Politics & Government

Pensions Account for 3% Projected Rise in City Budgets Through 2013

"Status quo" preliminary spending plan totaling $193.7 million goes before Council on Tuesday night.

La Mesa leaders will consider a two-year “status quo” budget for 2011-2013 at Tuesday night’s council meeting that provides for a 3 percent increase in general fund spending—all attributed to a rise in retirement and health-care costs.

“The budget is increasing slightly due to an increase in fringe benefits costs for PERS [the California Public Employees Retirement System] and health benefits,” says a 361-page spending plan that doesn’t once use the word “pension.”

The city is planning to contribute $500,000 each year from the General Fund toward paying employee pensions.*

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The extra money, said the budget, will “help offset the retirement plans’ unfunded liability amount.”

City Manager Dave Witt and finance director Sarah Waller-Bullock have recommended that the council adopt the preliminary budget for two budget years. The final budget will be decided in August. La Mesa has done two years at a time since 2001.

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Witt and Waller-Bullock put the 2011-12 budget at $103.2 million and the 2012-13 budget at $90.5 million.

“It is also important to note that we are currently in negotiations with each of the city’s three bargaining groups [La Mesa Police Officers' Association, La Mesa Firemen’s Association and La Mesa City Employees Association] and the preliminary budget does not include any salary or benefit adjustments that may result from these negotiations,” says a staff summary for the 4 p.m. council meeting Tuesday.

The state Legislature’s failure to pass a 2011-2012 budget also had hamstrung La Mesa staff in its budget planning.

“Any changes as a result of the passage of a 2011-2012 budget [in Sacramento] will be reflected in the final budget,” staff said.

The budget plan offers spending and revenue details to the smallest level, even noting that “beginning in 2011-2012, funding will no longer be received from Helix High School for the School Resource Officer.”

Major equipment purchases are also sought, mainly to replace items that have gotten too old or were deferred from previous years.

Among other things, the city plans to spend $875,000 on  a “triple Combination pumper/rescue combination vehicle” for the Fire Department, $205,900 for a “CCTV sewer inspection vehicle” and $195,470 for an asphalt patch truck.

The city noted the key role of Proposition L, the three-quarter-cent sales-tax hike approved by voters in November 2008:

“The Proposition L revenues budgeted in the 2011-2013 preliminary budget are $7.1 million and $7.3 million for each of the two fiscal years, respectively,” the budget says.

“When considering both the base sales tax and the Proposition L sales tax, sales taxes are projected to generate 48% and 49% of General Fund revenues in 2011-2012 and 2012-2013, respectively.

“This is an increase in proportion to total General Fund revenues over previous fiscal years as revenues derived from property taxes stay at historic lows. In 2009-2011, base and Proposition L sales tax revenues were budgeted at 43.7% and 44.5% of General Fund revenues, respectively.”

*Editor’s note: An earlier version of this story incorrectly said  the preliminary city budget would raise the amount of money that city employees pay toward their pension by $500,000 each year. In fact, the money is coming out of the General Fund.  Employee contribution levels have already been raised.


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