Critics Blast San Diego Labor Deal

May 12, 2005 (PLANSPONSOR.com) - Critics complain that a deal between the city of San Diego and one of its unions that is predicted to generate $200 million in savings to be applied to the city's $1.37 billion pension shortfall may still not go far enough.

Calling the pact “a good start,” Lisa Briggs, executive director of the San Diego County Taxpayers Association, complained that the deal with the Municipal Employees Association (MEA) doesn’t address pension reform measures the citizens’ group and others had been calling for, according to the San Diego Daily Transcript. The MEA represents about half of the city’s workforce, which still has to sign on to the agreement.

Briggs’ main complaint: the plan allows current employees to keep their current retirement benefits and falls short of the changes that the city’s Pension Reform Committee called for less than a year ago. Specifically, the committee recommended increasing the retirement ages and decreasing a retirement multiplier used in calculating benefits, Briggs said.”You’re not making too many cuts for the employees going forward,” she told the newspaper. “There are no substantive choices that would have affected the unfunded liability.”

If approved, the three-year contract would include a two-year salary and benefit freeze and would increase worker plan contributions by 3% during those years, according to the news report. Benefits and salaries will rise again in the third year.

Some cost savings could come from a part of the tentative deal that calls for a 3% increase in funds that MEA union employees pay into the pension system, totaling about $7 million, said Deputy City Manager Lisa Irvine. If the remaining three labor unions – the firefighters Local 145, the Police Officers Association and Local 127 – agree to a similar labor contract, savings estimates would jump to about $14 million for fiscal year 2006, Irvine said.

However, Briggs also asserted that any salary freeze cost reduction would essentially be canceled out for fiscal year 2006 because the city employees associations and unions were each given salary increases in old contracts that are factored into the budget.

The scandal-plagued pension system has kept the city in a state of turmoil in recent years that has prompted a number of state and federal investigations and prompted Mayor Dick Murphy to abruptly announce his plans to step down (See  San Diego’s Murphy: ‘The city needs a fresh start’ ).

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