THE ISSUANCE of pension obligation bonds was approved by a divided Huntington Beach City Council Monday night (Shutterstock).

A controversial measure to deal with the long-term financial costs of unfunded employee pension liabilities was approved by a divided Huntington Beach City Council on Monday night.

The council voted 4-3 (with Mayor Pro Tem Tito Ortiz and Councilmembers Mike Posey and Erik Peterson dissenting) in favor of authorizing taxable pension obligation bonds.

“The greatest financial threat [to the city] relates to our current CalPERS pension amount,” said City Manager Oliver Chi, and specifically unfunded accrued liability.

The unfunded liability is the difference between what the city has in the state personnel pension fund and what’s promised to those city employees as they retire.

Such a bond could save the city $170 million over the next 23 years or so, according to Chi. The total obligation is $436 million.

“It’s a viable, responsible option,” he said.  He added that the success of the bond would depend on the continuance of low interest rates.

Posey suggested that the bond proposal was too risky. “It’s like using one credit card to pay off another credit card,” he said.

The motion that was finally approved after a lengthy discussion included several amendments that would include varying certain debt service payments.

Also on Monday night, the council:

• approved a resolution establishing fees and charges for use and operator permits for group homes and sober living homes, and hourly billing rates for code enforcement services
• adopted a resolution establishing short-term rental permit fees and adding two code enforcement officers to the city’s table of organization.

The next scheduled meeting of the council is to be on Monday, March 15.