pensions

By Ed Mendel
Monday, December 9, 2013

Following the city charter, a reluctant San Bernardino city council last week approved a police pay raise costing about $1 million, the second $1 million police salary increase since the city filed for bankruptcy last year.

The four council members who voted for the 3 percent pay hike all criticized a city charter provision linking San Bernardino to the average police pay in 10 other cities, most much wealthier with higher per-capita income.

When a pay hike was approved last March, the city attorney, James Penman, and a councilman, Robert Jenkins, argued competitive pay attracts quality officers to combat a high crime rate. Penman was recalled last month, and Jenkins was not re-elected.

“I think most residents are puzzled and outraged that we are compelled during bankruptcy to provide substantial pay increases,” a newly elected councilman, Jim Mulvihill, said last week. “Not only that, it’s not any negotiation within our community.”

Several groups pushed to repeal the charter provision after the bankruptcy. But the city council chose not to put a repeal measure on the ballot last month, citing short timelines and ballot costs, the San Bernardino Sun reported.

After Vallejo filed for bankruptcy in May 2008, a split vote of the city council (called “insane” by a council member elected later) gave police a 7 percent raise that took effect in July 2010, more than a year before the city exited bankruptcy.

Now Vallejo has a $5.2 million general fund deficit projected to grow to $8.9 million next year. Critics say Vallejo failed to make structural budget changes needed for long-term solvency, such as curbing pension and retiree health care costs.

San Bernardino cut short-term pension costs. In danger of not making payroll, the city filed an emergency bankruptcy on August 1 last year, then took the unprecedented step of halting payments to the California Public Employees Retirement System.

Before resuming payments in July, CalPERS said the city ran up a debt of about $17 million. The big pension system, fearing other struggling cities may skip payments, is appealing a ruling that San Bernardino qualifies for bankruptcy.

U.S. Bankruptcy Judge Meredith Jury directed San Bernardino to prepare an outline or “term sheet” of its debt-cutting proposal for mediation with creditors conducted by retired U.S. Bankruptcy Judge Greg Zive of Reno.

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