Happy Thanksgiving. Be thankful for the County government we have today because it may not be there next year.
Halfway To Concord has learned that…For every dollar Contra Costa County spends today to support already unsustainable employee retiree pensions costs, over at least the next six years, taxpayers will be on the hook for 77 cents more, a shattering increase that harbors dire consequences for county government.
According to the Agenda for the Board of Supervisors (BOS) meeting to take place Tuesday, December 1, in Martinez, (See Sectiokn SD 4)
Retirement expense for the current year is projected to be $19.5 million less than last year. Departments Countywide were able to reduce projected expenditures for FY 2009-10 by a like amount without reducing programs or services. That was good news. The bad news is that market losses (26.5%) in combination with unachieved earning assumptions (7.8%) in calendar year 2008 exceeded 34% and will necessitate increased contributions to the Contra Costa County Employees Retirement Association (CCCERA) for the next eighteen years.
Over the next six years, retirement contributions to the Contra Costa County Employees’ Retirement Association are expected to increase by 77%. It is important enough to repeat that this projection is net of a 7.8% earning assumption.
According to a source familiar with the County’s figures, “this could be the beginning of a very ugly end for the county as we know it.
The 77% spike is based on the overly optimistic assumptions of a 7.8% gain on Retirement Board investments. The BOS is all but admitting that since the 7.8% target was not achieved, the outlays in County contributions to keep the employee pension scheme afloat could much higher than just 77-percent over at least the next 6 years.
Enjoy this scheduled Short Discussion in Board Chambers, Tuesday, December 1, when the BOS meeting begins at 9:00 a.m.
If you get a chance to ask a question during public comment, why not ask the BOS why it based so much emergency fiscal planning and budget cutting for the County on such an unrealistic rate of return?
{ 5 comments… read them below or add one }
Don’t forget CalPERS, they will need an additional $300M by 2011.
http://www.publicceo.com/index.php?option=com_content&view=article&id=925:calpers-piece-of-budget-woes-gaining-attention&catid=151:local-governments-publicceo-exclusive&Itemid=20
This is sick news. Will there ever be a fix? I’m beginning to think the masses are sheep going baaa baaa.
See attachment at
http://64.166.146.155/docs/2009/BOS/20091201_92/3140%5FAttachment%20to%20Resolution%20No%2E%202009%2D534%2Epdf
Here’s the Resolution for consideration. BOS does not think in terms of dollar costs (obviously)
http://64.166.146.155/docs/2009/BOS/20091201_92/3140%5FBO%5FEMPLOYEE%20RETIREMENT%20PLAN%20CONTRIBUTION%20RATES%20FOR%20FISCAL%20YEAR%202010%2D2011%2Epdf
1. The BOS is responsible for the pension fund shortage because they increased the pensions in 2001-02. Furthermore, they made them retroactive, so the immediate retirees received the higher pensions but had never contributed at the higher rate.
2. The BOS does not set the anticipated pension earning rate of 7.8%. The BOS appoints four of the nine members of the Retirement Board. The Retirement Board sets the anticipated earnings rate annually after considering or ignoring the opinion of their Acturary.
3. When the rate of earnings is higher, then the contributions by the Employer (County or other member) and the employee are lower. If the pension fund is too low, only the employer (taxpayer) is required to make up the shortage.
Putting dollars to it and the total budget and the time time would help to clarify things.