San Diego approves pay raises for hundreds of city workers

San Diego City Council members gave more than 600 city workers pay raises on Monday that range from 2 percent to 30 percent, increasing the city’s pension debt.

The series of hikes, which will spike salaries by $9.7 million per year, are expected to be followed by a second wave of raises in the next few months that would affect roughly the same number of workers, labor union officials said on Monday.

City officials say the raises, called “special salary adjustments,” are needed to alleviate recruiting and retention problems in certain positions for which employee turnover rates have been above average.

The raises, which take effect in January 2019 and 2020, are in addition to 3.3 percent pay increases virtually all 11,000 city employees will receive this July and in July 2019.

The raises coincide with the end of a five-year prohibition against city employee pay hikes that was included in the Proposition B pension cutback ballot measure that San Diego voters approved in 2012.
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Proposition B prohibited pay raises, except in special circumstances, through June 30, 2018. The idea was to ease pressure on the city’s pension obligations, which are calculated using a formula including an employee’s final salary.

An analysis completed in late March for the city’s pension system estimates that these raises, combined with the second wave coming later, will increase San Diego’s pension debt $15.8 million.
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The amount would be roughly double if not for Proposition B, which replaced pensions with 401(k)-style retirement plans for newly hired city workers other than police officers.

The analysis, which was conducted by actuarial firm Cheiron, said that 739 – about half — of the employees slated for these two waves of pay raises still have pensions, meaning they were hired before Proposition B took effect in July 2012.

The city’s unfunded pension debt has grown to $2.76 billion from $2 billion during the past two years, and the raises will increase it to $2.775 billion.

The raises are also expected to increase the city’s annual pension payment, which is typically about $320 million per year, by about $3.6 million per year.

Higher payments shrink how much the city can spend on police, firefighters, parks, libraries and any new initiatives that emerge.

The pay hikes range from 2.5 percent for recreation specialists to 30 percent for workers’ compensation claims representatives.

Turnover rates cited in the analysis range from less than 2 percent for accountants, who are getting 15 percent hikes, to 7.5 percent for airport managers, who are getting 25 percent raises.

Categories: Good Morning San Diego