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County Supervisors Add To Their Pension Payouts During Last Term In Office

Photo by Alison St John

The San Diego County Administration Building downtown is shown in this undated photo.

County Supervisors Add To Their Pension Payouts During Last Term In Office

GUEST:

Alison St John, reporter, KPBS News

Transcript

On Tuesday, San Diego County Supervisors’ agenda will include the final reading of an ordinance that effectively increases their pay by about 12 percent within the next year.

On Tuesday, item #7 on the San Diego County Supervisors’ agenda is the final reading of an ordinance that effectively increases their pay by about 12 percent within the next year.

This is not simply a pay raise; this is a step-up in the formula by which their pay is raised. In other words, it increases the size of San Diego County supervisors' pay and benefit increases indefinitely into the future.

The supervisors let the agenda item pass on consent when it came up for a first reading at their meeting in December before Christmas.

Haney Hong, head of the San Diego County Taxpayers Association, said if elected officials vote to raise their own salaries, it should be done in a way that is transparent, methodical and accountable.

“I think it would be fair to say that the timing might have actually reduced the amount of public conversation around this,” he said, “because there was the first reading just before the holidays. Now here we are at the very beginning of the year and we have our second reading.”

The city of San Diego has a Salary Setting Commission that recommends pay increases, which the council can then approve or ignore. But, like several other Southern California counties, San Diego County Supervisors adopted a formula in the 1970s that tied their salaries to that of Superior Court Judges. The formula was 80 percent.

The new ordinance will boost that to 90 percent. In a brief board letter on the item, Supervisor Ron Roberts calculates the change will cost taxpayers almost $90,000 in 2017.

Hong said the Taxpayers Association is more concerned about the longer-term costs.

“Because that pension is based on the highest salary earned, it’s not just the immediate bottom line for the year, but there’s also future implications with respect to pension benefits,” he said. “Right now, here in San Diego County, it’s almost $800 per man, woman and child that’s responsible for unfunded pension benefits.”

San Diego County’s pension fund has more than $2 billion dollars of unfunded liability; the exact amount changes depending on market returns each year.

The letter from Supervisor Roberts contains the following statement:

“There will be no impact on the retirement system fund because the budgeted appropriations for these increases all will include appropriate contributions to the retirement system to cover these increased costs.”

Roberts’ spokesman Tim McClain clarified.

“We were trying to articulate that the retirement fund itself will be made whole by future increased contributions as a result of the pay increase. The fiscal impact noted for FY 2016-17 and FY 2017-18 already reflects increased costs related to retirement contributions in addition to the actual pay increase itself.”

Hong reiterated that since salaries and pensions are paid with taxpayer dollars, the net effect is an increase in taxpayer liability.

“In the future, the County will have to contribute whatever is required for the ARC (Actuarial Required Contribution), which would get calculated based on expected benefits. That ARC will be a little bit higher if the salary is higher.”

When asked what justification he saw for a change in the formula for increasing supervisors' salary and benefits at this point, Hong did not have an answer.

In the letter from Roberts, he states that under the existing formula, supervisors’ salaries have increased 7.17 percent since 2008.

Under the ordinance, supervisor’s regular compensation will go from $153,289.60 to $162,870.20 and then $172,450.80 next year.

With the elections past, the supervisors have little to lose. They are all, except newly elected supervisor Kristin Gaspar, termed out and due to retire in either 2018 or 2020. Their pensions are based on their final year’s salary.

Gaspar, who is sworn in on Monday, did not respond to a question about her position on the salary ordinance, which will be on the agenda of her first board meeting this week.

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