Compton chips away at its CalPERS debt

Published Tuesday, Nov. 06, 2012 - The Sacramento Bee

In a case that highlights the debate over pension costs, Compton has sent CalPERS about $2.07 million after getting sued for nonpayment.

The city manager, G. Harold Duffey, personally hand-delivered a check for nearly $1.4 million last Friday. Another check was mailed earlier last week.

Still, the city is about $600,000 behind on its payments to the California Public Employees' Retirement System, pension fund officials said Monday. Another scheduled payment is due Saturday, said CalPERS spokeswoman Amy Norris.

The Compton case has drawn statewide attention as cities and counties struggle to support pension costs in a sluggish economy.

Just a few years ago, municipalities never would have dared missing payments. But San Bernardino is $5.2 million behind on its payments after filing for bankruptcy protection. CalPERS is challenging the city in court, saying it's improperly using the bankruptcy laws to skip out on its bills.

Separately, a group of creditors in Stockton's bankruptcy case are trying to block that city from paying CalPERS, saying the money should go to them instead.

CalPERS has made clear it will do everything it can to collect payments from municipalities. It sued Compton in late September.

Duffey said the city fell behind because of a short-term cash flow problem and he expects to have the matter cleared up by the end of the year.

"I want employees and retirees of the city of Compton to know that their retirement is not in jeopardy," he said in a press release.