Congressman Bob Filner wants to fight over pensions at the ballot box.

Filner, a Democratic mayoral candidate, said he hoped San Diego’s City Council would vote to put his pension proposal on the June 2012 election, assuming a major pension reform measure backed by local Republican interests first qualifies for the ballot.

“You can’t fight something with nothing,” Filner said.

Fellow mayoral candidate Carl DeMaio co-authored the Republican pension reform measure and is collecting signatures to get it on the ballot. The measure would replace pensions with 401(k)s for most new city employees, among other changes.

There are two ways to get a measure on the ballot: collect signatures, which can be a costly and uncertain endeavor, or simply asking the City Council to do it. In this case, Filner could find a sympathetic crowd, with five of the eight council members hailing from his party.

Filner hasn’t finished a formal plan. He did outline his proposal in an interview Friday. It focuses on capping individual payouts and reducing the city’s annual pension payment.

Should Filner’s plan reach the ballot, it would likely cement pensions as the central issue in the mayoral primary. And Filner vs. DeMaio could become an intriguing intra-primary battle.

Filner said his proposal will include:

• A cap on individual employee pensions of around $125,000 a year. “All the horror stories, by the way, are not about the trash collector,” he said. “They’re about the management people.”

• Unspecified concessions from city employees, but he will not give them 401(k)s. A 401(k) plan would leave new city workers without Social Security, he said.

• A way to reduce the current annual pension payment, which is $231 million this year. Filner floated two long-discussed, but never implemented ideas: extending the timeline for repaying the pension debt and issuing bonds to pay it back.

The debate over how long to take to pay off the pension debt goes back years.

The city used to be on a schedule that didn’t fully pay off the interest on its debt, causing the principal to grow — what’s known as negative amortization.

As officials and leaders looked for pension reforms, voters in 2004 approved a ballot measure to repay the debt in 15 years. But the retirement system balked and eventually settled on a complicated formula that results in paying off debts in less than 20 years.

If pension debts aren’t repaid quick enough, the city’s pension burden would grow and it would force future generations to pay more. The current repayment schedule keeps that from happening.

Filner said voters wouldn’t care if the pension debt grew if it meant more money could be freed up to fix the city’s current problems. He’s considering a repayment period as long as 30 years, though the retirement board ultimately would have to approve it.

“The problem is now,” Filner said. “If people are saying no new taxes and they want their potholes fixed and I can lower the payment, I think that makes more sense.”

Similarly, officials have long discussed borrowing money to fill the pension debts. Current Mayor Jerry Sanders has considered it throughout his tenure. But Sanders deputy Jay Goldstone said the mayor never went through with them because of the risk.

“The timing was not right,” Goldstone said.

The risk stems from a bet on the stock market.

A city borrows money and plugs it into its pension fund. It’s hoping that it can earn more in investments than it pays to borrow that money. If that happens, it could free up millions for the day-to-day operating budget. If it doesn’t happen, the problem can get even more expensive.

Filner said his timing might be better.

“I haven’t been involved in the day-to-day discussions of that,” he said. “Now, I’m looking at it anew.”

Liam Dillon is a news reporter for He covers San Diego City Hall and big buildings. What should he write about next?

Please contact him directly at or 619.550.5663.

Liam Dillon was formerly a senior reporter and assistant editor for Voice of San Diego. He led VOSD’s investigations and wrote about how regular people...

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