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2005 Audit Shows Internal Accounting Weaknesses; Despite Some Headway, Many More Improvements Must Be Made, Says Accounting Firm
Johnny, did you ever,just for an instant, consider that SD is having cash flow problems for more reasons than just the pension? Employees are not the ones who fudged the audits. That kept (and keeps) the city out of the short term bond market. My understanding is that (and note, I'm not 100% sure here) the city took out short term bonds to run operations until state tax money rolled in. It cannot do that now. That presents a huge cash flow problem for the city, none of which is the employees' fault. Obviously, some employees were involved in that, but most of them are gone now. The pension system is about 54% funded with investment gains, not tax dollars. Since the city didn't put in their share of the money, it's pretty darn tough to make investment gains. One of the reasons that it's costing so much now is that the Gleason settlement requires the city to put in more now to make up what they didn't put in earlier. That will eventually go away. As to my statement that switching from SDCERS to SS will save 5%, I was wrong. It will save 6.2%. I was guesstimating (as I freely admitted) the 5%. I was close. Look at page 51 of the 2005 SDCERS CAFR, available at sdcers.org. It gives the weighted total of the normal cost, i.e. the percentage of salary that the city must pay. That figure is 12.42% of payroll. Since SS would cost 6.2%, the difference (or savings) is 6.22%. Note that since 2005, POSC and the DROP have ended for new hires. That should make the rate of contribution, and thus the savings, go down.— February 1, 2008 8:30 a.m.
2005 Audit Shows Internal Accounting Weaknesses; Despite Some Headway, Many More Improvements Must Be Made, Says Accounting Firm
Johnny, OK, how about this: http://healthnews.uc.edu/news/?/3750/ Here's the first line of the story, "Cincinnati—University of Cincinnati (UC) environmental health researchers have determined that firefighters are significantly more likely to develop four different types of cancer than workers in other fields." "UC epidemiologists found that half the studied cancers—including testicular, prostate, skin, brain, rectum, stomach and colon cancer, non-Hodgkin’s lymphoma, multiple myeloma and malignant melanoma—were associated with firefighting to varying levels of increased risk." When are you going to realize that I do my absolute best to only write what I absolutely know and can back up. If I can't back something up, I'll write, "I think" of "the best I can recall" or some other disclaimer. Oh, and I never said we die at a younger rate because I haven't found a study to prove that. Now if one considers the higher incidence of cancer, one might surmise that...— February 1, 2008 8:06 a.m.
Liarless in Seattle
Don, regarding your post of 3:18 -- exactly, is all the OT reimbursed by the NFL or made up by sales tax revenues? I doubt it, especially given how low our TOT is and how little a percentage of our taxes that the state gives back.— January 31, 2008 9:17 p.m.
2005 Audit Shows Internal Accounting Weaknesses; Despite Some Headway, Many More Improvements Must Be Made, Says Accounting Firm
Don, in response to your post of 3:51 today, I'm sure you're aware that firefighters have a much, much higher cancer rate than private citizens. I'm sure you're also aware that a cancer diagnosis is presumed to be job related for firefighters because of the increased risk. However, that presumption ends five years after retirement. By pushing back retirement, you'll see a huge increase in worker's comp claims not only from cancer but from the actual physical trauma of doing the job. I'm betting that the worker's comp and disability retirement costs will offset any cost savings of a later retirement. There's a reason you can retire from the military after 20 years and there's a reason why firefighters can retire at 50. Remember that switching from the current system to a Social Security only system only saves about 5% of payroll. How much do you think you're going to save?— January 31, 2008 6:47 p.m.
Time for pension reform in San Diego
Johnny, if it was 10 cents on the dollar even I would've bought in. But it wasn't. As usual, you just can't help exaggerating. Once again, remember that 3% at 50 was the settlement in Corbett vs SDCERS. The alternative is keeping the present (at the time) figure of 2.5% at 50 to 2.9999% at 55 but also including OT in retirement. Why do you think the city was so quick to settle? Did you even read what I wrote above? Did you read the quotes from the settlement that I posted? And I'm still waiting for you to explain HOW DROP is a scam. Go on, explain it. Since it's an obvious scam and you're a brilliant attorney, I'm sure you can explain the scam to all of us. Oh.. one little condition. You'll have to use numbers and not value statements like, "double dipping". You'll need actual, verifiable proof. Otherwise, I see your objection as nothing more than jealousy.— January 31, 2008 6:38 p.m.
Time for pension reform in San Diego
Don, I believe that those who paid too little should pay the proper amount. That's one reason I never bought time. My point about the OC suit vs the San Diego problem is that the gains of rolling the system back to 1996 levels simply aren't there. Plus, you'd have additional liabilities by having to add OT into retirements if you tried to roll back Corbett vs SDCERS. Remember, the city pays an average of 12-13% into Safety employees retirements. (General employees are less) They'd pay 6.2% into Social Security. The difference between the current system and SS is less than 7% of payroll for Safety members and more like 4-5% for General members. Frankly, I don't think that difference is breaking the city. I think that the city's failure to pay into the system is the root cause.— January 31, 2008 3:21 p.m.
Time for pension reform in San Diego
Here's where you're confused on the DROP. The reason that the actuaries stated that it's a money loser is because of the bogus POSC. As I stated, I'm against that. It's been eliminated now and will eventually self-mitigate. I'm also against the SPSP plan, or at least the city paying into it. The money that goes into a DROP account is the employee's own money. The employee's money is used by SDCERS to earn interest. SDCERS has earned something like 13% over the past few years. Yes, there were a few years around the turn of the century that it was below that. Nonetheless, the retirement system earns money and pays out less money, keeping the rest. Meanwhile, the city doesn't need to pay into that employees retirement account anymore. If you believe Johnny Vegas' rants, that's a 100% of salary savings. Of course, that's not really true, but the city does save about 9% of salary. (Average 12% of salary into SDCERS - 3.05% into SPSP) That's a lot of money. Here's the deal. Let's say I retire from the military before I come to work for the city. Should I then give up my military retirement because I'd be double dipping? Of course not. Your objection has been that "it's different because it's the same employer." OK, how? Again, it's the employee's own money. NO other city (or SDCERS) money goes into that pot, except the aforementioned SPSP money. You're a good financial writer, Don. Let's see your reasons for why the DROP costs money.— January 31, 2008 2:54 p.m.
Time for pension reform in San Diego
Don, I'm a little confused. Was there any original research in this article, or did you just quote Aguirre the whole time? If you'll forgive me, I'll cross post over here from your other blog, since that one seems to have died. Here's the problem with applying the OC lawsuit here. Even if they prevail the percentages here aren't the same. The increase in the safety retirement in SD has been minimal compared to that in OC. Twenty years ago, the pension system here paid 2.5% at 50 and 2.77% at 55. In 1996, the formula was changed to 2.9999% at 55. Then in 2000 it was changed to 3% at 50. With the number of retirements since then, most everyone currently in the FD has been paying the actuarially required rates for at least 12 years now, and close to it for 20. The average safety employee retires at 57, so basically the increase has been .23% in all that time. Less than 10%. Keep this in mind -- the 3% at 50 was the city's settlement to a lawsuit. Basically, the city was going to lose a case that said that our OT should be counted in our top one year. To avoid that, the city gave us 3% at 50. If you take that away, you'll need to renegotiate that ruling and will likely need to pay retirements based on salary PLUS OT. Good luck planning for that. Oh, and there was no cap before, so folks retired at 110% or more. Now we're capped at 90%. Actuarially, that probably about evens out. So sorry, the increase in retirement percentage hasn't been the cause of the deficit. As I've discussed before, I'm against the POSC and frankly, you're a little confused on DROP.— January 31, 2008 2:34 p.m.
Liarless in Seattle
Johnny, that's my point. The Super Bowl is essentially nothing more than a sports based convention. It likely does bring in additional money to the city. But, as you stated, that's only every few years. Not worth the day to day corporate welfare that is given to sports teams. And once again, Johnny, you've completely misunderstood my entire point.— January 31, 2008 12:49 p.m.
Liarless in Seattle
Can I get an Amen? I do have a question, though. Does that account for profits during the Super Bowl? In one sense, that would be like saying that we don't need the Convention Center because it doesn't bring any money to San Diego.— January 31, 2008 11:43 a.m.