From : Jim Gleason 8515 Costa Verde Blvd.
San Diego, CA 92122
Subject: Endorsement of Recommendations of Pension
Reform Committee
In 2002, the Mayor and Council's Blue Ribbon
Committee on Finance warned of financial problems with
the pension System. Those warnings went unheeded. In
his June 30, 2002 actuarial report, Rick Roeder had a
graphic with one arrow shooting up like a rocket.
This arrow listing substantial new benefits and
liabilitie of the CERS. The other arrow
petered
downward in the other direction and listed intentional
underfundings. The caption said; "Which
Way Ya'
Goin?" Your Pension Reform Committee has carefully
studied the problems for almost a year and is making
solid recommendations to re-gain stability of the
System. April Boling and her committee are to be
congratulated for diligent, professional work ---at no
cost to the City. Their work should be accepted and
implemented.
Vinson & Elkins presented a blueprint of the problems
already reported by Diann Shippione . Mike Conger
honed in on these same problems with precision, and
presented solid legal grounds for the Retirement Board
to rescind its infamous MP II action.
Incredibly, the City Manager and Fred Pierce,
President of the Retirement Board, attempted to shoot
down the warnings of Ms. Shippione and Mr. Conger.
$90,000 of retirement trust money was allocated to
hire a PR firm to mis-inform, and to discredit
Shippione and Conger. Needless legal fees followed.
But now, let's fix it!
1.) Freeze, or lower payroll/salaries.
The PRC
properly warns that thirty- year amortization,
provided in the lawsuit settlement will initially
result in negative amortization because of salary
increases. This can be mitigated by freezing or
lowering the payroll until employer and employee
contributions can be set at actuarially determined
matching levels for 15-year amortization.
2.) Reform the Meet and Confer Process. Since 1996,
management has negotiated with employee unions to
underfund employer and employee contributions and
to
create lavish new benefits -for rank and file
employees--and management personnel.
.
Management negotiated with the unions and
simultaneously established management personnel's
benefits.its own benefits! Fix it! The
Management/Union negotiating team then sat
on the
SDCERS Board to act on commitments they had already
agreed to. Fix it!
On November 18th, 2002, The City manager, Auditor and
City Attorney allowed "Manager's Proposal II" to go to
Council docket on the Consent Agenda. Each of these
entities should have stopped the measure at that time
because of conflicts in the plan's creation and the
absence of a fiscal impact analysis showing the
"downside" of the scheme.
There was no incentive for management to manage. The
Auditor left with a pension of just under $8,000 a
month. A Deputy City Attorney gets a $10,000 a month
pension. A Deputy City Manager receives $12,000 a
month. Each of these latter two could also have over a
million dollars in their DROP accounts. Why should
they upset the money wagon? To put this $12,000 a
month pension in perspective, that is the total amount
received by the combined 60 older retirees at the low
end of the pension scale.
And, the rascals are not learning. Last Friday the
Retirement Board decided to discontinue publicly
disclosing the amount of pensions being granted. The
amounts of current pensions are the problem, the
public should know!
One of the pension amounts not disclosed last week
was that of a union president - not a working City
employee - a pension based on work performed for the
union-not service to the City. Will taxpayers
understand that sweetheart deal? How can this be
justified to be in the public's interest?
There is work to be done. A Council-appointed
independent professional team should be created to
oversee reform implementation. PRC members are logical
choices for this assignment.