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Task Force Critiques Fire District Fiscal Plan

Orinda Citizens Emergency Services Task Force pokes into details of Moraga Orinda Fire District's 15-year financial forecast.

A citizens task force has posted a detailed response to the Moraga Orinda Fire District's 15-year financial forecast released earlier this month.

The Orinda Citizens Emergency Services Task Force commends MOFD for taking the long view over 15 years and for "taking on the tough job of focusing on underfunded liabilities."  The task force states it agrees with the current forecast for revenue growth through 2022.

However, the task force "believes that the current forecast seriously understates the magnitude of unfunded future liabilities" with a discrepancy as large as $2 million to $5 million annually. Included in the under-projection, the task force states, are:

  • a pension obligation bond
  • a post-retirement medical benefit liability, and
  • underfunded pension liabilities

The district's 15-year plan anticipates a growth in property tax revenues of 2 percent in fiscal 2013-14, 3.25 percent in 2014-15, 3.5 percent in 2015-16, and 4 percent through the remainder of the plan.

The 15-year plan lays out a projection of retiring the current Unfunded Actuarial Accrued Liability by 2026-27. This includes a projection that the Contra Costa County Employee Retirement Association will average an aggregate annual return on investments of 7.75 percent by the end of that term. "Historically, CCCERA has exceed that goal in any 20-year period since its existence," the 15-year plan states.

One task force member,

Fritz 'Congodog' Stoop November 23, 2012 at 07:22 PM
I did not mention that because I was not aware. Is that a fact, where can I find supporting data? The MOFD is a liability that is draining the local resources at an alarming rate. Is it a fair statement to say that sending fire trucks to obvious medical situations (the vast majority of their call outs) is simply a means of padding their response statistics. A close look at this report should be on every Moraga/Orinda property owner's 'must read' list. Most folks here are capable of critical analysis of such documents, so I'd advise you be seated when you read it.
Diana Stephens November 24, 2012 at 11:49 PM
Thank you Fritz. The Emergency Services Task Force Report was an incredible amount of work, and while it is an effort to educate oneself about MOFD, it is one of the largest expenses property owners face and well worth the time. There is an Orinda leaning, if you will, as the Task Force members believe Orindans to be paying a greater share than they should, but there is a lot of pertinent information for everyone served by MOFD. Please check it out online at www.orindataskforce.org.
c5 November 26, 2012 at 02:20 PM
your comments justifying a budgeted 4% increase in property tax revenues forever and a 7.75% investment return forever remind me of an old saying.... 'if you don't learn from the past you are destined to repeat it'....and that in a nutshell is where the state of public sector pension and benefit finances stands.
Fritz 'Congodog' Stoop November 26, 2012 at 03:18 PM
c5 If it is so obvious that the MOFD is outsized for the size of the communities it serves and a fiscal nightmare, then why not do something about it. The current Board seems mesmerized by the 'empire building' antics of Chief Bradley and seems incapable of grabbing this costly bull by the horns. The weak Board needs either a serious change of attitude or replacing. The lack of citizen outrage is perplexing as this juggernaut continues to plow through tax dollars. The Task Force's Report is very clear: The district as comprised is at least twice as big as necessary, salaries/benefits/retirement structure begs revision and actual structure fires represent 1% (that is correct, ONE percent) of the call outs. The two hamlets need an ambulance service and a bare bones "structural fire department" augmented by a volunteer force. This model is common all over the United States in semi-rural communities such as ours. We need to stop being satisfied with our simple outrage and do something. Soon.
Steve Cohn November 26, 2012 at 04:27 PM
@c5 - I do not say a 4% increase in assessed values should continue forever but I do believe they can continue for 15 years, at least in Orinda. They might actually be higher for a while, as Pulte and Wilder are developed. They could get another boost if downtown Orinda is ever re-developed. And although I would not bet on it, if Prop 13 was amended to only limit residential properties to the 2% annual cap or if that cap was determined to be a cumulative cap and not year-by-year (so if it goes down 3% one year it could recoup that 3% plus another 2% in the future, not to exceed CPI cumulative growth). All in all, 4% average over the next 15 years given the current state of the tax base being 60% of the market value is not unreasonable. The 7.75% asset earning assumption for public funds is overly aggressive. That is why we are in the hole we are i. Assets would have to earn at 11% over the next ten years to make the 20 year period we are in the middle of average 7.75%. We need to "assume" a much lower rate which will cause us to have to deposit a much higher amount to fund the current promises and we will then have to tell the employees "if you want to save your money and assume those rates, fine, but we cannot afford to". MOFD is in contract negotiations. Will they tell their employees that or accept the current forecast presented by Chief Bradley to the Board and kick the bad news and huge budget down the road? Only "the people" can tell them to back off.

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