Contra Costa is paying the price for years of living beyond its means -- and it's about to get a lot worse. The numbers are staggering.
The retirement board that administers pensions for workers in 17 government agencies including the county, the sanitary district and local fire districts has historically undercharged employers and employees.
Instead, the board has banked on unrealistic investment assumptions that assume huge stock market and real estate profits. Recently, it has finally started to tamp down those forecasts. But that means the money to fund pensions must be made up elsewhere.
At the same time, the board's actuary has forecast that people will live longer than previously estimated. That also means more money is needed.
Consequently, the 17 public agencies will face soaring costs for the 2014-15 fiscal year. It's just now becoming clear how bad it will be:
These astronomical costs mean there's less money available for other things. Pensions are eating up an ever-growing portion of the budget. It means less money for salaries, fewer workers and reduced services.
The magnitude of the problem has come into focus in new calculations from the retirement board and an analysis last week by the county finance staff. It should set off alarm bells. Actually, it must set off those bells.
Some will ignorantly try to blame the retirement board for changing its investment assumptions. In fact the changes were long overdue; more delay would have only made the problem worse.
Some continue to parrot the myth that employees are paying half the going-forward cost for their pensions. They're not. And they insist the county has done all it can to control pension costs. It hasn't.
It's time to get serious.