Hermosa Beach looks to trim its pension costs
The Hermosa Beach City Council expressed a collective will to ask future municipal employees to shoulder part of the costs of their pensions and health benefits, a move suggested by Councilman Howard Fishman during his election campaign last year.
The matter was discussed at a Thursday meeting in which council members took preliminary steps to put together a lean budget for the next fiscal year, whcih begins this summer.
Council members also reached informal consensus for continuing to consider street paving a funding priority.
City Manager Steve Burrell pointed out that the municipal government has begun feeling the effects of the recession that was felt by residents and businesses quite a bit earlier.
“This year, probably more so than last year for the cities, we’re seeing the impact of the recession,” he said.
Councilman Kit Bobko said the city must seek to trim ongoing costs like pension contributions, which continue after an employee has retired.
“The legacy costs are really what I think is the anchor around the city’s neck,” he said.
The city would seek the employee cost sharing during salary negotiations with employee groups.
Councilman Jeff Duclos said he embraces the cost sharing concept.
“I’m very concerned about these legacy costs,” he said.
Fishman said “there is a groundswell of support” for the cost sharing.
Individual council members also introduced a variety of possibilities for cutting costs or raising revenues that might be discussed further as the budget talks continue.
Fishman, the retired risk manager of Manhattan Beach, said money from pet license fees increased to that city when, as head of animal control, he hatched a program to “find volunteers or parking officers on rainy days and have them canvass for pet licenses.”
The canvassers located pet owners by knocking on doors and looking for pet bowls and “beware of dog” signs.
“We doubled the licensing revenue in a year and a half just by canvassing,” Fishman said.
Mayor Michael DiVirgilio said with employee salaries claiming the lion’s share of shrinking revenues, the city could ask employee groups to take pay cuts.
“And I know that’s harsh, but it would require only a small-percentage reduction that would help us meet the [revenue] gap almost immediately,” he said.
DiVirgilio introduced the subject with little hope of an enthusiastic reception, saying, “This will probably go over like a lead balloon.”
Duclos said he wants further study of a city hiring freeze that includes five vacant Police Department positions, which decreases the patrol force by 18 percent. He said taking police off the streets could lead to a perception the city is less safe, which in turn could lower property values and property tax revenues.
“I was greatly concerned about the number of cuts as they relate to the police department,” he said.
“I say this because for me, the thing that drives the city is our property tax, and it’s totally based on what the perceived value of our city is to our residents. If we don’t do anything to drive that value, if we sit by passively and watch it deteriorate, because of any perceived sense that we’re not a safe city…then it’s like a house of cards,” Duclos said.
He mentioned an unfilled firefighter position along with the five police positions and said, “I think we have an obligation to figure out how to fill those where we can.”
DiVirgilio agreed that the city should look deeper into the hiring freeze and its cost savings. Eight positions remain unfilled outside the police and fire departments as well.
Duclos and Fishman mentioned the possibility of revisiting potential increases in the license fees paid to the city by businesses, a notion that raised hackles when former Councilman Michael Keegan proposed the first such increases in Hermosa in nearly three decades.
Fishman said any discussion of business license increases would have to involve the business community “from the start.”
Duclos said, “I’m not suggesting we plunge into that tonight, but that’s a matter that is going to be revisited at some point.”
Councilman Pete Tucker suggested reviewing fees for parks and recreation use.
Fishman repeated his suggestion that the rest of the council join him and Duclos in turning down a car allowance, health insurance and a separate stipend which they receive from the city.
“If we’re asking employees to take a hit and not get increases or what have you, then I just want the residents to know that some of the council is willing to do that as well,” Fishman said.
The week before, the City Council approved mid-year adjustments to the current budget that include the hiring freeze. ER