Read the report HERE (Pdf)
SAN DIEGO – The Kroll report on management of the city's pension system concluded that the system was plunged into crisis not through low investment returns or unpredictable events but through “years of reckless and wrongful mismanagement involving any number of city and pension board officials.” It found that:
The City Council and the pension board acted improperly and illegally in approving the first of two changes to the pension system, known as Manager's Proposal I, to avoid financial obligations set by state and local law.
The proposal benefitted the city by allowing the city to reduce its pension contributions.
The pension board failed to maintain the financial stability and political independence of the pension system.
A second pension system deal, known as Manager's Proposal II, offered no real benefits and “was unlawful for a number of reasons.” Furthermore, it was approved only through the award of new retiree benefits, “one of which, when stripped of its descriptive veneer, was made available only to a single individual then serving on the pension board.”
The city weakened its financial position by using pension system assets to pay for the health care costs of city retirees.
The pension board “made false and misleading public statements to disguise the extent to which pension system assets would be insufficient to pay the promised benefits to City retirees.”
The city “knowingly failed to comply with federal and state requirements” that sewage treatment costs be shared proportionately between residential and industrial users. The result was “city homeowners being overcharged on their monthly bills . . . with the excessive payments being used to subsidize the City's industrialized water users.”
A consequence of city officials' misdeeds regarding both the pension system and wastewater treatment was that “the city repeatedly obtained money from public investors through financial statements and related disclosures that were false.”
The report noted half the city council, most of the staff, the board, advisors, etc corrupt.
Report means: Nothing will happen except the taxpayers will be forced to pay for it all.
As a native San Diegian and resident here, Who Cares.
Really doesn't affect most of us here.
We are more concerned what is going on with the Middle East wars.
If We and Israel don't win, all the money in the world won't help us.
It's amazing to me that the monied conservative interests in CA aren't agressively planning for a ballot initiative to reform pensions. This plan should only be for non-public safety employees and, of course, only for future employees. I leave out public safety employees because an initiative for non-public employees would be far easier to pass. A public safety employee plan could be done later.
To demonstrate how easy it would be to pass, they could begin in Long Beach, which is contemplating a special election in early '07 to place a ballot measure proposing either a sales tax increase or a parcel tax to fund public safety. Placing a concurrent pension reform measure on the ballot would be just the ticket to send a strong message to local governments. Long Beach could be a trial run for a statewide measure.