Mayoral Candidates Spar Over City Bonds For Pension Debt
Verbal sparring in San Diego's mayoral campaign broke out today over whether the city should take out bonds that would amortize its $2.2 billion pension debt, which would spread payments over a longer period of time but reduce the annual cost.
Backers of the pension reform initiative passed by voters in June, including Councilman Carl DeMaio, criticized a plan proffered by his mayoral opponent, Rep. Bob Filner, D-San Diego, during the primary campaign to take the pension debt to the bond market.
At a news conference, they said the plan would cost taxpayers $335 million more than simply paying down the debt on schedule.
"Taking out another credit card to stretch out payments on the city's pension debt and racking up hundreds of millions in additional interest is exactly the kind of risky move that got City Hall into the pension mess to begin with,'' DeMaio said.
In response, Filner said he dropped his pension bond plan already.
The idea is no longer necessary, thanks to savings from a five-year freeze on the type of pay city workers can use to later calculate their pension payouts, Filner said. That's one of the provisions -- called "pensionable pay'' -- in Proposition B that has yet to be implemented.
"These people apparently haven't been following the campaign,'' Filner said. "Two months ago I committed to implementing the five-year pensionable pay freeze -- a provision only I can implement through collective bargaining -- which will reduce the city's unfunded pension liability by nearly $1 billion, and which eliminated the need to consider pension obligation bonds.''
Lani Lutar, executive director of the San Diego County Taxpayers Association, said Filner has previously flip-flopped on pension reform.