Committee advances 22 union MOUs after concessions to cover San Francisco budget gap

The Government Audit and Oversight Committee of the San Francisco Board of Supervisors on June 18 unanimously advanced 22 memoranda of understanding with city employee unions to the full board for final approval, after the Department of Human Resources and labor leaders described concession agreements intended to reduce a major budget shortfall.

Martin Grama, employee relations director for the Department of Human Resources, told the committee the package stems from negotiations intended to address a projected $522,000,000 budget deficit and that the agreements together bring "approximately $80,000,000 in the first year" of savings. Grama said most miscellaneous employee groups agreed to about a 4.5 percent giveback (reported alternately as roughly 4.62 percent depending on calculations) over two years. For groups without scheduled raises, the giveback took the form of 12 furlough days per year; public safety and nurses' units will follow a separate model of roughly 8 percent over two years.

The agreements also include layoff-protection windows and carefully defined exceptions. Grama described three windows: the spring 2010 window tied to the date of agreement, the first half of fiscal year 2010–11 (fall 2010) and the spring of 2011 (second half of FY10–11). During the fall window, layoffs and notices would generally be prohibited except for narrow circumstances such as a loss of FMAP (federal medical assistance) funding, a shortfall in SB 188-related hospital funding, or position eliminations proposed in the mayor's budget. For spring 2011, Grama said layoffs could occur if 3/6/9-month fiscal reports show a deficit exceeding $25,000,000 (with layoffs allowed to address only 60 percent of the amount above $25,000,000) or if a joint report projects a deficit of more than $300,000,000 for FY2011–12.

Committee members pressed for clarity on timing and triggers. Vice Chair Supervisor Carmen Chu asked what would happen if FMAP or SB 188 funds "do not come in in their entirety," and Grama said other local budget mechanisms could be used to fill shortfalls but reiterated that the written triggers in the agreement control whether layoffs proceed. Grama also clarified notice rules: the contracts preserve a 60-day notice for original layoffs and add a requirement to give at least 10 working days' notice to employees who are displaced through bumping so they can transition work.

Grama and Human Resources staff said the package includes changes to employee health benefits. For fiscal year 2011–12 the city's contribution for "employee only" coverage will be capped at the top of the second-lowest tier (the Blue Shield level this year), meaning employees who elect the most expensive city-only plan would pay the difference. DHR estimated roughly 800 employees are currently in the city-only plan and said the excess cost associated with those enrollments is about $3,000,000.

Labor leaders who negotiated the agreements described broad participation and ratification. Bob Muscat of the Public Employee Committee said the concessions reflected "a very high level of participation" and significant member support. Tim Paulson of the San Francisco Labor Council called the degree of unity "unprecedented" in recent memory and credited negotiators with keeping services and compensation impacts lower than they otherwise would have been.

The committee proceeded to a procedural motion late in the hearing. Vice Chair Carmen Chu moved to send items 1 through 22 forward as a committee report to meet calendar deadlines; the motion was advanced "without objection." DHR said eight additional contracts, including nurses', police and firefighter units, are expected at a July 7 special GAO meeting, and the clerk noted items acted on would appear on the full board agenda on June 29.

The committee did not record a roll-call vote on the package; the committee report advances the MOUs to the Board of Supervisors, which will take final action. The committee adjourned after the motion.