ELK GROVE (CBS13) — Elk Grove will be forking out an additional $1.5 million a year to cover increasing public pension costs.
The city is just one of many across the state that will be contributing a larger amount to CalPERS starting in 2015.
“It’s just another one of those pressures that we are going to have to deal with,” said Laura Gill, Elk Grove’s city manager.
Shops are busier and tax revenues are starting to climb, but a new wave of money will need to make its way to city hall to cover pension-cost increases which are the equivalent of adding 12 new officers.
“For the next two years our budget is balanced, and we have two years to figure out how we are going to absorb this,” Gill said.
The city will be able to cover some of that through reserves, but other cities hit hard during the recession won’t have that luxury.
Most cities have renegotiated with unions to increase what these public employees pay into their retirement, but some economists expect more cities will file for bankruptcy if something drastic is not done soon.