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org

January 15, 2010

OPEN LETTER TO THE SAN DIEGO UNION-TRIBUNE EDITOR

Re: Mayor vows progress on projects and budget/One pundit’s Band-Aid is another’s fiscal reform,
by Craig Gustafson/Helen Gao 1/13/10

Dear Editor,

Here’s why the San Diego County Taxpayers Association believes it’s premature to declare
“mission accomplished” on pension reform:

While the City has implemented a pension plan for new employees hired after July 1, 2009, this
plan only applies to non-public safety employees. It does not apply to the elected officials or
public safety employees that constitute the largest portion of the budget. Currently, the
legislative pension benefits awarded to Councilmembers represent the most lavish of all
city retirement plans.

In 2004, the Pension Reform Committee proposed recommendations to reduce pension costs.
While the City has made progress, we can’t reiterate enough that our system will continue to be
unsustainable if public safety retirement benefits are not scaled back to reasonable levels that
are identified in the PRC report.

The City continues to provide expensive discretionary pension perks that can and should be
eliminated or reduced. The potential for savings? Over $25 million annually.

Last October Councilmembers Frye and DeMaio requested a legal analysis of various pension
reform options to identify which benefits are vested and which may be renegotiated. We
anxiously look forward to City Attorney Jan Goldsmith’s response and urge action on legally
feasible opportunities.

In addition to the massive pension deficit, retiree medical benefits represent an additional $1.3
billion unfunded liability. When the City enters into negotiations with labor groups on this
benefit in the near future, it is absolutely imperative that taxpayer savings are achieved.

Let’s not mistake modest progress for success that can be hailed as a “model for the nation.” The
City still has a long way to go.

Sincerely,

Lani Lutar, President & CEO