Berkeley Council Worksession Examines Unfunded Liabilities

By Charlotte Perry-Houts
Thursday January 20, 2011 - 09:56:00 AM

The Berkeley City Council discussed the city's unfunded liabilities with City Auditor Anne-Marie Hogan, City Manager Phil Kamlarz, and Budget Manager Teresa Berkeley-Simmons at Tuesday night's Worksession. Facing a projected $11.5 million deficit this fiscal year, the city is trying to figure out how to deal with its employees' pension, vacation, and health benefits that it doesn't have the money to pay for. Hogan's report shows that while 77% of the city's total benefits are funded, several categories of benefits are significantly lower, with only 2% of Sick and Vacation payouts funded and 13% of Police Retiree Medical expenses funded. The report lists the dollar amount of unfunded liabilities to be $252.81 million. 

Council members discussed the problems with contributing more money to CalPERS to reduce the amount of unfunded pensions. Given the city's large deficit, increasing CalPERS contributions would mean more cuts to city services. City Manager Phil Kamlarz pointed out that most of the cuts have been restricted to administrative staff in order not to negatively affect key city services like Police and Fire. 130 full-time positions have been eliminated through attrition in dealing with the budget problems, and there are plans to cut 75 more. Since fewer employees have been leaving, layoffs are scheduled for March and April of this year. 

Council members emphasized the importance of employee and union participation in the upcoming discussions about budgets, benefits, and cuts. The first closed session on employee benefits negotiations is on January 31st.