced last month in his State of the City address was that he would seek to end the controversial DROP retirement program for all current city employees.
This is huge.
DROP allows police officers and other city employees to “retire” from city service and begin collecting their vested pension benefits. But they can still work for the city for up to five years. All the while, their pensions are deposited into an account that accrues a very good annual return. Then, when they retire, they can choose to cash that money out all at once or keep it invested in the program and take regular payouts.
It’s been a controversial issue for several years.
|Mayor: Just DROP it.|
Former Mayor Dick Murphy successfully negotiated an end to the benefit for new employees. But that only affects new workers and hundreds of current city employees are still in line to take advantage of DROP.
That is, unless Sanders is serious.
The city’s employee unions consider DROP one of many vested retirement benefits — which, as we all know from City Attorney Mike Aguirre’s efforts to roll back supposedly illegal benefits, are difficult if not impossible to roll back.
I had caught up with police officer and union leader Mark Sullivan after the speech and he said then the mayor was going to have a fight on his hands.
I also asked the mayor’s spokesman Fred Sainz how the mayor determined DROP could be dropped legally. Did the mayor get advice from City Attorney Mike Aguirre?
Sainz said no — confirming once again the dysfunction of this little City Hall relationship.
“We have not nor will we consult with the city attorney on labor negotiations,” Sainz said.
So how had they come to the decision to fight DROP and do it right?
They just believe it is legal to get rid of it, Sainz said.
I’ve been meaning to follow up on this for weeks and I will keep an eye on it. There are dozens of implications of the mayor’s move and it could prove to be a bitter fight if he pursues elimination of DROP. It will also be interesting politically. The mayor’s chief rival in his re-election campaign is businessman Steve Francis, who has lambasted the mayor for not paying police better wages. Francis, though, has also lambasted the mayor for not reforming the pension system. How Francis comes down on this might be a big deal as the police union decides who to endorse in the campaign.
Keep an eye out for all that. But for now a friend alerted me to this interesting news out of Tuesday’s election in San Francisco.
Proposition B, allowing certain San Francisco police officers eligible for retirement benefits to continue working for up to three years while accruing retirement benefits in tax-deferred retirement accounts, was approved by approximately 65 percent of voters.
What one city giveth, another taketh away.