Unfunded municipal retiree benefits may be common practice. Odds on Pacifica?
San Francisco Examiner/Melissa Griffin, 8/8/12. "Retiree health cost weigh on San Francisco."
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| The plan is simple, 2 fish no future |
"Last week, a nonpartisan nonprofit called California Common Sense
released a study of the retiree health care finances of the 20
California cities with the largest budgets.
With a $4 billion liability,
San Francisco had the distinction of having the largest unfunded
retiree health care debt on the list and zero dollars put away to pay
for it. Even Bakersfield looks good by comparison. Our first-place
finish might have something to do with the fact that the city and county
of San Francisco employs more people than most cities.
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| Fix a problem before it happens? |
So how did we get here? San Francisco uses a “pay as you go” system
whereby we use today’s dollars to pay for today’s retirees, instead of
having put money away back when we promised those retirees lifetime
health care benefits. That failure to fund the program at the time the
union contracts were signed means that we never earned interest or
dividends from any money put aside. And you can put the blame squarely on the elected officials who have
failed to properly fund retiree health care (along with infrastructure
maintenance), much to the detri
ment of the financial health of this
city.
At Tuesday’s Board of Supervisors meeting, Elsbernd said he plans to
introduce legislation that would require the controller to include the
amount of The City’s retiree health obligation in the annual revenue
letter. The purpose of the legislation is to shed light on the $300
million or so that we accrue each year in unfunded retiree health
liability because, Elsbernd said, “You’re not going to get anywhere
unless there’s a common agreement on what the problem is.”
And the problem is that when it comes to avoiding reality, our City Hall is No. 1." Read Article.
Submitted by Jim Alex
Posted by Kathy Meeh
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