Huntington Beach to Be Billed for Inflating Pensions, Officials Say

In a move that might cost the city as much as $1 million, state officials intend to bill Huntington Beach and other municipalities accused of “spiking,” or artificially inflating the pensions of some government retirees, city leaders told The Times on Wednesday.

Deputy City Administrator Robert Franz and City Councilman Dave Sullivan said they learned about the state’s plans from a state Public Employees Retirement System (PERS) official during a conference for government officials in the Bay Area last week.

If PERS proceeds with the proposal, Sullivan estimates that the city will owe about $1 million, but Franz indicated that it would be considerably less than that. Franz said, however, that the amount will remain uncertain until PERS formally notifies the city.

PERS officials in Sacramento could not be reached for comment Wednesday.

Spiking is the term used when a governmental entity, such as a city, allows retirement credit for such things as unused vacation days and car allowances in computing a retiree’s salary.

Last year, state officials denounced the practice, saying that California taxpayers were carrying the burden for artificially inflated pensions caused by some cities. Huntington Beach was cited as a prime offender.

The state controller’s office charged that Huntington Beach, Anaheim and six cities in Los Angeles County--Beverly Hills, Bellflower, Culver City, Hawthorne, Manhattan Beach and Torrance--had been guilty of spiking retirees’ salaries.

Franz and Sullivan quoted the PERS official they heard last week in Burlingame as saying that all cities would be required to make up the cost of spiked pensions. But because PERS officials could not be reached, it was not clear on Wednesday if Anaheim and the six Los Angeles County cities are included.

Sullivan and Franz said they are certain that Huntington Beach faces a billing.

Franz, who is a finance expert for the city, conceded that the PERS action will add to the city’s budget problems. Last month the City Council froze hiring and took several other budget-cutting steps to head off an anticipated $2-million budget shortfall this year.

Any new money required to pay PERS, Franz said, will add to the budget problem. But he added that PERS probably will allow long-term repayments--possibly over 30 years.

However Huntington Beach repays the spiking costs, Sullivan said, “it is bad news for the taxpayers.”

Sullivan, a former president of the citizens’ group Huntington Beach Tomorrow, vociferously criticized the city’s spiking of pensions when the issue arose in January, 1992. He subsequently campaigned for a City Council seat, and the spiking issue was a major part of his platform. He won an upset victory in November.

Councilman Earle Robitaille, a former police chief, is among 16 Huntington Beach municipal retirees accused in a 1992 state audit of having a spiked, or inflated, pension. According to the state’s audit last year, Robitaille improperly figured in a car allowance and vacation pay, adding nearly $12,000 to his final-year salary.

Robitaille has repeatedly, and angrily, denounced that accusation, saying that neither he nor the city did anything wrong in figuring his pension. At the Jan. 21, 1992, City Council meeting, Robitaille lashed out at those who accused him of having a spiked pension.

“I did my 32 years as a public employee. I’m no longer a second-class citizen,” said Robitaille, adding that the charges were “witless, harebrained trash.”