Retiree Health Benefits
Retiree Health Care Benefits for Former Housing Authority Employees
Extends San Francisco’s retiree health benefits to former employees of the San Francisco Housing Authority.
What the Measure Would Do
This measure would amend the San Francisco City Charter to provide retiree health care benefits to employees of the former San Francisco Housing Authority, which was absorbed by the City and County of San Francisco in 2019. To qualify, an employee would need to have begun work for the city after March 7, 2019, and before March 1, 2021, without a break in service between employment with the Housing Authority and employment with the city.
If the measure passes, approximately 25 former Housing Authority employees who now work for the city would qualify for retiree health benefits. The City Controller estimates an increased cost to the city of approximately $80,000 spread over many years. If it does not pass, former Housing Authority employees would have to start from zero in accruing retiree benefits, negatively impacting their ability to retire.
The San Francisco Housing Authority (SFHA) was jointly established by the San Francisco Board of Supervisors and the State of California in 1938. Until recently, the SFHA operated independently of the city and managed both public housing and the federal Section 8 voucher program (also known as Housing Choice Vouchers) for more than 20,000 San Francisco residents. The Department of Housing and Urban Development (HUD) requires at least 30% of Housing Authority employees to be public housing residents or very-low-income earners (defined as earning 50% or less of the area median income).1
SFHA has faced mounting financial and management challenges in recent years. In 2012, the agency was deemed “troubled” after a federal audit revealed a number of concerns, including a backlog of deferred maintenance on its properties. In 2013, then-Mayor Ed Lee led efforts to reorganize the agency, including the transfer of SFHA public housing properties into management by nonprofit housing organizations. In 2018, SFHA again came under scrutiny after discovering a $29.5 million budget shortfall due to accounting errors. Finally, in March 2019, HUD informed SFHA that it was in default on several
contracts.2 HUD requested that the City and County of San Francisco assume responsibility for SFHA’s essential functions and contract with a third party to oversee programmatic and financial administration.3
Today, SFHA is under control of the city and is called the Housing Authority of the City and County of San Francisco.4 The transition affected 90 employees represented by the Service Employees International Union, 25 of whom ultimately transitioned to employment with the city.5 The measure is a result of negotiations between the city and the union over how to provide retiree benefits to these new city employees. If the proposed charter amendment passes, these 25 employees would be eligible for retiree health care benefits based on the date they began working at SFHA, not the date they began working for the city. The Service Employees International Union supports the measure.
In San Francisco, city retiree benefits are based on length of employment and the year in which an employee started working. Prior to 2009, all employees were eligible to receive fully paid health benefits upon retirement if they worked for at least five years. They received these benefits even if they changed employers and ultimately retired from another organization.
In 2008, voters approved Prop. B, which changed the retiree benefits calculation for city employees hired in 2009 or later. Under the new policy, employees who began working at the city prior to 2009 retain the previous benefits package. Employees who began working after 2009 receive between 50% and 100% of the full retiree benefits subsidy based on their years of service. Prop. B made another significant change: The years-of-service calculation only applies for consecutive years of employment with the city and only if the employee ultimately retires from the city. All employees affected by this year’s Prop. C would receive benefits based on the year they were hired by SFHA and how long they have been employed by both the SFHA and the city combined.
The Board of Supervisors unanimously voted to place Prop. C on the ballot, and Mayor Breed is a co-sponsor. Because it amends the City Charter, the measure must appear on the ballot. It requires a simple majority (50% plus one vote) to pass.
• This measure would prevent serious impacts to a small number of employees at little financial cost to the city.
• This measure would provide critical retirement support to current and former public housing residents and low-income earners, some of whom are reaching retirement age and would have difficulty finding employment elsewhere.
• SPUR's Ballot Analysis Committee could not identify any downsides to this measure.
The eligibility of approximately 25 employees for retiree health benefits may seem like a small matter to take to the voters, but because eligibility is defined in the City Charter, there is no other way to modify the rules. Prop. C would prevent long-time Housing Authority employees from having to start at zero in accruing retiree benefits, increasing the likelihood that they will be able to retire. This is a matter of enormous consequence for the affected employees, who include current and former public housing residents and very-low-income earners. Both the population at risk and the small financial cost to the city make this measure worthy of support.
1 HUD, “Section 3 Brochure,” https://www.hud.gov/program_offices/fair_housing_equal_opp/ section3/section3brochure
2 Joshua Sabatini, “SF Preparing to Assume Control of Troubled Housing Authority in Face of Federal Takeover Threat,” San Francisco Examiner, March 8, 2019, https://www.sfexaminer. com/news/sf-preparing-to-assume-control-of-troubled-housing-authority-in-face-of-federal-takeover-threat/
3 Adam Brinklow, “San Francisco Must Take Over Troubled Housing Authority,” Curbed San Francisco, May 8, 2019, https://sf.curbed.com/2019/3/8/18256742/san-francisco-housing-authority-...
4 SPUR supported a reorganization of the SFHA similar to this in our 2013 report, Re-Envisioning The San Francisco Housing Authority, https://www.spur.org/publications/ white-paper/2013-06-24/re-envisioning-san-francisco-housing-authority
5 It is possible that additional SFHA staff could transition to city employment before March 2021 and be covered by this measure.