January 26, 2011
CONTACT: Chris Cate
619-234-6423 or email@example.com
Gayle Lynn Falkenthal, APR
619-997-2495 or firstname.lastname@example.org
Cost of Pension Obligations Escalating for Taxpayers Across San Diego County
Failure by city leaders to enact reforms may result in cutbacks to city services
(San Diego) – While the City of San Diego’s employee pension challenges remain in the headlines, most of the remaining 17 incorporated cities in San Diego County face their own serious increase in pension liability costs for the upcoming FY 2012 budget year.
According to a recently released report by the San Diego County Taxpayers Association, the 17 cities participating in the California Public Employees Retirement System (CalPERS) will pay an additional $16.3 million next year, with the total unfunded liability for all retirement plans increasing by $145 million, which is more than 30 percent over this year.
The hardest hit cities will be Chula Vista, El Cajon, and Oceanside. Next year, Oceanside will pay an additional $3.7 million for employee pensions; Chula Vista will need to pay an additional $1.9 million, and Carlsbad another $1.7 million. While Oceanside will see the largest increase in terms of dollars, Lemon Grove will see the largest percentage increase at almost 34%.
These contribution amounts do not include the cost of cities to “pick-up”, or pay, a portion of the employee’s required pension contribution.
At over $36 million, or almost 77%, the City of Oceanside also saw the largest increase in its unfunded liability. Coronado and Vista rounded out the top 3 in increases to its unfunded pension liability, with increases of 51% and 43% respectively.
In June 2009, SDCTA issued formal pension reform recommendations for the 17 cities in the County of San Diego participating in CalPERS, and it enthusiastically supports the actions taken to date by these cities since its recommendations were published.
“Modest, sensible measures have already made a huge difference in some cities for their taxpayers,” said April Boling, SDCTA board member and former chairperson of the City of San Diego’s Pension Reform Committee. “Asking employees to contribute a small, reasonable amount to their own pensions and establishing modest retirement programs for new hires adds up.
“The savings can then be used to invest in services such as improved public safety protection, infrastructure repair and maintenance, and keeping libraries and parks open longer hours – all without raising taxes to do so. And in the long run, it will preserve jobs for city employees.”
“The San Diego County Taxpayers Association urges elected officials, city management staff, labor leaders and employees to work together in a spirit of collegial problem solving to rein in these costs before forced to make hard choices,” said Chris Cate, SDCTA Senior Director of Policy and Operations. “It’s smart fiscal management and we must see more of it in the future if cities are to avoid drastic cuts in services to their citizens.”
A copy of each city’s newly released pension valuation report can be accessed at the new San Diego County Taxpayers Association Data Center online at www.sdcta.org. There is a small membership fee for accessing these reports, which also allows access to other materials in the SDCTA Data Center.
The San Diego County Taxpayers Association is a non-profit, non-partisan organization, dedicated to promoting accountable, cost-effective and efficient government and opposing unnecessary new taxes and fees. Founded in 1945, SDCTA has spent the past 66 years saving the region’s taxpayers millions of dollars, as well as generating information to help educate the public.