What’s Another $30 Million? Charge It.

What happens when you run up a credit card but only make the minimum payment? It never works out very well. But that’s how Fullerton is handling $30,000,000 in retiree health care commitments.


Jack Dean passed along this unfortunate piece from the OC Register which exposes over $1 billion in unfunded retiree health commitments for Orange County and its cities. Fullerton’s spending problem is summarized here:

City Fullerton
Population 138,610
Unfunded costs $29,986,735
Unfunded cost per capita $216
Maximum benefit (per year) $9,744
Paid in 2009 $1,927,528
Does the agency pay only the minimum cost? Yes
Is a lifetime benefit offered? Fire employees
Source: Retiree health costs and other retiree data from local cities and the county; population statistics from the California Department of Finance

Retiree health benefits are negotiated between our city council and the public employee unions during contract renewals. Supervisor John Moorlach says they are an easy squeeze for unions because boosting benefits for employees requires no up-front cost to the city.

Much like exorbitant pensions, these benefits are a long-term commitment where the future costs are impossible to calculate at the time the entitlements are given. Ultimately, taxpayers are responsible if costs “unexpectedly” spiral out of control. And of course, they always do.

14 Replies to “What’s Another $30 Million? Charge It.”

  1. Blaming unions for a mess like this is missing the mark. The blame lies with the dunderhead electeds who approve deals that have predictable long term costs and then make little or no arrangement to fund those costs. These electeds should have some kind of personal liability in such situations – that would bring some much needed accountability and have a chiilllng effect going forward. Truth be known, many government employees have been misled by these electeds into thinking they have a secure retirement, when
    the truth is they do not.

  2. BAW, I agree that our electeds are responsible for this mess, but the unions also did their share. Remember… they LIED to our council about the ultimate costs of these benefits. Even a wise representative (if there is such a thing) will fall for a lie now and then. They knew what they were getting away with (see the CalPERS memos if you need evidence.)

  3. I think Been Around a While is on to something here. Remember most fire and cops barely have 6 junior college units under their belts (at least that’s what Jo-Jo Sipowicz says). How could such buffoons control the various city councils and BOS. Hold the elected people accountable for the mess. They hold the credit card and are doing the charging.

    1. Cause the councilmembers are even more ignorant. But being ignorant doesn’t ensure that somebody isn’t greedy and manipulative.

  4. Travis how did the unions lie? Oh so what you’re saying when the City negotiates with the unions, the City just takes the union’s numbers as gospel. Oh Please. The city has their paperwork sent to them from PERS. They have the same numbers as the unions. There aren’t two sets of numbers. Hold the council members responsible. Like your home boy Norby who will be a triple dipper when it’s all done. If anyone is a liar, you should be posting a picture of your other home boy Nelson. That guy is the epitome of a liar. I guess that’s why he got elected this time around.

  5. Lie #1: We need these pensions and pay increases to stay competitive with other cities.

    Lie #2: We need this pension spike to maintain public safety.

    Lie #3: These pensions won’t cost you any more money in the future.

    Lie #4: Our crime rate will go up if we don’t enhance these benefits

    Lie #5: We won’t be able to recruit without these pensions.

    Lie #6: Public saftey employees die young.

    …and so forth.

  6. Travis, while the unions may misrepresent financial impacts, it is the Council and their City management staff under the direction fo the Council that has the responsibility to run the numbers to determine costs going forward. And, if City staff lacks that expertise, then the Council should hire independent consultants to do an analysis. Anyone who commits to a major public policy decision simply based upon what unions tell them is not doing their job.

  7. Travis so where did they lie about the PERS numbers. Those posts you listed are just arguments of persuasion on the part of the union. Your buddy Nelson lies all the time to get his way. So fucking what…..right?

    1. Um, let’s see: can you list Nelson’s lies?

      These would be statements that you can prove are deliberate flasehoods. That’s what a lie is. Remedial Reading Comprehension at FJC might help you out.

      BTW, your weird fixation on Nelson is becoming more than a little creepy.

  8. I see. They’re not lies, they’re just “arguments of persuasion”that happen to be completely false. Nice spin. I can see why they put you in charge of kicking up dust on the blogs.

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