Del Mar City Council establishes pension reserve fund

By Kristina Houck

Facing a shortfall of more than $9 million in its pension fund, the Del Mar City Council on Sept. 3 unanimously established a pension reserve fund as a new pillar in the city budget process.

“I think this is very needed,” Mayor Terry Sinnott said. “It should be something used every year as a tool. It allows us to take a little bit more control over how we’re meeting this obligation. We want to meet this obligation.”

Del Mar’s firefighters, lifeguards and miscellaneous employees, meaning all other city employees, participate in the California Public Employees’ Retirement System. Del Mar contributes varying amounts each year, which represent about 27 percent of the city’s payroll.

According to the latest CalPERS reports released in June 2011, Del Mar has pension liabilities totaling $31.7 million with pension assets having a market value of $22.4 million, which means benefit pools are underfunded by more than $9 million, said Jim Eckmann, chair of the Del Mar Finance Committee and Pension Subcommittee.

City staff and the Del Mar Finance Committee recommended Del Mar establish a pension reserve fund and contribute an amount of money each year based on a 15-year amortization period, prevailing interest rates and new standards set by the Governmental Accounting Standards Board. GASB 68 is a new accounting policy for all public pension plans, which the city must implement in July 2014.

Based on these elements, the Finance Committee estimated the city should set aside $520,000 per year as a local savings account to offset and gradually eliminate the city’s unfunded pension liabilities. This amount would be adjusted each year, according to the actual GASB reported pension liability with consideration given to the market rate adjustment by Moody’s Investor Services.

The funds would be retained on Del Mar’s balance sheet, “so the cash will remain under our control,” said Tom McGreal, member of the Finance Committee and Pension Subcommittee.

“The city should pay CalPERS an annual contribution amount that’s equivalent to what the new GASB accounting policy tells us we should be accruing each year because we’re trying to do two things: We’re trying to solve the unfunded liability problem that we have today, and we’re trying to make sure that it doesn’t grow in the future,” McGreal said.

“The pension reserve policy we’re advocating addresses a growing problem that we’ve been looking at now for over a year. It also provides a long-term solution to what really is a long-term pension obligation problem, so it’s properly timed.”

In June 2011, the City Council expanded membership of the Del Mar Finance Committee from seven to nine members to analyze the city’s long-term pension obligations and offer solutions. Council members thanked committee and staff members for their work on the issue.

“I think that we’re far beyond what other cities and municipalities are doing in looking at our liability and establishing a policy, which is nothing else other than financial discipline on our part,” Councilman Al Corti said. “If nothing else, I think it’s prudent. I think it will help us financially.”

Related posts:

  1. Kudos to City of Del Mar’s Finance Committee Pension Sub-Committee
  2. Time to look at Del Mar pension reform
  3. Del Mar recognizes rising pension costs, seeks solution
  4. Del Mar Pension Reform: Q&A with Pension Subcommittee Chair Jim Eckmann
  5. City of Solana Beach, employees come to terms on wages, pension cuts

Short URL:

Posted by Staff on Sep 5, 2013. Filed under Del Mar, News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

1 Comment for “Del Mar City Council establishes pension reserve fund”

  1. Bob Loblaw

    CalPers and public employee’s unions are bankrupting municipalities across the state. What do you think is going to happen when the Federal Reserve stops propping up Wall St.? Why does a lifeguard get a lifetime pension? Just asking.

Leave a Reply



Bottom Buttons 1

Bottom Buttons 2

Bottom Buttons 3

Bottom Buttons 4

Bottom Buttons 5

Bottom Buttons 6





  • Community input received on proposed health club and pool facility in Rancho Santa Fe
    About 100 Rancho Santa Fe residents showed up on Friday, Oct. 17, for a health club and pool community meeting, the last outreach before ballots were mailed on Monday, Oct. 20. On the ballots, members are being asked whether the Rancho Santa Fe Association should spend $350,000 on a professional planning phase for the potential new community amenity. RSF Ass […]
  • Czech violin duo to perform at Village Church in Rancho Santa Fe
    In cooperation with the Consulate General of the Czech Republic, the Czech School San Diego hosts a free classical violin concert by internationally recognized Czech violin player Jaroslav Svecený and his daughter, Julie Svecená, who are on a tour of the United States. The concert will be at 7 p.m. Oct. 27 in the Village Church. The father-daughter duo will […]
  • Rancho Santa Fe weekly sports update
    Torrey Pines defeated Canyon Crest Academy 4-3 in a Palomar League opener for both teams on Oct. 9. Alayna Tomlinson and Farah Farjood each scored two goals to lead the Falcons. Samantha “Sammy” Cirino added one goal and one assist. […]