HUNTINGTON BEACH : Council to Focus on Employees’ Spiking

The City Council is expected to take action Tuesday involving city employees who plan to “spike” their retirement pensions by adding such benefits as unused vacation days and car allowances.

The council’s regular meeting will move from its usual Monday slot because of the Fourth of July holiday and be held Tuesday starting at 6:30 p.m. in the council chambers.

Spiking occurs when employees inflate their final year’s wages--on which a pension is based--by foregoing vacation days, car allowances and other benefits and taking them as wages instead.

The city estimates that pension spiking by city employees could cost $13 million in additional pension benefits and, because those pensions are unfunded, it could become a liability for the city. Officials say the state will bill the city for some of that cost.

The council at its June 20 meeting enacted a two-week moratorium on paying the spiked portions of any retirements pending legal advice.

Councilman David Sullivan, chairman of a City Council subcommittee that is investigating spiking, said the council is expected to meet in closed session before Tuesday’s meeting with attorney Peter J. Brown of the Los Angeles firm of Liebert, Cassidy & Frierson to discuss the council’s options.

Sullivan said the council is expected to announce its decision during the open portion of the meeting.

Meanwhile, Sullivan said that Brown, who specializes in employee relations, sent a letter this week on behalf of the city to the state Public Employees Retirement System (PERS) informing officials that Huntington Beach will not pay a $743,632 bill for spiked pensions.

“The letter says that we feel that the spiking process is illegal, therefore, an illegal act can’t be approved and we are not going to pay for the spiking,” Sullivan said.

In other action slated for Tuesday’s meeting, the council is expected to consider an ordinance that would set development standards for single-family residential projects built on parcels of land either adjacent or surrounded by existing homes. The intent of the standards are to ensure compatibility of new homes with existing homes in a neighborhood.

The council on June 6 adopted a 45-day building moratorium on these types of parcels, dubbed “in-fill lots,” pending an ordinance to address compatibility issues.

More information about the meeting is available by calling the city clerk’s office at (714) 536-5227.