According to a Northwestern University study, Contra Costa County is among several counties in the Bay Area headed for insolvency in the next 15 years. The culprit, researchers say, is unfunded liabilities from employee pension systems. The study puts Contra Costa's unfunded pension liability at $5 billion and predicts the county will be insolvent in 2025.
"This is unsustainable. We keep hearing that word, but it's starting to really mean something now. These are slated to be broke. That's what that study is saying," says Kris Hunt, executive director of the Contra Costa Taxpayers Association.
"The problem with the study is these pension systems aren't going insolvent," says Contra Costa Supervisor John Gioia, who serves on the county's pension board. "What's happening is local government and state government are going to be paying more in pension costs, which isn't a good thing, because it cuts services, but it's really important to note that these pension systems are not going bankrupt because they legally cannot go bankrupt."
The Northwestern study says the unfunded liability in Contra Costa County amounts to nearly $13,000 per household. Those who represent many of the 10,000 employees in Contra Costa's pension system say the Northwestern study overstates the program's problems.
"We don't think they're right. In the short of it we think they're using unrealistic assumptions that at the end of the day would cause taxpayers to have to pay a whole lot more than what they actually need to pay to keep the systems solvent," says Larry Enginton with Public Employees Local 1.
Edginton says the extreme cases where former city managers or fire chiefs collect pensions in the hundreds of thousands of dollars don't apply to his membership.
Local 1's mid-level employees retire after 25 years, with an average pension of $2,500 per month.
