City of Monrovia

MONROVIA- Monrovia will save more than $2 million in safety employee pension costs over the next two decades thanks to good financial planning and a lot of patience.

The City this month sold $12.75 million in Pension Obligation Bonds (POBs) and will use the money to pay its future pension obligations up front, in today's dollars, saving an estimated $2.4 million over the next 18 years.

Only pension payments for public safety employees - sworn police officers and firefighters - will be affected.
"Good planning and a lot of patience have paid off for us in a big way," said Mayor Mary Ann Lutz. "This move enables us to stabilize a major cost for the City over many years and ultimately saves our taxpayers a lot of money."

The bonds were authorized by the City Council nearly two years ago - in August, 2008 - as the City entered into a new five-year contract with the Monrovia Police Officers Association. Negotiations with the police union had come to a contentious impasse at the time, with the rising costs of public safety pensions playing a major role in the negotiations.
In approving the bond strategy, though, the Council instructed staff to monitor the bond market and not sell the bonds until the interest rates were low enough to make the sale a financially sound transaction. Shortly after that, the economy took another downturn and the bond market became much more risky and expensive. The City watched and waited, keeping the bonds on hold until the right time.

Last month, with the bond market recovering and interest rates at advantageous levels, the City moved to sell the bonds and put the new strategy into effect.

In all, $12.75 million in bonds have been sold at an interest rate of 6.5%, re-payable over the next 18 years. The total cost of the bond repayment will be $23 million - but that's $2.4 million less than the pension costs would have been without the bond-enabled, upfront payment.

It averages out to a savings for Monrovia of more than $130,300 per year.

Pension Obligation Bonds are authorized by the State as a means of stabilizing pension costs. At least 26 states allow the bonds, and they have been used by hundreds of cities, states, counties and other agencies to hold down costs and stabilize financial planning.

MONROVIA- In the face of the continuing salary and benefits controversy in the City of Bell, Monrovia's City Council has ordered full online disclosure of both their salaries and those of the City's top managers.

"Our salaries and benefits have always been matters of public record," said Mayor Mary Ann Lutz. "With the current interest of the public in municipal compensation, though, we've decided to make it very easy for anyone to get this information."

Monrovia has posted the City Council and top management salaries and benefit packages on its website, linked directly from the homepage at www.CityofMonrovia.org.

The information shows Monrovia City Council salaries of $460 per month ($4,800 annually) and a City Manager salary of $181,956 annually, a far cry from the extraordinarily-high $100,000-plus council and $800,000-plus city manager salaries being reported in Bell.

"Our citizens are, of course, concerned when they hear news reports of municipal employees and elected officials making outlandish salaries, such as the case in Bell," Mayor Lutz continued. "It is important at times like these that they have confidence that their community is doing the responsible thing.

"Fiscal responsibility has always been, and continues to be, the top priority of Monrovia's City Council," she said.
Mayor Pro Tem Tom Adams agreed, saying, "What has happened in Bell is scandalous and outrageous, but it doesn't change the fact that Monrovia's Council and staff have always been responsible in their compensation. There are apparently a few bad apples out there, but they're not in Monrovia and whatever games they've been playing aren't being played here."

Lutz also pointed out that Monrovia has held back on Council and management raises for the past two years, cut employee bonuses, and has been restructuring compensation and benefit packages for some time to keep costs down and yet sustain and expand services. Even the City Manager's contract now contains a pay-per-performance structure that has replaced the traditional bonus system.

"We've held the line on personnel costs and maintained a balanced and responsible budget," the Mayor said. "Monrovia is doing it right."

Lutz and Adams were joined by other members of the Council in condemning the situation in Bell and reassuring Monrovians of their community's financial situation:

"This Council has always been open in its financial decisions," said Council Member Joe Garcia. "I can assure the people of Monrovia that the kind of things that have gone on elsewhere could not happen here. We are transparent in our dealings for just that reason. Our budget is balanced and our salaries are well within reason."

Council Member Clarence Shaw also reminded Monrovians that, "With each budget the City adopts, we also adopt a list of our top priorities, and Fiscal Responsibility is right up there at the top every time, along with Public Safety. We will not overpay ourselves or others and put those priorities at risk."

And Council Member Becky Shevlin said, "It's not enough just to say, ‘it's not us; it's the other guy.' Monrovians need to know for sure that their City is ethically and responsibly run, and so posting our salaries and benefits online is a great idea."