Carlsbad Pays Down PERS Debt as Contributions Increase 
By: Hallie Thompson, CCEA Vice President

At the June 18th meeting, Carlsbad City Council approved pension funding, a one-time payment of $20 million to CalPERS to reduce the unfunded liability, and policy to use general fund surplus monies to fund employee pensions.

Due to losses (-3.5% for the 2018 calendar year) by CalPERS investments, employer contributions are expected to increase over the next few years. Employees under PERPA will also begin contributing a slightly larger amount, which the state stipulates cannot exceed 8% for CCEA employees. Discussions around how to safely fund our pension will definitely increase.

CalPERS states in its November 2018 Annual Review of Funding, that “(a)s a result of the relatively good performance of the capital markets over the previous two fiscal years, the estimated funded status of the system has increased to 71% as of June 30, 2018, despite the lowering of the discount rate to 7%. However, employer contribution levels are climbing and this is potentially increasing financial stress on some employers. The greatest risk to the system continues to be the ability of employers to make their required contributions.”  Click Here or search CalPERS annual review of funding 2018 for more information.

Employer contributions are projected to increase over the next few years, which means that discussions around how to safely fund our pension will definitely increase. Employees under PEPRA will also begin contributing a slightly larger amount, which the state stipulates cannot exceed 8% for CCEA employees.

As always, we appreciate your ideas, feedback, and help on the topic of pension funding and CalPERS. 

Happy reminder that all CCEA members will receive 2 floating holidays on July 1, 2019!

Revisions to Management Compensation     
 

A proposal  was presented to City Council at the June 18th meeting to revise the Management Compensation Plan and Benefits. The proposal included the following:

•  A 4% increase beginning January 2020 (salary ranges would be moved as well)
  • 3% will come from the 2019-20 budget and the remaining 1% would come from the salary savings of the current fiscal year
• Addition of 1 floating holiday for a total of 2 floating holidays 
• Increase uniform allowance from $26.00 to $34.62 for the Police Chief and Assistant Police Chief

The City Council then voted on the resolution and it passed 5-0. The 3% increase was approved with the option of increasing to 4% pending results from the survey.

Several questions were raised by the council members for clarification before the vote took place. 

What is the current CPI?
2018 average was 3.35% and 2019 YTD ranges 2.4% – 2.9%

Has a comparison compensation study been conducted?
A study has not been completed yet. If the budget is approved a study will begin this Summer, be concluded in Fall 2019 then presented to city council in Spring of 2020.  City council proposed a 3% increase and any additional increase above 3% would be discussed after study is presented. The rationale for 4% was based on the comparison survey done in 2016 for 2017 in which they found the general employees salaries to be below market as well as the CCEA’s 2018 negotiation of up to 3% increase (based on CPI) for 3 years. 

What is the compaction issue at 4% v 3%?
Based on data from the 2016 survey analysis, management was already below the top 1/3 and we transitioned out of a Pay for Performance increase. We will know better about compaction after the comparison study is done this year but there are compaction issues being faced. 

We will keep you updated on any changes once the survey is completed and presented to City Council in early 2020.

Training Opportunities

Foresters Financial: PERS & Social Security
Thursday July 11th

Leaders Mindset
Thursday July 11th

Business Writing
Tuesday July 16th

Run Hide Fight
Wednesday July 24th

Managing Up
Tuesday July 30th

Yoga

Every Wednesday & Friday

Emily Guinaugh
(760) 602-2436
emily.guinaugh@carlsbadca.gov

CCEA Board Members

Tye Gillespie President
Hallie Thompson Vice President
Marie Ashe-Nutter Treasurer
Mayra Turchiano Secretary
Terry Ennis Public Works: Transportation
Daisy Hernandez Public Works: GFE
Tom Vega Public Works: Utilities
Allen Edwards Housing & Neighborhood Services, Policy & Leadership, and Safety 
Eric Smith Parks 
Rosario Aranda HR, IT, and Finance
Bonnie Crane -Sullivan Library & Recreation 
Tammy McMinn At-Large

Anniversaries

June 2019