Friday, February 22, 2019     Volume: 19, Issue: 51

Santa Maria Sun / News

The following article was posted on August 8th, 2018, in the Santa Maria Sun - Volume 19, Issue 23 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [] - Volume 19, Issue 23

Santa Maria responds to grand jury report on pensions

By Spencer Cole

The Santa Maria City Council responded to a Santa Barbara Barbara County grand jury report on Aug. 7. The city's answer included two recommendations, which Santa Maria officials say the city has already implemented, as well as several findings that the city partially disagreed with and noted in its letter, sent by Mayor Alice Patino. 

The council met after the Sun's press time but was expected to ratify the letter's contents unanimously, according to city staff.

In all, the city partially disputed several findings, including its state Public Employees Retirement System (CalPERS) plan's solvency, which the jury said was at high risk.

While the city agreed with the jury that its funding ratios were lower than it "would like," officials argued that the funding ratios identified by the jury were "not a predictor of a plan's solvency." Instead, a lower ratio is "a signal that action may need to be taken to improve the ratio over the long term." 

The grand jury noted in one of its findings that Santa Maria faced greater pension risk because of its relatively low general fund revenue per capita, which currently is less than 50 percent of Santa Barbara's and less than 67 percent when compared to Lompoc.

"Santa Maria has taken steps to end employer contributions in lieu of employee contributions in its pension plans," the jury stated. "This step moves some of the burden of repaying its unfunded pension liabilities from the city to its active employees." 

For the most part, the city agreed with this finding from the jury but took exception to two key points. Spokespersons for Santa Maria argued that the grand jury did not take all factors into account when it came to the general fund. 

"For example the grand jury's analysis does not take into account that Santa Maria has (both currently and historically) a much lower number of employee-to-population ratio than Santa Barbara, San Luis Obispo, and Lompoc," the city said in its response. "In fact, Santa Maria's employee-to-population ratio at 4.76 (per 1,000 residents) is almost half that of Santa Barbara's ratio of 9.26, San Luis Obispo's 8.93, and Lompoc's 8.14."

Another factor the city noted was that not all pension costs are funded by general fund revenues and that the grand jury did not take into account new or significant changes in the city's revenues. One example listed was the retail development at Enos Ranch, which Santa Maria officials say will provide a steady revenue stream and increase city tax revenue.

The letter is scheduled to be sent to the grand jury following the Aug. 7 City Council meeting.

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