Politics, government and public life for Southern California

Pushback: State pension giant CalPERS challenges San Bernardino's refusal to pay into retirement plan

Steven Cuevas/KPCC

San Bernardino City Hall meeting chambers

The city of San Bernardino has missed making payments of more than a million dollars a month to its employee pension plan since July, when the city first declared its fiscal emergency.

That non-payment is part the city's plan to show a bankruptcy court judge how it will close a deficit of nearly $46 million and restore the city to solvency.

The San Bernardino City Council decided Monday to not direct nearly $13 million it would normally have paid this fiscal year into California's public employee retirement system, known as CalPERS.
 
The city is already $6.9 million in arrears,  the most any California city has fallen behind in recent months, said CalPERS spokeswoman Amy Norris. She was not immediately able to say if  other municipalities have gone deeper into debt to CalPERS in past years, so it's difficult to put San Bernardino's non-payment into historical context.
 
CalPERS responded to the plan Wednesday by asking the judge who's monitoring the city's bankruptcy case to let it sue the city for payment. Normally, a city that files for bankruptcy would be shielded from lawsuits while it restructures its finances.
 
Mayor Pat Morris said insolvent San Bernardino had no choice but to temporarily halt paying into the pension plan.
 
"We have to first of all keep our essential services alive to protect our community and deliver those baseline services and doing that is taking all of our resources, it's that simple," Morris said.
 
The city had negotiated with CalPERS to try and arrange a different payment schedule and to pay interest on the mounting debt, Morris said. The agency manages pension funds for about 3,000 current and future retirees.
 
Morris says the city plans to pay up eventually, and does not want CalPERS -- which he described as a good partner to the city -- to drop or terminate the city's pension business.
 
"We're a member of the family in acute distress, and we're hoping that here in the ER room they will be one of the doctors who will help us through this and not an assassin," the mayor said.

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LA City Council members skip conference despite recess

Mercer 3951

Frank Stoltze/KPCC

L.A. City Councilman Ed Reyes is one of two council members at the National League of Cities conference this week.

It’s quiet around City Hall this week, with Mayor Antonio Villaraigosa in South America and the Los Angeles City Council on recess.

The council isn't meeting so members can attend the National League of Cities conference in Boston. But … that doesn’t mean the council members are actually there. 

Councilman Jose Huizar, for example, is in Korea with the Korean American Federation to talk about economic development. He and State Sen. Kevin De Leon are meeting with the new owners of the Wilshire Grand Hotel, which is now a part of Huizar’s district. He will also visit the National Assembly of the Republic of Korea and school leaders in the Kyonggi Province. 

Councilman Tony Cardenas, meanwhile, has been in Washington, D.C., preparing for his next job as a member of the U.S. House of Representatives.

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Campaign treasurer Kinde Durkee gets 8 years in prison

kinde durkee

California Democratic Council, Henry Vandermeir/AP

Former campaign treasurer Kinde Durkee had more than 50 Democratic clients who will likely recoup only a fraction of their losses.

Former Democratic campaign treasurer Kinde Durkee was sentenced Wednesday to eight years in federal prison for defrauding high-profile clients, including U.S. Sen. Dianne Feinstein, of at least $7 million.

Durkee, 59, was sentenced in U.S. District Court in Sacramento. She pleaded guilty in March to five counts of mail fraud. The judge also ordered Durkee to pay $10.5 million in restitution to her victims. 

Durkee appeared in court for the sentencing dressed all in black.  Reading from a prepared statement, her voice quavering at times, Durkee apologized to her former clients and employees. “I’m truly sorry for the hurt I have caused.” she said.

U.S. District Judge Kimberly Mueller called Durkee’s crimes “significant and egregious.”
She said “the violation of trust cannot be overstated and the potential that certain elections were affected.”

The judge added it was Durkee's “inability to acknowledge her limits that led to her downfall.”

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Maven's Morning Coffee: Democrats' super-majority, treasurer gets sentenced, 101 Safe Surrenders in LA County

Justin Sullivan/Getty Images

Democrats now have a super-majority in Sacramento, but they likely won't take advantage of that power until next fall.

Good morning, readers. Welcome to the Maven's Morning Coffee -- a listing of the important headlines, news conferences, public meetings and announcements you need to know to fuel up and tackle your day.

The Maven's Morning Coffee is also available as a daily email. Click here to subscribe.

Today is Wednesday, Nov. 28, and here is what's happening in Los Angeles:

Headlines

Democrats aren't likely to benefit from their super-majorities in Sacramento until the fall, reports KPCC. "They’ll start off with it but then the dominoes will fall with the different races, people moving up to Congress, people moving up to the state senate," according to political consultant Steve Maviglio.

Former campaign treasurer Kinde Durkee will be sentenced today in Sacramento for stealing millions of dollars from her Democratic clients. The LA Weekly reports Durkee agrees with the prosecutors' recommendation that she spend eight years in prison.

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Democrats unlikely to leverage Sacramento super majority until fall

Freshman Congress

Kitty Felde/KPCC

Gloria Negrete-McLeod (right) — seen at orientation week at the Capitol — will leave a vacancy in the state legislature when she resigns to take her seat in the House of Representatives.

When California’s state legislature convenes next week to swear in new members, Democrats will have a so-called super majority in both houses: a two-thirds majority in each chamber that empowers them to pass taxes without Republican votes and to override a gubernatorial veto. 

But that advantage could prove elusive for Democrats in the coming months.

One month after California’s newly elected senators and assembly members take their seats, two Democratic senators will head to Congress: Juan Vargas of San Diego and Gloria Negrete-McLeod of San Bernardino.

Shannan Velayas of the Secretary of State’s office says when those senators depart, it’ll trigger a special election to fill the vacancies: “The state senator must step down from office before the governor can call an election to fill that vacancy.”

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