Pension Debt and Annual Costs Are Increasing Again for Los Gatos During the 2020-2021 Fiscal Year!

The Town just posted the new CALPERs actuarial valuations as of June 30, 2019 and as we suspected they are not pretty.

Funded status for both plans decreased. Safety is down to 67.9% and Misc is also down to 71.9%. UAL for Safety is $26.9m and Misc is $35.9m, which totals $62.8m. That is up from $59.3m as of the last June 30, 2018 valuation.

The mandatory payments for next fiscal year (FY 22) are really accelerating. When comparing the mandatory payments from 3 years ago (FY 19), the Safety plan is up 42% or $976K and the Misc plan is up 34% or $1m.

Total mandatory payments for FY22 will be $7,262,794. In FY 19 they were $5,280,528. That is a 37% increase or $1,982,266 in 3 years. That increase can only be paid by general tax revenues and with the impact of COVID 19 the FY 22 budget will really be stress tested.

We have been warning the Council for 3 years that the escalating mandatory CALPERs payments will “crowd out” spending for other services and they need to develop a plan for this. They didn’t want to deal with it. And here it is.

The only good news is that in FY 23 the Town will begin to get the benefit of the $8.5m ADP that has been made. That will slow the rate of increase in the mandatory payment in the Misc plan. No way of knowing today what that will be.

In closing, you just have to shake your head when you compare the reality of the Town’s situation to Jensen’s ballot argument words of “thoughtfully addresses unfunded pension liabilities”. Either she really is clueless or she just wants to spin an inconvenient fact.

Leave a Reply

Your email address will not be published.