The city of Berkeley has an unfunded liability for promised employee benefits of $310 million — which equates to $197,000 for every full-time city employee — according to an eye-opening story by Daniel Borenstein published in the Contra Costa Times on January 8.
The piece, which takes as its starting point a November 16 report by Berkeley city auditor Ann-Marie Hogan, claims that the city has spent beyond its means, and will have to make difficult choices on whether to tax residents more highly or make harsh cutbacks, including significant job losses at the city, or both.
Borenstein writes that increases to city benefit costs will force Berkeley to eliminate 63 full-time positions, or 4% of the workforce. Hogan tells Berkeleyside that figure is incorrect and will actually be higher as she was only referring to the General Fund, which covers the fire and police departments and administrative staff, not all city employees. “The dollar equivalent of positions which might have to go is higher than 4% of the workforce, although I don’t have the exact number of what it will be,” she says.
“The city has been aware for several years of the underfunded liability,” she continues. “We are not alone. All California cities in the Public Employee Retirement system are facing this issue — some are just facing it sooner than others. San Jose, for example, has its own pension fund and made benefit cuts in December.”