HUNTINGTON BEACH : Councilman Wants Pension Tax Ended

A charter amendment that would eliminate a tax funding city employees’ retirement costs is expected to be among items the City Council will consider at tonight’s meeting.

Councilman David Sullivan plans to ask his colleagues to place the issue on the November ballot.

“I’m just proposing that the citizens should have a right to vote on it,” Sullivan said, charging that the retirement tax is “outrageous.”

Deputy City Administrator Robert Franz said that elimination of the tax would mean a $6.3-million loss to the city’s general fund budget.


The city has been collecting the tax since 1966. It appears on property tax bills as “Huntington Beach city debt.”

Huntington Beach is the only city in Orange County where a property tax is used for retirement purposes, he said.

In other business, the council is expected to discuss in closed session the city’s legal options in challenging the state’s Public Employees’ Retirement System, which is forcing the city to pay for retired employees who inflated their pensions through spiking.

Spiking is the practice of employees’ raising their salary in their final year of work by forgoing vacation days, car allowances and other benefits and instead receiving the value of the benefits in direct wages, upon which their pension is based.


Last month, the council voted to eliminate its role in spiking. Nevertheless, the state pension agency told the city it is still obligated for past spiking costs. The city’s total cost for pension-spiking is estimated at $13 million.

In another item on the agenda, the council, acting as the Redevelopment Agency, will consider eminent-domain taking of property downtown in the Main-Pier redevelopment area.

According to a staff report, the agency’s final offer of $1,365,500 to buy private property within the redevelopment area, known as Third Block West, has been rejected by the owners. The project area is bounded by Main Street, Olive Avenue, 5th Street and Orange Avenue. Subterranean parking, a two-story retail and office structure and 68 condominiums are proposed there.

Other public hearings scheduled include:


* An appeal filed by Councilman Ralph Bauer of the Planning Commission’s denial of a special permit for an indoor swap meet within a 212,500-square-foot industrial building, 5555 McFadden Ave. at Graham Street.

* A proposed business license ordinance that would set fees for indoor and outdoor swap meets, special events and charitable events. If approved, the estimated increase in revenue would be $200,000 a year.

The council will also consider a new contract agreement with the Municipal Employees Assn., the city’s largest bargaining group, which represents some 500 workers. The contract offers no salary increases and would eliminate pension spiking as of Jan. 31, 1994.

For more information, call the city clerk’s office at (714) 536-5227.