Workers will be asked to pay into retirement
Canan Tasci, Staff Writer
Created: 06/22/2011 04:48:14 PM PDT

MONTCLAIR – Public safety and other city employees will be asked to permanently contribute to their pension benefits to help the city deal with a long-term shortfall in its bond payments.

As a temporary relief, employees in the past two years have been asked to pay 6 percent of their membership contribution to the California Public Employees Retirement System. They will be asked again to do so for the next fiscal year, but now as a permanent contribution.

“This is something that does need to be negotiated,” said City Manager Edward Starr.

Starr said the pension contribution will help pay for the city’s bond payments, which are about $1.92 million annually.

“By doing this now we can put money away, and over time as revenue grows and the economy improves we will close the long-term structural deficit and it will no longer be an issue,” he said.

While the city has been making bond payments, long-term revenue continues to come in slowly, and the city doesn’t anticipate the growth in the economy to make up for the payments immediately, Starr said.

Starr said the city is doing this for two reasons – to help pay for the bonds and also because the public is demanding that cities reduce pension liability and cost.

“By being pro-active at the local level it will prevent the state or voters from doing something more stringent as far as changing the way pensions are in the state,” he said.

The measure is a part of the city’s 2011-12 annual budget, approved by the City Council on Monday.

The city’s operating budget is $34.1 million, with a total projected revenue of $33.6 million.

Starr said the slight shortfall of $576,691 is related to an accounting adjustment related to the bonds.

To help close the city’s general fund portion of the operating budget, City Council members, during June 16 preliminary budget discussions, decided not to conduct a strategic planning session, which costs $15,000, for the next fiscal year and that amount was removed from the budget, Starr said.

The preliminary budget, as presented, contained a $37,000 shortfall in general fund revenues. The shortfall will be addressed by keeping some employment positions vacant until the deficit is made up early in the fiscal year, Starr said.

Starr said over the years the city has produced leaner and leaner budgets.

To read entire story, click here.