Yes, colleagues, so thank you again for allowing me an opportunity to come to this committee. And present to you a hearing item today. This is a proposed Charter Amendment, a narrowly crafted resolution to transition approximately 38 employees who were formerly employed by the Redevelopment Agency. And as many of you know in 2012, there were in 2012 we were all reeling from the governors decision to abolish the redevelopment agencies across the state and to say the least this is one issue im working with and i was just in another committee dealing with another issue with the dissolution of Redevelopment Agency has put us in a state of tizzy. Over the past three years we focused on moving forward projects that have benefited from tax increment and finding out tax increment dollars and finding alternative sources of funding for infrastructure, and Affordable Housing and project areas. Well, however similar to those projects, there are employees of the agency who have spent a number of years in limbo as well. The biggest barrier that we heard from employees making the complete transition from city and county is that they cant count their previous years of service at the Redevelopment Agency towards their vesting Retiree Health care benefits in the city. We all know how important that is. Many of these employees are midcareer and very, very close to retirement. So possibility of having to start all over again and accrue additional 20 years is very problematic. The Charter Amendment simply allows employees of the former Redevelopment Agency, specifically those who were hired on or before jan january 9th of 2009 to count their years of service at the Redevelopment Agency to their years of service as City Employees for purposes of Retiree Health care benefits. We have worked hard with the City Attorneys Office and Human Resources and Health Systems to ensure were not allowing any of these 38 employees to doubledip. So colleagues i have a second draft of this amendment before you today, that makes a number of changes and im going go through those changes, okay . First its removing the use of the word transfer. Which is an inappropriately used in the first draft to characterize the situation these employees are in. An additional requirements to exclude Redevelopment Agency employees who have received Health Care Coverage under the Public Employees medical and hospital care act, at the request of the Health Service system, to add the extension of domestic partner also do not get an additional benefit as a result of this particular Charter Amendment. Also want to clarify that if any employee otherwise eligible retired and returned to the city employment are not they are not eligible to receive any additional benefits. These amendments are the result of more than a month of conversation with city departments and unions specifically local 21 and seiu 1021 who represent this class of workers and colleagues i feel its important to narrowly taylor the message for these employees not for their own choosing, but have been in a difficult position for frankly a number of years. I want to also acknowledge that we have representatives from local 21, as well as seiu 1021 here today should have you any questions, as well as miss Micky Callahan from the department of Human Resources to avail herself to questions. So mr. Chair, i would like to turn it back to you and see if there is any discussion. If not, we can go to Public Comment . Supervisor tang, do you have . Some comments. Thank you, supervisor cohen, i know its been difficult for the employees faced in this position. I know there were questions on page 5 this was language inserted and just wanted to confirm that Charter Amendment says, shall not expand or contract the groups of employs eligible for retirees. It should be 2009. 2009. Yes, it should be 2009. 2009, okay, that is on page 6. So my version says 2008. So i just wanted to make sure that is correct. Okay. Lets see. Page 6. What line are you on . Line 2, page 6. It says 2008. I dont know if we can get clarification, perhaps from the City Attorney. Deputy City Attorney john givner. Supervisor tang, do you have other comments . Sure, my second question has to do with the memo we were issued per the Controllers Office about the potentially unfunded liability. Just wanted to unfunded costs to government. So i wanted to see if could you speak to that as well. Sure, were working on getting the correct answer for the time. But mr. Rosenfeld, i was wondering if you could speak to supervisor tangs question. Thank you. Good afternoon, supervisor, ben rosenfield, controller. We have distributed our first draft on the measure. This is a complicated measure and in a lot of ways, well continue to revise our analysis as we work through the process. We find that the charter measure as proposed will likely increase the cost to government. But there is a number of caveats to that analysis. Really it affects costs in two direct ways and then a third way that is more difficult to determine. The first two the first relates to retiree vesting for the group of employees in question here as we understand you rifes arrives at the number of 3540 employees. If the city were to hire these employees absented the charter measure, that restrict the way that the vesting the vesting in Retiree Health benefits works versus the rules that existed for the day before. This measure would for those employees hired today would determine that they are subject to the former vesting rules. That generally speaking are more generous than those now in place for new employees hired. That would likely increase the cost to government, because its providing those employees with a richer Retiree Health benefit than otherwise the case. Secondly, employees under the existing charter, employees hired after the january 9, 2009 date maybe a lesser prefunding contribution on behalf of their ultimate Retiree Health benefits than those hired before that date. So the other way around. So for those folks hired those city employed hired after january 9, 2009 contribute 2 and for employees hired before that, were expecting january 17 to contribute 1 . So employees of the former Successor Agency brought into the Health Service system by virtue of this measure would contributing a lower amount towards their ultimate Retiree Health benefits than would otherwise be the case without the measure. Those two things together, kind of a more generous benefit and a reduced contribution into the trustee will likely increase the cost to government as a result of the measure for these 40 employees. I think the scale is important to remember here. Were working to determine a harder number to discuss with you. Its a complicated calculation that depends on years of service and will depend on individual employees choices about the individual health plans that they plan to adopt, the family size or plan size upon retirement and most fundamentally its a decision that the city will have to make about the decision if they would offer to hire employees from the former Successor Agency, which isnt mandated by the measure. The most complicated financial issue here really relates to the pension plan of the former Redevelopment Agency. This is an issue that we face in San Francisco regardless of whether this measure goes forward and its an issue many other jurisdictions face. But at some point, as these Pension Plans active enrollment in these Pension Plans for former Redevelopment Agency diminish and become zero pers, which is the other side of the pension fund might ultimately find that the plan is closed meaning no new contributions are coming in to pay for pension benefits drawing out. At one point pers may find that the plan is closed and as a result, require that the Successor Agency fully pay off an accrued unfunded liability the a more rapidly rate. The measure in and of itself doesnt cause the financial issue and its true of Redevelopment Agency throughout the state, but to the extent that the measure by providing richer benefits than might otherwise be the case to former employees might close the group off faster than would be the case and could be a factor in such a situation in the future. So those are really the three key financial issue as we see them. Well continue to refine our cost estimates and report back to the committee as we go through the process. Thank you for that and i know that none of us years ago did not anticipate we would be in this kind of situation and again, its very unfortunate. I dont know if its the Controllers Office or another entity that might speak how we might fund the potential increase, again, that we dont have a specific number that we can put to at the moment. Should we arrive at some sort of number, what that funding mechanism might be . Certainly others should speak to this as well. There is a process in redevelopment dissolution law that determines what costs are ultimately are payable from the successor to the Redevelopment Agency and which ones arent . Its basically state law determines that anything that is deemed an enforceable obligation of the Redevelopment Agency at the time of dissolution can continue to be paid from property tax increment. 65 of which or ends up being paid otherwise would float to local general fund and other fund. I think the circumstance here is the same. There is a process by which one can determine through the state whether an obligation is enforceable. Its my own estimate that these are likely to be enforceable obligations of the Successor Agency. And they could continue to be paid from funds that otherwise would flow to the Redevelopment Agency. Should the city find that wasnt the case, and it would be a state determination that happens through this somewhat convoluted process that was set up in dissolution law. We would have options at that point. We could either choose to take the cost on, knowing that it would be a general fund cost, or again, the city does have the policy choice in the future to simply not effectuate the transition of these employees to the city, to the extent that we find its not an eligible cost from redevelopment funds. The last question on that, when would that state determination happen . Is that something im not familiar with how that process works its a process whereby every six months the Successor Agency has to submit proposed spending plan for that six month period to the state and the state approves or disproves it or approves some of the line items and is the recognized obligation payment schedule process. Its kind of a sixmonth budget process in essence. I would assume this question could be tested in a sixmonth robes process for the next six month period after the ballot measure was approved, if it was. Thank you very much. I just would like supervisor tang, if i could take a moment to address a couple of things. First of all the clerk circulated a second copy that should clear up discrepancyof the date. The existing charter on page 5 of both documents, you have in front of you, the clean version that the clerk has just distributed and the redlined version that shows some of todays amendments. Of the existing charter references june 3, 2008. That is language from an old Charter Amendment from 2008. And that language refers to the intent of the that Charter Amendment. In the redlined version, there were some errors in the published charter that leaked their way into the first version of this Charter Amendment. So we corrected those errors in the version that supervisor cohen has circulated today and as a result, the copy that you got makes it look like that 2008 date is say new date, but actually that is existing language. And to speak to your question, supervisor tang that Redevelopment Agency former employees also come funded as enforceable obligations. So are there any other questions, colleagues . Yes. Okay. Mr. Rosenfield, i would like to have a followup of supervisor tangs question. In regards to the additional costs. Your analysis that you made seems that your analysis is based on the cost differential ofsomeone that would be hired at todays rate, versus what rate they were getting . If the city hired these people during the original hiring date, which is probably, to me, a truer difference . What would be i mean obviously or maybe not so obviously, would it have made a difference in terms of the cost differential . They are not new employees in many ways. They have been working. I understand the question. Im thinking through it quickly. So of course legally employees of the former Redevelopment Agency were not employees of the city and county of San Francisco. They have a different federal tax id number for federal government purposes. They are and have always been legally separate employee. To your question, mr. Chair, though, if the city at the time ten years ago, lets say, had decided that we were going to staff our rda with City Employees and hire people for that work, but as City Employees and assign them for work, which is a model you do see in some other cities. I think the cost differential were talking about here would be negligible. Its really the difference of the change in their Employment Status per our charter rules that now happens; that creates the cost differential. I appreciate that. I just wanted to get that clarification. So i could understand the potential impact versus, well the reality of the situation now versus had it been different originally. I think the gist of the issue here that we are talking about is our charter allowing reciprocity for employees. There is no such allowance for Retiree Health years of service. This charter measure creates that. Additionally, we have had a significant change in health plans put in place by the voters during the period and this measure brings employees forward under the more favorable older plan provisions. I understand. Thank you very much. No other comments . Public comments on this item . I have a few cards here. [ reading speakers names ] good afternoon, my name is alex, the representative from ifp that represents about 22 employees from the former Redevelopment Agency. Local 21 and our members strongly support the Charter Amendment. Since redevelopment was dissolved by the state in 2012, our members have been unfairly placed in a legal limbo that will Charter Amendment will help overcom. The state laws of ab 26 and 1424 that ended redevelopment were both poorly written when comes to dealing with the unique situation in San Francisco. Unlike other bay area Redevelopment Agency ours was not part of the city. But now to make sure that our former redevelopment employees that were working when redevelopment was dissolved can be fairly treated as City Employees, the charter needs to be modified to recognize their years of service for Retiree Health care. The good news is that our member will not cost the city because their salaris and benefits are covered by the tax increments and developer fees and they do include our benefits and the salaries. They are existing obligations, so this should have a minimal cost to the city and county of San Francisco. Keep in mind, too, when it comes to comparing retirements versus the old system in San Francisco and what currently is in the contract for redevelopment employees is that its the same fiveyear vesting that the employees currently have. So what the situation that were trying to avoid here is having someone that is midcareer, that has dedicated their live life to serving San Francisco and being already vested and now has to suddenly work 20 years to vest. Its unfair and not recognizing the reality. Right now local 21 members thank you. Good afternoon. Thank you supervisor cohen and the committee. My name is ariana casanova, and i want to thank the committee for addressing this. Its a unique situation to San Francisco. Most redevelopment agencis, for example in the east bay are all pers and they were easily followed into either cities and this wasnt an issue. Its very unique in San Francisco because of the Charter Amendment. And it is also the right thing to do to recognize the very important work that a lot of these workers do, the transbay tunnel, Hunters Point and recognizing their contributions to the economic stability of the city of San Francisco. And so with that, i hope we could support and move forward and do justice for these 38 workers, which i represent 16 of. And so that we can continue to do the great work that they do, and for the city. Thank you. Thank you. Any other Public Comments on this issue . Yes, i work with the office of Community Investment which used to be the San Francisco Redevelopment Agency. Im on the Hunters Point shipyard project team and speak on behalf of those employees that i represent on local 21 and some of my colleagues are here. I came to work at the Redevelopment Agency six years ago because i was inspired by the agencys amazing commitment to improving the quality of lifes for residents throughout the city. The list of redevelopment achievement is really long and we have generated tens of thousands of jobs and created Affordable Housing opportunities and worked on the Affordable Housing unit for the hunters bay shipyard. Our work is now solely focused on completing the transbay and shipyard and we had to abandon our other work. Our workforce was reduced to less than 50. This was not easy, but we got through it. Mainly thanks to our great work of our executive Management Team led my stephany bowey. I continue to be proud of the work of the agency, but i have to say its strange to be working on projects that are so important to the city and at the same time not be a City Employee. Right now, when redevelopment projects end, our careers end, and it would be really detrimental for the city of San Francisco to lose the individuals who work on those projects. The Institutional Knowledge and experience would be a great loss and we have lost two people in the last month. My coworksers have put in years of work to improving the quality of life and would love to do so in future, which is why the proposed Charter Amendment is before you. It would allow for a smooth and fair transition of less than 40 employees owhose salaries are covered by private developers and tax increment. Thank you. Any other Public Comment . Seeing none, Public Comment is now closed. Supervisor cohen, thank you for bringing this measure to our attention. I personally feel there is going to be maybe some costs to the city, but as i was pointing out, if we had taken the Redevelopment Agency as City Employees in the first place, we would probably end up having very little difference in the expenses. And i think for me, just because they were not hired by the city and under some other agency but yet these are the same people serving our communities in San Francisco. I think its just the right thing to do. With that, i will be supporting your amendments. And i also want to be added as a coauthor. Supervisor tang. Thank you. I just want to thank you everyone who came out and spoke during Public Comment. I know that some of the issues were actually raised at that time. So i dont know if perhaps our director of Human Resources, since you are here if you could speak to some of the comment has there were made . Thank you, supervisor tang. Supervisors, thanks for the opportunity. We have been working with the cityattorneys office, supervisor cohens office and i have been in discussion with local 21 in particular as well on this amendment. I wanted to i know that mr. Thomp made a comment and i want to make sure we were able to address a potential issue, which is really just a clarification and perhaps when the City Attorney we can ask to look at it, which would be the amendment is intended as i understand it to address those affected and the reading of those who voluntarily came into City Employee as a career choice and i dont think that is intended to affect them. So that would be something that we would be looking for perhaps some clarification on. I dont think were in a difference of opinion, however, based on my conversations. I dont know if the City Attorney would want to comment . Do you need a second . Okay. I will just add something that we have made a request to the director of dhrs office of an analysis who wouldnt be covered under this particular change and we never received that information. Im going to answer the question. The Charter Amendment that is before you today, with the amendments that have been offered by supervisor cohen covers as director callahan mentioned covers people who were hired by redevelopment prior to 2009. And later became City Employees. I think the question is that miss callahan is posing should the board further amend the Charter Amendment to provide that you only want to cover people hired by redevelopment prior to 2009 and who became City Employees in 2012. Or after. Or after, but before 2015. Supervisor cohen, would you like to respond to that . So maybe you can rephase the question. What exactly are your questions, director callahan. Its more in the order of a clarification as you say to be narrowlytailored. Were moving forward as i understand with this Charter Amendment to address the situation of people through no fault of their own were effectively forced into city employment because of the dissolution of redevelopment in its historicalet iteration. So the amendment covers people who came into city employment between 2009 and 2012. I dont think that is the understanding and talking to local 21 that they the retirement the Retiree Medical coverage for people that came previously. That is all. Supervisor campos, would you like to make a comment . Sure. I certainly would like to hear from local 21 or from 1021. I mean im still not clear why we would need the amdm
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