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21_Latest News - February 2010

21_February 25, 2010
Union Election Further Complicates a Tangled City Budget
The New York Times by Gerry Shih


When the ballot counters at Local 1021 of the Service Employees International Union announce the results of the union’s bitter leadership election Saturday, the news will be felt keenly in two quarters.

One is the fractious world of labor: the former leaders pushed aside during a reorganization of regional unions three years ago are seeking to return to power by promising to hold back the recent tide of pay cuts and layoffs. The leadership installed three years ago is making similar promises to retain power.

The second is in San Francisco City Hall, which spends 52 percent of its $6.6 billion budget on personnel costs. Unless it can manage to trim what it pays those nurses, social workers and janitors, the city will not be able to make ends meet next year.

What this means in the near term is that the city’s goal of winning labor’s backing for the short- and long-term solutions to budget deficits is likely to be difficult to achieve.

The looming deficit for the fiscal year that begins July 1, and the difficult decisions it brings, comes on the heels of cuts made by the city to close last year’s $438 million gap. Last June, services like substance-abuse programs were sharply reduced and more than 500 public employees were laid off.

In the longer term, the results could loosen the knots that have bound unions with the dominant Democratic Party and its mayors and supervisors, which would be a striking change for a city where labor leaders like Harry Bridges once held sway.

Despite all the young professionals and affluent retirees who have arrived in the decades since, and notwithstanding all the other issues the left has rallied around along the way, like gay rights, steadfast support for labor has been the beating heart of this city’s progressive politics.

It is a banner carried today by members of the Board of Supervisors like David Campos and Eric Mar. “I used to be a shop steward for the S.E.I.U. and organized in the workplace,” Mr. Mar said. “This is a strongly labor town and as one of the elected officials, I’m doing my best to make sure they are represented.”

But, he added, “we’re in the worst economic crisis of our lifetime, and people’s fears of the economy and their pocketbooks will drive their decision making.”

Steve Ponder, a compensation analyst in the city’s Department of Human Resources said that while San Francisco’s unionized city workers were paid about the same as other public employees in the Bay Area, they did considerably better than private-sector peers.

A janitor working for the city can make as much as $50,000 in base salary, not including $27,800 in benefits. Mr. Ponder said a janitor in the private sector typically earned less than half that amount in total compensation.

Against that backdrop, the city is facing both short- and long-term bills accumulated during decades of mutual support between labor unions and City Hall.

The unified city and county government now spends about 13 percent of the budget, or $890 million, on pensions and benefits. By 2014, these alone will rise 57 percent, to $1.4 billion. Most of the expenditures will come from general fund dollars — now a pie of around $3 billion, or less than half the city’s total budget. That portion of the budget represents most of what can be easily shifted around as the supervisors and the mayor wrangle over for economic and social priorities.

The trend lines laid out by city economists describe a government with a shrinking capacity to deliver vital services or underwrite new initiatives, particularly if pension obligations keep expanding. And then there is the immediate problem of the near-record $522 million deficit for the coming fiscal year.

“This is the toughest year that anyone has seen in recent history,” said David Chiu, the president of the Board of Supervisors, “in large part because last year we cut to the bone, and this year, we’re cutting bone.”

Yet city management and labor leaders alike say that at this critical time, with so many jobs at stake, bargaining efforts have by been hindered by a labor movement dogged by infighting.

“Hopefully with the outcome of the elections in the next month we’ll see some unity that will allow them to speak with one voice,” said Mike Casey, the president of the city’s labor council. “Right now, that kind of unity doesn’t exist. It’s not even close.”

The mayor’s office says the city is seeking $70 million from wage givebacks alone, excluding additional savings from layoffs or reconfigurations of the workweek. Mayor Gavin Newsom’s spokesman, Tony Winnicker, said the city could lay off 10,000 of the 26,000 city workers —who now work a 40-hour week — and then rehire most of them to work for 37.5 hours. This would be an effective 6.5 percent pay cut and would save $50 million.

Damita Davis-Howard, the interim director of Local 1021 of the S.E.I.U., has told reporters that Mr. Newsom’s plan was “not the right track; it’s the next step in a downward spiral for the city and its citizens.” Through a spokesman, she declined to be interviewed for this article.

The fight over pensions is just as barbed. Ben Rosenfield, city budget director, said in an interview, “Every dollar we are spending on benefits is a dollar not available to solve deficits or fund city services. The challenge at the moment is that our cost increases are expected to consume the vast majority, if not all, of our expected revenue growth. What that means is while we are dealing larger macroeconomic issues like declining revenues from the state, we really don’t have the benefit of local tax revenues to help us.”

Most city unions already contribute 7.5 percent of their wages toward pensions, except for the S.E.I.U., which argues that its members are paid less than any other union workers on the payroll. The city has picked up S.E.I.U. members’ contributions for the past decade as part of an arrangement made years ago when the union gave up a 7.5 percent raise.

In December, Supervisor Sean Elsbernd introduced a well-received measure that would require all city employees to contribute 7.5 percent of their annual pension payments. The labor council made a counterproposal with relatively minor changes.

Mr. Elsbernd’s bill originally calculated the pension payouts based on an average of worker’s salary over the final three years. The council wanted to average the last two years.

But this month, Supervisors Mar and Campos, who represent two labor-heavy districts, introduced a further amendment to Mr. Elsbernd’s bill that would negate the pension contributions with a pay raise for the S.E.I.U., a move that would in fact increase costs to the city, according to the city controller.

The internal battles within the service employees union have also created confusion in the negotiations.

“When I meet with the other unions,” Mr. Elsbernd said, “they all send their president or attorney or two or three people. I have to sit down with 65 to 85 people from the S.E.I.U. bargaining team every time because they’re simply unable to delegate the responsibility of conferring.”

This chaotic approach is the result of lingering distrust between the factions vying for control of the union, city official and representatives of other unions said.

One source of bitterness revolved around accusations of skullduggery over the union’s response last year to the city’s effort to have S.E.I.U. members give up a 3.75 percent raise that had been promised for years.

Brenda Barros, a union activist who supports the existing leadership under Ms. Davis-Howard, accused allies of Sin Yee Poon, the head of the rival faction, of altering the agreement while key negotiators were on vacation. The revisions were later disavowed at a rowdy membership meeting. Union members said it was not clear whether Ms. Davis-Howard or Ms. Poon would prevail in the contest for control of the union. But Ms. Poon said the election had one clear result already: “It’s moved us closer to directing our resources and focusing our energies to get what we need to stand up against the attacks on pensions and other unfair demands.”

The negotiations between the unions and the city are expected to continue until June, the deadline for passing next year’s budget.




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