Daniel Borenstein

By Daniel Borenstein, staff columnist
Posted: 04/19/2013 09:00:00 AM PDT
Updated: 04/21/2013 05:10:33 AM PDT

City officials try to have it both ways.

They blame their pension woes on the mighty California Public Employees’ Retirement System. But when CalPERS tries to do the right thing, as we just saw, cities drag their feet like petulant children.

CalPERS administers pensions for 450 of California’s 482 incorporated cities and towns. For years, the nation’s largest retirement system has used accounting gimmicks that have kept those municipalities’ rates artificially low. As a result, cities have been underfunding the generous benefits they promised workers.

Labor leaders like that because it leaves more money each year for salaries. Similarly, many city council members go along because it pleases unions that fund their campaigns and leaves more discretionary money in annual municipal budgets.

CalPERS has fallen billions of dollars short and needs cities to start paying off their portion of the debt at a more reasonable pace instead of leaving it for our children and grandchildren. It’s not only a matter of fairness to future generations; the fiscal integrity of the entire pension fund is at risk.

CalPERS deserves much blame for its years of deceptive accounting. But city officials must own up to their complicity. Any competent city manager or conscientious council member should have seen the problem and set aside more money.

Now city leaders are playing the victim card. The hypocrisy reached absurdity last week as the CalPERS board made much-needed accounting changes that will bring rates closer to where they should be.

Natasha Karl, lobbyist for the League of California Cities, and officials from 28 cities pleaded for delay. “We are concerned,” Karl wrote, “that these changes may further jeopardize cities working to achieve financial stability and the unintended consequence may be the risk of making some agencies insolvent.”

Yes, cities will face higher rates. But the money goes toward paying off their debts.

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