Two flashes of seemingly encouraging news for City Hall streaked across the skies from Sacramento this week :
• The once-staggering public employee pension fund known widely as CalPers, the largest in the country, reported that its fund grew by a whopping 20 percent in the last 12 months, by the end of the fiscal year on June 30. Its best return in 14 years bolstered investments under management to $237.5 billion, up from a flat $165 billion in 2009.
• In a move eagerly anticipated by the 400 hometown redevelopment agencies throughout the state, the League of California Cities and the California Redevelopment Assn., filed a lawsuit seeking to prevent Gov. Brown and the state legislature from forcing what many regard as a bargain with devil. In evident defiance of Prop. 22 passed by voters last November, the legislature has told the redevelopment agencies they will be dissolved unless each makes a huge payment to the state next year and a smaller amount every year thereafter, in perpetuity. The petitioners claim the new law violates last November’s successful proposition that forbids the state from raiding municipal funds.
Status Is Quo
Partway through the bargaining negotiations with City Hall’s six labor unions, where the accent is on givebacks, City Manager John Nachbar said the surprising CalPers surplus “will not have any big effect on our employee rates.”
Even though the supposedly plump amount is a sign that much better economic days are beckoning for the pension fund, “we won’t likely see any effect for four to five years. And the impact then won’t be anything dramatic.”
For perspective, Mr. Nachbar said that “it is important to remember CalPers had many years of losses. This week’s news is helpful, and I don’t want to discount it. But our employer rates are based on the status of things, like it’s always in arrears, two years ago.
“The hole that was dug was so deep that it will take years, multiple stellar years, three or four in a row probably, to make up for it.
“We don’t anticipate any significant impact on our employer rates. Not any, for four or five years.”
Turning to the redevelopment matter, Culver City’s Redevelopment Agency voted unanimously last week to stay alive by paying $12.1 million in what members called “hush money” to Sacramento and $3 million every year thereafter.
The suing state agencies have asked the state Supreme Court to issue a stay by Aug. 15 to keep the regulation from going into effect until there is a ruling on the legal challenge.
Presently, the lawsuit does not alter any of City Hall’s planning or intentions.
“We believe what the state is doing is unconstitutional, and we think that view will be validated by the courts,” Mr. Nachbar said. “We knew the lawsuit was coming, but nothing changes for us.”
