As if the county needed more problems. The Harvey Rose audit and actuarial firm sent a disturbing report this month to county Supervisor Joe Simitian, who was interested in knowing how the unfunded liability to cover retiree health care benefits compared with his last tour of duty as a county supervisor, back in the late ’90s.
The bad news: it’s up from $69 million in 2000 to $1.68 billion as of last summer. http://sanjoseinside.com/images/uploads/harvey_rose_retiree_memo_1998.pdf”>View the 1998 Harvey Rose memo.
According to Rose’s audit, the county did not make the required contributions into its retiree health care fund in five of the last 11 years, and between 2001 and 2003, the unfunded liability figure ballooned from $105 million to $425 million. Making matters worse, the county stopped making the recommended contributions to its plan in the 2003-04 and 2004-05 fiscal years.
When the “great recession” hit in 2008-09, the county stopped making the required contributions altogether, dropping as low as 42 percent of what’s required in 2010-11, the audit notes. Contributions have increased since, but they’re still not enough to make a dent in the damage that’s already been done.
The audit provides the county with options to cover the unfunded liability, such as redirecting property tax revenues or dipping into the general fund. Of course, that probably won’t happen this year considering the county is trying to balance the budget in the face of a $90 million shortfall projected for 2013-14.