A change to the city of San Diego’s pension system that echoes of earlier and problematic underfunding deals is headed to the pension board for discussion tomorrow.
As our erstwhile City Hall reporter Rani Gupta meticulously documented earlier this year, the Mayor’s Office has pushed to consider changing pension accounting to in effect shave tens of millions of dollars from the city’s annual pension payment. The payment is expected to increase in coming years as the city continued to grapple with a structurally unbalanced budget.
Read her full story for all the details but here’s a good snippet:
It’s been a while since a San Diego mayor has been accused of tampering with the pension system.
But Mayor Jerry Sanders’ recent announcement that he is replacing three pension board members appointed before he took office has raised concerns that Sanders is angling to revise a relatively unknown aspect of the pension system.
Eliminating a provision known as “the corridor” could save the city tens of millions of dollars on its annual pension payments during upcoming years, softening the blow to the city’s budget at a time the city is dealing with flagging tax revenues. But it also raises fears that the city could repeat the mistakes of notorious deals that led the city to underfund the pension system.
Then, like today, the city was reeling with budget problems. City officials looked to the pension fund to ease its immediate financial problems, ultimately worsening the long-term health of the fund — and the city.
William Sheffler, one of the three pension board members who won’t be reappointed, said he found it curious that Sanders proposed replacing the trustees around the same time his staff started discussing the provision.
“It kind of smacks of an attempt to influence the board,” he said.
Mayor Jerry Sanders then convened a committee to study the issue, but its meetings were private.
City Council members Donna Frye and Carl DeMaio joined today with the San Diego County Taxpayers Association to oppose the change.
Update: In the original version of this post I incorrectly stated that the item was headed for a vote tomorrow. It is just being discussed. I regret the error.