Escondido City Hall / File photo by Adriana Heldiz

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The Escondido council last week discussed the results of a poll gauging the political viability of a sales tax measure on the November ballot, but heated discussions about the city’s $300 million unfunded pension liability quickly took center stage.  

The tax measure in question is almost identical to one the council rejected in 2020, but support from residents and promising revenue projections for the measure have put it back on the council’s radar

The city-commissioned poll taken by more than 1,000 Escondido voters showed support in excess of 60 percent for the proposed sales tax hike, which aims to address Escondido’s growing budget deficit. 

Escondido had to close an $8.5 million deficit for the 2021/2022 fiscal year and projects that deficit to grow to $10 million annually over the next five years. 

The proposed one-cent sales tax increase is projected to generate about $28 million annually. About 62 percent of residents would support the measure if the tax hike did not have a scheduled end date, and 68 percent of residents could support it if it automatically ended in 20 years. Two thirds of voters would need to approve the tax increase. 

The current sales tax rate in Escondido is 7.75 percent, below the 8.25 percent tax rate in effect in cities like Del Mar, Oceanside, Vista, El Cajon, Chula Vista, Imperial Beach and La Mesa.   

Residents also indicated they would want to see the money address homeless issues, improve infrastructure and public safety, clean up and beautify the city and provide more affordable housing. 

But the city’s unfunded pension liability was barely mentioned in the survey, which Councilmember Joe Garcia took issue with, saying the city should have been more transparent with voters about the reality of where most of their projected debt is coming from. 

Pension liability is the difference between the total amount the city owes to retirees and the amount of money available to make those payments. 

Escondido currently has $300 million in unfunded pension liability and, in 2020, had a pension funded ratio of 70 percent, according to the California state auditor. 

The city has to make annual payments toward this debt to the state pension system. These payments are projected to range between $10 million and $22 million until 2044, according to a city staff report. 

A 2019-2020 report from the California state auditor that ranked the fiscal health of cities, including their pension obligations, listed Escondido’s pension funding as “high risk.” 

In comparison, Oceanside, the largest city in North County was ranked as “moderate risk,” with a pension funded ratio of 76 percent. Carlsbad, the third-largest North County city behind Escondido, was ranked “low risk” with a pension funded ratio of 78 percent. 

In order to make the payments toward these debts, Escondido has cut city services over the past few years including reducing staff, deferring infrastructure maintenance, outsourcing services, reducing the maintenance of city parks and eliminating some community outreach programs. 

Garcia argued during the meeting that the city should be doing more to inform voters about the city’s pension debt and said the language of the proposed ballot measure should also highlight the issue. 

“I think we need to be completely honest and transparent with the community and say we need to pay this, and we need your help to do this,” said Garcia. 

Mayor Paul McNamara disagreed, saying that city staff and the City Council have discussed Escondido’s pension debt enough to keep voters informed. He also argued that this debt will have to be paid regardless of this measure, so it doesn’t need to be explicitly identified. 

McNamara later said that if the aim is to be transparent, then language should also be included explaining that the Escondido’s quality of life will continue to decrease without this measure as more city services are cut.  

The tense exchange, which lasted several minutes, ended with the Council asking staff to come back at a later meeting with language options for the ballot measure that would include both suggestions.  

The Council has until Aug. 12 to put the measure on the ballot. If they decide to move forward with it, they still have to decide between a 1/2-cent tax increase, a 3/4-cent increase or a one-cent increase. 

In Other News 

  • Federal prosecutors charged North County educator and coach Daniel Dasko with allegedly distributing child pornography. Dasko was arrested last week in Carlsbad for allegedly soliciting sexual images and videos from young boys. He has taught in at least six North County elementary schools as a substitute teacher since 2018. (Union-Tribune) 
  • Oceanside is investigating recent allegations made against elected City Treasurer Victor Roy. The allegations first surfaced in an email sent from a city employee to Roy accusing him of trying to solicit campaign donations from city staff, inappropriate behavior toward staff, making bad investment decisions and more. The city said, however, that the investment issues are not part of the investigation. (Voice of San Diego) 
  • The California Coastal Commission is considering an appeal to Oceanside’s proposed revetment project, which would rebuild a two-block-long rock revetment on the beach along South Pacific Street. The appeal from staffers raised concerns about how the project would affect the sand, maintain public access, meet development standards and more. (Union-Tribune) 
  • Palomar Health announced plans to build a new 120-bed behavioral health hospital near its Escondido campus in partnership with Kindred Healthcare. The $100 million project is expected to break ground this year and begin accepting patients in 2024. (Coast News) 
  • The San Diego Humane Society is expanding its low-cost veterinary care services thanks to a $100,000 grant from PetSmart Charities. (Union-Tribune) 

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