Huntington Keeps Pension ‘Spiking’ : Benefits: Citing contracts, the council votes to uphold the practice for 153 workers who gave city officials notice before Friday of their intention to retire.

The City Council Tuesday voted to continue allowing employees to “spike” their retirement pensions, which already may have cost the city $13 million, saying they are bound by employee contracts.

If they halted the practice of spiking now, the City Council “would be in violation of collective bargaining laws,” Councilman David Sullivan said. “You can’t unilaterally violate those agreements.” The vote affects 153 employees who gave city officials notice before Friday of their intention to retire.

A state law that went into effect Friday makes most aspects of spiking illegal.

Spiking occurs when employees artificially inflate their pensions by adding such benefits as unused vacation days, car allowances and city contributions to increase their final year’s salary, on which a pension is based.

But Mayor Linda Moulton Patterson, who with Councilman Ralph Bauer voted to end the practice, said, “I think we have to find out if spiking is legal or not. . . . I don’t think we can condone this.”

The council discussed its legal options in a closed session with attorney Peter J. Brown of the Los Angeles firm of Liebert, Cassidy & Frierson before the 4-2 vote.

On June 20, the council enacted a two-week moratorium on paying the spiked portions of retirements pending legal advice.

The city estimates that pension spiking by some employees could cost the city up to $13 million, the amount of additional pension benefits that the state Public Employees Retirement System has paid retirees since the spiking began in the late 1980s.

PERS, however, already has billed the city for $743,632 in disallowed costs.

Brown has sent a letter to PERS saying the city refuses to pay.

“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.

But critics of the dilemma are furious that in previous years, city officials did approve the spiking.

“I am totally shocked that city officials, apparently without the knowledge and approval of City Council, would amend signed and approved contracts that would cost taxpayers many millions of dollars,” said Bill Mello, director of the Citizens’ Bureau of Investigation, a group of residents investigating waste and abuses of city government.

Mello charged that in approving employee contracts for 1991 and 1992, officials allowed some city employees to increase spiking from 80 to 192 hours.

“CBI believes spiking is illegal and that the ’91 and ’92 employment contracts are not enforceable because they violate contract law,” Mello said.

Sullivan said he believed previous city councils probably allowed pension spiking because they were never adequately briefed on its fiscal impact.