Rules committee forwards charter amendments on airport police retirement after FAA permissibility and cost questions

The San Francisco Board of Supervisors Rules Committee on Thursday moved two charter amendment drafts forward that would allow the city to transfer certain airport police officers and related assets and liabilities from the California Public Employees’ Retirement System (CalPERS) into the San Francisco Employees’ Retirement System (SFERS). The committee scheduled further consideration at a special meeting on July 10.

The proposals, presented as Item 3 (the cost-neutrality draft) and Item 4 (a draft clarifying an exemption to cost-neutrality for the airport police contract amendment), would expand the Board’s authority to amend retirement contracts and to include time worked as airport police in SFERS benefit calculations.

Claire Murphy, executive director of SFERS, told the committee that records for many officers are held at CalPERS and that the agency lacks the detailed individual data — current salaries, ages and likely retirement dates — needed to produce a definitive cost estimate. Murphy said earlier CalPERS work put the total liability for the affected population in the low‑forty million dollar range in 2000–2001, but that recent wages and service make the present cost unknown. "We do not know what it would cost," Murphy said, and estimated the affected population at roughly 94 officers but noted the number who remain active in CalPERS could be lower.

Controller Ed Harrington said airport funds are generally allowed to pay fringe benefits, including pensions, under federal guidance (citing OMB Circular A‑87) and that he had seen "no reason to believe the airport could not pay for it." At the same time, airport counsel warned the Federal Aviation Administration (FAA) is the final arbiter of permissibility and that the FAA might conclude some reimbursements are not allowable because services were rendered prior to 1996. Rob Mayer, representing airport legal interests, said seeking an FAA advisory or informal permissibility review before finalizing a contract amendment would mitigate that risk.

Public safety union representatives urged passage in order to achieve retirement parity for officers who worked at the airport, citing actuaries' estimates provided to them. John Tennant, general counsel for the San Francisco POA, and Gary Delaney, president of the San Francisco Police Officers Association, said their actuarial work estimated a much smaller cost when accounting for the number of officers likely to opt into a transfer: an updated Milliman actuarial (with 62 participants) returned an estimated total cost of approximately $770,000 and an annual amortized payment of about $37,000 over 20 years, according to Delaney.

Supervisors pressed for clarity about worst‑case scenarios should the FAA later rule a payment impermissible. Committee members asked whether the charter language in the first draft (which mandates cost neutrality) would prevent the Board from implementing a contract amendment if the FAA later required the general fund to assume a liability; city attorney staff replied that a passed charter amendment could constrain the Board’s ability to effectuate a contract amendment that incurred non‑neutral costs.

The committee voted to move the items for continued consideration at a special meeting on July 10 and to ask staff to pursue an FAA permissibility read as early as possible to inform the full Board’s subsequent vote. No final contract action or transfer was approved at the committee meeting; committee members emphasized that a formal SFERS/CalPERS contract amendment would be required after any charter change and that the contract — not the charter vote alone — would carry the actual cost implications.