By a vote of 4-1, the La Verne City Council approved a resolution to offer early retirement packages to as many as 15 of its miscellaneous (non public safety) employees to help balance an anticipated budget shortfall of $1.7 million. If accepted by half of the employees to whom the package is extended, an estimated short-term savings of between $600,000 and $800,000 could result.
Councilman Steven Johnson opposed the resolution, which includes an offer of two years additional service credit for employees accepting the incentive package, saying, “Future generations will not receive the benefits, only the debt.”
By reducing staff via the sweetened retirement offers, the City is expected to realize short-term savings, enabling it to balance the budget. Longer-term, however, the City is likely to face higher pension costs to help fund the California Public Employees’ Retirement System (CalPERS) to which City retirees belong. It’s estimated that CalPERS is currently underfunded by as much as 35%.
Although the debate was civil among the Council members, sharp points were made. City Manager Marty Lomeli noted that the passage of the resolution would help save city jobs, adding that “it’s a solution.”
Johnson, however, was not supportive of the resolution, citing CalPERS’ current unfunded liabilities. He also asked that other Council members delay their decisions at least until the Council participates in upcoming budget workshops when it can examine other budget-reduction alternatives.
Discussion also ensued as to whether the City’s future CalPERS obligations will be paid with “cheaper” dollars or whether those cheaper dollars will be offset by increased cost of living adjustments (COLAs).
Opposing the proposal, Johnson said he wasn’t willing to put “future generations on the hook” by delaying tough financial decisions. “We’re just leaving them with picking up the tab,” he said.
In other city business, the Council also moved forward on a plan to offer a similar retirement package to a select number of police personnel with the rank of corporal or sergeant. Short-term budget savings of $420,000 are projected. Again, Johnson opposed the ordinance. A final vote on the resolution is expected at the Council’s May 17 meeting.
Refuse and recycling rates could also be going up by an average of 87 cents. A public hearing to discuss the projected hike is scheduled for June 7.
The meeting began with the Council honoring J. Marion Elementary School for being recognized as a California Distinguished School, a designation awarded to only 5% of all California schools.