by JEC / Special to the OB Rag / October 26, 2010
The traveling troupe of City officials drew a small crowd to last night’s presentation at Point Loma High School of the City’s upcoming budget dilemma and promotion for Proposition D, the half cent sales tax increase on November’s ballot.
The audience of 27 mainly gray haired people listened solemnly as Chief Operations Officer (aka “City Manager”) Jay Goldstone opened the show. But before his second paragraph former City Attorney Mike Aquirre showed up walking among the audience distributing a faux invoice charging $2.1 billion for the City’s Pension expenses.
The gathering lacked the drama of the first meeting at University City High School on October 18th when the audience started lobbing questions like grenades. Last nights fete did not provide for dialogue, no open questions were taken from the audience and none were offered. People were invited to submit questions on an index card provided by staff.
After a series of boring PowerPoint presentations from five department heads; Police, Fire, Parks, Library and General Services (Streets), Goldstone provided answers to the index cards. It seemed he didn’t have time to answer all the questions; time limits.
In a nutshell, Police and Fire are slated for a cut of a little over 6 % while the other departments, including a few departments not represented, are facing a 23.7% reduction of their General Fund monies. For example Parks proposes cutting 191 FTE”s (full time equivalents) and closing all city pools, reducing or eliminating recreation centers, reduced maintenance at City parks. Fire rings would also be removed. With the long list of closures and reductions it was less clear what the Parks department was going to actually do with the remaining 614 FTE’s.
The push of course was for Proposition D. The tone was draconian, the death of a thousand cuts final blow should Prop. D not pass. Goldstone though had difficulty explaining why, in the face of these drastic cuts, the city was holding the budgeted reserve at 7%, “after all we did hope to increase it 7.5% to enhance the city’s credit rating.” The reserve, monies held back for a rainy day, amounts to about one-third of potential Prop D taxes.
One tough question, “Why are you building a new central library while cutting and closing libraries?” Answer: “the new library is being built without General Fund money.”
The money Goldstone was referring to comes from the Center City Development Corporation (CCDC). Called “tax-increments” in truth it’s simply property tax revenues. Over the last 38 years CCDC has enriched the downtown because increases in property values and the resulting increase in property taxes are not shared.
Consider publically financed Petco Park and the surrounding improvements. The additional property taxes assessed on those properties is reserved for the downtown only; nothing to the rest of the city, nothing to city schools. For what the citizens in the city’s neighborhoods spends downtown stays downtown. The big news is the debt service for Petco Park is now being paid by CCDC.
{ 8 comments… read them below or add one }
JEC, thanks for keeping the rest of us uptodate. You have raised some good questions, like what is Park & Rec going to do with over 600 people once all the Rec Centers and Pools are closed, and about the “rainy day” funds. Didn’t know it was even at 7%.
The OB Rag says you should hold you nose and vote FOR PROP D. Obviously, friends disagree. Our recent poll (just taken down) showed 52% against it, 4% unknown, and 44% in favor of Prop D with 91 respondents over a week.
Prop D is a pensions tax. Sure if Prop D fails, the city will punish the taxpayers by cutting services, but the 16% of the current city budget going to pensions and benefits is the real drain on the city. The city has a $1 billion annual budget and $2 billion in unfunded pension liability and as much as another $1 billion in unfunded retirement heath care. Raising taxes is just an attempt to kick the can down the road rather than deal with pension mess. This tax is regressive and solves nothing.
As long as employees can earn more in retirement than when they work, retire and get benefits before 60 years of age, use DROP, and not contribute a significant portion of their own income to retirement, this city will have a budget problem.
I’m voting NO wouldn’t give this city one more dime to waste!
Thanks for the update, will not bother to go to tonight’s meeting, will work on my
ballot instead –still have not decided whether I am going to hold my nose or not !!
RB’s comments need clarification, and I know others are blaming this tax on the
pension program for city employees. First of all, city employees DO pay into the plan, and the city was to match their contributions. This is the only retirement plan for city employees as the city opted out of their being in the Social Security program. Second, the problems started in the ’90’s when the CITY did NOT pay their contribution into the fund. They used it for other purposes. This went on for years, but there was enough in the fund to pay retirees due to the employee contributions and the investment earnings. Thirdly, the changes were made to increase the pension benefits when the economy was doing so good, but of course, we know that changed.
My point is that the employees are due a decent retirement program, and should not be blamed for the mistakes the city made in not making the contributions when they should have. Yes, new employees will not have the luxury plan that was negotiated under better plans.
Thanks, Nancy
Can you address RB’s claim that about retired city employees receiving more in retirement than when they are working? I’m relatively new to San Diego and don’t know all the history. However, when I see claims like that I have to wonder how anyone can justify it.
I’d appreciate the insight.
http://www.signonsandiego.com/news/2010/oct/21/prop-d-could-force-long-promised-drop-study/
Nancy’s comments need clarification.
When the whole city budget is $1 billion dollars annually and the unfunded liability is $2 billion for the pension and $1 billion for retirement heath care, when the budget already spend $160 million or 16% just to keep these amounts of unfunded liability from growing, this tax is for the unfunded employee pension plan liability. Yes, the employees did contribute a small part of the funds need for their pensions. Calling it a match is deceptive. The program was never an equal match, the employees never matched what the city put in to the pension fund. The employees need to put more into this Cadillac plan or end the plan.
As for Social Security, how can you expect the ruling class to live on SS like the rest of us? How can Social Security match the $80,000 per year more a city librarian can make in retirement above their working salary? Who other than a city worker makes more money in retirement than while working? Who other than a city council person can start earning a pension in their 40’s without any vesting period?
So who put the employees and taxpayers in this bad situation, corrupt elected representatives and corrupt union leaders, especially the three union leaders who were on the pension board. Employees should get a pension but it should be capped at 80% of the average of their highest three year of salary and the define benefits pension should be capped at $100,000. $100,000 is a very decent retirement.