city whatsoever. >> supervisor, there is an overflow room. that room is available. supervisor kim: thank you. >> [unintelligible] supervisor elsbernd: mr. mcdonnell, the demonstrated commitment to the city through his resonate, and his work with his current occupation. and i just think the threat of not knowledge -- the brat of knowledge, and he is clearly a man of integrity. and it is that kind of integrity, from what i have heard, and will spread out

amongst the community. i think it shines through. it is something everyone else will benefit from. mr. alonso stood out to me as someone who would bring a breath of fresh air to something that was highly political. he would be the everyman at this committee. i think that would be very, very helpful with the group, and i think that group of three brings elements of diversity which we are striving to strike. it matches up well with the three who have already been appointed by the election commission, and it leaves the door open for few appointments from the mayor. so, those would be my top 3. supervisor kim: i think i concur with my colleagues that that wek

at balancing the other three members, to make sure there are a variety of perspectives and keep in mind those already appointed by the elections task force. given who has been appointed already, a heavily lean towards an asian-american and latino, as well as members from the east side of the city. i was very impressed with our candidates. i was also impressed by mike alonso and maria arreola. it is also important that we have an asian-american representation. anna yee was not able to make it today.

i would strongly support miss jenny lam as well, who lives in district 8 and works in district 3. i know and have worked with, to various expense, james tracy, mr. hogarth, and mr. mcdonnell. i think that they would be very fair. we do not have any lgbt task force members as well. and think it is important that that community is represented in this task force as well. the individuals i would consider in terms of supporting -- not because we do not have many other great applicants that would serve our task force well -- but given who has been appointed thus far and fun to

come up with a balance. there are a number of folks here i would love to work with in the future to my office to get acquainted and through a variety of other commissions. i know this is decommissioned that you all wanted to apply for, for many of you, the only commission you apply for. i know that folks have talked about ms. morales, and i know she has been active are around mental health and residency issues. i would love to work with her in district 6. supervisor farrell: we need to get three names out of here. let me bring a little experience to this. i was not on the committee 10 years ago, but i served a member of the board to was on the committee 10 years ago, and that was shared by my -- shared by my

then-employer. those three were in the same boat when they each have 3 folks that wanted. each server -- each supervisor put forward one named. collectively, those three names were submitted to the full board, and the full board approved. i recall supervisor sandoval had one name, the other two supervisors had to other names. we can move forward. of is that sound to my colleagues? -- how does that sound to my colleagues? supervisor kim: in terms of my personal vote, i am more than happy to send this out of committee that way, but i mean not be able to support all three that come out of this committee.

i am not sure who each member will pick. i am willing to do this to get this out of the rules committee. >supervisor farrell: i spoken about mr. mcdonnell before, and both of you mentioned him. we played for the same grammar school baseball coach. i, too, would be very happy to support -- this would be a great non-political point of view in the process. however we want to pursue this. i am happy to support those two. supervisor elsbernd: i think the thrust of the history lesson is that nobody got everybody they wanted, and it worked out as a compromise. this is a board that means to

serve everyone, not just one particular group of folks. so, maybe trying to work this out, hearing supervisor farrell's comment -- how about mcdonnell, lam. supervisor kim: ok. we have alonso, lam, mcdonnell. i am happy to put out these three individuals since they were on my list. supervisor farrell: that is fine with me. as it relates to ms. lam, but i have a concern -- nothing against your personally -- the

conflict. i think that is real. i think she is a woman with young kids. that is great. we need that in the city more than anything. i was very ready to support the three i mentioned in the beginning. but i do want a strong stand from us going forward. and i believe those three would be terrific. supervisor kim: all right. we cannot forward these three with recommendation. we have mike alonso, jenny lam, and eric mcdonnell. we do have to make this decision by tuesday, june 28, which is why we call the special meeting today. really -- >> really quickly -- supervisor kim: i really want to

thank our 23 applicants. it is great to see the breath of leadership and the passion. this is very important, one of the most important task force appointments the city is going to be making this year, and i want to thank everyone for the time it took to apply. we really appreciate that. i am happy that we have come to a consensus around three appointees, and we will be forwarding that to the full board with a positive recommendation. thank you. madam clerk, please call item no. 5. >> item 5 -- charter and and and to amend the charter of the city by amending the provisions adjusting retiree benefits and health-care benefits.

supervisor kim: my apologies. the chief sponsor of the amendment is supervisor elsbernd and so i will turn the chair over to him. i may have to leave and attend the budget committee, which is another committee i am a member of as well. supervisor elsbernd: we can do that real quick. we can do it real quick. two minutes. supervisor kim: my apologies. we do have a item number four, which we moved over so supervisor weiner could attend the budget committee meeting. i just wanted to open that up for public comment. many members of the public may have expected the item to come

up now. we did want to give everyone a chance to speak on the charter amendment. supervisor elsbernd: differ -- item four, supervisor weiner's proposal. >> i thought i watched this on tv earlier this morning. i was not aware he would be switching things around. i am asking you not to put this charter amendment forward. and think there are ways established to deal with changing these things, and i hope, maybe perhaps this will focus people's attention on us and a specific way to review a

voter past initiatives and to see if there's a need for review and to bring them back to the voter. i think this is not a good policy. it is basically not a democratic way of handling the situation. we have really excellent alternatives. thank you very much. >> judy berkowitz. passed a resolution urging you not to pass this on to the full board in any form, including the latest amendment. however, i do congratulate supervisor weiner for

accomplishing what heretofore only the planning department has been able to accomplish, and that is to unify many different sectors of the public behind something that does not serve the public well. the voters will. -- the voters well. i appeal for you to appeal this to the call of the chair or defeat it sammy write your. supervisor kim: is there any further public comment on this item? seeing none, public comment is closed. i believe there is such a consensus from community members -- i just wanted to say i do have concerns about this, but i appreciate supervisor weiner came in on items of ballot initiative to the voters. this will not impact any initiative or ballot measure

that voters have already voted on, and i think voters can certainly decide whether our perspective on measures in to dozen 12 should be able to a bent -- should be able to be amended by the supervisors. i am ready to for this item to the full board. colleagues? supervisor elsbernd: this recommendation? >supervisor kim: without objection, we will move this on to the full board. thank you. we will now come back to item 5. i defer to you, supervisor elsbernd. supervisor elsbernd: i do not need a big introduction. i am going to turn it over to micki callahan. this proposal has received a lot of attention, but it is 250 pages, and we have not had a

good opportunity to walk through all of the. i have asked her to educate all of us and the members of the public. the floor is yours. >> thank you, madame chair, supervisors. i am presenting an overview of the consensus measures initiated by supervisor elsbernd. i am also prepared to answer questions with respect to the technical amendments, the version that you see today, which is not particularly a substantive. however, i will review the general elements. first of all, we have elements that applied only to new hires. these are employees not currently in city employment and would not start until july 20 -- july 2012. for those employees, we have a tiered retirement plan.

currently, our retirement plans, as of several years ago, are based on a two-year final average salary. this is intended to address to spiking. additionally, we are capping the potential salary at the irs cap, or a lower number. the cap is 85% from the total and 75% to keep them comparable in terms of the reduction. note that in addition, a lot of attention has been paid to the idea of premiums and whether or not they are pensionable. premiums will not be calculated on hand pensionable salary. that is already the case for

overtime. supervisor elsbernd: it has changed from 24 months to 36 months? >> yes. supervisor elsbernd: can you point to other jurisdictions that are beyond 36 months? >> no, i cannot. in on aware of any jurisdiction that has more than 36 months. supervisor elsbernd: that would be the high-end? >> that has been the standard. most of these plans are created with a three-year final salary. there was a move to go to the current city employee is -- city employees, with the addition of those who have a two-year. for the maximum for miscellaneous would go from 2.3% of salary at age 62 to 3.3% at

age 65. to not only -- they do not only decrease our costs, but it reflects the fact that people are indeed living longer and longer working lives still. supervisor elsbernd: can you talk about the benefit of the change and what that means on the retiree health care side? >> absolutely. we have a comprehensive retiree health-care program. the most expensive retiree are those who retire early, that is before they are eligible for medicare. medicare provides a significant offset for as. goes to stay longer have a higher final salary, -- those to stay longer have a higher final salary. supervisor elsbernd: thank you. >> for police, fire, and chirac,

the safety groups, -- and sher iff -- it drops instead of the current 2.4%. the maximum stretches out, again reflecting the fact that people have long working lives than they did when this was still first to establish. and in addition, it is helpful to us for reduction in our unfunded health-care liability. miscellaneous safety is a small group. on the left hand of the slide. typically, they are juvenile counselors, district attorney investigators, etc., and they are described correctly as somewhat in between the two groups. and their benefits are accordingly sculpted. supervisor elsbernd: is this

also reflective of the pers employees? >> with the exception of the deputy sheriffs. they had the same instructions going forward as the new employees. we have -- this is an area where we have had a change since the original introduction. it was probably improperly known as divesting retirements. it is for those who have been here at least five years and do not work long enough to receive a service return the. initially we looked at creating a deferred service retirement for those in -- for those individuals in lieu of a service retirement. supervisor elsbernd: use me as an example. next year, i will be a city

employee, i will have worked for the city for 12 years, and i will be 36. >> he has not achieved age 50 or 60, therefore you do have the option to have what we call a vested retirement. it is really an annuity. they calculate the employee contribution. the city had made the contribution in some cases through collective bargaining for part-time, as i think in your case. that is doubled, and that becomes an annuity you can take out the bank that is an unusually rich benefit. supervisor elsbernd: does anybody else have that in a public agency? >> nobody else that we know of in a public agency. there are legitimate concerns as far as people who may not have

an opportunity to get a career benefit through no fault of their run. we initially put in a deferred service retirement. it would allow you to start drawing at age 60. that would not achieve the economies we had hoped for, so we had agreed with our labor partners to an amendment that would be a half match. it is a 1% match, and those are guaranteed savings, and all more important given our employee contributions. for new employees, it would only be paid -- supervisor elsbernd: i want to reinforce what you just said. this is new employees on the

supplemental. >> i am still on the element of the proposal that only applies to new employees. not only have the they retired, but they are not in the cities service. for those individuals, the two elements that applied to them, the fund is required to be paid and the supplemental would not be permanent. as you know, supervisor, from the retirement board, the supplemental is paid with the earnings better in excess of those expected. the mechanism that provides for repayment is independent of the status of the fund. even though right now we're climbing out of a really deep hole, given the market's losses of 2008, and yet the

supplemental was paid because the fund achieve higher than the 7.5% interest that was expected. this could be a change going forward. currently, the supplemental cola is build and -- built-in. when i retire in the future sunday, i would receive the supplemental cola. even when the city was not fully funded, even when there were no excess earnings, i would continue to get that extra money. it is an expression of the fund having excess earnings that they did not use. going forward for new hires, it would not be permanent.

it would continue to be paid until there were no excess earnings and it would be paid again in the future when there are excess earnings. supervisor elsbernd: let me just preface a question i will have when it gets to your return, and maybe, perhaps j.. defining these changes are around the supplemental cola are difficult. if you could prepare an answer, i would appreciate it. >> what i just described reflect long-term savings, because these apply to people who were not even on the city's payroll. it is the typical turnover of 5% @ year. so, the element most people are referring to when they talk about how much does it save in the next 10 years, the floating

contribution, the employee contribution. the employee contribution is set by charter for virtually all city employees at 7.5%. it varies. it goes up, it goes down, depending on what is in the plan, the demographics, but also, power the investments doing. we have encountered an unprecedented rapid increase in employer contribution. our current structure provides that the employer takes all of the risk, whether it goes up or down. the employer receives all the benefits. in the early 2000's, the employer did not have to make a contribution to the pension fund, at even as the employee contribution was being maintained as 7.5%.

our new model is we share on the additional payments required. we have a significant matrix -- i do not know if people in the audience can see it -- these materials are available to the public. in july 2013, that is when the city of labor contract expires, and the floating contribution would apply. supervisor elsbernd: let's now runover that point. i think that is a good point. it can impact current contracts? >> i think virtually all of our labor agreements expressly state that employees contributions are at 7.5%. they have to expire in order for

us to apply a different number. so, the majority of those contracts, certainly all miscellaneous contracts, are set to expire in july 2012. police and fire are set to expire in july 200413. -- july 2013. in july, we believe the contribution will likely be between the employer contribution -- it will be between -- it will be between 22 and 22.5%, for an employee he he makes between $50,000.100000 dollars on a pretax basis. employees at -- between $50,000

and $100,000 on a pretax basis. employees who make less -- as i mentioned, the contracts must expire for this to apply. u c above on the chart be numbers that reflect -- you see above on the chart the numbers that reflect when the rates drop. you go up for more you have a line of zeros, 1.5%, etc., of the existing 7.5% base. what we like about this model, we think it is a sensible for many -- this sensible for many reasons -- defensible for many reasons. supervisor elsbernd: