A new database by Stanford University academics that ranks hundreds of public agencies across the state by pension liability lists Corte Madera deep in red ink at No. 17 — and Ross, Sausalito and Mill Valley in the top 100.
Marin County’s pension program checks in at No. 144 — and in better shape than 22 other California counties when ranked by unfunded liability per household — but no breakdown was available outlining the county system’s individual components, including county government, the city of San Rafael and the Novato and Southern Marin fire districts.
Former Marin assemblyman Joe Nation, a public policy professor at Stanford, worked with top colleagues and others to sort 2013 data providing fiscal detail on 1,079 California counties, cities and key special districts on pensiontracker.org. The data indicates Corte Madera officials over the years have promised pensions that in effect now cost each household in the city $25,003 — the 17th-highest tab calculated across the state, and the highest in Marin. George Warman, Corte Madera’s veteran finance chief, said Nation makes the situation seem apocalyptic. “The world is not all falling down,” Warman said, adding the city is paying off its pension liability “on an ongoing basis over a period of time.” Further, state reform puts new hires under a less expensive plan that will eventually curb city costs, he said.
But Nation said the town faces a monumental fiscal hurdle. “Clearly Corte Madera has a challenge,” Nation observed. “They have their work cut out for them.”
Employees of most cities and special districts in Marin are part of the state CalPERS retiree system, and robust benefits in Corte Madera allow former city fire chief Robert C. Fox to collect the state system’s biggest pension in the region. Fox’s final pay and 36 years of service provided a $223,483 pension in 2013, making him No. 72 on CalPERS’ payroll of 583,000 pensioners.
Last year, Robert Fellner, a researcher for the California Public Policy Center’s Transparent California website, criticized “exorbitant” pay and benefits at Corte Madera Town Hall, noting the average compensation package topped $170,000.
Paying benefits
The unfunded liability Nation cites doesn’t mean bills will be in the mail, although a future generation of taxpayers is on the hook to pay up if the stock market tanks. The numbers provide a way of measuring benefits approved by elected officials, and their progress, or lack of it, in paying for them. Corte Madera’s $25,003 tab is the amount each household would have to pay for pensions promised by the Town Council. But the tab covers pension costs only — and does not include the often larger cost of retiree health benefits, information Nation said eventually will be added to the database.
Three other Marin agencies ranked in the top 100 across the state: Ross, at No. 52, checked in at $17,328 per household; Sausalito, at No. 68, registered $15,888 per household; and Mill Valley, at No. 84, posted $14,831.
Sausalito Councilwoman Linda Pfeifer was shocked by news of Sausalito’s situation. “Oh, my god!” she exclaimed. “There’s no way little Sausalito should be No. 68 in California. … This is really outrageous.” Pfeifer, a spending critic often in the council minority, said her colleagues “keep claiming pensions are not a problem” and turn a deaf ear to her protests.
Although Warman indicated there was no cause for alarm in Corte Madera, Pfeifer said she feared “taxpayers will be left holding the bill” in Sausalito.
Paying down debt
Ross Town Manager Joe Chinn, former finance chief in Elk Grove, said costs will be lower than forecasted, in light of the town’s liability “prefunding” program under which it pays down debt. “We’re managing our liability and reducing our costs,” he said, adding he will propose strategies to further curb the pension tab early next year.
Chinn said he had not seen the Stanford data and thus could not analyze it. Officials in Mill Valley could not be reached for comment Friday.
In all, 18 Marin agencies were among the top 500 when ranked according to unfunded pension liability per household. They include: No. 284, San Anselmo, $6,935; No. 296, Fairfax, $6,701; No. 309, Larkspur, $6,376; No. 313, Novato, $6,098; No. 315, Tiburon, $5,978; No. 327, Tiburon Fire Protection District, $5,640; No. 334, Marinwood Community Services District, $5,402; No. 382, Stinson Beach Water District, $4,206; No. 403, Kentfield Fire Protection District, $3,775; No. 449, Central Marin Police Authority, $2,765; No. 477, Marin Municipal Water District, $2,352; No. 483, Tiburon Sanitary District, $2,298; and No. 493, Bolinas Community Public Utility District, $2,151.
Topping the list statewide was the Southern California city of Irwindale, with a $134,907-per-household tab. Other household totals include No. 5, San Francisco, $47,288; No. 13, Los Angeles, $26,847; No. 29, San Jose, $19,906; No. 35, Santa Cruz, $19,178; and No. 47, Redwood City, $18,014.
Pension data
The Stanford rankings in some respects mirror a 2013 “pension roulette” study by Marin’s Citizens for Sustainable Pension Plans that reported local city and county governments had mounted a retiree debt of as much as $2.3 billion, making the average resident’s share of the tab $25,000. In that study, Corte Madera also topped the per-household liability list among Marin cities, while Tiburon was doing the best.
Nation, a researcher at the Stanford Institute for Economic Policy Research, said the new database at pensiontracker.org is the first to provide city, county and special district pension data for California. It allows citizens to measure agency fiscal affairs by 20 metrics, including percent of revenue spent to pay for pensions.
The site, containing 2 million data points, draws information from more than 60 pension systems including CalPERS as well as the offices of the state controller and treasurer, the state Department of Finance and the U.S. Census Bureau. It does not yet include data from 1,022 school districts covered by the state teachers’ or University of California retirement systems.
Alarm bells
To get a complete picture of pension liability in terms of costs per household, Nation noted, residents would have to add up the obligations mounted by each public agency serving them. He hopes pensiontracker.org will become a “Zillow”-like site that allows people to measure total per household costs by simply typing in their address.
Nation rang pension alarm bells in 2010, when he noted that optimistic investment assumptions put future generations in peril of fiscal calamity because taxpayers are obligated to pay costs if Wall Street doesn’t shine brightly.
Nation warned then that Marin taxpayers faced a $2.4 billion unfunded pension liability at the Civic Center — almost quadruple the county’s estimate. Buoyant investment projections in effect enable the county to pay for future pensions at a discount, providing elected officials with more money for today’s programs including pet projects and pay raises, he noted.
