Editorial: SLO must reduce pension obligations

The city of San Luis Obispo is conducting a series of public forums and hearings — the first is tonight — to gather citizen input on spending priorities. We applaud city officials for including the public in the budget-making process. These are taxpayer dollars at stake, and citizens should be consulted on how their money is used.

We wonder, though, how much say the public truly has when the pot of money available for projects and programs is growing ever smaller.

The recession is partly to blame, but as a special report in Sunday’s Tribune noted, it’s also due to decisions made years ago that obligated current and future councils to skyrocketing pensions, salaries and other employee benefits.

As a result, about 80 percent of the city’s operating budget now goes to compensation, leaving only 20 percent for items such as capital projects, equipment purchases and other improvements. By comparison, as recently as 2002-03, the city was paying 72 percent for compensation — leaving 28 percent for everything else.

New City Manager Katie Lichtig — who is going through her first budget cycle in San Luis Obispo — appointed a community task force to examine this tough budget dilemma.

The task force succinctly summed up the issue in this way: “In any realistic scenario, it is abundantly clear that the city must accelerate a reduction in staffing costs.”

The group went on to suggest several methods — both short- and long-term — for the city to consider.

Those include:

Requiring staff to take furlough days.

Reducing base pay.

Developing a lay-off strategy in case unions don’t agree to cost-cutting concessions.

Asking city voters to repeal binding arbitration for police and firefighters.

Switching to a two-tier pension plan that offers new hires less lucrative benefits. (The report correctly points out, however, that this alone will not solve the problem of escalating pension costs.)

Holding down health insurance costs for retirees.

Looking closely at what the private sector pays when it sets city salary benchmarks. (The task force urges private sector employers to cooperate in sharing information — we heartily second that suggestion.)

As we’ve previously reported, the City Council will not be getting a formal presentation on the task force report; the council voted 3-2 against that.

We believe that’s a big mistake, but at least Lichtig did say she will use the report as guidance in presenting the budget.

We’re glad to hear it. Why bother to convene a task force of hardworking, well-informed private citizens if the city is not going to make good use of their expertise?

For that matter, why go through the motions of soliciting public comment on the budget when the city has an ever-shrinking pool of discretionary dollars to spend?

Pension cuts, pay reductions and an end to binding arbitration are highly controversial, to be sure. But without such measures, the day may come when there is no money left for any worthy new projects or programs, no matter how hard the public lobbies for them. For that matter, even existing programs and services may have to be cut, or fees dramatically increased to retain them.

To avoid that, the city must commit to making substantive changes that will free up taxpayer dollars for purposes other than salaries, overtime and pensions.

If San Luis Obispo residents truly want a meaningful say in how their money is spent, they would do well to demand the city make this Priority No. 1: Develop and implement a plan to reduce runaway compensation costs.

Learn More

The public is invited to a community forum on San Luis Obispo’s budget priorities from 6:30 to 9:30 tonight at the Ludwick Community Center, 864 Santa Rosa St. For more information on the budget — or to fill out an online priorities survey — go to www.slocity.org.