ORINDA -- An ambitious plan to reduce an estimated $60.4 million in Moraga-Orinda Fire District pension and health care debt within 15 years will undergo intense scrutiny this week following a report that shows the shortfall has swelled an additional $21.8 million.
That brings the total debt to about $82 million, equal to more than 10 years of base salaries for district employees, or more than four times the district's $19 million annual budget.
Directors Steve Anderson and Alex Evans will meet in Orinda on Wednesday, acting as MOFD's finance committee, to discuss the district's 2013-14 draft budget. The directors said last week they also plan to analyze the long-range financial plan crafted last year by former fire Chief Randy Bradley and former administrative services director Sue Casey. At the time, they estimated that the district, which serves about 35,000 residents, had accumulated $24 million in debt to the pension system; $24.7 million in pension obligation bonds issued to cover additional retirement debt; and a $11.7 million shortfall in its retiree health care fund.
The directors said they will comb through the plan and pay particular attention to new debt recently calculated by consultants for the Contra Costa County Employees' Retirement Association, which manages the district's retirement benefits.
"We plan to go through each cell in the (long-range financial plan) to determine the underlying assumptions," Anderson said in an email.
New debt is detailed in a July report authored by The Segal Company, the retirement association's actuarial consultants.
According to the analysis, MOFD's unfunded employee pension debt just to the retirement association grew from about $24 million at the end of 2011 to $46.1 million at the end of 2012.
The drastic 89 percent increase in the district's debt to the retirement association exceeds the hit the association has taken as a whole. More than half the fire district's increase is due to the retirement association's lowering of expectations on future investment returns and other changes.
The neighboring -- and much larger -- Contra Costa County Fire Protection District, with which MOFD has proposed partnering to build a joint fire station in Lafayette, also faces large retirement debt. But ConFire's total unfunded liability of roughly $430 million is about one-third of MOFD's total retirement debt on a per-capita basis.
ConFire, which serves about 600,000 residents, closed five fire stations and destaffed seven engine companies to cope with its troubled finances.
MOFD's draft plan calls for the district to reduce its debt by slashing capital spending and setting up a trust fund to pay off the health care debt, among other measures. The board last reviewed the plan in March.
What: Moraga-Orinda Fire District finance committee
When: 4 p.m. Wednesday
Where: Sarge Littlehale Community Room, Orinda City Hall, 22 Orinda Way