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Pensions: City can't keep up with cost

Glendale is being forced to contribute more to CalPERS than it can afford.

April 23, 2010|By Melanie Hicken

Glendale’s contribution to employee pension plans in 2001: zero. The city’s check in 2009: $22.6 million.

The growing burden of the California Public Employees Retirement System on Glendale’s bottom line in the last decade has been steep, and city officials are asking employees to pay a larger share of the costs.

In addition to increased contributions from current employees, city officials are proposing a two-tier retirement system with scaled-back benefits for all new hires.

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“I don’t know how we justify these levels of benefits for public employees,” City Manager Jim Starbird said. “Not only are they terribly costly, and we can no longer support the structure financially, but I don’t know how we justify this to the public.”

Representatives from three of the city’s employee unions — who would have to approve the proposed changes — say they are willing to negotiate. The Glendale Police Officers’ Assn. could not be reached for comment.

“We certainly want to do our share to make sure we don’t lose employees and keep things in the positions where we can hire the right people,” said Craig Hinckley, president of the city’s largest employee bargaining group, the Glendale City Employees’ Assn.

Still, union representatives said any changes must be made carefully so as not to hurt the city’s ability to attract quality employees.

“We have to make sure we don’t short ourselves with regard to surrounding cities . . .” said Jay Kreitz, president of the Glendale Managers’ Assn. “Or we’re not going to be able to hire the brightest and the best like we normally do.”

The proposed changes come as pension payments on behalf of city employees have added up to about $90 million in the last five years alone, according to a News-Press analysis of city budgets. That’s nearly double the total amount spent on library operations during the same time period.

The sharp increase was fueled by significant increases in benefits and salaries that the City Council approved in the stock market boom years when Glendale had little or no required contribution. And forecasts from state pension officials show little indication that the trend will plateau soon, as Glendale and other cities face major investment losses from the state system.

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