Eureka’s bottomless pension pit

In the recent article on the city of Eureka’s finances, Mayor Susan Seaman talks of the huge and ever-increasing costs of CalPERS retirement obligations (“Seaman: Sales tax revenue a challenge,” Times-Standard, Dec. 26, Page A1). After exchanging a series of letters examining these costs with Greg Sparks, I would like to provide clarity and definition to this description of “huge and ever-increasing.”

First: debt payment. Beginning in 2015, the city of Eureka began paying down its unfunded pension liability debt. These payments were $921,000 in 2015; $1,022,000 in 2016; $3,952,000 in 2017; $4,633,000 in 2018; and $5,474,000 in 2019.

Going forward, these yearly unfunded pension liability debt payments will increase around $300,000 a year. Yearly pension debt payments will be $5.7 million in 2020; $6 million in 2021; $6.3 million in 2022; increasing to $8.4 million in 2028 and further increasing to $9.3 million in 2031. These debt payments will continue until the year 2038. These debt payments define the magnitude of funding that will simply not be available to provide services for the community. Second: current cost.

The website publicpay.ca.gov lists 2019 (most recent year posted) health/retirement costs for Eureka and its 492 employees as $3.6 million. Compare this to 2009 data, which lists 2009 health/retirement costs for Eureka’s then-527 employees as $1,969,000. (The website publicpay.ca.gov lists the disclaimer that current costs do not include payments toward unfunded liability.)

Third: total cost.

To determine total costs for 2018, debt + current costs, we see the total expenditure is $8.2 million ($4.6 million + $3.6 million). 2019 data should be posted June 2020. In the article, Mayor Seaman says, “Everything is an opportunity, but everything is a challenge.” I would ask: What specific opportunities are going to arise from over two decades of these ever-increasing yearly multi-million-dollar payments that result in loss of services provided by Eureka?