>> thanks for all of you being here. in january when i was sworn in, there were five major objectives that i wanted to accomplish. a pension reform was at the top. as i went through all of the town hall meetings on the budget, i indicated to the budget -- to the public that we needed to fix our financial house in the city. at the beginning of this conversation when he leaves started meeting, we had choices to make right at the beginning. the choices included whether or

not we're going to hold out for months finger of blame -- claiming for what occurred. or whether we would get to work and at the numbers tell us what we needed to do. as precisely what we set out to do and allow those numbers, the numbers that we have been quoting as the numbers we had to attack. the financial house of the city , it would allow ourselves to focus as we have done. i like to thank the people that are standing beside me as well as the ones in the back of me having spent quality time in coming up with a consensus, a comprehensive plan that we believe will fix the problem for the long-term. i'm happy to announce that we have at least a sponsor's if not more to present this pension

proposal to the board going through the rules committee and eventually the full board for the ballot. having said that, i want to emphasize that this proposal is comprehensive. it looks that not only the numbers that have been talked about with all of the press and all of you, the looks of the programs that we have put in place. and we have been contributing to a program that we have not been able to afford in a number of years. and also do it in the fashion that provides a dignified attention to those that have contributed many of their years of this wonderful city. i am proud to say that in working on this, we also have the choice about whether or not we would do it as a government or do it as a collaboration of people that were concerned about

working families in this city. and making sure that we talked to everybody and had every voice heard. we start in january up to now 4.5 up to five months of a concerted effort to reflect a comprehensive approach. it reflects a dialogue that is transparent. it reflects labor leaders, officials, the private sector as long as regent as well as the non-profit sector contributing about how the city can work together to make sure that we have a solvent pension system before us. we're looking at the system not just for the short term, but for the long term. we have ever imposed that we believe will save the city between 800 and billion dollars in the next 10 years. allowing the pension system to be solvent during those years

and wander into the future. as you know, reforming pension alone will not ensure that the city will be fiscally sound. i've also been working hard to balance the budget and we will be a announcing those measures next week as we report to the board of supervisors. have committed ourselves to doing five-year budgeting and five-year financial planning. that has also been very helpful to understanding how the pension system works and how it is part of the fiscal soundness of the city. it is painfully evident that not just in san francisco but every city across this country has been facing the pension system and making sure that that challenge is confronted. in different cities have different approaches. with a voice of the san francisco would have a special approach.

that is the consensus in bringing everybody under the tent to talk through what these numbers mean and what we can do to contribute. a lot to thank all of the people who stand beside me as well as those that have initially signed on the include all of the supervisors here today. this proposal ties back into investing in our neighborhoods and our communities. as i have said many times with this of the city, we can make city services increase and be maintained as well as proper investments to keep families in our city. is a halt what i want to reemphasize a consensus proposal levels in the city leaders, business, community in the nonprofit [unintelligible]

no matter what level of work you have in the city, we will contribute to the solution. we're seeking long-term reform in this proposal in the form of new and lower benefits that we have yet to hire and immediately relief in the form of current employees for the existing level benefits that we apply. it is important to show in this consensus plan that its comprehensiveness will be reflected in its ability to provide pensions biking, caps pension benefits, it raises the retirement age, it requires existing in the new employees to share health care costs. and it uses a sliding scale to protect lower wage earners of our employee group. if it does probably the most important thing that other pension plans you've been reading about the not do. a requires a greater

contribution to the health trust fund. finally you have questions about the other plans. and i will say to you that the other plans that may be have been developed under closed doors and with smaller numbers of people have not had the transparency that this process had nor has it been reviewed ha literally or with all the different actuarial reviews. the actuarial and the private sector as well as ours in the controller's office and those that we have hired and certainly have passed muster with the city attorney's office. have included the months that, representatives of the labor unions, moderates and progressives. the downtown business representative as well as members of the board of supervisors. i would like to recognize the tremendous effort that

supervisor elsbernd has given to this process since day one. [applause] and i know from the very first day that we met and talked about this, there was a healthy level of cynicism that was displayed. one that was probably a arrested with a lot of things that have gone proper for many years. the really keen look at what the retirement system wasn't doing. and as it was brought up with others in the discussion, we got better and better at allowing him members to speak to us. when you take into account of the health contributions in the pension contributions, we have a serious comprehensive plan that is reflecting the consistency -- the consensus.

it is important that we don't leave people behind. and we have done that. our plan is fair and is responsible. protect city services, and it ensures that our workers can retire in dignity and continued access to health care plans across the rest of this exceediy less affordable. >with that, i would like to welcome to this podium someone we have been working very closely with. come out for us. [applause] >> thank you, mr. mayor. they did make me promise not to play the banjo. [laughter] so that will not happen. this is truly an historic day for san francisco.

we all worked on this. to think -- in the mayor touched on this point -- this is a huge nationwide problem it is being approached in various ways. adversarial, dictatorial, some cooperation. it is really in san francisco we have been able to come together. i do not want to belabor the point because it has been made, but we have taken the lead nationally and a plan -- in a plan that has majorly contributed -- that has been majorly contributed to by the unions in our city, the administration, and a number of other sources. i think there will be real surprised nationally when they see san francisco taking the lead.

so, i am thrilled. i keep thinking i belong to some native american tribe. thank you. thank you all of you, for what you have done. i am thrilled to be part of this. thank you. >> that held the senate on the board of supervisors, -- cynic a on the board of supervisors, sean elsbernd. supervisor elsbernd: thank you, mr. mayor. the mayor was right there behind all the numbers in every nuance, and really throughout the process. i cannot tell you how much i appreciate that. let's thank mr. helmland.

here we are. admittedly, i was a cynic. i was not sure this process would deliver. it absolutely has. this is a real reform. this is a real proposal that every single san franciscan can be proud to support come november. i think it is important to state we will save up to $800 million over the next 10 years. that is real sacrifice from our public employees. this is our current employees stepping forward and making real sacrifices. individual families will be sharing the burden. that is something that needs to be recognized and shown tremendous gratitude. i fully expect the voters in november will show that gratitude. i know the members of the board who are here appreciate that.

so, thank you to the mayor. thank you to the public employees who are here for stepping forward. [applause] mayor lee: part of this effort has been a new found relationship between the mayor's office and the board of supervisors. we cannot do it without leadership from both sides, lowering everything from egos to pass the blame and getting through the work of the city. i want to thank president david chiu for helping to lead this on the board. each time i met with individual members on the board, the wool idea of the pension was always an update. i want to thank all of them for their contributions, for their ideas, for keeping things moving forward, and their positive attitude for a very complex and

comprehensive challenged that we had. supervisor and for president david chiu. president chiu: good morning. today is a great day to be a san franciscan. this is the day we shall we are not washington, d.c. we show we are not sacramento, gridlock's for decades and drowning in liabilities. this is the day that we show we're not wisconsin and trying to blame things on our workers. i want to thank everyone for coming together. mayor lee, spots to vote for putting this at the top of the priorities -- thank you for putting this at the top of the priorities. warren helmand. i want to thank all our brothers and sisters from labor. not only have they been at the table for months, helping us put this together, but our employees

are going to be giving up thousands of dollars every year person. i do not think we can forget that. we have to thank over and over again our workers for stepping up and being part of the table. i not only want to thank our colleagues, but i want to thank supervisor elsbernd, who has made this his passion. he has educated us over the years, bring us together. on behalf of the supervisors, we look forward to making sure san francisco is with us and make sure that we will ensure the health and safety of our residents. thank you very much. [applause] mayor lee: we had to be guided by a level of expertise and everything that we did. i know the hardest working entity that helped all the

groups come together, recognize what we had to do, has been our department of human resources. kudos to you for all the expertise, the insights, the guidance you what had. what works and does not work, what could be negotiated, what had to be left on the side for future consideration, what could be done immediately. all those things were guided by strong expertise in the city. i want to personally wantmickey and martin fourth -- i want to personally thank mickey and martin for sacrificing so much personal time. you of done a wonderful job. come on up. [applause] >> thank you, mr. mayor. i appreciate it. i will not repeat all the things, except to acknowledge

our wonderful staff. stick your hands in the air as well. thank you. the themselves will also be contributing in the cost sharing. and of course, it has been wonderful to come together with labor in the city, and the way we do with especially in san francisco. i get to do what some people regard as the more boring parts, which is actually talk about what we did. as the mere mention, -- as the mayor mentioned, a keystone of this program is cost sharing by employees. that is giving us an immediate release starting at approximately a year from now in fiscal year fy2012-2013. the cost sharing will depend on the health of the pension fund.

real contribution rates, and based on the level of employee earnings, they will assist the city. it will become the employe e contribution. we cannot projects what our -- we cannot predict what our pension rates will be next year, but they certainly will not be going up and our employees will be part of that solution. that is where the bulk of the savings come from, that $800 billion is not cost sharing. we are different in that our model the employees to benefit when the rates do drop. we hope they drop sooner rather than later. what we are doing is moving to a shared growth model. shared risk, shared benefit periods -- shared risk, sure

benefit. they will benefit, as the city does, when the rates are ultimately reduced. in addition to the cost sharing, and let me also mention, the cost sharing follows a model that excludes the people who earn less than $50,000 a year. then there is a graduated bonus, reflecting the fact that they do have a more expensive pension plan. our plan also includes employees who are not in the retirement system. we have approximately 8000 city employees in the california pension system. they will be participating by three different methods. the details -- we have some months to work out, because they are extraordinarily complex. we are happy that our brother

and sister employees will be joining us in the program. we have new retirement tears. -- tiers. we are raising the minimum age at which one is eligible for retirement. this will encourage employees to stay longer. which not only reduces pension costs, but will reduce our costs for retiree health care. when people retire, we pay for their health care, and also for the health care to replace them. so, it is a two-for-one in that regard. on public safety, the retirement age is raised to 58 spurious -- to 58. we have a pension double salary cap which is 75% to 85% of the irs base. i can go into detail.

. very complex. we are moving to a final compensation. for new hires, so the final pension will be calculated for new hires a son their three highest years, another fine a one-year -- not their final one year. we are eliminating what has been known as the best in retirement, also known as the annuity program, for new hires. instead we will of the service retirement option which is approximately half the cost. we're very pleased about that as well. supplemental, which is paid when the funding has earnings in excess of that which is predicted, will now be paid only when the fund is healthy enough to pay them. so, the fund will have to be fully funded to pay those

supplemental cost. they will continue to be shared in payoffs, but only when the fund can afford it. also, our elected officials will be joining us in the cost sharing and paying their own retirement contributions as well. [laughter] and i'm sure they are happy about that. the health service board is in a very contentious issue because the city has wanted to move to the model from 2004. i would call the city appointee's beneficiaries of the fund. after much struggle, we have come up with the new model. the members of the health service board will be made up of 3 beneficiaries, members of the trust, three city appointees, and they will choose a tie- breaker, if you will, the

denominates by the comptroller. we're very happy with that compromise solution. that as a part -- a very large part of the increase in our health costs. a lot of that has to do with the decisions we make in terms of our health coverage. we are also, as mayor lee mention, already we're requiring people who hire -- people who were hired since january 2009 to contribute to retirement. it is an unfunded liability. did not pay for the health care they promise to their retirees. we started doing that in 2009. now, we will begin contributing in our wrap up, and acting out with unmatched -- maxing out with a matched contribution from

the city. this is only a minimum. the city and negotiate. -- the city can negotiate. there are certain retiree health benefits that were improved after people left city service, and the city will be making -- the amendment makes changes to ensure that any windfalls or benefit improvements that came after someone was no longer in city service will not be in effect. benefit improvements will be restricted to those who have not yet retired -- they will not receive benefits that were not in effect when they left. and that is pretty much my summary. i would like to thank everyone for working on it. thank you to the people who calculated all of it. [laughter] thank you, micki. mayor lee: very comprehensive.

we began with people asking, why should we sacrifice? what do we get for ourselves? and that great leap, i think, started very early to "what can we do to help to make sure our pension is solvent?" that is the changing role that labor has made. i was pretty excited from the beginning where we were making a lot of proposals. where we started having union representatives make their proposals, then we knew we were on our road to ultimately thinking together how we could solve this problem. again, i want to attribute, really, where the cost of this matter lies. and that is with our labor unions and labour representatives working together with us to build consensus so we all sacrifice to make our system work better. with that, i would like to introduce rebecca ryan. [applause]

>> thank you so much. i want to acknowledge my colleagues standing beside me and behind me. i think it is important to understand what a difficult process consensus is. it is always preferable, but what it requires is a balancing of many different interests. people stayed in the room when things get difficult. people continued the hard work. we did not allow ourselves to get sidetracked or splintered. i think there is a myth out there about public employees, and what i am here to say is public employees are the solution in san francisco. they always step forward. after the election in november, where they said to the voters, if there is a problem, we will figure it out and we will not shy away from it. they came together.

based upon the facts, they found a fair and equitable solution. and i think the message is, the employee -- coppell -- the public employees step forward and the right thing in the right way. that is what this measure represents. that is what we should be celebrating. these are real human beings that have to make real sacrifices. but we understand why. and believe me, nobody has a better interest in the financial health of the city and the programs and services it provides then the workers who provide them. so, thank you for the opportunity to do the right thing, and i hope that the message that is shared from this is that the workers in san francisco did do the right thing. thank you. [applause]

mayor lee: i also noticed from the san francisco labor council, we began with a lot of the union reps saying, "please just talk to was." after a few months, it was "ok, talk with us. " tim paulsen, from our labor council. >> thank you, mr. mayor. as you say, this is historic. i speak to my colleagues all over the country, and there has never been a partnership with a city family that we have seen like we have seen in san francisco. usually, someone has to run good idea or they're doing it unilaterally. and there's all kinds of friction. here in san francisco, we really have done it as a good way. where do we get business, labor, progressives, and moderates

coming together for solutions to save jobs and city services? here. in san francisco. by the way, this has also been done with the account of the impact on working men and women in town. this is done deliberately. this is done smartly. during those long, long meetings during which we crafted this proposal -- i want to thank warren hellman for helping lead this charge. i want to thank all the sector unions. the public safety, the lawyers. everyone was at the table. i want to give an extra shot out to the chair of our public employees union from local 21. i am surprised his marriage is still together, the amount of hours he has spent on this. i want to