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You wouldn’t imagine what Bill Craig has seen going to San Diego’s landfills in his years as a city surveyor.
Giant old yachts? They’re dumped all the time. About 10 years ago, someone called up asking if he could get rid of 25,000 pounds of mayonnaise. Craig thinks the landfill took it.
A few times in his career, he’s watched flatbed trucks roll up with a special delivery: the carcass of a beached whale. The landfill would be its cemetery. Whale trucks come around noon, Craig said, so that the news cameras show up.
“I love my job and it just reinforces the fact that when you’re working at the landfill, you never know what’s going to come through,” Craig said.
These days, Craig is starting to envision the end of his career. He’s 56 years old and has worked for the city for almost three decades. He sees himself as “kind of like a dinosaur.”
And he’s beginning to wonder who’s going to pay for his health care when he retires. This month, Mayor Jerry Sanders’ office and the city’s labor unions are expected to conclude two years of talks about reducing the benefits granted to a generation of municipal workers. What’s decided could affect Craig until the day he dies.
Because of a quirk in city and federal rules, Craig is one of up to 1,305 city employees who might not have access to Medicare when they retire. Should the city go so far as eliminating retiree health care for current employees, Craig faces the possibility of falling through a health care donut hole. He could grow old without any medical coverage at all.
“I’m a pawn to the city’s negotiations right now,” said Craig, also a board member of the city’s white-collar union.
Craig’s situation epitomizes the financial and moral complexities in reforming retiree health care benefits. Though there’s little indication the city will strip away all his health care, big changes likely are coming. In recent years, the Mayor’s Office has maintained that the health care promises it made Craig and thousands of other employees are unsustainable. The numbers back that up. San Diego never put away enough money to pay for those promises and now faces a $1.4 billion retiree health care deficit.
Like San Diego’s pension debt, retiree health care costs are a crushing liability that erodes the city’s ability to pay for regular city services such as fire, police, parks and libraries. But health care benefits aren’t nearly as protected as pensions, making them a much more welcoming target for city officials.
But people like Craig make negotiations to reform retiree health care difficult.
In 1981, prompted by Mayor Pete Wilson, general city employees voted out of the Social Security and Medicare systems in return for the promise of city-sponsored pensions and retiree health care. Five years later, the federal government required all employers to participate in Medicare. All city workers hired after then will receive that coverage.
That leaves a group of employees that do not have access to Medicare, federally subsidized health insurance for those older than 65. Craig’s group is solely reliant on the city for health coverage.
The 1,305 current city workers hired between 1972 and 1986 could fit that profile, said Valerie VanDeweghe, deputy director in the city’s Risk Management department. Those employees either hadn’t worked at the city long enough to qualify for Medicare coverage when workers voted out of the system or began working when the city wasn’t participating in it.
Retirement wasn’t on Craig’s mind when the city hired him in 1982, one of the years it was out of Medicare. Craig grew up in National City and worked for San Diego County before he took the city job.
“I was 27 and it wasn’t a big deal,” he said. “I’m being told I’m being covered in retirement for medical. That’s cool.”
Groups of employees other than Craig’s received different benefits at different times, too.
Under the current system, a firefighter hired in 2000 would receive city health care benefits for life with Medicare eligibility. A librarian hired in 1980 would receive city health care, but no Medicare. A garbage collector hired in 2006 would receive nothing from the city at all, but would get Medicare.
Changes to the city’s coverage could affect all workers the same or the city and labor leaders could try to negotiate distinct benefits for various kinds of employees. Benefits for already retired workers, everyone agrees, won’t be touched.
Neither Sanders’ office nor union leaders would discuss the ongoing negotiations, but all indications are that the mayor is going for major cuts. City Chief Operating Officer Jay Goldstone estimated over the summer that the city might save $420 million over 10 years by reducing retiree health care costs, and said the city might go further than that. Eliminating retiree health care for all current city workers, for instance, would save an estimated $1 billion.
Should that happen, what becomes of the 1,305 current city workers hired between 1972 and 1986? They wouldn’t all fall through the health care donut hole. These workers could be eligible for Medicare through their spouses or by working somewhere else before the city hired them. Also, they could get another job after they retire from the city.
For these reasons, VanDeweghe said she didn’t know how many of them wouldn’t have Medicare access after they retire.
“The problem is that we don’t know who or how many fall into this group,” VanDeweghe said. “There’s no way for us to know.”
To be sure, these employees also could pay for their retiree health care in other ways even if the city cuts the benefit. They could use their pensions, as City Councilman Carl DeMaio has suggested in his budget plan. Further, by not paying into Medicare these workers have always received a boost, albeit small, to their take home pay. Craig said he hadn’t even noticed that bump until recently. Saving that little wouldn’t help, he added.
Both the Mayor’s Office and union leaders said that they are taking employees’ Medicare access into account during the talks. Mayoral spokeswoman Rachel Laing said the talks were real negotiations, “not a beatdown.”
“It’s a matter of trying to present something fair that labor can say is offering reasonable protection to their members,” Laing said. “And so of course things like how close people are to retirement, whether they’re Medicare eligible, etc., is going to factor into a reasonable offer.”
Laing said the Mayor’s Office also wanted to keep the city from facing a mass retirement of employees trying to secure their health care before any new agreement would take effect. Changes to health care and pension benefits in 2009 led to more than 600 employees retiring within six months, a situation the city’s retirement system described as “an exodus never seen before.”
VanDeweghe is one of those employees nearing the end of her city career.
She laughed when she recited the exact date the city hired her in 1976. Like Craig, she could fall through the donut hole. VanDeweghe hadn’t worked long enough to be eligible for Medicare before the city voted out of the system.
Her current plan? To look for another job after she retires.