By Liset Márquez, Inland Valley Daily Bulletin
Created: 10/05/2011 10:45:44 AM PDT
MONTCLAIR — Executive and department managers have agreed to permanently contribute to their pension benefits to help the city deal with a long-term shortfall in its bond payments.
In the past, the city has contributed to the employees’ pension benefits.
Employees will now pay 6 percent of their membership contribution to the California Public Employees Retirement System, said Ed Starr, Montclair’s city manager.
“We can no longer afford to pay to meet those contributions,” he said.
While the city has passed a balanced budget, Starr said Montclair has “a long term structural deficit,” that needs to be addressed.
Pension contributions will help pay for the city’s bond payments, which are about $1.92 million annually.
Officials have set aside enough money to make bond payments through 2013 but after that, Starr said the city needs to find alternative sources.
“I have to find $2 million, which is a reoccurring amount by 2012 to be able to make bond payments through 2035,” Starr said.
Starr said the contribution rates are just one step in the process to securing enough funding. The remaining amount would be made up from rate adjustments and new revenues, if the economy turns in the near future.
The agreement saves the city nearly $179,000, Starr said. Pension contributions became effective Sept. 12.
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