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Viewpoint: Claremont’s pension debt crisis is real

In last week’s COURIER, former mayor Larry Schroeder tried to explain how Claremont’s large CALPERS pension debt will be paid in full by the year 2045. While his explanation was incomplete and misleading, I suppose we should be grateful that he has belatedly developed an interest in the city’s unfunded pension obligations.

During the 12 years Mr. Schroeder served on the city council, our CALPERS debt increased by more than $30 million. Remarkably, while this massive debt continued to pile up year after year, neither he nor any of his colleagues ever even bothered to ask a couple of obvious questions:  “How come our pension debt keeps going up by millions of dollars every year?” and “When will it begin to decrease?”

The answers are actually very simple.

It is true that the city makes large payments each year to amortize the existing CALPERS debt, which currently stands at $58 million; but at the same time, we continue to put millions of dollars of newly-accrued pension expenses on our “CALPERS credit card.” In other words, we are adding new pension debt at a much faster rate than we are paying it off.

How much faster? Over the past 15 years, our CALPERS debt has increased by an average of more than $3 million per year. At that rate, the total debt will exceed $100 million by the end of this decade — unless Claremont goes bankrupt first.

We don’t have to dig very deep to discover why Claremont — which has more revenue at its disposal than most other cities of its size — needs to add millions of dollars in new debt each year just to pay basic operating expenses. By any measure, we are one of the most wastefully managed cites in the state.

As you might have guessed, there is a direct correlation between the size of a city’s pensionable payroll and its financial health. Claremont, which currently has 150 full-time pensionable city employees, is consistently rated by the state auditor as one of the most fiscally stressed cities in California. By contrast, cities like San Dimas (72 employees), Diamond Bar (56), and Walnut (38) have minimal pension debt, tens of millions of dollars in free reserves, and high ratings from the state auditor.

Contrary to what Mr. Schroeder has suggested, Claremont’s pension debt crisis can’t be solved by continuing to ignore it. Unless and until long-overdue cuts are made to our bloated and unsustainable city staff, we will continue to go deeper into debt.

In my public and private discussions with the city manager and members of the council, they have made it quite clear that they don’t intend to make any staff cuts. I believe them. In the budget they approved last month, the council actually added three new full-time positions to the city payroll.

We can complain all we want about the council’s feckless behavior, but it is ultimately our responsibility to hold them accountable. If we keep re-electing people who have proven that they lack the judgement and skill necessary to hold public office, we only have ourselves to blame.

Of course, as the incumbent members of the council have conveniently rigged the system in their favor by taking away our right to vote in city-wide elections, getting rid of them will be easier said than done. But that is just another reason why we must resolve to do all we can to replace every last one of them as soon as possible. Claremont literally cannot afford to do otherwise.

Jim Belna
Claremont

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