Fresno’s municipal pension system and City Hall are at odds over how much should be paid into the police and firefighter retirement fund.

And, the dispute could wind up in the courtroom.

The city wants to keep its contributions the same as last year, approximately $30.8 million. The pension board with the legal right to set the rate, said the contribution should be $33.7 million instead. The pension fund is for both sworn police and firefighters. Other city employees have a separate retirement fund.

The pension systems — known as the City of Fresno Fire & Police Retirement System and the City of Fresno Employees Retirement System (collectively referred to as CFRS) — have threatened to sue if the city does not raise its contribution.

Fresno is one of the rare California cities with a fully-funded pension and a long history of strong fiscal management.

GV Wire reached out to the city officials for comment but didn’t receive a response before the publication of this story.

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Budget Process: No More Overfunding

During the city budget process in June, the city council voted to keep its pension contribution at last year’s level. The city said the fund is already funded at 116% — meaning if the city owed everything right now, it would have a 16% surplus.

To save $6 million to help a city budget that was $40 million in the hole, the council voted to keep contributions the same instead of continuing to “superfund” the pension system. The budget maneuver prevented cuts in firefighter staffing and services.

CFRS wrote a July 15 letter to City Attorney Andrew Janz, saying it sets the contribution rate, which can’t be unilaterally cut.

“There is no basis under California law for the City’s refusal to timely pay these amounts. And, CFRS will pursue all available legal remedies, including without limitation suing the City and its City Council for immediate payments of all amounts due, plus interest,” stated the letter, written by attorney Ashely Dunning of Nossaman LLP of San Francisco.

CFRS provided the city with an Aug. 9 deadline to comply.

Robert Theller, the fund’s retirement administrator, questions how the city calculated a $6 million savings.

“We have requested where that calculation came from several times, and the city has not provided it,” Theller said.

Theller said the retirement board sets the contribution rate, using a third-party actuary consultant — experts in risk management. The 9.5% increase in contributions for Fiscal Year 2025 (from $30.8M to$33.7M) was based on factors such as increased wages and hiring more sworn personnel.

Karbassi: ‘Something Has to Give’

Councilmember Mike Karbassi led the effort during budget hearings to maintain the pension contribution level. He said without that maneuver the fire department risked staffing and unit cuts. Station 2 in Karbassi’s northwest Fresno district would be in jeopardy, he said.

“We can’t afford to superfund a pension already funded to the tune a quarter-of-a-billion dollar surplus,” Karbassi said. “Something has to give,” he said.

Theller said it is a matter of priorities.

“I would look back through the budget priorities that they did prioritize, such as new street signs over those firefighters, and not paying the benefits that they promised to the existing firefighters,” Theller said.

Read Retirement System Letter to City