Prop B Disclosure Becomes Issue in Mayoral Race

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    NEWSLETTERS

    NBCSanDiego

    A September study aimed at calculating the costs of a proposed temporary 401 (k)-style retirement plan for new city employees was drastically skewed, showing an estimated $3.4 million annual savings for the city when in fact the plan would cost the city about $2.8 million a year, if it were ever fully implemented.

    It’s a story first uncovered by City Beat’s Kelly Davis.

    Today, Rep. Bob Filner, D-San Diego, accused his opponent Councilman Carl DeMaio of keeping workers and city leaders in the dark about the actual costs of the interim 401(k)-style retirement plan.

    When the interim plan was approved, city leaders were under a time crunch to lift a hiring freeze after voters ended the city’s pension system for new employees.

    DeMaio Announces Major Deal in Prop B Implementation

    [DGO] DeMaio Announces Major Deal in Prop B Implementation
    Mayoral candidate and Councilman Carl DeMaio announced Thursday that a majority of the City Council pledged to block a vote overriding part of his pension overhaul measure, Proposition B. Critics dismissed DeMaio's announcement as a publicity stunt.

    The erroneous study was sent out to the City Council prior to a public vetting of the analysis on Sept. 13. City Beat reports that the city’s Independent Budget Analyst noticed the baseline figures used in the study were drastically off, and the author of the study had already agreed to take another look at the numbers before that Sept. 13 public hearing.

    However, the City Council was not informed about the problems with the actuarial analysis.
    A state law requires actuarial analysis of any changes to the city’s retirement plan be made public at least two weeks before any public vote.

    On Oct. 1, Jay Goldstone, the city’s chief operating officer finally notified city leaders about the problem with the original study, and sent out a new analysis that showed the plan would cost the city $2.8 million by 2032, if it were ever fully implemented.

    The council was set to vote on the retirement-plan change that same day.

    Councilwoman Donna Frye said Councilman Carl DeMaio pushed the plan along without asking for the transparency or in-depth analysis he typically champions.

    “I guarantee you if the first analysis had come out and shown that there were increased costs and the second analysis had come out and shown there were going to be savings, Mr. DeMaio would have pulled up Buck Consulting, the city attorney and Jay Goldstone and anyone he could have pulled up there and held a big public hearing,” said former City Councilwoman Donna Frye, a supporter of Filner.

    K.B. Forbes, a spokesman for Carl DeMaio, said the numbers in the study were unimportant because the interim plan in question will only be in place for a brief period -- until the city's labor unions negotiate a new deal.

    “An adjustment to a 20-year projection is irrelevant. This is a temporary plan in place for less than one year,” he wrote in an email statement. “This temporary plan will not be in place for the 20 years as projections assume. Bob Filner still wants to litigate Proposition B, even while he continues to say it is a settled matter.”

    Forbes declined to answer questions or respond to the issue of transparency or whether there was any concern about city leaders allowing the City Council to hear about the erroneous report on Sept. 13 without informing them of the suspected problem with the math.

    A spokesman for the mayor’s office did not return a phone call about the issue Friday.  Frye was displeased with the city and councilman’s response to the revelations.

    “It is never unimportant to put out the right numbers,” she said Friday after a press conference announcing the issue. “It’s those types of ridiculous statements that got this city into trouble in the first place. Facts matter. Disclosure matters and numbers matter.”

    Filner said at Friday’s press conference that he does plan to implement Proposition B, the June ballot measure that halted the city’s current pension system for new hires.

    “The voters passed it. I will implement it,” Filner said. “In fact, I will implement it even faster and better because I can negotiate a five-year agreement which saves even more money and Carl cannot. But, I was against it for a variety of reasons.”

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