Andrew Edwards, Staff Writer
Posted: 08/10/2012 01:46:23 PM PDT
Special Section: San Bernardino
SAN BERNARDINO – The city has nearly $200 million in unfunded pension costs, according to a U.S. Bankruptcy Court filing showing to whom the city owes the most in unsecured claims.
San Bernardino owes the most – $143.3 million – to the California Public Employment Retirement System, or CalPERS, which manages retirement benefits for state workers and employees of many California municipalities.
That figure and others are outlined in a U.S. Bankruptcy Court filing in Riverside showing the city’s creditors who hold the city’s 20 largest unsecured claims.
CalPERS and other pension-related obligations total about $192.7 million, according to the filing. The filing lists roughly $281.2 million in total obligations that also include several equipment and vehicle leases.
Although pensions represent the largest chunk of San Bernardino’s unsecured debts, the city will not be able to erase obligations owed to current or future retirees, attorneys said.
“I don’t see the city not making its obligation to CalPERS,” City Attorney James F. Penman said.
State workers and employees for many Golden State municipalities receive pension benefits through CalPERS.
Attorneys Dieter Dammeier and Corey Glave, who respectively represent San Bernardino’s police and fire unions, also said they are confident existing pension obligations will survive the bankruptcy process.
San Bernardino filed for emergency bankruptcy protection on Aug.1 while facing a $45million deficit.
Although city officials and the court may not be able to cancel pension payments, San Bernardino’s bankruptcy is just one of the fiscal crises taking place in the Golden State arousing debate on public employees’ pensions.
Pension costs were once an issue that interested few outside of the ranks of fiscal conservatives. Retirement costs, however, have increased attention as San Bernardino and other cities seek bankruptcy protection and state government deals with perennial multi-billion deficits.
San Bernardino Mayor Pat Morris, who has called for higher retirement ages, said Friday the city’s list of creditors shows how City Hall is squeezed by pension costs.
“In the large picture of things, beyond our pension funds, we don’t have a lot of mega long-term obligations,” Morris said.
Defenders of pensions, including employee groups and CalPERS officials, respond that new criticisms of pensions let public officials off the hook for bad spending and ignore the extraordinary damage the post-2007 housing market crash did to city budgets.
“I think it’s completely unfair, the focus on employee retirements,” said Glave, attorney for San Bernardino Professional Firefighters.
“Almost every city has pension requirements. Some cities chose methods to pay them. Others chose to have unfunded allocations,” Glave said.The firefighters union is itself on the creditors list. The city lists a $1.4 million judgement owed to the union in the filing.
An Aug. 8 opinion piece by CalPERS board member Rob Feckner further argues that pensions are not the reason behind the bankruptcy in San Bernardino and Stockton.
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I always wonder if there has been (shocker alert) diversion of funding that would shore up pensions to other activities, while the market was flush with dividends. Any competent accountant, like the ones noticing all the shortages, should be able to note that investment burdens needed to support expected payouts were problematic.
But as we all know, when a politico gets a bug up there b–t to build some pie in the sky community theater or animal park, and the funds aren’t readily available , revenue streams change direction very quickly