Earned pension benefits can’t be taken away from city employees. So San Diego leaders want to come at mushrooming pension costs from the other end. The tactic centers on a new concept called "pensionable pay."
San Diego may be the only city in America where the concept is being floated, according to city officials.
Rising payments to the San Diego city pension fund are expected peak in coming years at more than $500 million annually. To slow that increase, leaders want to freeze employee base salaries for a time. If salaries don’t go up, neither do pension costs.
City leaders are asking labor unions to negotiate on how to best implement such a proposal and to settle all major lawsuits associated with the pension. Councilman Kevin Faulconer said it’s in everyone’s interest.
"We need to end to end the pension wars, the lawsuits and the divisiveness and that’s exactly what this type of global settlement can achieve," Faulconer said.
City leaders see the move as an olive branch to unions because the City Council could just impose a salary freeze. But some labor leaders don’t see it that way.
The Police Officers Association says it’s not a good-faith offer because it already has a contract with the city in place. Local 127, the city's blue-collar union called the offer a political stunt and said it too already has a contract with the city. Union president Joan Raymond said there are other ways the city can save money such as charging for trash pick-up or raising the business licensing fee. She said hammering the unions is going to hurt the city in the end.
"It's getting to the point where people will come and work here for two reasons. One, to get trained at a job until they can leave and get higher pay elsewhere. Or two, they don't have any other choice," she said. "And I don't think that's the type of workforce you want."
At a news conference today, city leaders called on the unions to settle all major pension lawsuits and to work out the pensionable-pay agreement.
Councilman Carl DeMaio was not at the news conference, but was the first to introduce the concept. He said it’s in the labor unions best interest to get on board.
"They get to decide, do they want to be part of the solution? Do they want to end this nightmare and secure our city’s financial future and in doing so secure their jobs?" DeMaio said. "Or do they want to continue to fight?"
