Mara's Pension Problem

Mara Elliott has the highest pension cost of any city official, even though she makes less and has served less time than others. Here's why... *Spoiler Alert: it's illegal.*

At a Glance

  • Mara shouldn’t be getting any pension benefits as the city attorney because Prop. B in 2012 eliminated pensions for elected officials.
  • Elliott persuaded the city council last year to join the unions’ quo warranto lawsuit and agree that the ENTIRETY of Prop. B is invalid
  • The annual difference to her pension without Prop. B will be at least an extra $1.6 million in pension benefits – in violation of Prop. B.

In Depth Analysis

I did a CPRA request for the city’s share of contributions to SDCERS for people in the City Attorney’s Office going back to 2010; that request is here.  In response, I received this 2010-2018 spreadsheet.

Because that spreadsheet didn’t include the entire 2019 calendar year, I separately requested the same info for all of 2019; that request is here.  I was provided this 2019 spreadsheet.

I created a spreadsheet showing the history of Elliott’s annual compensation and the cost of the city’s share of her benefits; you’ll find it here. As you’ll see, the percentages increase three-fold for her pension at two to three times for her other benefits when measures against her based salary. That got me wondering: Why did her pension increase?

It turns out that Elliott told SDCERS to put her into the pension system for elected officials shortly after assuming office.

Since at least 1971, the San Diego Municipal Code section 27.1402 has allowed elected officials to participate in the city’s pension program. Section 24.1705 has set the benefit at 3.5% per year of “service credit” for elected officials (not the 2.5% for most employees) based on final compensation. Section 24.0103 defines “service credit” by reference to “creditable service,” which defines both terms to include “service rendered for compensation as an employee or officer (employed, appointed or elected) of the City or a contracting agency, and only while he or she is receiving compensation from the City or a contracting agency, and is contributing to this System pursuant to appropriate provisions of this Article. . . .”

Putting those provisions together, Elliott would be entitled to a pension benefit of roughly $102.5k per year if she serves until December 2024.  Her pay will be at least $206k per year starting in December 2020 (according to the fiscal analysis in Prop. L, which voters approved in November 2018).  She started as a deputy city attorney in mid-2009 and would therefore have more than 15 years of “service credit” if she retires at the end of a second term (when she’ll be over 55).  The math is this: 15 years * .035 per year * $206k annual salary = $108,150 pension benefit per year.

What makes this problematic is that she is getting “service credit” not only at her higher pay as an elected official but the higher benefit formula applies also to the years she worked before assuming office at the 2.5% benefit rate. So she’s getting a retroactive raise.

But that’s not the worst of it.  She shouldn’t be getting any pension benefits as the city attorney because Prop. B in 2012 eliminated defined-benefit programs for employees AND elected officials. The supreme court said that Prop. B violated the meet-and-confer rules applicable to unions, but there are no meet-and-confer rules for elected officials; in fact, the voters eliminated pension benefits for state legislators back in 1990.

Here’s the Prop. B language that now appears in charter section 140 (see page 24 of the ballot materials): “Notwithstanding the foregoing, and except as expressly provided in this Article IX, all Officers and employees, with the exception of sworn police officers, who are initially hired or assume office on or after the effective date of this Section shall participate only in such Defined Contribution Plans as authorized by Sections 150 and 151 of this Charter.”  (These are my highlights so you can see how it applies to elected officials; cops are the only exceptions.)

Furthermore, the ballot materials (excerpt attached) state that Prop. B would: “Eliminate the defined benefit pension plan prospectively for elected officials (Mayor, City Attorney and City Councilmembers).”

Despite the clear language in Prop. B, Elliott persuaded the city council last year to join the unions’ quo warranto lawsuit and agree that the ENTIRETY of Prop. B is invalid (look at the highlighted language at the end of the answer), even though Prop. B contained a severance provision (look at Section 7 on page 28 of the ballot materials). Severance means that only the illegal parts are ineffective and everything else remains.  So why did Elliott persuade the council to agree that the entirety should be invalidated?

Answer: Because Elliott’s pension would be just $26,250 per year if it ended when she assumed office in 2016.  At that time, her pay was $150k per year and her benefit was 2.5% per year of service. Here’s the math: 7 years * .025 per year * $150k annual salary = $26,250 pension benefit per year. The annual difference to her pension without Prop. B is more than $80k, and if she retires at the end of 2024 and lives 20 years, that’ll be at least an extra $1.6 million in pension benefits – in violation of Prop. B.

Notice the Elliott has the highest pension cost of any city official – higher than the COO’s pension cost – even though Elliott makes considerably less than the COO and has less service time than the COO has.

This is not just a problem for Elliott.  Georgette Gomez is also taking a pension even though her only connection to the city prior to being an elected official was as an intern in the 1990s (per attached).  Like Elliott, Gomez gave instructions that she be put into the pension system for elected officials (despite it being eliminated for new elected officials by Prop. B in 2012).  The only difference is that Elliott, as a lawyer, should have known better.