Yep, it's true: San Diego City Council President Scott Peters says the problems the city's been having trying to meet its employee-pension obligations are under control and well-managed. The crisis, qua crisis, is over.
The pension emergency emerged in 2004 when a decade of mismanagement left the pension system only 68-percent funded. But since then, Peters argued, the City Council has ended some of the most severe abuses, the executive-mayor government has set up a payment plan to re-fund the accounts, and San Diego never missed a bond payment anywhere along the way.
'We are making all of our payments; we've cleaned up our act here. It's 80-percent funded,' Peters told CityBeat.
What really burns Peters' toast these days is the boilerplate language used in numerous news stories (including in CityBeat) referring to San Diego's 'pension crisis' as shorthand for the present state of San Diego's finances
'The pension is still an issue,' he said. 'What concerns me about labeling things as a crisis is it takes attention away from other things, like brush management, fire prevention, parks, other things that when you say that's a crisis that anyone pays attention to.'
Meantime, City Attorney Mike Aguirre nearly lost his temper at the idea that the crisis has ended.
'It's actuarial hocus pocus,' he said.
He noted that the city just gave a 9-percent salary bump to its police officers, which will raise the pension's requirements, and that the current pension-system funding level relied heavily on unexpected gains in the stock market last year.
'It just shows you' Aguirre said, that Peters 'has learned absolutely nothing from the misconduct he did before and the damage he's done to the city.'
The city's acting chief operating officer, Jay Goldstone, said he doesn't take issue with the notion of a city still in crisis.
'I don't totally react to it because I wasn't here' when the mismanagement was occurring, he said. 'I was brought in as part of the team to help right the ship.' He concurred that the fund is now 80-percent funded, and a plan is in place for coping with the missing 20 percent. 'We still have a ways to go. Does that mean there is no crisis? I don't know if I would characterize it that way.'
The city is unlikely to file for bankruptcy, he said, but the chasm between money the city owes to its retirees and the money it has in the bank still yawns deep and wide. Consider that Aguirre believes the pension-fund gap must be paid off in 15 years, rather than the 20 years planned by Goldstone. And the city owes all retirees who worked for the city before 2005 health insurance for the rest of their lives. There again Goldstone has a plan of attack, but it will add between $50 million and $75 million in annual budget expenses. Combine that with the need to meet a billion-dollar sewer-repair court order, the need to make up for capital maintenance backlog and the fact that most of the painless solutions to meeting the budget gap have been applied, perhaps the dire term of art should be 'looming budget disaster.'