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 knowledge everyone surrounding us today. some of the other people working. i know tommy o'connor from the firefighters. the police representatives. along with the board of supervisors. there was a lot of number crunching to people were fully prepared when the move to the table. this is historic. i am really proud of both the public sector and the private sector that we can craft this

kind of resolution. thank you. [applause] mayor lee: i also said the transparency was well beyond the labor unions as well, as well as our city workers. so, i know this transparency was reflected in the san francisco chamber of commerce and their ongoing participation. they listened very quickly to our efforts. >> thank you, mayor lee. the chamber of commerce and the entire business community of san francisco want to thank you for your leadership, and supervisor tells burns -- supervisor tells burns -- supervisor elsbernd, for your leadership. businesses have had to reduce their work forces. we have 40,000 unemployed san

franciscans. it was time that we faced the reality of helping the city of just -- i just needed pension reforms. we're pleased to be part of this process. again, the best kind of reform is consensus reform. there are many times when you see in front of you city leaders, labor leaders, business leaders agreeing this is the right solution of the right time. thank you, mayor, again for your leadership, and we look forward to balancing the city budget and getting a raw economy back on track. thank you. [applause] mayor lee: by the way, if you are keeping count, i counted nine supervisors here. the other two who could not make it, i believe it was because they could not get here on time. we also have with us david

metcalf from spur. we had a representative from the labor foundation. i also want to emphasize tim paulsen stood up for working families. that included rebecca ryan, roxanne sanchez, tom o'connor, tim paulsen, and we are joined by the fire chief joann hayes- white. i want to make sure i recognize throughout the process that our city attorney contributed to all the legal questions that came up. knowing how difficult these aspects were, they stepped up to help us review all these

proposals. with that, this press conference is concluded, and we will move forward. yes, we will take questions. >> [unintelligible] >> first of all -- [unintelligible] in this proposal, we're talking about 35%. how can we afford that? mayor lee: it does, but obviously we have a long-term view on this. our talks relations indicates -- our copulations indicate this over 10 years. a lot will depend on how -- our calculations indicate the server 10 years. a lot will depend on how our investments do. we've always said employee

contributions would be the major part and for a lot of current sacrifices are reflected. >> 35% -- it never gets to 35%. [unintelligible] mayor lee: it is a safety net. we have made the calculations just in case. >> [unintelligible] mayor lee: the very first year this takes effect, we anticipate $60 million in year 2013. in addition to that, all the new hires will begin contributing in a different way beginning january of next year. that is the savings. there is no smoothing in this process, because there is no

smoothing in the economics of what we are facing. so we did not consider that a dog. >> the 10-year plan will not get going before a couple of years. mayor lee: we do have labor contracts in place right now that we have to honor. we currently have a lot of obligations that we have to honor with current retirees. so we did not touch that the legal obligation. so we had to start making significant changes as of nest -- next fiscal year. >> [unintelligible] mayor lee: the service employees are right here. they are right here among us. >> [unintelligible] can you talk about how they came on board? >> i would just say, we are happy to be here today. [laughter]

i am the staff director in san francisco for the service employees. i am joined by members of our bargaining team. we are pleased to be here. we are especially thankful to warren hellman for his guidance and participation. we do have meetings with the mayor, issues we will be discussing. it is a healthy process and we're happy to participate. >> [unintelligible] >> we will be discussing with the mayor. >> analysis negotiation different from previous years? >> negotiation is always a difficult process. both sides come in with their interests and ideas. what was different is we spent a great deal of time at the beginning and got beat up from the press because of the time that we did take because -- so that we fully understood what was going into the discussions.

>> there is a particular elected official not ammonia. [unintelligible] mayor lee: i did meet with him yesterday. we explained our proposals. we will leave it to him whether he wants to present those or not. we to believe that our consensus approach is the right thing to do. it signals that if you do want a sacrifice, you have to work directly with people who will offer that sacrifice and will do it in a way which is comprehensive and reflective of the values of san francisco. that is what we have done. i leave mr. adachi to his viewpoint. i am sure he has to recognize this is the official city family and he does not represent that. >> [unintelligible]