For Immediate Release June 27, 2013

Contact: Office of Supervisor Mark Farrell Margaux Kelly Jess Montejano

415.554.7752 415.554.7733 415.554.7756

San Francisco Board of Supervisors Rules Committee Unanimously Recommends Approval of Supervisor Mark Farrells Charter Amendment
Supervisor Mark Farrell recently introduced a charter amendment to solve for San Franciscos $4.4 unfunded retiree healthcare liability

SAN FRANCISCO Today, the San Francisco Board of Supervisors Rules Committee unanimously recommended approval of Supervisor Mark Farrells charter amendment to solve San Franciscos $4.4 billion unfunded retiree healthcare liability to the full Board of Supervisors. The charter amendment was passed at the Rules Committee earlier today and is poised to head to appear on this years November 2013 general election ballot with the recent addition of cosponsorship from Supervisors Scott Wiener, Katy Tang, Norman Yee, London Breed, and David Chiu. Charter amendments from the Board of Supervisors require at least 6-votes in support in order to qualify for the general election. Im proud to have a broad coalition, growing by the day, that is supporting my charter amendment to solve one of our Citys last largest structural financial issues our $4.4 billion unfunded retiree healthcare liability, stated Supervisor Mark Farrell. It is critical that we plan for our financial future as a City, and passing this charter amendment will ensure that the children of today dont pay for our healthcare costs of tomorrow. Historically, San Franciscos retiree health plan has been funded on a pay-as-you-go basis, similar to Social Security at the federal level, where the current generation of taxpayers pays for the prior generations benefits. San Franciscos current retiree healthcare costs are estimated to increase from $150 million in 2013, to over $500 million in the next 20 years an average annual increase of ~8%. One of the most satisfying factors of this measure is that within 30 years we will be able to eliminate our $4.4 billion unfunded retiree healthcare liability without asking employees for additional concessions, and without reducing any benefits were simply requiring the City to be more fiscally disciplined and plan for the future, stated Supervisor Farrell. Supervisor Farrells charter amendment will effectively switch from the current pay-as-you system to a fully prefunded system that will be fully funded into perpetuity in the next 30-years. Farrells charter amendment caps San Franciscos payroll expenses for healthcare costs at 10% of payroll, so that city government can have even greater certainty in their budgeting process. Lastly, Farrells charter amendment will stop the Retiree Health Care Trust Fund (RHCTF) from the possibility from being raided in 2020, and will ensure that the RHCTF will do exactly what it was intended to do pay for city employee retiree health care costs. Im proud to wholeheartedly back Supervisor Farrells effort to get our $4.4 billion retiree unfunded healthcare liability under control, stated Tom OConnor President of the San Francisco Fire Fighters Local 798. Weve stepped up many times to work and give back

to the city we love, and we thank Supervisor Farrell for fixing a huge financial problem without balancing it on the backs of our workers. To date, Supervisor Farrells charter amendment has earned the formal endorsement of: Mayor Ed Lee, Supervisors Scott Wiener, Katy Tang, Norman Yee, London Breed, David Chiu, IFTPE Local 21, the Municipal Executives Association, the Alliance for Jobs and Sustainable Growth, San Francisco Chamber of Commerce, San Francisco Firefighters Local 978, San Francisco Police Officers Association, the San Francisco Council of District Merchants, and Protect our Benefits. Government must act effectively and efficiently to preserve vital city resources and to invest in education, job creation, economic growth and other priorities, said Bob Linscheid, President & CEO, San Francisco Chamber of Commerce. The San Francisco Chamber of Commerce puts its full support behind Supervisor Farrells efforts to reign in the citys growing unfunded health care liability. Responsible and compassionate efforts such as the proposed charter amendment are exactly what we should expect and deserve from our citys leaders. Supervisor Farrells proposed charter amendment will now head to the full Board of Supervisors for a first vote on July 9th with the second and final vote scheduled for the next week on July 16th. ###