The latest estimate is lower than the $2.57 billion calculated two years ago. The reduction results primarily from the use of new actuarial assumptions, and secondarily, from recent board of supervisors’ action to modify the health care benefits for unrepresented county employees.

The liability is still staggering, because the board of supervisors has yet to make any meaningful changes to the generous health care benefit plans available to county employees and retirees covered by union contracts, despite three opportunities to do so in the past several months.

The county’s predicament did not develop overnight. It has been nurtured for decades by past boards that repeatedly agreed to increasingly expensive health care benefits in a labor-friendly environment, without any consideration of future costs. But in light of today’s clear understanding of the crushing impact that the obligation will have on the county’s ability to provide services, it is worrisome to see the current board appears to be continuing this trend.

Most of the county’s 39 union contracts expire in September of 2008. In the past several months, three new labor contracts have been approved. None includes changes to health care benefit plans that would begin to seriously address the county’s imminent financial crisis. This does not bode well for the outcome of future negotiations unless the supervisors take as realistic and tough a position with labor unions as it has with the County’s unrepresented employees.

If the Board of Supervisors either collectively, or any of its members individually, squander this opportunity to substantially improve the county’s financial situation in the name of political expediency or labor peace, out-of-control retiree health care costs will surely and painfully impact the county’s ability to deliver basic services to its more than one million citizens.

The complete report is available on the Contra Costa County Grand Jury web site: www.cc-courts.org/grandjury