In the spirit of all the kids going back to school, I would like to share a couple of things I remember from Grade School:
- It’s pretty cool to be No. 1.
- Don’t worry about what others think of you. Just be yourself.
So how does that apply to Newport Beach? Well…in an Orange County Register study based on of the 2010 CalPERS Annual Financial Report, Newport Beach is No. 1 in the Per Capita Ranking for Unfunded Pension Liability!
Yeah!
Right!?
Newport Beach has 85,376 residents. Newport Beach has $303,170,402 (as of June 30, 2009, for the pension numbers and 2010 for retiree health insurance pensions) in unfunded pension liability. This means that Newport Beach has a per capita unfunded pension liability of $3,551.
In comparison, neighboring Costa Mesa has 110,146 residents with $262,531,311 in unfunded pension liability, which gives each resident a $2,383 share.
In FUTHER comparison, Democrat-led Irvine (Costa Mesa and Newport Beach have had Republican majorities on their City Councils since the beginning of time) has 219,156 residents and $163,579,542 in unfunded pension liability, which gives each of its residents a $746 unfunded pension liability tab.
Now to be fair, Irvine doesn’t have a beach, nor do they have their own Fire Department, so any full-time lifeguards that Irvine may have for their City pools won’t receive lifetime pensions of over $100K a year for the rest of their lives, after being able to retire at age 50 …
So do those numbers above give you pause? It surely did County Supervisor John Moorlach, who in a recent opinion column used Newport Beach as an example to demonstrate how the County of Orange will probably go bankrupt again.
Moorlach essentially pointed out that Newport Beach barely has the money to cover just its Pension Liability debts, if they were all due today (which they aren’t). What Moorlach didn’t mention (which wouldn’t have made a difference to his editorial) was that our Taj Mahal/Civic Center will add almost $150 million to our balance sheet, essentially meaning that if all Newport Beach’s debts came due today, the debtors would just be looking at our empty pockets…kinda like the US of A, right?
Long story short, while others have been trying to convince me that Newport Beach is in great financial shape…with the City in Hundreds of Millions of dollars in unfunded pension debt and with City Employees soon to be filling up a new Taj Mahal leaving the City in another $150 million in debt…I don’t feel soo good anymore…
So…what has Newport Beach done to reverse the trend? Well, they’ve started to re-negotiate some of those lucrative pension deals that the full-time Lifeguards get. They’ve started the process of getting rid of City Employees and replacing them with contractors (parking meters for example).
That’s a start, right?
But how well will that trend work after the Taj Mahal (City Hall/Civic Center) opens with all kinds of empty offices? When a new Police Station is built? Won’t that natural temptation to fill those offices with some more civil servants be too great?
But I suppose time will tell. Most of the current City Councilmembers (a majority of whom will have been on for over a decade each) will be terming out of office within the next four years, so they won’t have to deal with all that debt when the bells toll.
All the while, the rest of the County will continue to point at Newport Beach as the shining example of grand self-indulgent decadence with our new shiny Civic Center and will continue to use Newport Beach as the cautionary tale in regards to our overwhelming Unfunded Pension Liabilities, unless something REAL is done to correct the ship.
But at least our Councilmembers vehemently, and blindly, defend their positions by not worrying about what others think of us, so at least they paid attention to those lessons during grade school.
I, on the other hand, believe in what I can touch and what I can see. And all I see is red…but at least we are No. 1 at something, right?
