When people talk government pension details, eyes roll back. But the latest at Calpensions.com on Monrovia is interesting – and frightening – for a few reasons. The city’s current unfunded liability is $112 million. This, by the way, in a city of 36,000.
Here’s a show stopper:
“In fact, if we do nothing, current financial modeling indicates that the costs associated with the pending CalPERS UAL repayment schedule will strain our General Fund to the point of rendering the City insolvent in either FY 2021/22 or FY 2022/23.”
Despite this, the city’s plan has no staff or service cuts. Employees took a minor pay cut across the board, but the larger bite will be paid with a bond, which the city will have to pay back with interest. And more taxes. One potential stumbling block:
“But in a system that expects to pay 60 percent of future pension costs with a risky stock-laden investment portfolio, a plunge in a record-high market could quickly add new debt.”
Have to wonder what the rest of the cities in the San Gabriel Valley are facing.
You should read the whole scary story: https://calpensions.com/2017/11/27/one-citys-struggle-with-mounting-calpers-costs/