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The most pressing issue facing San Diego is fixing the pension problem and dealing with the associated budget deficits it created.
The city of San Diego lost its ability to sell bonds that finance city government when rating agencies suspended our credit rating. That happened because city officials lied to investors in disclosure documents that, well, didn’t disclose. Among several undisclosed improper acts, according to the Securities and Exchange Commission (SEC), was the gross under-funding of the city’s pension system. More retirement benefits were promised to employees than the city’s general fund could afford to cover. The pension shortfall exploded, and eventually required a very large commitment of general fund revenue to restore the pension fund’s stability.
Because the city of San Diego has been shut out of the municipal bond market, private placements are necessary to finance basic infrastructure, like replacing aging water pipes and repaving cratered streets. These private loans are issued at higher interest rates. This costs taxpayers—you and me—tens of millions of dollars a year in added interest costs.
But Marshall is just the person to lead us out of this quagmire.
Marshall Merrifield possesses the financial expertise to guide San Diego back to an investment grade bond rating.
As you may recall from an earlier post, Marshall worked in municipal finance on Wall Street. He also has on-the-job experience complying with federal securities regulations. He knows what it will take to get San Diego back on track.
People offer many suggestions about how to deal with the pension obligations that weigh our city government down with debt.
I heard someone say recently the city should just unilaterally force all current employees to join a 401(K) plan like the rest of us. That person clearly doesn’t have the expertise to deal with this serious and complicated problem.
According to the law, once a pension benefit is vested, it cannot be taken away. Marshall supports a hybrid of defined contribution and defined benefit retirement plan for future employees that will reduce taxpayer risk.
Marshall Merrifield supports Kroll Report reforms as the blueprint for building toward fiscal health.
Marshall understands that City Hall cannot continue to be run as in the past. He supports Kroll’s recommendations to implement accounting procedures and controls that restore our reputation on Wall Street and facilitate reentry into the bond market.
Once back in the capital markets, Marshall will push to refinance the city’s $1 billion-plus municipal debt to get a lower interest rate and reduce the city’s expenses by tens of millions of dollars. Because saving money for taxpayers is a priority for Marshall, he speaks about it every chance he gets.
If you have not attended a candidate forum yet, please do. When you are there, I encourage you to find Marshall, shake his hand, and ask questions. I am convinced his personal and professional leadership qualities will impress you as much as they impressed me the first time we met in 2003.
I am honored to support Marshall Merrifield for City Council in District One and hope you will join me.