I am Joe Flynn, retired city employee….and member of
SDREA.
Insert –
ad lib – picked up on point that Carl DeMaio made, that “employees and retirees
are both victims of this problem.” Too
good to miss since Judi I., sees us as
the enemy. Tried to point out that
retirees would be the first to feel the brunt but active employees need to take
the long view and make sure the system is there and sound when they get there.
I am here today to support
the recommendations of the Pension Review Committee, in general, and
Recommendations #5, #11, and #13 in particular.
Those
three recommendations address Retiree Health Care, the second largest deficit,
and an item of great importance to retirees.
Recommendation
#5 states that Health Care should be funded separately. We know the
Retirement system was never funded for Health Care. When city employees received health care years ago, we gave up a
number of paid holidays to offset the cost.
So perhaps there was some money floating around over the years, but it
was never accounted for.
Which
brings us to Recommendation #11, which calls for separate accounting for
Retiree Medical Health Plan assets and liabilities. And specifically to identify contributions for the Health
Plan.
Recommendation
#13 calls for a shorter amortization period for the unfunded
liability. I would rephrase the PRC
recommendation to say, “When you are paying off the debt, shorten up the
repayment plan so you are always making a dent in the principle.” Those 30 year plans just put you deeper in
debt.
>>>>>>>>>>>>>>>>
(shift gears)
In
the past year the Pension Reform Committee members found the problems, and
provided a plan to begin the long road back.
I cannot say enough for the committee members who not only understood
the complex finance and accounting problems but condensed their task to a clear
statement of purpose and principle – all we have to do is tell the truth. And they have.
But you have a difficult task ahead for there
are
those who
still fail to see the problem.
Despite
early, detailed and continuing warnings over two years by Retirement Board
Member Diann Shipione;
By the Blue Ribbon Committee on Finance
By the Pension Reform Committee
By every print and film media in San Diego and throughout
the country,
And most recently by the Vinson & Elkins
Report……….
Page 2
But despite these detailed assessments of the
liabilities facing the Pension System and the City of San Diego there are those
who still do not perceive the problem.
Unfortunately, some of these individuals
are responsible for administering the Pension System. Earlier, the Retirement Board President allocated $90,000 to hire
a public relations firm to ridicule those who pointed out the problems with the
pension fund. This is the source of the
Chicken Little – the Sky is falling in story.
And
just yesterday I received in the mail the Free Spirit, the Retirement System
Magazine sent to all city employees. In
it I learned that an audit of the year 2003
“found nothing to indicate that our vested retirement benefits are in
jeopardy.” And that they were proud to receive a “clean” audit.
I
read that audit, and it did state cleanly that the system, as of June
30, 2003 had an unfunded liability of $1.157 Billion. But never fear; in that same magazine, we learn, “that in the
Fall of 2004 the sun and the moon and your pension benefits are all where they
should be.”
It
may be important to offer retirees reassurance where possible, but there is an
elephant in the room and no one is talking about it.
It has been said that the eye is blind to what the mind will not see, and that will complicate your task considerably.
But now, it is up to you, the Mayor and
Council to take charge, and begin work to restore San Diego to financial stability
and security.
Thank you