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Oxnard Mulls Big Boost in City Pensions

The Region

Before the budget crisis surfaced, officials had agreed to participate in an early retirement plan of 90% pay for 450 employees.

January 14, 2003|Catherine Saillant

Even as Oxnard braces for potentially severe funding cutbacks, its city manager is recommending that 450 employees -- including himself and other top managers -- be awarded a 33% boost in their pensions.

City Manager Ed Sotelo said the improvements are needed to keep worker benefits competitive with those of other government jobs.

Under the proposal, an employee with 30 years of service would qualify for 90% retirement pay at age 60. Currently the same worker would retire with 68% of pay.

The improvement is being considered even as the state faces a record $35-billion budget shortfall that could result in significant funding cuts to California's counties and cities. And it is opposed by many of the city's younger employees, who will end up paying most of the $2.9-million annual cost.

Sotelo and council members say they must stick by agreements reached with unions three months ago, before the full extent of the state's financial crisis was known. Under those pacts, the city's portion of the cost is $734,000 a year. Employees will contribute the remaining $2.2-million through payroll deductions.

"That money was set aside before we knew this was coming," Sotelo said. "We are in good, sound financial health. In no way does this create a financial impact that will hurt services to our residents."

Still, one taxpayer advocate cautioned that it is unwise to saddle the city with new long-term obligations when the state is facing so much financial uncertainty. Oxnard's decision also could put pressure on other local cities to approve similar packages for their employees, said Don Facciano, executive director of the Ventura County Taxpayers Assn.

"We do need to take a hard look every time we have budget crunches," Facciano said. "This is an increase to the citizens of Oxnard. And that should be looked at very carefully."

The proposal comes before the council at today's 7 p.m. meeting. Council members appear to favor the improvement, saying it is needed to keep valuable employees from leaving the city for other jobs.

"It's a competitive thing," said Councilman John Zaragoza. "Quite a few cities have gone this route in order to retain top-quality employees."

Across the state, public employee unions have pushed for new retirement benefits that became available last year. Bakersfield, Montclair, Inglewood and the counties of San Diego and Riverside, along with at least 40 other local agencies, have already adopted benefit increases similar to those proposed by Oxnard.

But more than 100 agencies have approved more modest, and less costly, boosts to pension pay, according to figures supplied by California Public Employees Retirement System, the state's largest pension fund administrator.

In Oxnard, many employees oppose the benefit increase because it will cost them so much. To cover the cost, employees will contribute 8% of each paycheck to a retirement trust fund.

That works well for employees who are nearing retirement, said Roger Brooks. But for those who have many years left, the hefty price tag is less appealing, said Brooks, 40, a code enforcement officer.

He will see $300 deducted from his pay each month, Brooks said. That comes on top of a recent 26% increase in the cost of health insurance, he said.

Brooks and other employees contend that their union, Service Employees International, Local 998, did not fully inform members about the financial effect before polling them on whether to accept the benefit.

But a union official said that it scrupulously followed the rules in conducting the election. In fact, they polled the workers twice, said Jack Futoran, the union's interim executive director.

"A majority of the people approved it," Futoran said.

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