Pension cuts ease Chino funding gap

Neil Nisperos, Staff Writer

CHINO - City officials expect to see savings in the new fiscal year by enacting a two-tier pension reform system, paying off pension costs and leaving jobs vacant.

Police officers, elected officials and unrepresented management employees will now pay half the cost of member contributions for pension benefits from the California Public Employees' Retirement System.

The city had previously been paying the contributions in full.

New employees hired on or after the start of the 2011-12 fiscal year will pay for their entire pension contribution.

Retirement pension formulas between the city and CalPERS were also amended to 2 percent at 55 years old for miscellaneous employees, and 3 percent at 55 for safety employees.

The pension changes are expected to save the city $497,000, according to a city report.

Council members recently approved the budget.

The city's General Fund reserve balance of $27 million will be reduced to about $20 million, officials said, in an effort to keep services and pay pension costs.

City leaders approved spending $4.2 million from General Fund reserves to pay off a CalPERS "side fund" established six years ago to address public safety employee retirement costs.

Another $2.8 million from General Fund reserves will be spent to help maintain public services such as safety, after-school care, family counseling and senior services.

In addition to pension reform, the city plans to leave eight city positions vacant, bringing unfunded positions in the past three years to a total of 30.

The vacancies will save the city $3.6 million annually, officials said.

Council members also approved a plan to transition contracted IT services to a city-run, in-house operation projected to save $243,000 in the first year.

"General fund expenditures continue to be reduced by maintaining salary and benefit costs at 2008 levels and by reducing the number of city employees through attrition," according to a report by City Manager Patrick Glover. "Additionally, staff continues to reduce expenditures for outside contracted services by performing more services in-house with city staff."