San Diego Council Shoots Down Pension Reserve Fund Proposal

San Diego Mayor Kevin Faulconer last week called for the creation of a $21 million pension reserve fund, for the purpose of storing extra cash to ensure the city’s ability to fully cover unexpected fluctuations of future pension contributions.

But the San Diego City Council on Wednesday voted down the idea.

From Fox 5:

A proposal by the San Diego mayor’s office to create a reserve fund to cover unexpected increases in pension contributions was voted down Wednesday by the City Council’s Budget Committee.

[…]

Committee Chairman Todd Gloria noted that the SDCERS bill has been paid on time and in full for 11 years running.

“At first blush, I think this is a solution in search of a problem,” Gloria said. “Even with these variations, we have managed to address it, pay it and move forward.”

He also rejected the argument that a new reserve account would protect neighborhood services, since the $21.2 million proposed for the account could be used for other purposes during the current fiscal year. The money comes from a surplus generated in the fiscal year ended June 30.

On the other side, Councilman Scott Sherman said it would have helped if a pension reserve account was around several years ago, when a $75 million contribution increase led to a large reduction in basic library and recreation center hours, and prompted rolling cutbacks at fire stations.

Mayor Kevin Faulconer issued a statement saying San Diegans “have seen firsthand how volatile pension costs hurt neighborhood and infrastructure services, but today’s vote ignores that painful history and unnecessarily injects uncertainty into the city’s ability to continue making big investments in streets, parks and other programs.

The city paid $255 million towards its pension system in 2015.

Photo by TaxCredits.net