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The Huntington Beach Finance Commission has yet to come up with a way to stop the city’s budget bleeding. But its members decided on one thing during their first meeting: They can’t stand the California Public Employees Retirement System.
The city has tasked its finance commission with financial solutions in light of “worsening national, state and local economies.” The commission’s first public hearing was dominated by nearly an hour of lamentations on CalPERS.
The CalPERS investment funds were hammered in the stock market crash of 2008 and 2009 and they have yet to fully recover. The finance commissioners said things didn’t have to be this way. Sustaining a retirement system that relies on the temperamental conditions of the market is foolish, members said.
“I wouldn’t run a business this way,” said Vice Chairman of the Finance Commission Frank LoGrasso. “I wouldn’t take my retirement fund to Vegas.”
The city was facing a budget shortfall of $5 million in the current fiscal year and, due to state law, was also faced with the prospect of making up the shortfall in the retirement system, said Huntington Beach Mayor Cathy Green. The city was considering laying off employees to make ends meet.
CalPERS says it has improved its investment strategies since the beginning of the Great Recession. According to CalPERS spokesperson Brad Pacheco, CalPERS changed its policies to “reduce leverage in the market.”
“We’re back on track,” Pacheco said.