Scary title? Yes. Fearmongering? Only if you consider reminding everyone of our insolvency as being “fearmongering”.
With the city of Newport Beach owing over $1 billion in pensions that they never bothered to fully fund while hiring employees, we’re on the cusp of a major financial crisis which will become unsustainable in a mere 6-8 years. Meanwhile, we are expanding entire pension-dependant departments without making corresponding changes in our pension reduction plan, spending $260k on unnecessary road signs and $250k on a proven-by-numbers bus idea which is guaranteed to fail.
Furthermore, it looks mathematically likely that the CalPERS debt will be doubling in the next 6 years, bringing our debt payments and liabilities even closer and more dramatic. Unless council takes drastic action to create a fiscally responsible city, we can fully expect bankruptcy in Newport Beach within the next 10-15 years. Curious what we are paying? Check out the salaries we are paying our people, at: http://transparentcalifornia.com/salaries/2015/newport-beach/
It’s sad to note that most cities in California– and most states– are in the same bucket. There are three general ways that politicians view this problem:
1) “It’s not a problem, because government defies the restrictions of math”.
2) “It’s a problem, but since everyone is dealing with it, we’ll get a bailout from the federal government, which defies the restrictions of math”.
3) “It’s a problem, and the entities that caused it (local government) should deal with it, because even governments are restricted to the confines of mathematics”.
Here is a comprehensive report by Costa Mesa Brief called “Pensions and the CalPERS Time Bomb”: