The city's pension board will consider this summer replacing a plan for high payments over the next 12 years with less aggressive methods for paying down nearly $3 billion in debt.
San Diego may soon get a reprieve of roughly $100 million per year when the city’s pension board considers revamping its long-term plan to pay off nearly $3 billion in projectedCity officials say the money could be used to address urgent issues like crumbling infrastructure and severe staffing shortages they have blamed for inefficient delivery of neighborhood services.
That plan has been criticized by city officials for crippling city finances from now through 2036 and then giving the city abrupt relief in 2037, when the annual payment is scheduled to plummet from $450 million to $176 million in just one year. When the city’s existing plan is compared to a payoff plan with 20-year smoothing, the city’s annual contribution would be roughly $110 million lower than currently planned
The gap would steadily shrink until fiscal 2029, when the city’s contribution under a 15-year smoothing plan would be higher than under the existing plan — and would stay higher than the existing plan through fiscal 2037. The floor will make the contribution $58 million higher in fiscal 2029 than it would be if no floor was in place, and the impact of the floor would steadily increase through fiscal 2036, when it would elevate the contribution $136 million.
“That’s hundreds of millions of dollars that could be paid over a longer amount of time that we can’t use to fund our storm drain system right now, our water system, or hire new employees,” von Wilpert said. Von Wilpert said she understands the desire to be cautious regarding pension payments, especially in a city that was nicknamed Enron-by-the-Sea for a pension underfunding scandal two decades ago.“I certainly want to be on the right side of history,” she said.
If the board opts for 15-year smoothing, total payments would add up to $4.3 billion, and the debt would be gone in fiscal 2037. Under 20-year smoothing, total payments would add up to $5 billion, and the debt would be gone in fiscal 2042. The pension board invited Matt Vespi, San Diego’s chief financial officer, to plead the city’s case in January.
The current circumstances of the pension system are similar to 2007, the last time a major revamp happened.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Column: Wave, not just the Padres, have chance to deliver major sports title to San DiegoAlso: Xander Bogaerts battles a monster; Lamont Butler's pro potential; and a plea for Ted Leitner's return to talk radio
Read more »
San Diego nonprofit resumes older adult programming after pandemic hiatusAt Jewish Family Services, seniors can once again have a meal, enjoy company with their coffee and participate in classes
Read more »
‘They cannot say no’: San Diego officials target homeless encampments despite pushbackResearchers told the San Diego City Council to decriminalize things like blocking a sidewalk or sleeping where it's not allowed. It only makes homelessness worse. Less than 48 hours later, top city officials doubled down. From our partner inewsource ⬇️
Read more »
San Diego weekend arts events: MSG, photography and so many poetsThis weekend in the arts: Poets laureate at the downtown library; Medium Festival of Photography; indie bands Jupiter Flight and Nite Lapse at the Casbah; Mathieu Gregoire at ICE Gallery; Barrio Art Crawl and Fern St. Circus; 'Exotic Deadly: Or the MSG Play' at The Old Globe; and Prebys Play Day at Museum of Contemporary Art San Diego.
Read more »
Fletcher’s downfall another chapter in a history of San Diego sex scandalsNathan Fletcher’s abrupt resignation from the San Diego County Board of Supervisors last week puts him in a notorious pantheon of local Democratic politicians.
Read more »