Beyond the Ford severance scandal

Pub date June 21, 2011

Supervisor John Avalos and state Senator Leland Yee, who are both running for mayor, picked up on a populist issue last week, blasting away at Muni for paying outgoing chief Nathaniel Ford a whopping $384,000 severance. “With $384,000,” Yee’s website lamented, “the entire city of San Francisco could park free of charge for three days. Muni could be entirely free for a whole day. We could stripe seven miles of new bike lanes.”

In reality $384,000 is a fraction of Muni’s budget — less than half of 1 percent. And it’s a trivial amount compared to what CEOs get in the private sector — Peter Darbee, whose firm killed eight people and wiped out a neighborhood, walked away with $35 million when he left Pacific Gas and Electric Co. in disgrace.

But this is exactly the sort of deal that infuriates the public. When the cost of parking meters and tickets keep rising, and Muni’s on-time performance lags, why is the guy in charge, who’s leaving in part because he isn’t doing the job, getting such a nice golden parachute, courtesy of the taxpayers?

In the end, there’s not a lot Yee or Avalos can do about it. For one thing, the decision was made not by the supervisors but by the San Francisco Municipal Transportation Agency. Beyond that, SFMTA had only limited choices — Ford has an employment contract. And it’s hard to fire someone in the middle of a term of contracted employment without buying out at least part of the deal.

That’s the larger issue here, one that the mayoral candidates ought to be talking about. Why does the head of Muni get a special employment contract? The heads of the Police Department and Fire Department don’t get one. In fact, most department heads don’t get contracts specifying a term of office and including severance pay.

Those contracts can be expensive — Susan Leal got $400,000 when she was dismissed as head of the SF Public Utilities Commission. Arlene Ackerman got $375,000 when she left the San Francisco Unified School District.

No rank-and-file city employees get severance if they’re fired for cause (or if they negotiate a resignation to avoid disciplinary action). City department heads shouldn’t either.

We understand why school superintendents and Muni managers want those sorts of deals: If you work for a political agency, there’s always a chance that the people who hired you will be gone at some point and you’ll be working for people with different visions and political positions. But none of these department heads are paupers — they’re well paid, and, like anyone who takes a management job, they know that their job security depends on performance.

It’s akin, in a much more limited way, to what’s been happening in the private sector, where the top people get compensation that vastly exceeds what even the people immediately below them get. Muni’s assistant general managers don’t get employment contracts with golden parachutes.

San Francisco needs a city policy on special employment contracts — and rules barring excessive severance pay for management-level employees. The supervisors ought to ask the budget analyst for a report on which city employees have contracts, what they call for, and how they compare to what similar-level employees without contracts are paid. There should be hearing on this and legislation that clears up what is now an expensive — and disheartening — hodgepodge of private deals.