Mayor Sam Adams wants to expand health benefits for City of Portland employees to include, for the first time, gender reassignment surgery.

Terry Richardson, the mayor’s liaison to city unions took the idea to Portland’s Labor-Management Benefits Committee last week.

Under the mayor’s initial plan, city workers would get a maximum lifetime benefit of $50,000 for gender reassignment surgery. The total cost to the city hasn’t been determined, Richardson says.

The proposed change comes as Portland enters labor negotiations with almost all of its represented employees. About two-thirds of the city’s 6,000-plus workers are unionized. Seven out of the city’s eight union contracts expire in 2010.

The added cost of covering reassignment surgeries would run counter to the city’s push on other fronts to save money amid the recession. So far, management has floated the possibility of a four-day work week, furloughs and no cost-of-living increases.

Richard Beetle, business manager with the city’s Laborers Local 493, says his membership hasn’t weighed in on the proposal yet.

San Francisco has already adopted policies to have employees’ health insurance cover gender reassignment surgery, which typically exceeds $50,000. Seattle has not.

San Francisco began its policy in 2001, with lifetime surgical caps of $50,000. Despite fears the program would overwhelm taxpayers, city leaders decided the plan’s first four years proved otherwise.

Between 2001 and 2004, the city’s health plan paid $156,000 on seven claims, according to San Francisco’s Human Rights Commission. In 2004, San Francisco raised its lifetime surgical cap to $75,000.