In a City Where Public Retirees are Raking in Millions, What’s a Mayor to Do?
If it were up to El Monte Mayor Andre Quintero, public retirees in his city would collect their CalPERS pension like everyone else and live a comfortable if modest life. Instead, a number of former employees are raking in loads of cash through double “supplemental” pensions, and there’s almost nothing he can do about it.
California City News covered the situation last month. As we noted, El Monte dropped its supplemental pension system after the 2008 recession, but that only applied to new hires. For some 200 public servants, the maddening system continues and it is wreaking havoc on city finances.
El Monte now has one of the heaviest retirement burdens in the state. Last year, retirement expenses ate up $16.5 million, equivalent to 28% of the general fund. The bonus pensions alone cost the cash-strapped city $2.4 million.
Mayor Quintero says El Monte was taken advantage of by the very people entrusted to protect it. “We cannot condone or justify these benefits,” he recently told the city council. But they can’t change them either—not easily anyway.
The supplemental pensions are written into the city’s contracts with the employee unions, making them nearly sacrosanct. Any attempt to revise them would no doubt be met with union scorn and a probable legal challenge that could further jeopardize a city where one in four live in poverty.
For now, El Monte’s best bet may be the courts. A series of recent rulings have dealt a blow to the so-called “California rule,” which holds that public employees are entitled to the pension benefits set at hire. It’s the doctrine that would give the unions the upper-hand in any lawsuit, but the courts’ shifting opinion has given many local governments hope.
The issue is headed to the California Supreme Court. Cities and counties across the state will be watching the results closely. El Monte and its mayor will undoubtedly be among them.