Unexpected Pension Bill Blows San Diego's Budget

The city of San Diego made its full annual pension contribution Monday, just days after the San Diego City Employees Retirement System board failed to lower its bill to the municipal government.

The payment blew a $25 million hole in the city's budget for the fiscal year that started today because the mayor's office and City Council built the spending plan around a recent agreement with employee unions. The budget writers expected the retirement contribution to go down by that amount as a result of the deal.

However, the SDCERS board came one vote short last week of lowering this year's contribution from $275.4 million to around $250 million.

An SDCERS spokeswoman said if the board later recommends a lower bill, tax laws will prevent a refund from being issued to the city. The result is the $25 million in expected savings won't materialize.

More than $19 million was slated for the city's general fund, which pays for basic services like public safety and recreation centers.

Todd Gloria, president of the San Diego City Council and head of its Budget Committee, said city officials will have to revisit the budget that was passed just last month.

Gloria said about $10 million in employee compensation hikes envisioned in the five-year labor deals will have to come from reserves.

Funding is unlikely to be available for planned increases in library hours, additional recruits for police academies and improvements to the Mission Trails Regional Park campground and visitors' center, he said.

Gloria said savings from the labor deal will be realized in future fiscal years.

-City News Service