News in Depth
Councilmembers Vote 6-3 (O'Donnell, Gabelich Lerch Dissenting) To Give Themselves Retirement Health Insurance Benefit, Reworded To Delete "Sick Leave" Verbiage But Substantively Paralleling Benefit Council Gave Exiting Mayor O'Neill In May
City Att'y Shannon Says Council's Actions Are Not "Golden Handshake"; We Post Extended Transcript Excerpts
(July 16, 2006) -- At its July 11 meeting, the City Council reworded, and then voted 6-3 (Councilmembers Patrick O'Donnell, Rae Gabelich & Val Lerch dissenting), to grant itself a retirement benefit substantively equivalent to 50 hours of sick leave per year of each Councilmember's incumbency for taxpayer-paid health insurance after leaving City Hall.
At the urging of Councilwoman Suja Lowenthal, the benefit was reworded to avoid calling it sick leave. The end result puts Councilmembers on a par with citywide officeholders (City Attorney, City Prosecutor, City Auditor) to whom a past Council gave the benefit in 1997, and Mayor O'Neill...to whom the present Council gave the benefit in May 2006 (8-0 vote) just weeks before her scheduled retirement.
The terminology now reads, "The City Auditor, City Prosecutor, City Attorney, City Council and Mayor shall, upon retirement, be provided with a retirement health-care benefit to be calculated as a credit in an amount equal to fifty hours of compensation for each year of their elected service, for utilization in accordance with the provisions of section 210, 211 and 214 of the city's personnel ordinance."
Those voting "yes" on the Council-retirement benefit were Councilmembers Bonnie Lowenthal, Suja Lowenthal, Frank Colonna, Jackie Kell, Laura Richardson and Tonia Reyes Uranga (motion by Kell, seconded by Colonna).
LBReport.com posts extended transcript excerpts of the July 11 Council action below.
In a May 23, 2006 action, the Council voted 8-0 (2d district vacant) to grant the retirement benefit [50 hours of credited sick leave for each year of her incumbency] to Mayor Beverly O'Neill just weeks before her retirement, adding her to the offices of City Attorney, City Auditor, City Prosecutor made eligible for the benefit by Council action in 1997.
For O'Neill (with twelve years in office), the taxpayer-paid benefit amounts to about $31,000 worth of taxpayer-paid health insurance. For Councilmembers, it amounts to about $5,200 for each eight year exiting Councilmember (must be at least age 50 with five years covered employment to qualify). Although Councilmembers are only paid 1/4 of the Mayor's salary, they receive taxpayer-paid health insurance benefits while in office; the retirement benefit they gave themselves effectively means they will receive taxpayer-assistance in buying health insurance for some period of time after they leave City Hall.
The May 2006 item for Mayor O'Neill was agendized by management as a "consent calendar" item on which public discussion wasn't expected...but drew our attention after Councilwoman Tonia Reyes Uranga pulled the item to discuss giving the retirement benefit to Councilmembers too.
LBReport.com had labelled the benefit for the Mayor and Councilmembers a "golden handshake" -- an description disputed by City Attorney Robert Shannon:
City Attorney Bob Shannon: ...Reference has been made to the fact that this proposed compensation is a "golden handshake," either a golden handshake or a golden handshake to the other Councilpeople, and if that were the case then it would be inappropriate for you to, as a policy matter, to grant it to yourselves. And I'm not saying which way you should vote on this, please understand this. But if you are inclined to do that, it would be because you recognize the fact that these categories of employees, and only these categories of employees in city employment, cannot accumulate sick leave for the purpose of post-retirement health benefits. Everybody else can do that. [T]hese are the only categories of employees that cannot accumulate sick leave. So if you do grant yourself and these other categories of employees these benefits, you're doing it because there's a perceived inequity and it's the fair thing to do.
The Council action comes four years after the Council voted 9-0, with Mayor O'Neill presiding, to boost the pensions of non-public safety city employees. The action, which carried long-term, costly taxpayer consequences, was scheduled for the last meeting of an outgoing Council and the first day of an incoming one; voting yes were then-Councilmembers B. Lowenthal, Baker, Colonna, Carroll, Kell, Richardson, Grabinski/Reyes Uranga, Webb and Shultz/Lerch.
Salient portions of the July 11, 2006 Council discussion follow. Our transcript is unofficial, prepared by us:
Councilwoman Rae Gabelich: ...I believe that...the position of the Council should be compensated better than what it is today, but I don't believe that this is where we start this, so I'll be voting against it.
Councilwoman Suja Lowenthal: ...I feel that there is a problem with the way this city is structured in terms of how it has a structure for the Council position but the way to correct that isn't to add on these smaller components toward the end, but I do respect and value what one might try to accomplish with this, so my other question, thought, suggestion, is could this be reworded. I don't truly feel it is "sick time"...If it can be reworded as a benefit at the end of one's service to purchase health benefits I think that would be a very honest way to go about it and I would support that but calling it sick time I'm having problems with it.
Councilman Val Lerch: ...I don't feel that giving us sick leave for somebody who's not accountable to their sick leave, if I'm sick tomorrow, that bank doesn't go down; it stays at the full amount; I think it's a backdoor way of giving us some compensation. I agree that we don't get paid enough and we ought to look at other ways of doing it but to me this is just a backdoor compensation and I will be voting against it too.
Councilmember Bonnie Lowenthal: I have to say I am supportive of this. I need to turn the tide here. I think it's very reasonable...I believe that it's most appropriate for elected officials to have parity with the other citywide officials, the Mayor, the Auditor, the Prosecutor and the City Attorney who do also receive this benefit. As I understand it, we are unlike other cities that do have retirement health care...I think this is a very small amount of money that would be put to use in any retirement health care benefit that Councilmembers, or the Mayor, or the other citywide elected officials are eligible for. So I feel it is legitimate expense and appropriate for City Councilmembers...
[Councilmember Reyes Uranga invites comment from city staff]
City Manager Jerry Miller: ...In my reading of this, this is a fairly modest benefit that could accrue to part-time elected officials...
Councilwoman Jackie Kell: I'm in favor of all city employees receiving health care upon retirement, health insurance.
Councilman Val Lerch: ...If I'd been here when the City Attorney and the Mayor had gotten this. I would have voted against it. [Comment: The Councilman apparently misspoke; he was part of the 8-0 May 06 vote to give the benefit to the Mayor.]. And I may bring a resolution to ask that all future elected officials in all categories not get it. And just because the full time elected officials get it doesn't mean that we're entitled to it. Unless you're going to, if I'm out sick next week, you're going to depreciate my bank, then I'm OK with it, that's the difference. We're just gettin' a benefit that we just get to sit there; eight years later, we get to walk away no matter how many times we've been sick or how many times we haven't been at work. Does that make sense to anybody? Obviously not, but that's the problem here.
Councilwoman Suja Lowenthal: ...I would really like some advice from staff on what kind of language, how this could be reworded to reflect what this really is, which would be the ability to purchase health insurance at the end of one's service. That's something I'm not opposed to. I am opposed to calling it sick time...
Councilwoman Reyes Uranga: ...The National League of Cities indicated that a city our size, City Councimembers work on an average 44-60 hours a week, so we don't just sit here...When we talk about part time versus full time, the [City] Charter does not state that we're a part time Council. The Charter states that we are compensated part-time. We are a full time Council that is compensated on a part-time basis...
City Attorney Bob Shannon: [responding to S. Lowenthal's request to reword benefit]...It really is semantics here. It really is an attempt to provide a retirement benefit, and that's really the only reason, in fact, that it's an attempt to provide a retirement benefit is the only reason why you can apply this retroactively. This is not the first time this has been done. Of course you did this with the Mayor a couple of months ago but you did this with the then-City Attorney, City Prosecutor and City Auditor in 1997 and at that time you gave them significant, one could say retroactive benefits but they're deemed to be retirement benefits and therefore they're legal. If they were not deemed to be retirement benefits, which is what you're wrestling with, if they were not deemed to be retirement benefits, they could not be applied retroactively.
...[Council colloquy on wording; Council moves on to other agenda items, then returns to this item]
City Attorney Bob Shannon: Madam Mayor, we've attempted to come up with some language, and I believe this is acceptable at least to the Councilwoman from the Second district, and it will be articulated as follows: "The City Auditor, City Prosecutor, City Attorney, City Council and Mayor shall, upon retirement, be provided with a retirement health-care benefit to be calculated as a credit in an amount equal to fifty hours of compensation for each year of their elected service, for utilization in accordance with the provisions of section 210, 211 and 214 of the city's personnel ordinance."
Mayor O'Neill: Was that wording to your liking?
Councilwoman Suja Lowenthal: Yes.
[Mayor invites public comment]
Joe Weinstein: ...Someone from the public has to express that there has been considerable public outrage over you voting yourselves any kind of perks. And I realize that you're in a bind. First of all under normal circumstances, voting yourself extra perks is simply unethical. It's just unethical politics. On the other hand, the Charter puts everything in your hands; the buck has got to stop with you. There's got to be a solution...The solution has to be to amend the Charter so that all bucks do not stop with you...We very badly need an independent review body or a second legislative body, whatever you want. Just remember, we celebrated 230 years of independence of this country which was brought about because colonists felt they had not sufficient representation to justify the taxation...
City Attorney Bob Shannon: Could I just make a brief comment, Madam Mayor. Reference has been made to the fact that this proposed compensation is a "golden handshake," either a golden handshake or a golden handshake to the other Councilpeople, and if that were the case then it would be inappropriate for you to, as a policy matter, to grant it to yourselves. And I'm not saying which way you should vote on this, please understand this. But if you are inclined to do that, it would be because you recognize the fact that these categories of employees, and only these categories of employees in city employment, cannot accumulate sick leave for the purpose of post-retirement health benefits. Everybody else can do that. Every other employee, and believe me before I was City Attorney, I was very conscious of this, I accumulated sick leave time, didn't take sick leave, because I knew at the time that I retired I would have this bank of sick leave to use to apply to my post-retirement health benefits. These categories of employees, and of course once I became City Attorney that stopped, and it stopped with regard to the other categories, these are the only categories of employees that cannot accumulate sick leave. So if you do grant yourself and these other categories of employees these benefits, you're doing it because there's a perceived inequity and it's the fair thing to do...
[Council vote: Yes: B. Lowenthal, S. Lowenthal, Colonna, Kell, Richardson, Reyes Uranga. No: O'Donnell, Gabelich, Lerch].
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