San Francisco supervisors weigh labor deals whose cost would reach $384 million a year

Six contract extensions on Tuesday’s agenda would give more than 22,000 city employees 12 percent raises through 2031 and a no-layoff pledge through mid-2029, and the controller estimates the added annual cost would reach $384 million.

By Staff Reporter

San Francisco’s Board of Supervisors is scheduled on Tuesday to take its first vote on contract extensions covering most of the city’s unionized work force, a package that would lock in 12 percent raises through mid-2031 and bar layoffs of permanent civil servants until mid-2029, even as the city works to close a long-term budget gap.

The six ordinances, on the board’s Oct. 20 agenda for first reading, amend the 2024-2027 agreements with the Service Employees International Union Local 1021; the International Federation of Professional and Technical Engineers Local 21; the Municipal Executives’ Association; Laborers Local 261; Plumbers and Pipefitters Local 38; and the association of investigators in the district attorney’s office. Each would extend a contract set to expire on June 30, 2027, through June 30, 2031.

Mayor Daniel Lurie’s administration offered the terms in August, months before formal bargaining was expected to begin, and the two largest unions ratified them in September, The San Francisco Standard reported. Tuesday’s vote is the full board’s first say, and it arrives with the controller’s estimate of what the deals would cost.

What the city would pay

In a cost analysis dated Oct. 8, Controller Greg Wagner wrote that the amended contracts affect approximately 19,000 authorized positions with a salary and benefits base of $3.7 billion in the 2027-28 fiscal year. He estimated the added cost at $18.3 million that year, rising to $130.7 million in 2028-29, $246 million in 2029-30 and $384.2 million in 2030-31, or about 10.4 percent of the base.

The SEIU agreement accounts for the largest share, about $199.7 million in the final year, followed by Local 21 at about $115.6 million and the Municipal Executives’ Association at about $45.4 million. Mr. Wagner wrote that approximately half of the increased cost would be supported by the General Fund, the city’s main discretionary account.

The raises arrive in eight steps, according to a Department of Human Resources presentation to the board’s Government Audit and Oversight Committee on Oct. 15: 1 percent on Jan. 1, 2028; then 2 percent each July and 1 percent each late December from 2028 through 2030; and a final 2 percent on April 5, 2031. That back-loaded schedule is why the cost is modest at first and grows steeply.

The controller found the costs close to what the city had already assumed: $3.8 million lower in 2027-28 and $0.7 million lower in 2028-29, and $5.3 million higher in 2029-30, than if the raises had matched the wage increases assumed when the current budget was adopted. The estimates exclude any cost of backfilling union representatives given release time to attend a new labor-management committee, the memo said.

The no-layoff pledge

Under the amendments, the city agrees not to issue layoff notices or lay off permanent civil service employees through June 30, 2029, a period that spans the 2027-28 and 2028-29 fiscal years. The agreements also create a citywide labor-management committee, with equal numbers of union and city appointees, that would meet every two months; unresolved issues could go to a mediator and, once or twice a year, to the mayor and the human resources director.

The human resources department told the committee that 14 of the city’s 27 unions had ratified the terms. The six before the board represent 22,384 employees, it said, and eight smaller units, including IBEW Local 6 and Automotive Machinists Local 1414, have ratified agreements not yet submitted. The mayor’s office asked the board to waive its usual 30-day hold, and the committee sent the measures to the full board on Oct. 15.

SEIU Local 1021 urged members to approve the deal in a September bulletin that cited federal budget cuts under the law known as H.R. 1. “It ensures that our members will not be laid off for at least three fiscal years,” the union’s president, Theresa Rutherford, said in the bulletin.

Mr. Lurie, who The Standard noted was elected without the support of public-sector unions, said in a statement after the September votes that the contract “honors their work, provides stability, and recognizes cost-of-living increases.”

A dissent, and a deficit

Not every unit agreed. A bargaining unit of nearly 2,400 city nurses rejected the offer, The Standard reported. Jennifer Esteen, a registered nurse on its bargaining team, told the outlet that a two-year layoff guarantee fell short for a four-year contract. “If it’s two years of protections, we want a two-year deal,” she said. Police officers and firefighters won 14 percent raises over four years in March, the outlet reported.

In their March update to the five-year financial plan, the controller, the mayor’s budget office and the board’s budget analyst projected a $642.8 million General Fund shortfall over two years and a structural gap growing to $1.09 billion by 2029-30 absent corrective action. The budget Mr. Lurie signed on July 30 closed the two-year gap and, his office said, reduced the structural deficit by about $300 million.

Because the raises closely track wage assumptions already in the budget, the controller’s comparison suggests the contracts would not by themselves widen those forecast gaps much. But they would set wages for most of the city’s unionized workers through mid-2031, and the no-layoff pledge would remove one conventional tool for closing a shortfall through mid-2029. The Standard reported in September that the mayor had not detailed how the budget would accommodate the raises.

The same SEIU local is at odds with another Bay Area employer: its Oakland members voted to authorize a strike as that city confronts its own deficits.

Because the measures are ordinances, they require a second board vote at a later meeting before going to the mayor.