The proposal to cut off future councilmembers from their ability to receive retirement benefits is a city-staff recommended path to save Signal Hill some money, but the current sitting Signal Hill City Councilmembers declined to take that step at last Tuesday’s Council meeting. They voted 3-2 (Vice Mayor Michael Noll and Councilmember Ellen Ward dissenting) to continue the discussion until more information becomes available.
At the Nov. 20 meeting, the Signal Hill City Council mulled over a staff recommendation for an ordinance that would exclude future councilmembers from CalPERS, (also known as the California Public Employees’ Retirement System). Enrollment in the CalPERS system offers Signal Hill employees, including councilmembers, retirement pensions and retiree medical benefits. Deputy City Manager Charlie Honeycutt highlighted the potential savings for the City.
“Based on our current costs,” Honeycutt told the Council, “we estimate that future savings can be as much as $11,600 per year, per [council]member, and then up to $10,620 in retiree health once a councilmember retires and if they qualify for retirement through the [CalPERS] system.”
The recommendation could not cover current councilmembers who are already participating members of CalPERS, according to the deputy city manager. Honeycutt confirmed that the California Government code would not allow any existing CalPERS member to withdraw from CalPERS.
“We have communicated with CalPERS,” Honeycutt said, “and they have determined that future councilmembers could be excluded from membership, and it only applies to those who would be elected after the effective date of this ordinance.”
Councilmember Ed Wilson opposed the proposal outright, indicating that he didn’t want to make the council seat a position that would require a councilmember to be independently wealthy or not working to run for the office.
“In that sense,” Wilson concluded, “I think when you take certain benefits away, there are not that many, you start eliminating the number of people that may be interested in helping the City, and I don’t want to see that.”
Mayor Tina Hansen agreed with Wilson. She highlighted the finality of the decision if the Council chose to close off retirement benefits for future councilmembers.
“We don’t know what’s going to be here in 20 years,” Hansen said. “We are going to close this off forever. And I think that, as Ed said, whether you’re juggling a full-time job and this or are retired and are essentially [making] this a full-time position, there should be some compensation for this or some benefits with that.”
However, both Vice Mayor Noll and Councilmember Ward voiced their strong support of the staff recommendation to cut off future councilmembers from CalPERS.
“Our employees have been contributing money to their retirement without any additional raise, and they’ve been shorthanded and doing a great job,” Ward said. “I, of course, don’t pay into retirement because I’m retired from the [CalPERS] system. So, you know, it doesn’t affect me, but I think we should save money wherever we can.”
Ward is the only sitting councilmember who is not participating at all in the Signal Hill retirement plan with CalPERS, Honeycutt confirmed Wednesday. Councilmember Larry Forester is contributing to the pension plan, but he opted out of the retiree health benefits. Forester, Ward, Hansen and Wilson– who opted into the CalPERS system– are required to contribute at least four percent of their salary towards pension costs.
While all councilmembers voiced how they felt about the proposal that would significantly impact the benefits for the people who would someday take over the council seats, the Council requested that staff research a few questions before they discuss the retirement issue further. The Council asked if other cities are excluding future councilmembers from CalPERS. They also asked if a future councilmember could opt out of the retirement system up front.
In an interview after the Tuesday night meeting, Wilson stressed the importance of keeping the benefits for the future councilmembers.
“It’s tough enough to get good people to run,” Wilson said, “and the benefits that you get from running I think are not necessarily monetary, but I don’t want to take away the small ones from a future councilmember.” He pointed to other times when the City has saved money on its retirement benefits for City employees.
The City has taken steps over the last couple of years to address the high costs of pensions and health benefits for retirees, according to Honeycutt’s report. The deputy city manager reported that all employees in addition to the councilmembers contribute at least four percent of their salary to their retirement. His report detailed a Council decision that changed the retirement formulas for new employees. One significant change to the new retirement formula raises the retirement age in order to be eligible for full retirement benefits, according to Honeycutt.
Other City Council highlights
Community garden In a first-reading vote, the Council voted 5-0 to approve a zoning ordinance amendment that essentially approves the property located at 1917 E. 21st Street to be open space and allowed to be used for a community garden. The property is adjacent to the Signal Hill Park.
U-Haul storage The Council has given a Signal Hill resident 30 days to remove a U-Haul storage trailer that had been sitting in the back yard of a residential property at 2047 North Terrace Drive.
Alarm system The Council has requested that staff review the alarm permit management policies and return to Council with recommendations on how to update the alarm system ordinance.
Tetra Tech The Council authorized the City Manager to enter into a contract with Tetra Tech Inc.The company will be responsible for the 2013 Water Master Plan Update.
Neighborhood Watch Councilmember Ed Wilson thanked the police department and his neighbor for their help when burglars broke into his home on Monday. Wilson reported that police apprehended the suspects, and his home and possessions were safe.
The next Signal Hill City Council meeting will take place on Dec. 4 at 7pm at the Signal Hill Council Chamber.