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San Diego city councilmember Carl DeMaio says he was shocked when he saw some of the payments made to retired city employees, so shocked he thought it was a joke. It wasn’t.

On Tuesday, February 11, in a crowded press room on the 13th floor of the City Hall building, just hours after Mayor Sanders announced a two-billion-dollar deficit in the city’s pension fund, Councilmember DeMaio revealed the shocking numbers to the public as part of the third report on the excesses of the city’s labor and retirement benefit program.

Titled “The Million Dollar Circle,” the report issued by DeMaio’s office discloses payouts to five retiring city employees in 2008 in excess of a million dollars. The report also uncovers 86 instances of pension allowances during 2008 that were over six figures.

“The figures we are about to show will likely outrage the average taxpayer,” said DeMaio from the podium.

“A total of 1774 city employees have a cash value of $333 million dollars in funds sitting in the pension system in DROP accounts, all earning — during this down market — a guaranteed, risk-free 7.75 percent rate of return.”

It’s not just the lump-sum payouts that have DeMaio outraged; it’s also the “double dipping” going on by many high-level city employees enrolled in the Deferred Retirement Option Program (DROP).

“The DROP program allows employees to ‘double dip’ [and] bank retirement payouts at 8 percent compound interest for five years. All the while, they continue to draw their city salaries.”

According to the report, immoderate payouts have caused the city’s pension deficit to skyrocket by 1475 percent since 1998.

As a temporary fix, DeMaio called on San Diego’s Pension Board to drop the guaranteed interest rate of 7.75 percent down to 4 percent at their February 20 meeting.

“This item is on the agenda for consideration by the pension board, and I hope they are listening.”

DeMaio estimates that such a reform would save taxpayers $3.5 million in 2011 and reduce pension liability by 250 million dollars.

When asked if DeMaio participates in the DROP program he said he was embaraased to participate. By not enrolling, DeMaio says he saved $28,500 from his office budget and used the extra funds to pay for an additional constituent service representative.

Closing out the press conference, DeMaio reiterated his disgust with the excessive benefit payouts. “They are a few people at the top of this Ponzi Scheme, and I use that term decidedly, who are able to be part of that million dollar circle. And because eof those excesses the retirement security of every employee is threatened.”

To find out some of the elected officials that double dipped, go to Councilmember DeMaio’s website at sandiego.gov/citycouncil/cd5.

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Comments

JF Feb. 13, 2009 @ 10:20 a.m.

Dorian, The SDCERS board already lowered the assumption rate for DROP and was already planning to do it again -- all without DeMaio's input. He's simply grandstanding about an already done deal.

Further, you've got some facts wrong and DeMaio did nothing to correct you. DeMaio says he was "embarrassed" to enroll in DROP and that he saves $28K by not enrolling in DROP. He CAN'T enroll in DROP. He's not eligible. Further evidence of his grandstanding.

DeMaio contradicts himself by correctly stating that the assumption rate is 7.75%, but then grandstands some more by repeatedly using the bogus 8% figure. Further, he fails to mention that in years past the system made 14%, but only paid 8%. What happened to that money? I guess he forgot about it.

DeMaio repeatedly uses the catch-phrase "double dipping". I'd like your opinion, Dorian. If someone retires from the military and takes a second job are they "double dipping?" That's exactly what DROP is. City retirees are simply investing their own vested retirement funds.

Lastly, Carl fails to explain why it's apparently OK for him to become a millionaire with government contracts, but not OK to earn a negotiated wage and retirement worth far less.

DeMaio is just fishing for media attention with this press release. Looks like you bit.

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JohnnyVegas Feb. 13, 2009 @ 11:28 a.m.

DeMaio contradicts himself by correctly stating that the assumption rate is 7.75%, but then grandstands some more by repeatedly using the bogus 8% figure.

JF, if the 7.75% is COMPOUNDED, then you are wrong.

A compounded 7.75% is easily over an 8% APR.

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JohnnyVegas Feb. 13, 2009 @ 11:31 a.m.

DeMaio repeatedly uses the catch-phrase "double dipping". I'd like your opinion, Dorian. If someone retires from the military and takes a second job are they "double dipping?" That's exactly what DROP is.

No that is nto what DROP is.

And when you put your life on the line all over the world for pay that can be as low as $1,500 a month like military personnel do then you can make such an argument-but you don't and you never will.

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JF Feb. 13, 2009 @ 4:05 p.m.

Nope, but I do put my life on the line all over this country.

So given that you don't do that and never will, then I assume by your logic that you can't make such a whine about my retirement.

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Fred Williams Feb. 13, 2009 @ 5:27 p.m.

JF, you "put your life on the line"? How often?

How many fire calls have you had this year so far?

Isn't the truth that the overwhelming majority of calls are medical -- something we shouldn't be sending an entire crew to cover except for the union dictated work rules?

Convenience store clerks put their lives on the line every day too, with a much higher rate of job related deaths...should we give them double-dips too?

Get off that "I'm a fireman, you all bow down to me" trip and you'll make better sense.

Best,

Fred

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JF Feb. 13, 2009 @ 9:46 p.m.

Fred, you say that we shouldn't send the whole crew to medical calls. I have a question. If you go into a hospital with a critical illness, how many people will be around your bed? I'm guessing more than the 6 we send. Plus they don't have to move obese folks from the third floor. We have absolutely no way to pre-screen those calls any better. Trust me. We'd like to keep that engine available for the next call.

And since you brought it up, medical calls are often just as dangerous as fires. I suppose you've never had the pleasure of wrestling with a drunk covered in blood and puke... in a wrecked car... wedged under a leaking gasoline tanker. I have. Ever had a pissed off HIV+ patient try to spit in your eye? I have. Intubated a bloody Hep C+ traffic accident victim? I have. Wrestled a 300 lb naked, sweaty, combative diabetic with low blood sugar? Well, you get the point.

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JF Feb. 13, 2009 @ 9:58 p.m.

Now let's talk about this "hero" thing for a bit.

Back around the turn of the 20th Century, the Chief of the FDNY said, "Firemen are going to get killed. When they join the department they face that fact. When a man becomes a fireman his greatest act of bravery has been accomplished. What he does after that is all in the line of work."

I think you'll find most firefighters are fairly humble about what it is that they do. Proud, but humble. Nonetheless, people hail us a heroes. Most guys I know hide from the TV cameras.

You're reading a lot into my statements above. I don't think anyone should "bow down to me" and I have a ton of respect for those we serve. I regularly remind those I work with that while some of the emergencies we respond to don't seem like much to us, the person calling has obviously lost control of some portion of their life and needs our help. That's what we do.

BTW, you didn't post all day. I assume you were at HQ volunteering?

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Ponzi Feb. 15, 2009 @ 11:53 a.m.

Firemen get paid too much. Period.

There should be a two-tier wage system for them like military, since we're making comparisons.

While they are sitting around, cooking, working out, shopping, watching TV, playing cards, and other trivial homemaking things at the firehouse pay them $15 an hour. When they are on a call, clock the time and give them "combat pay type" compensation at $40 an hour.

Of course there might be an increase in arson if that was the case.

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JohnnyVegas Feb. 15, 2009 @ 1:20 p.m.

Wrestled a 300 lb naked, sweaty, combative diabetic with low blood sugar?

By JF

Ewwww....... I never knew you and Fumbler "wrestled"......

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JF Feb. 15, 2009 @ 2:15 p.m.

Ponzi, $15/hour would be a raise for bottom step firefighters. And $40/hour is more than a Battalion Chief makes now.

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Joe Poutous Feb. 15, 2009 @ 2:20 p.m.

Wow Ponzi, I hope you never have to call 911. I think that firemen deserve the pay that they get.

They work their asses off to get the job, they are constantly at the ready to serve. It can be anything from your granny choking on a chicken bone to a burning furniture warehouse spewing toxic chemicals.

I know that there is a resession and the the city is broke, but we need to look somewhere else to make cuts.

  • Joe
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JohnnyVegas Feb. 15, 2009 @ 4:49 p.m.

Ponzi, $15/hour would be a raise for bottom step firefighters. And $40/hour is more than a Battalion Chief makes now.

By JF

Entry level pay, with benefits, is over $100K per year-which is $50 an hour JF. After 2-3 years that is double, before OT.

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JohnnyVegas Feb. 15, 2009 @ 4:52 p.m.

Wow Ponzi, I hope you never have to call 911. I think that firemen deserve the pay that they get.

They work their asses off to get the job, they are constantly at the ready to serve. It can be anything from your granny choking on a chicken bone to a burning furniture warehouse spewing toxic chemicals.

I know that there is a resession and the the city is broke, but we need to look somewhere else to make cuts.

- Joe

You're obviously a FF or connected to one.

Anyone that says a $200K per year job that requires no college degree, where the actual number of FIRE calls they go on represent 3-5% of their work, is either a FF or a family member of one.

No one says that except FF's (and their families) If they were subject to competition I am sure the compensation could be reduced 75%, or more, with no drop off in service levels.

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Joe Poutous Feb. 15, 2009 @ 8:07 p.m.

Nope, I'm not a fireman.. I know 1 or 2 of them, and I think that a cousin of mine is a FF out in the Lagunas.

They don't have to go to college to become firefighters, but the training is pretty damn intense and does take a couple of years to complete.

$40 an hour is about $80K a year if you are a saleried employee.

from: http://www.bls.gov/k12/help03.htm "In 2006, the middle half of all firefighters earned between $29,550 and $54,120 annually. The lowest-paid 10 percent earned less than $20,660. The highest-paid 10 percent earned more than $66,140.

Firefighting supervisors and managers and fire inspectors earned more."

  • Joe
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Joe Poutous Feb. 15, 2009 @ 8:12 p.m.

...wait, never mind - those are national averages.

I still think that those guys deserve good pay. - Joe

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JohnnyVegas Feb. 15, 2009 @ 10:19 p.m.

I still think that those guys deserve good pay.

I think we disagree on what "good pay" is.

$50K per year is good pay, especially for a job that requries no formal education like FF. That is ABOVE the median wage for San Diego, and CA.

$200K per year is more than good pay in my book. So is $100K per year. And that is what CA muni FF's make.

I know unemployed lawyers who would love a $50K per year/40 hour week job. Most lawyers work 50-80 hours a week for between $40K-$90K. 80 hours a week in the FD would bring you $300K per year.

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Xray Feb. 17, 2009 @ 10:26 a.m.

Johnny V, get over your angry little man complex, from the stuff I have seen you post you obviously could not cut it as a cop or firefighter. If you are in fact an attorney take pride in the fact your types(attorney's)have cornered the market in owning the most pages of a phone book, you win!!!.

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