Some great comments from the field including one regarding acronyms in today’s blogs. No one in their right mind would want to know this stuff off the top. I do only as a side effect of having lived it for about a decade now.
So, here you go:
CAFR: This stands for Comprehensive Annual Financial Report, normally produced every year by the city which is supposed to accurately reflect the city’s financial condition and contains the city’s financial statements. In September 2003, the city attempted to borrow $505 million from Wall Street using the 2002 CAFR which was discovered to contain errors and omissions. The $505 million deal was pulled off the market. In 2004 the city hired KPMG to reaudit its 2003 CAFR. However, it was not until last week that the city finally gave the unaudited 2003 CAFR to KPMG. You’ll find a lot of these acronyms in the CAFR.
UAAL: Unfunded Actuarial Accrued Liability, which reflects the amount of money the city owes the pension system to ensure retirement benefits will be paid.
SDCERS: San Diego City Employees’ Retirement System which is the entity that is supposed to administer the pension plan.
DROP: This is the Deferred Retirement Option Plan. San Diego has a “hybrid” form of DROP which is the subject of some controversy. The city’s DROP plan has some qualities of a defined benefit plan and some of a defined contribution plan. It is unlike anything anywhere else in that the city and employees may continue to make contributions to their DROP accounts even after they have “retired” under DROP.
MP1, MP2 and MP3: Manager’s Proposals 1, 2 and 3 are all backloading “deals” that were cut between the city and the pension board under which the parties agreed to let the city underfund the pension plan backloading the debt for future generations of employees, politicians and taxpayers.
– PAT SHEA