Council will start late after session on pensions [Press-Telegram, Long Beach, Calif.]
Apr. 18--LONG BEACH -- The skyrocketing cost of employee pensions will be placed under a microscope by the City Council on Tuesday.
The 4 p.m. pension study session and a 5 p.m. closed session will push the council's regular meeting time back to 6 p.m. The regular meeting can be viewed live in Long Beach on Charter Communications Channel 3, Verizon FiOS channel 21, and online at .
The council began discussing the pension problem back in December, and Tuesday's meeting is a continuation of that study session. The meeting will give the council, and Long Beach residents, a sense of the financial challenges facing the city because of workers' pensions and some of the possible solutions to remedy them.
Long Beach faces other budget challenges as well, such as unaffordable pay raises promised in workers' contracts and declining revenue because of the recession. The city is facing an $18.5 million budget deficit in the next fiscal year that begins Oct.1.
There is likely no simple solution, however, as any change to the pension system would have to be negotiated with city employee unions.
According to the presentation given to the council in December by the Department of Financial Management, the citywide cost of pensions grew from $74.2 million in the last fiscal year to $80.4 million this year. The cost is expected to hit $85.2 million in the 2011 fiscal year and $96.9 million in the 2012
fiscal year.
The general fund's share of the pension cost is typically a little over half -- of this year's $80.4 million cost, $42.2 million is from the general fund, according to Director of Financial Management Lori Ann Farrell.
The cost is expected to only keep rising, though, as the city deals with other financial problems, some developments over the next year could slow down the pension avalanche, Farrell said. Just like last year, city officials are expected to try to negotiate some sort of pay concessions from the employee associations, either forgoing or delaying scheduled pay raises.
If salaries don't go up, then pensions won't be quite as costly, Farrell said.
"With FY11, the key will be whether there are concessions or not," she said.
Contract talks
When or if that will happen is still unclear, but the council will start considering what direction to take negotiations with the employee associations following the pension meeting during a 5 p.m. closed session.
In that meeting, the council is scheduled to discuss "labor negotiations" involving all of the city worker unions, which may be a jumping-off point for opening up new talks.
The council will also discuss two litigation issues and the land exchange plan to preserve part of Los Cerritos Wetlands.
Some of the parcels involved have changed on the wetlands side, while the city is still putting up its Public Service Yard by the Los Angeles River in the land swap.
Last year, the council gave City Manager Pat West the authority to finalize the deal, and he said Friday that it won't be going back to the council for approval. West added that an issue of contaminants on the wetlands property had been resolved -- owner LCW cleaned up property, and the Environmental Protection Agency sent the city a letter that it will take no further action on the site, West said.
The deal is getting close, he said.
"We're talking about entering escrow," West said.
Shoreline amendment
During the regular meeting, the council will consider amending the Local Coastal Program and the Downtown Shoreline Planned Development District to pave the way for a development from Ocean Boulevard to Shoreline Drive.
The development has three project options that would have a maximum of 1,370 residential condominiums, 340,000 square feet of office space, 28,000 square feet of retail space, a 400-room hotel, 27,000 square feet of conference and banquet facilities, and up to 3,430 parking spaces, according to a city report.
The project site is currently home to City National Bank, Union Bank and Molina Healthcare.
Police station funds
In another development action, the council will consider transferring the city's federal Recovery Zone Economic Development bonds to the Redevelopment Agency and approving the issuance of tax allocation bonds of up to $35 million.
The money will be used for North Long Beach redevelopment projects, but the council is also being asked to approve using part of that money to fund the construction of a new East Long Beach police substation. The RDA board has already approved issuing the bonds and paying for the police substation, which will be built at the site of the Schroeder Hall Army Reserve Center at Willow Street and Grand Avenue after it closes next year.
The police substation project has met with opposition from neighbors because it also calls for building a mental health clinic for the homeless across the street next to the Department of Health and Human Services.
Kroc Center Red Team
While some development projects seem to be on track, the planned Kroc Center, a community and recreation center in Central Long Beach, is having trouble getting off the ground.
Sixth District Councilman Dee Andrews, with legislation co-signer 8th District Councilwoman Rae Gabelich, wants the council to approve the creation of a Kroc Center Red Team to aggressively pursue the remaining $15 million that is needed to fund the $120 million project. The bulk of the development is being funded by the estate of the late Joan Kroc and Salvation Army reserves.
The Kroc Center would be a 168,000-square-foot facility on 19 acres with a sports field, an aquatics center, and indoor recreational and educational amenities.
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