Solana Beach has instituted pension reforms that will make it the first city in San Diego County to implement a new tier for all labor employees by reducing benefits for new hires and raising employee contributions. Specifically, city workers will be responsible for the entire "employee portion" of their CalPERS pension contribution and the city will continue to pay its share as well. The two-tiered system for new hires will go into effect on January 1st. Reportedly the reforms could save the city $200,000 this year and $3 million over 10 years. Solana Beach’s City Manager, David Ott, said the following of the reforms: “The current pension is not sustainable in the long run, so we felt here in Solana Beach, we had to take some action on it. […] Nobody likes this, but all of them (the employees) understood the reasons for it. This city is a lot less contentious than other cities have been and will be.” The city currently has a budget deficit of $600,000. The North County Times reports:
“The agreements affected every city employee. The two public safety unions, representing firefighters and lifeguards, bumped employee contributions to a state-run retirement fund from 2 percent to 9 percent starting on Sept. 1. Members of these unions received a 2 percent raise, but Ott said the city got an immediate 5 percent savings. […] Public safety employees hired by the city after Jan. 1 will receive a lower pension benefit than current employees: 2 percent of the average of their highest three years of salary for each year of service, as opposed to 3 percent.”
As for city council members, on September 1st they will begin to pay their 8 percent employee contribution and will receive no raise. In an editorial from the North County Times, the newspaper applauded the pension reforms and used the occasion to point out that other cities should implement similar moves. The editorial board writes:
“That is money that can be used to keep firefighters on the payroll, fill potholes, keep city parks open and all the rest of the good things government provides. We have been calling for this kind of reform since December 2004 when Escondido blithely joined a race to keep up with Carlsbad and Oceanside largess. Earlier this year, Carlsbad took a modest step towards reform. Now citizens should demand that all the rest of our cities begin reforms, too. Whether any of this will be enough remains to be seen.”
You can read the full editorial here.