The new budget includes $41.9 million in general fund spending and $42.9 million in anticipated operating revenue.
Six years after a former official warned the city of Upland was in danger of going bankrupt, it is now in the black, even as its pension obligations continue to grow.
News of the city’s improved financial footing comes as the San Bernardino County Grand Jury urges Upland to get serious about tackling its unfunded pension obligations, which continue to grow.
On June 24, the Upland City Council approved the budget for the current fiscal year, which began July 1. Although the budget shows pension obligation costs rising, it also suggests that the wolf is not yet at the door.
The new budget includes $41.9 million in general fund spending. That’s up $1 million over the year before, including an additional $546,830 in pension increases and salaries, and an increase of $460,160 in maintenance and operations.
But revenue is going up even faster, with $42.9 million in anticipated operating revenue. That’s up $1.73 million over the year before, including an additional $727,420 in property taxes thanks to an increase in assessed values and property sales.
“I first noticed the city finances were improved for the fiscal year ending June 30, 2016,” Councilwoman Janice Elliott said Wednesday. Since her election, the city has contracted with the county for fire protection services, replaced full-time employees with contractors and delayed infrastructure maintenance to cut costs.
“That’s going to make things look rosy, but they don’t make things disappear,” Elliott said. “You’re actually going to spend more money when you finally catch up on repairs.”
But the city’s pension debt is growing as well. The new budget pegs Upland’s unfunded pension liability at $38,350, up from $33,760 in the previous year.
The California Public Employee Retirement System represents 1.9 million public employees. Cities throughout the state are struggling to keep up with payments to the retirement system, which has been burdened in part by employees with CalPERS pensions living longer lives, requiring more money than was previously anticipated to continue paying their pensions.
According to Stanford University’s Institute for Economic Policy Research, government agencies statewide may owe more than $1 trillion to CalPERS, depending on investment returns. According to Stanford’s PensionTracker.org website, each Upland household is responsible for $13,072 in unfunded pension debt from the city of Upland and $186 in unfunded debt from the Upland City Housing Authority.
It could be worse, though: According to the same site, the average California household is responsible for $78,334 in unfunded pension debt. Montclair plans to dip into its reserves to cover its unfunded pension liabilities for the coming year.
In its report, the Grand Jury gave Upland an Aug. 27 deadline to respond to its request for an explicit plan to deal with its unfunded pension obligations.
“Although we haven’t passed a policy on it, we have contributed a significant amount of money to an account that is solely dedicated to paying for the pension,” Elliott said.
Interim City Manager Rosemary Hoerning did not respond to requests for comment.
July 3, 2019
Inland Valley Daily Bulletin
By Beau Yarbrough
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