Wednesday, October 10, 2012




October 9, 2012

This week, Carl DeMaio attacked Bob Filner for supporting pension obligation bonds to reduce the City’s unfunded pension liability, despite the fact that Filner has repeatedly stated that such bonds are no longer necessary because of nearly $1 billion in reduced pension obligations as a result of a 5-year freeze on pensionable pay which he has committed to implement.

Today, it was revealed that DeMaio himself endorsed the use of pension obligation bonds to reduce the City’s unfunded liability.

In a news conference on Monday, DeMaio denounced pension obligation bonds:

“Taking out another credit card to stretch out payments on the City’s pension debt and racking up hundreds of millions in additional interest is exactly the kind of risky move that got City Hall into the pension mess to begin with.” - Carl DeMaio

Source:  DeMaio news conference, KPBS, October 8, 2012

But in a 2004 Union-Tribune commentary authored by DeMaio, he expressed support for pension obligation bonds as one measure to address the City's unfunded pension liability:

"After creating an independent Pension Reform Committee to provide advice on reforms, city leaders have severely watered down the panel's recommendations…
Combined with the anticipated sale of pension obligation bonds, these reforms would put the pension fund back on firm footing."

Source:  San Diego Union-Tribune, August 13, 2004

In a 2004 report from DeMaio's Performance Instititute (funded by U-T San Diego publisher Doug Manchester), DeMaio offered a blanket endorsement of the reforms proposed by the City's Pension Reform Committee, which included issuance of $600 million in pension obligation bonds to address the City's unfunded pension liabilities:

"The City's Pension Reform Committee has been meeting and deliberating over a series of reforms to the Pension System. Based on the minutes and votes from the meetings of the Committee, the San Diego Citizens' Budget Plan offers a blanket endorsement of their reforms - likely to be presented before the City Council on June 29, 2004…

“…The Pension Reform Committee will likely propose that the City use Pension Obligation Bonds (POBs) to address the current liability in the Pension Fund. The current proposal is to issue a  $200 million POB this year, and instruct the City Manager to find an additional $200 million in FY 2006 and $200 million in FY 2007."  (pg. 21)

Source:  San Diego Citizens' Budget Plan, The Performance Institute, 2004

“This is just one example of the overwhelming hypocrisy and dishonesty with which DeMaio approaches this election,” said Filner.  "DeMaio himself supported these bonds when he was fronting for Doug Manchester, but now he’s attacking me for previously supporting them.  Apparently, DeMaio has no shame and no memory.”


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