(April 25, 2005) -- As reported earlier today via Reuters, San Diego Mayor Dick Murphy has announced he will resign in the wake of a scandal over the city's pension debt.
LBReport.com asked LB City Hall's Finance Director, Mike Killebrew, if it's fair to draw parallels to LB given the City Council's 2002 voted action (after 2002 city elections) boosting pensions for city employees, a decision now straining LB taxpayer resources.
"Absolutely not," Mr. Killebrew told us. "Unlike San Diego, LB's pension is 100% funded. In San Diego, a decision was made not to fund the pension over several years and when that came to light, there was a problem because they had a requirement to fund the pension all along."
"In contrast, while Long Beach was for a time 'super funded' [contributions exceeded requirements], we always recognized and acknowledged our obligation to fund the pensions," Mr. Killebrew said.
Mr. Killebrew noted that LB's pension costs are explicitly included in city management's Three-Year Financial Plan...and he acknowledged it is a significant sum.
"In 2006, I expect pension costs will be roughly $50 million citywide, with roughly $32 million of that from the general fund," Mr. Killebrew said.
We also asked Norm Ryan, whose 2002 Mayoral campaign predicted red ink, if he saw parallels between San Diego and Long Beach. Mr. Ryan stressed that one major difference is that San Diego may have involved crimes [currently being investigated] while LB's pension boosting was publicly voted by Councilmembers and apparently legal "although I believe it was inappropriate," he added.
Mr. Ryan said he sees "philosophical parallels" in the way San Diego and Long Beach officials have dealt with debt. "Long Beach City management's 'Three Year Financial Plan' was effectively 'dead on arrival' with Councilmembers repeatedly delaying and deferring serious cuts into the future in hopes things would get better."
Mr. Ryan said that in his opinion, banking on hopes was philosophically similar in San Diego and Long Beach...and when official predictions didn't materialize, taxpayers are now left holding the bag.
"I'm not surprised that some at Long Beach City Hall are now suggesting raising taxes," Mr Ryan said, adding "When they say LB's pensions are '100% funded,' they mean taxpayers -- you and I -- will fully fund them."