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Police File Claims Over Huntington's Refusal to Pay State for Spiking : Pensions: Officers say the city is jeopardizing its contract with the retirement system, endangering their benefits. Deputy city attorney says move is premature and should wait until PERS issue is resolved.

August 25, 1994|DEBRA CANO | SPECIAL TO THE TIMES

HUNTINGTON BEACH — Police officers have filed 99 claims against the city, charging that their retirement benefits are in jeopardy.

Huntington Beach Police Officers' Assn. President Richard Wright said Wednesday the claims are intended to protect employees if the city loses its contract with the state Public Employees' Retirement System over a dispute about paying a bill for pension costs.

"We want to protect the employees from any loss in benefits that could arise by any bad faith bargaining between the city and PERS," Wright said. "Our best legal advice is that this is the best course to pursue."

Wright said he expects more police officers and other city employees to file similar claims. The claims charge that individual damages would exceed $25,000 and may be as high as $1 million if pension benefits are lost as a result of the city's actions.

Attorney Gregory G. Petersen, representing the police officers' association, said the city has refused to pay the PERS bill, violating its contract with employee unions and possibly affecting their pension benefits.

"By not paying it they put in danger the basic manner in which the officers' pensions would be paid in the future," Petersen said.

Petersen also said the claims are the first step before a lawsuit is filed against the city.

In response, Deputy City Atty. Bob Sangster said that the claims are premature. "No one has been harmed and these issues should wait until after the city and PERS have resolved their issues," he said.

PERS wants the city to pay $919,000 as the city's contribution toward the retirement for 39 employees who converted certain benefits, such as pay for unused vacation and sick leave, to their final year's salary, on which a pension is based.

In June, the City Council voted not to pay the sum.

Some council members contend that the practice of city employees "inflating" their pensions to increase their retirement pay is illegal and should not have been allowed by PERS, and therefore the city should not be obligated to pay the costs.

City officials say that if the city must contribute to such pensions for city workers, ultimately, it could cost $13 million.

The city agreed in past contracts with employee unions that certain benefits could be converted to salary. However, a new state law has made most aspects of converting benefits illegal.

PERS informed the city in a July 22 letter that it is obligated to pay for the pension costs and that it will increase the city's contribution rate to cover the sum.

The letter also stated that failure by the city to pay the bill could result in termination of the city's contract with PERS.

Last week, city officials meet with PERS officials to discuss the dispute and the council has since met in closed session to discuss its options.

Deputy City Administrator Richard Barnard said that the city intends to honor its obligations with PERS.

"We are paying and meeting contractual obligations with PERS," Barnard said.

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