HUNTINGTON BEACH : City for City Worker Retirement Targeted

A residents group is working to abolish a special tax that costs property owners about $6.3 million a year to pay retirement benefits of city employees.

City employees now pay nothing toward their retirement benefits. Instead, the city pays 14% of each employee’s salary amount into the retirement fund, and much of that money comes from the special property tax.

“We are outraged about the extravagant retirement benefits paid entirely by taxpayers,” said Jim L. Banks, 41, an attorney who is heading the petition drive.

“While people are losing their jobs or having their pay and benefits severely cut, there have been no pay or benefit cuts for Huntington Beach city employees.”

The petition by Citizens Against Retirement Tax, which consists of about 20 residents, would require most employees to pay 7% of their current pay for retirement benefits, with the city contributing 7%.

Police, firefighters and lifeguards would pay 9% of their salaries, with the city paying 14%.

Banks two weeks ago asked the City Council to vote to put the retirement tax on the ballot. They have not responded, Banks said, but Councilman David Sullivan said he is studying the request.

“I am, of course, greatly concerned that Huntington Beach is the only city in Orange County that has a retirement tax,” Sullivan said.

The rate for the tax is about $50 per $100,000 assessed valuation.

Deputy City Administrator Bob Franz said Huntington Beach is one of 43 cities in California with the retirement tax. But Huntington Beach has no property taxes for sewers, lighting, landscaping and libraries, which some cities have, he said.

Franz said that until the 1970s, employees paid half of their retirement costs. But one year the city agreed to pay full retirement costs if employees would forgo a pay raise that year. The arrangement has continued ever since.

Employees have treated it “as a God-given right and refused to settle contracts for anything less,” Banks said.

Banks and other volunteers are attempting to collect about 16,000 signatures to force a citywide vote on the retirement tax in November.

“I’ve talked to people living in Huntington Beach 20 to 30 years, and 99% of them don’t know about it,” Banks said.