CAPITOLA -- Mayor Michael Termini is going to reduce his $500-a-month city paycheck by $82 and fully fund his city retirement benefit.
Termini announced that decision Tuesday night after he was unable to persuade the other council members to do the same.
Elected council members are treated like miscellaneous city employees who have the city pay a portion of their retirement benefit. The city pays 16.5 percent of the salary to the California Public Employees Retirement System, an amount that is capped, and the employee pays 8.3 percent.
Councilman Sam Storey reiterated his suggestion to ask the city's financial advisory committee for advice.
"I'm not comfortable making a decision about my own income," he said. "It's a conflict of interest."
Councilman Kirby Nicol, who is eligible to receive $100 a month for life after serving eight years, said the city pension will be deducted from his Social Security benefit.
"It's much ado about nothing, at worst political nonsense," he said.
Councilwoman Stephanie Harlan agreed, saying, "So little money is involved."
Councilman Dennis Norton said he wished he could opt out of CalPERS because his participation prevents him from being able to deduct contributions to an individual retirement account on his tax return. However, federal law requires a retirement benefit for elected officials who are paid, and once an elected official is in CalPERS, he or she can't switch to anything else.
"It is political nonsense," Termini said. "I knew that when I proposed it. ... You can't say anyone runs for office in Capitola for the money but I felt it was important to take a stand."
After the vote, city resident T.J. Welch, campaign treasurer for successful council candidate Ed Bottorff, commended Termini, saying, "Ed is going to do the same thing."
Resident Sandy Erickson supported the idea of council members footing the bill for their own retirement.
"If you are a retired official and you're elected to this council, the taxpayer is on the hook for it if CalPERS investments are short," she said.
She was surprised the city's fund balance was $567,000 as of June 30, saying if voters had known, they might not have supported Measure O, a permanent quarter-cent sales tax expected to raise $900,000 a year.
City manager Jamie Goldstein said the city closes its books this time of year after getting sales tax receipts from the state Board of Equalization. He said city treasurer reports indicated the balance was rising.
The council voted 5-0 to allocate $120,000 from the fund balance to repair a 950-foot stretch of the 50-year-old Noble Gulch pipe to prevent another pipe failure. The city repaired the section that failed in March 2011, flooding the village.
Repairs are expected to be done by year's end.
Nicol wanted to allocate the rest of the balance to restore city reserves depleted by flooding expenses but it wasn't on the agenda. Termini said it will come up at the midyear budget update.
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