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Anaheim : City Gets Windfall From Pension Fund

June 11, 1994|MARTIN MILLER

City officials are considering how to spend an unexpected $13.7-million surplus from the Public Employees Retirement System.

Officials said the surplus money will not be used to close a $9-million shortfall in the city's $137-million general fund budget. To make up the shortfall, the city has proposed cutting 16 jobs and imposing a utility fee against the city-owned Public Utility Department.

City Manager James D. Ruth recommended that the council put the $9.6 million into a reserve account.

Ruth said the money could help cushion possible financial blows, such as an unexpectedly low allotment of state money.

If the money is not needed to cover shortfalls in state funding, it could be used for capital improvements, Ruth said. The city may also channel part of the surplus to a reserve fund especially for the Anaheim Convention Center.

Because of PERS policy and state laws, only $9.6 million of the $13.7 million will be available to the city during fiscal year 1994-95, city officials said. It was not clear whether the remaining $4.1 million will be made available to the city next year, or whether PERS will lower its rates to balance city accounts, officials said.

Officials said the surplus was created by better-than-expected returns on PERS investments in recent years, plus a series of wage freezes on city employees.

The City Council is expected to decide how it will spend the PERS surplus when it votes June 21 on the 1994-95 budget.

The last time the city had a PERS surplus was three years ago when it received about $13 million.

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