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CARLSBAD: Mayor proposes overhauling city's pension system
Bud Lewis wants it to go before voters in 2010
By BARBARA HENRY - Staff Writer | ∞
CARLSBAD ---- Mayor Bud Lewis plans to put forward his proposal to overhaul the city's pension system early next year and wants to see it go on the ballot in 2010.
"I want it to be the key point of the (2010) election," Lewis said Thursday as he discussed the proposal, which calls for cutting retirement benefits for future city employees rather than existing ones.
Carlsbad is one of a number of cities contemplating reducing its pension benefits.
Some communities are doing so because pensions are costing more than anticipated, but Carlsbad officials have said they have the money to cover the costs.
However, given the state of the nation's economy these days, reducing city pensions could be a financially prudent move, the mayor said.
"These are tough times," he said.
The proposal, which may be on the council's workshop agenda early next year, is expected to stir up plenty of controversy in a town where city union members have become increasingly politically active.
The 2010 election already is expected to be lively because the mayor's seat is on the ballot. Lewis, who has been on the council since 1970 and served as mayor since 1986, has said he won't run again.
While union members aren't expected to be supportive of the pension proposal, the head of the city firefighters union said Friday that he was waiting for more details before he would take a stance.
"I really can't make a comment at all," union President Rick Fisher said.
Lewis and the members of the firefighters' union have had their differences for years. The firefighters' political action group opposed his 2006 re-election campaign, and Lewis has made no secret of his distaste for the union.
Finding backers?
To change the city's current system, the mayor will need the support of the state Legislature and his own City Council.
He'll need a majority "yes" vote from the council in order to put the item on the ballot in 2010.
He also needs state legislation to change the way the state calculates Carlsbad's payments into the state pension system, Lewis said.
Last week, several council members didn't appear to be eagerly embracing the pension idea.
"We need a little more information than that," Councilwoman Ann Kulchin said Thursday when asked how she might vote.
Councilman Matt Hall said he might support changing the pension system, but not the proposal the mayor is considering.
Hall said he wants to increase the amount employees pay into the system, rather than decreasing the amount the city pays when those employees retire.
And, newly elected Councilman Keith Blackburn has said he doesn't want Carlsbad to be the first community in the region to overhaul its pension system.
Councilman Mark Packard couldn't be reached for comment Thursday.
The current system
The mayor said his rough proposal calls for decreasing retirement benefits that the city will eventually pay to any city employees hired after 2010 ---- employees hired before then wouldn't be affected.
Instead of a "3 percent" plan, the new city employees could end up with a "2.5 percent" or a "2.7 percent plan," he said.
In Carlsbad, general city employees are eligible for a "3 percent at 60" plan, meaning that if they retire at age 60, they receive an annual pension equal to 3 percent of their highest yearly salary, multiplied by the number of years they were employed by the city.
Firefighters and police get the deal at age 50.
Under such a system, a city employee who worked 25 years before retiring and had a peak salary of $75,000 could receive an annual benefit of $56,250.
The council unanimously approved the benefit for police officers in 2001. When the firefighters' turn came in 2002, the council divided 3-2, with Lewis and Hall voting against the proposal.
The two men also voted against expanding it to general employees in 2003.
A long-term solution?
Many communities have raised their retirement benefit in recent years to the 3 percent level. Some have experienced sticker shock afterward, when they realized how much it would cost.
Carlsbad, which is considered one of the more well-off communities in the region, has not experienced difficulties in funding its pensions so far, city finance employees said.
However, the city's annual pension expense isn't cheap.
Carlsbad anticipates spending $16.5 million on its retirement expenses this year, city Finance Director Lisa Irvine said.
Changing the system isn't expected to be an immediate money-saver, but something that reduces expenses years from now.
How much money the city could save depends on many things, ranging from the age an employee decides to retire to even how the stock market performs over the years, Irvine said.
Contact staff writer Barbara Henry at (760) 901-4072 or bhenry@nctimes.com.
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James wrote on Nov 15, 2008 6:19 PM:Why would the city want to overhaul this? The article in the paper this morning states that they have an increase in property taxes. This is one last attempt for Lewis to stick it to the Firefighters. Carlsbad is not San Diego. Carlsbad is fiscally responsible unlike San Diego
A Question wrote on Nov 15, 2008 10:44 PM:Won't this make it more difficult to recruit top notch employees to replace all those that will be retiring soon? Why would someone leave another City to come here if they will not get similar retirement?
City Employee wrote on Nov 16, 2008 7:39 AM:Good bye, Bud, don't let the door hit you on the way out and take Matt with you.
Who is this Packard guy? Take him, too.
Harold wrote on Nov 16, 2008 8:34 AM:This is clearly one last shot at the Firemen for Mayor Lewis. "Council votes unanimous for cops, and votes 3-2 for Firemen. The same benefit? Why the different vote? This demonstrates Bias aimed at the two groups.
Our men in blue have been begging the city for money to fund services like ladder trucks and ambulances. I am a citizen that has relied on these fine men more than once to assist me with my health problems. I can assure you, when you need them, they're worth every penny.
Thank you police and firemen! You protect us and I'll do my best to protect you! Council candidates of 2010, don't even think about taking money from these fine men!
Double Dippers wrote on Nov 16, 2008 2:41 PM:Smarties work for the Gov/schools, cities...and like the good mayor 'Bud-get'and be 'vested' in more the one pension plan. Retired teacher pension and full benefits, then CalPers, city full pension (over $100K!) - wow! Then only need 40 quarter years (over any period of time/jobs) to get ss and medicare too. These 'retired' city workers (some who can retire at age FIFTY?) make more in retirement that most who work outside gov/unions for 50 years and whose ONLY pension is monthly social security (maybe $1500 a month) and medicare which they must pay for So, why wouldn't top notch 'potential' employees from North Dakota (no more snow), Texas (no more heat strokes and hurricanes/tornadoes) be willing to take a job in Carlsbad, America's finest city (who monikered that?) in paradise just because they would get 'only 2.7%' pension benefits? The 'rest of us' can't even get full SS benefits til age 67! Nothing in life is guaranteed of course, not even having a job tomorrow. Sad that our mayor isn't willing to take a little cut in pay, but then again, he has slaved for us, given us the golden goose golf course too. YEAH BUD - we'll be sure to build a fine statue in the town square - anyone care to donate?
Citizen for common sense wrote on Nov 16, 2008 2:55 PM:Anybody who thinks this idea is wrong should read "While America aged : how pension debts ruined General Motors, stopped the NYC subways, bankrupted San Diego, and loom as the next financial crisis" by Roger Lowenstein. You can find it in your library.
Lloyd wrote on Nov 16, 2008 3:02 PM:And who suffers in this? The citizens do because why would a city employee work for a city like Carlsbad when there are better paying and better retirement jobs out there in neighboring cities. This whole thing just doesn't make sense. Bud you need to retire this year.
Wondering wrote on Nov 16, 2008 3:03 PM:Then how would Carlsbad be competitive when they hire employees? What would be the draw to come to Carlsbad insted of a city with better retirement benefits. I agree with Mr Blackburn, he has the right idea.
JohnnyV wrote on Nov 16, 2008 5:10 PM:Gov employees are already making 1-20 times more in public than they ould in the real world of private sector work, and their gold plated Cadillac pesnions are 20 times better than anything in the private sector.
Put the welfare queens into a 2%@67 or give them SS.
1 vs. 2.7 wrote on Nov 16, 2008 9:02 PM:Federal government only pays its employees 1% pension per year. Why wouldn't anyone work for 2.7%? millions are getting less than 1%. Guarenteed 2.7% or 2%, millions will take it any day.
Thanks Mayor for your foresight to save Carlsbad from being a bankrupted city like San Diego.
Those who already got their 3% should help out the mayor to ensure that the city will have enough to continue funding your 3%.
Just Wondering wrote on Nov 17, 2008 9:16 AM:Why don't all of you complainers do something about improving YOUR situations. Pull yourselves up instead of trying to pull others down.
Oh, I forgot, misery loves company.
James wrote on Nov 18, 2008 7:10 AM:Exactly, The complainers love to criticze what other people have. Governmant employess become this for the secutiry not the money. Speaking of welfare queens...You just elected the King of Welfare, The Handout President!
If you read the article, Carlsbad has planned for these costs in the future. The other cities have not. Plain and simple. Why should our police and fireman take the consquences of other cities? Bye BUD!
Larry wrote on Nov 20, 2008 8:49 AM:How in the world can a firefighter retire at 50 and still make ends meet based on a formula of less than 3%/50? For the sake of the poor and struggling retired firefighters, I say change the formula to 10%/40. It's the least we can do for all the years of polishing the trucks at the firehouse.
Olaf wrote on Nov 25, 2008 1:57 PM:Once again the misinformed hit the blogs. San Diego was hit with a pension mess because of add on pension goodies. The NORMAL city employee does not work for the city because of money. They can make 50-75% more in the private sector. It is for benifits. So either pay them the money (like the feds do to pay for their own retirement) or give them the benifits. Cheapen out on either and get cheap foreign workers who will not do a service to anyone.
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