OCEANSIDE -- New questions have arisen about the cost of a sweetened pension plan for hundreds of city workers that took effect last week.
Under labor deals approved two years ago, Oceanside's non-safety employees can now retire at 55 and get 2.7 percent of their salary for every year of service. They used to get 2 percent for each year.
Staffers had said the increase would cost the city, on average, $250,000 to $300,000 per year over 20 years, but those estimates now appear to be getting a second look.
Finance Director Teri Ferro hired an actuarial consultant last week to review the numbers. The North County Times had inquired why budget forecasts for fiscal 2010 showed a much larger increase in non-safety pension costs -- $2.8 million.
Ferro said the firm should have answers in about six weeks.
Public agencies have grown increasingly concerned about pension costs, as revenues skid. Last month, city managers from across the San Diego region issued a report to elected officials warning that "pension costs will soon escalate beyond our ability to manage them while the benefits exceed what taxpayers themselves can receive and what is needed to attract qualified employees."
Oceanside, like most cities in the county, belongs to the California Public Employees Retirement System, the state's largest pension fund. The city's annual contributions fluctuate with the ups and downs of investment returns.
The recession has been tough for all parties. CalPERS has lost nearly a third of its value since October 2007, the Sacramento Bee reported in late June.
Oceanside has compensated for diminishing tax revenue by cutting library hours, shuttering a recreation center and slashing positions.
By approving the enhanced pension benefit in 2007, the City Council added $16.1 million to Oceanside's unfunded liability. The present value of the benefits climbed by $25 million, a city report states.
Councilman Jack Feller was the only dissenter. "The public has to pay for this," Feller said at the time. "A lot of money."
As part of the deal, employees agreed to chip in part of their salaries. Most have since contributed between 1 and 4 percent of their salaries. According to a city report, employees had contributed $1.2 million as of July 1.
City Manager Peter Weiss said Friday that he stands behind his staff's original cost estimates. "Until we get verifiable numbers that either support or are contrary to what was done before, there's not much I can do to make any recommendations."
Public agencies can't take away promised pension benefits under state law, but they can change the terms for new employees.
"It's a commitment we made and it's a commitment we're going to keep," Councilman Jerry Kern said recently. "(But) if that vote came up today, we'd probably say we just can't afford this."
Call staff writer Craig TenBroeck at 760-901-4062.
