The Nascent Financial Crisis at Coastside Fire
On August 16, 2011 the Coastside Fire Protection District(CFPD) Board held a Special Meeting. It was called on short notice. Darin Boville was not notified to video record it. So, citizens won’t get to see what the Board did. Two citizens were in the audience that day, spoke and saw what happened. I was one of them.
The Coastside Fire former employee retirement CalPERS debt was thought to be about $5M in 2009. This year it was estimated to be $9M to $13.2M. According to the actuarial consultant the Coastside Board hired, John Bartel, the CalPERS’s Board’s August 17, 2011 action raised Coastside’s termination debt to $13.5M to $19.8M. CalPERS pools are black boxes. When a CalPERS customer asks what the size of their debt in a pool is, it can take half a year for CalPERS to provide a range like $13.5M to $19.8M. When CalPERS unilaterally moves a customer agency’s contract form one pool to another, the customer can get hit with millions in additional debt. When the CalPERS Board votes like they did on August 17 to change actuarial assumptions, a contracting agency debt can go up 50%. The current interest rate CalPERS charges on debt is 7.75%.
Today, the total combined Coastside Fire liability for former employee CalPERS retirement plan and former employee family medical plan is larger than the HMB Beachwood settlement. Coastside Fire has roughly $8M in annual revenue. For comparison, the City of HMB has roughly a $10M budget. Compounding the problem is the City of Vallejo’s experience in Federal Bankruptcy Court. Even under dire conditions for Vallejo, the CalPERS obligation had seniority. Four of eight of Vallejo’s Fire Stations have been closed. As one citizen in Vallejo quipped, “Our Fire Department is a pension plan masquerading as a Fire Department.” So, bankruptcy or dissolving Coastside Fire District won’t extinguish Coastside’s CalPERS obligation.