Updated Sunday, December 21, 2014 as of 2:24 PM ET

Newport Beach's $100,000 Lifeguards Threatened as Pensions Mount

(Bloomberg) -- Newport Beach, California, where four ranking lifeguards earned more than the town’s $109,677 median household income in 2012, may partially disband its municipal ocean rescue to deal with rising pension costs.

The Orange County city of 87,000, with a median home value of $1.5 million according to Zillow.com, is weighing bids from other governments and private companies for lifeguard services at Corona del Mar State Beach, which the municipality patrols, according to bid documents.

Newport Beach’s oceanfront, including the state park, draws about 1.6 million visitors a year and averages 800 rescues annually, according to bid documents. With about 14 percent of Newport Beach’s general budget going toward employee pensions, municipal lifeguards may be a luxury the town can’t afford forever, City Manager Dave Kiff said by e-mail. Newport Beach isn’t alone in the Golden State, said Michael Coleman, fiscal adviser to the League of California Cities.

“The escalating cost of pensions, especially public-safety pensions -- of which lifeguards are part -- is putting more pressure on cities,” Coleman said by telephone. “If this continues, we’re going to see more and more cities outsourcing these functions.”

California cities from the Mexican border to the San Francisco Bay have confronted rising pension costs as they contended with post-recession unemployment and strained property- and sales-tax revenue. Local governments have struggled to support six-figure lifetime benefits for some retirees even as they cut police and fire services for city residents.

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