gistfile1.yml

postgresql:
  pkg:
    - installed
    - env:
      - LC_ALL: en_US.UTF-8
  service:
    - running
    - enable: true
    - require:
        - pkg: postgresql
    - watch:
        - file: /etc/postgresql/9.3/main/pg_hba.conf
        - file: /etc/postgresql/9.3/main/postgresql.conf

/etc/postgresql/9.3/main/pg_hba.conf:
  file.managed:
    - source: salt://files/pg_hba.conf
    - user: postgres
    - group: postgres
    - mode: 0640
    - require:
        - pkg: postgresql

/etc/postgresql/9.3/main/postgresql.conf:
  file.managed:
    - source: salt://files/postgresql.conf
    - user: postgres
    - group: postgres
    - mode: 0644
    - require:
        - pkg: postgresql      

postgresql-user-dev:
  postgres_user.present:
    - name: dev
    - password: dev
    - require:
        - service: postgresql

postgresql-db-dev:
  postgres_database.present:
    - name: dev
    - encoding: UTF-8
    - lc_ctype: en_US.UTF-8
    - lc_collate: en_US.UTF-8
    - template: template0
    - owner: dev
    - require:
        - postgres_user: postgresql-user-dev

Gives the following error on the second run:
"Database dev has wrong parameters which couldn't be changed on fly"

Solution: encoding: UTF-8 should be encoding: UTF8.

An IRC log pointing to this Gist was the third result in Google for this error.

Thanks and keep being awesome!