The Morning Report
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One crown jewel reform in the financial package that San Diego’s City Council is proposing for November’s ballot addresses a major problem on the city’s books: retiree healthcare.
The city shall, the ballot proposal says, reduce its retiree health care liability, a $1.3 billion mandate that’s only 3 percent funded. The retiree health care cut must happen before a sales tax increase would kick in.
The plan sounds great on paper, but spelling out what it means will be a challenge throughout the ordeal.
First, take the definition of “reduce.” Taken literally, if the city cuts just one cent from its retiree health care costs it would technically comply with the restriction imposed by the ballot measure.
That’s not the intent, said City Councilwoman Donna Frye, the plan’s chief architect. She said a “reasonable person standard” should determine if the city met the requirement. More strict language, she said, could run afoul of state labor laws mandating good faith negotiations on benefit changes or present an unrealistic time frame.
“This is not for games and stunts,” Frye said. “But some of this stuff is hard to quantify.”
Like all the rest of the reforms, the city auditor would decide if the city met the retiree health requirements followed by City Council confirming the auditor’s findings.
Retiree health care, like many of the other reform measures included in the ballot measure, has long been a topic for debate at City Hall. Already, a joint labor union-city study on the benefit is overdue and both sides were planning to talk changes to the plan before the ballot measure arose.
But there appear to be some intractable differences that likely will frustrate any attempt to cut health care costs. For example, Randon Levitt, a San Diego police officer, recently filed suit contending the city violated its charter by not allowing employees to vote before a retiree health care benefit took effect last year. Michael Conger, the attorney representing Levitt, argued that the voting requirement would apply to any changes the city makes to retiree health care benefits.
The process doesn’t have to be contentious, Conger said. For example, Conger said the police union is floating a plan that he said would reduce costs without cutting benefit levels by moving to a larger system.
Everyone, he said, would vote for that.
— LIAM DILLON