Pension Fund Claims City Owes $5.7 Million

The president of Pasadena’s retirement board said it may have to sue the municipality for more than $5.7 million that an independent auditor estimates that the city owes the Police and Fire Pension Fund.

John Tennant, board president and a Pasadena fire captain, said it is the body’s fiduciary duty to ensure that everything the city owes the fund under the terms of a decade-old, state-approved agreement is retrieved.

That pact allows Pasadena to shift new property taxes from a downtown redevelopment area to the pension fund so it can meet its future obligations to employees’ pensions.

However, Tennant said, the auditor has informed the board that the city has shortchanged the fund by $600,000 a year since 1992 by deducting higher administrative fees for redevelopment costs.

City Finance Director Jay Goldstone acknowledged that the city increased its administrative costs from $200,000 in the first few years after the agreement to $800,000, but said those staff costs are in line with increases in other redevelopment expenses. Goldstone said the bailout agreement places no limit on such costs.