City to Look Closer at Pension Liabilities

The Hermosa Beach City Council has agreed 4-1 to move forward with using an independent firm to review the city's unfunded pension liabilities (see accompanying city staff report under photo.)

The decision came , just a month after a  found that Hermosa’s pension costs were among the highest in the county.

Mayor Pro Tem Jeff Duclos voted against the idea of an independent study, telling his fellow council members that the decision is "premature."

"We have a detailed study already done by the grand jury. The staff is now preparing a response to that," he said.

The grand jury recommended in its report that Hermosa Beach:

1. make proposals for reducing or eliminating the employee retirement pickup during contract negotiations with employee bargaining groups (the pickup cost is the retirement contribution share paid by the city);
2. proceed cautiously with its current initiatives to pay off the negative CalPERS balance.

"It seems like this idea of judging the prospects of our future obligations in the middle of what’s already a reform effort by the city... doesn’t make a lot of sense," Duclos said at the council meeting.

But City Councilman Kit Bobko, who first proposed that an independent economic review be conducted, said that the report is "very important... so we have a better idea going forward for what the real outlook for the city is."

The council decided to hire an independent firm to review the city's pension numbers, which will be presented in a separate report from consulting firm Bartel Associates. Additional data will be available in a CalPERS assessment.

The total cost for the independent review and PERS evaluation will be about $20,500, according to city staffers.

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