Supervisor Campains Should Focus on Solving Unfunded County Debt
Original post made
by Concerned Debt, Danville,
on Mar 4, 2012
The amount of debt this county owes to its employees should be the main subject of campaigns for Supervisors. The potentially new Supervisors of all open seats should address the public on how they plan to reduce the two billion dollar debt without creative financing or tricks. Every man woman and child in the county owes over two thousand to the county for its overspending to employees.
At this rate services will further deteriorate to dangerous levels without immediate reform. Today all we get from government is new tax proposals. We need tax and debt reform.
If you read this study that was done several years ago tells us that the Supervisors know the problem exists but are failing to correct it before it over runs us. Thanks to reports from Dan Borenstein of the Times News, the public has been slowly provided information to show the depth and magnitude of this problem.
New potential Supervisorial Candidates need to explain how they plan to take control of this run away debt before our county becomes the first to file bankruptcy.
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Posted by Informed Resident
a resident of another community
on Mar 5, 2012 at 2:01 pm
@ East County Watch,
Your statements are qualified by what exactly? More innuendo? Really?
And now you are calling me names, just a few days after accusing me of being "childish"? That is a whole new level of hypocrisy for you.
Once again you do a grandiose job of making yourself look foolish and your hollow accusations even more transparent. I have nothing to sell, however you on the other hand appear to have some sort of agenda, vendetta wrapped up in your infatuation in peddling of bad information. It gets clearer with every post. Mr. Borenstein excuses may just be that he really doesn't understand the complexities of the issue, his laziness or even his track record of attacking public employees in his quest.
All of that aside what is it about this document below that you don't quite comprehend? It is simple really-even you should be able to follow the time line and see that from the original report dated July of 2007, that "Concerned debt" originally posted Web Link to the report (public record), that is currently available @ Web Link (then click "AGENDAS" from April 2010-June 2010) that the debt has been slashed.
The document is very simple to read. If you can't follow it or the link, I will post it below. It has all the answers to your questions. Perhaps this will aid you with your personal misunderstandings of what is fiction and what is fact. More importantly it will supply other readers with pertanent information so that they can judge for themselves.
One last important point…This latest report is now over a year old. The County (Bos) made further significant contract changes last year (2011) so if the report lists an OPEB liability of $1.02 billion in early 2010 under "Present Day" below you can imagine the next report will show even further reduction based on contracts negotiated in 2011. As I previously stated all accounts show it is greatly reduced to a very manageable amount and now is out of the "Billions"...
East Co Watch, you cannot ignore, deny or even begin to diminish the power of the progress that has been made in a few short years without looking foolish.
Perhaps you need to keep Mr. Borenstein more accountable by not subscribing, as so many other County residents have done. Web Link Too bad your Ace Reporter couldn't find and report on this. It did not take me long to find it.
Don't take my word for it, Here is the report-right from the people that know it inside and out. Enjoy!
Other Post Employment Benefit Funding Update
David Twa, County Administrator
On April 13, 2010 the Board of Supervisors was presented with the County's '2010 Other Post Employment Benefits (OPEB) Valuation Report as of January 1, 2010 and Annual Required Contributions for the Fiscal Year Ending June, 30, 2010'. The report describes the County's opeb liability per Government Accounting Standards Board Statement 45 and projects the County's liability based upon those specific accounting rules.
The purpose of this report is to describe and document the County's progress to date in meeting Board established funding goals.
On May 16, 2006, the Board of Supervisors accepted a report from Buck Consultants concerning a preliminary actuarial analysis of the County's liability for retiree healthcare and other post-employment benefits. This report estimated the County's then current opeb liability at $2.6 billion. The report concluded by recommending that staff:Prepare an analysis of opeb liability reductions that could be produced through changes to healthcare benefits
Prepare an analysis of the cost associated with funding varying levels of the liability and make recommendations concerning the portion of the liability that should be pre-funded
Investigate unresolved questions concerning State and Federal reimbursement for pre-funding OPEB costs, establishment of an irrevocable trust for the accumulation of pre-funding assets, and options for investment of such assets
Work with California State Association of Counties (CSAC) and other public sector partners to gather data and develop statewide strategies for managing this issue
In the fall of 2006, the County Administrator established an OPEB Task Force to bring together the breadth of expertise available within the County and through professional contracts in each of the following areas: financial, audit, budgetary, personnel, labor relations, benefits, and legal. The importance of incorporating into the ongoing process the perspective of all stakeholders was also emphasized. The first direction to the Task Force was the development of a strategic plan to address the County's opeb liability.
In March 2007, the Task Force presented a report to the Board that detailed the OPEB challenge, the consequences of inaction, strategies to deal with the issue, and described where the County was in relation to other governmental entities. The report quoted Ken Kurtz of Moody's Investor Services who said "If you decide you want to continue Retiree Health Benefits as a priority then make a plan and fund it. If you decide that Retiree Health Benefits are not a priority, then don't make a plan, and you don't have to fund it. But don't maintain Retiree Health Benefits with no plan and no funding."
In June 2007, the OPEB Task Force presented an OPEB Update Report to the Board of Supervisors. The result of the Task Force report was that the Board of Supervisors:
established goals to guide the Task Force's work: 1) Fully comply with Governmental Accounting Standards Board (GASB) Statement 45; and 2) Adopt an OPEB financing plan, which balances our requirement to provide public services with competitive health care benefits for our employees (now and when they retire);
adopted an OPEB funding target of 100% of the potential liability for the retiree population (at that point approximately 40% of the total liability);
adopted a specific allocation of resources to be directed towards the opeb liability; and
directed the County Administrator to begin pre-negotiation meetings with County labor representatives regarding the development of possible plans and models for benefit reform.
The Update Report declared that "the scope of the issue isas has been noted many times by many individualshuge, not only for Contra Costa County, but for the nation; however, it is not insurmountable. Contra Costa will address this issue successfully as it does with every challenge. A sound long-term strategy is of uppermost importance. The primary issue is that Contra Costa County has a very large potential opeb liability that is the result of 46 years of retiree health benefit accumulation, combined with the positive demographic of longer life expectancy, and the less positive reality of rapidly increasing health care costs. Preparing to pre-fund this liability will take a multi-decade effort, but can and will be achieved through a combination of revenue redirection, benefit plan changes, and as a last resort, service delivery reductions". The Board of Supervisors accepted this report and directed the County Administration and staff to begin implementation of its recommendations.
Four years after the initial report regarding the County's opeb liability, the Board of Supervisors has achieved unprecedented results. Continual implementation of the strategic recommendations has allowed the Board of Supervisors to meet or exceed all of their goals.
The County's Unfunded Actuarial Accrued Liability (UAAL) has declined by 60.3% (from $2.57 billion to $1.02 billion); the normal cost has declined 78% (from $130.6 million to $29.2 million); the Annually Required Contribution (ARC) has declined by 70.7% (from $216.3 million to $63.3 million); the results reflect negotiated changes to the health care plans, caps on the County's contributions and the cooperation of the County's bargaining units; and the County has also pre-funded 2% of its OPEB obligation by depositing funds in an irrevocable trust fund.