CalPERS and the bankrupt city of San Bernardino, headed for a possible legal showdown over pension contributions, said this week they’ve made headway in mediation talks.
In a filing Wednesday in U.S. Bankruptcy Court in Riverside, lawyers for the city said two all-day mediation sessions in Los Angeles last month yielded “significant and substantial progress” with the California Public Employees’ Retirement System.
Asked about the city’s filing, CalPERS spokesman Brad Pacheco said, “We agree with the city and can confirm that we have made progress as they have described.”
San Bernardino is roughly $14 million behind on its CalPERS payments, and city officials have openly talked about challenging the pension fund in court over the city’s $24 million-a-year contribution. CalPERS has said it wants to work with the city, but also argues that the annual payments must be maintained in full.
Even as mediation continues, CalPERS won a court ruling last month that could enable it to put more pressure on the city. The 9th Circuit Court of Appeals gave CalPERS the green light to challenge San Bernardino’s right to even file for bankruptcy. If CalPERS could succeed in getting the bankruptcy tossed out, it would give it greater leeway to sue San Bernardino. Still, a hearing on the appeal won’t occur until August.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.