George Rebane
Nevada County’s considerable (massive?) unfunded pension liabilities have been downplayed by the county electeds and staff for the last several years. When this matter has been brought up to the Board of Supervisors by citizens, it has been either dismissed with hubristic silence or called a form of “rural myth” (more here). This week county CEO Rick Haffey added his contribution by introducing a new version of this dance. It was published in the 31may12 Union (‘Supes have taken proactive approach to public pensions’), and for those not having access to that newspaper – their website is paywalled – you can download a pdf of it here.
The bottom line, as Mr Haffey corroborates, is that the county will be $119M in arrears, to make up for the anticipated shortfall that CalPERS (the state employees’ pension fund manager) will require to pay county retirees in the outyears. There is no plan for making up this amount, and Mr Haffey neither provides one nor states that one is in preparation. On top of that, there is no indication that the county knows how much and when payments on the $119M will come due. Such a schedule of dollars and dates, even in estimated form, is required to forge a plan to deal with these unfunded liabilities.
We can only deduce from this that the county, in its present make-up of electeds and staff, does not intend to address the problem – do they all plan to be gone then? Instead, in Mr Haffey’s article he goes into some detail to exonerate the current Rood Center crew in having caused the problem or of having added to it. The presentation focuses on decisions and provisions going forward that should be taken as long overdue but now prudent behavior on the part of state and local officials. But there is nothing included on the disposition of the $119M overhang facing the county.
One wonders what Mr Haffey and county CFO Mr Joe Cristoffel have been telling people about our ability to deal with this problem in order to have soothed both county taxpayers and those expecting their pension allotments. Mr Haffey’s Other Voices (OV) piece seems to be one more contribution to the series of calmatives dispensed from Rood. In my email a correspondent submitted a set of tongue-in-cheek alternative summations of the OV article which are compiled below.
Summary #1 of OV: "Don't worry about the 10,000 acre fire you see approaching on the horizon, we have prepared for this…we have 2 squirt guns and a half-full 5 gallon bucket of water at our disposal."
Summary #2 of OV: "My current bosses are awesome. All this pension crisis stuff – which I cannot confirm or deny – is not their fault. Please re-elect my bosses. Paid for by 1 of 6 public employee unions."
Summary #3 of OV: "Gotcha! We do have a pension problem. We vehemently denied such a problem for years ‘cause we thought the stock and real estate market were poised to soar again. My bad."
Summary #4 of OV: "We always knew that the pension crisis we denied did, in fact, exist and while you were sleeping we did a huge list of things on the margin to soften the blow. I will conveniently leave out the fact that the pension plan was fully funded, then pillaged (we increased the payouts by over 25% cause we had cash burning a hole in our pockets, everyone at the negotiating table received said raise and stocks/real estate never go down), just before we started fixing it again."
Summary #5 of OV: "We have consulted with each of the 6 public employee unions and they promise us that there is no pension crisis."
In his conclusion, the best hope Mr Haffey can offer is that IF state and local remedies are adopted/implemented, then these “will go a long way in stabilizing public pension for both public employees and taxpayers.” (emphasis mine) He opines there’s a good chance that our $119M unfunded liabilities will not continue to grow – and that’s all? Now don’t you feel better already?
rebanesruminations.com 
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