Seems like we are heading in the direction of Flint MI. The WSJ reports (http://online.wsj.com/article/SB10001424052970203735304577163752725118984.html)

"He [the stat's emergency administrator] left open how he planned to tackle the city's costs for current employees and retiree benefits, which remain a major stumbling block between the city and its unions.

The city's police officers and firefighters have been working without a contract for more than a year as they fight demands for double-digit percentage salary cuts. They say they have already made significant concessions. Flint has 700 employees but pays pensions and health care for 3,000 retirees. Retiree benefit obligations are estimated at more than $800 million."

TriMet has similar issues; and thanks to the 2007 Oregon legislature and Oregon governor, TriMet managers must arbitrate a new labor contract rather than threaten to walkout and not agree to a new contract. I think TriMet may be the first local government agency to need a massive bailout or face default.

Try San Francisco - even some of the progressives have figured out that in a few years all SF city government is going to do is mail out pension checks and pay the medical costs of retirees if nothing is done (you work for SF for five years, and you get free medical care for life, amazingly).

Returning to an earlier post, this is another reason why you want to move out of a central city to a fast-growing suburb - even if both city governments are equally stupid, the fast-growing suburb is going to have a lot less in legacy pension costs. In retrospect, one of the smartest things Portland did was to expand to above a half-million people through annexations a couple of decades ago - not only did it give us a place to dump all the poor and minority people who didn't fit into Sam Adams' vision of Hipster Portland, but it put off the day of pension reckoning by a few years.

Then by rezoning they could collect even more money. Flag lots, allowing a house or two to be built in the backyard of the original house, more money yet for the city.
More infill, more money.
Livability? - waaay low on the totem pole.

Since my property TAXES now exceed the original 30 yr fixed principal & interest payments on my now fully paid for home, can I just sign the deed over to the fire & police fund instead of bothering trying to actually sell it?

Actually, in 2006 the City closed the police and firefighter retirement fund, and all new hires since have been placed in the fully-funded PERS system. From an actuarial standpoint, the City's unfunded liability attributable to its current employees has decreased, not increased, ever since.

To be sure, the current (as opposed to actuarially calculated) unfunded liability has increased since 2006 as firefighters and police retire, but that is exactly what the projections assumed. As more retirees pass away and as fewer and eventually no more retirements occur, the current unfunded liability will drop. That too is what the actuarial projections have always assumed.

Would it make sense for the City to dedicate additional money to defray the future costs of police and firefighter retirements? Sure. But it would mean cutting other general fund-supported programs. Right now, there's just not enough general fund money to go around. Even the non-general fund expenditures favored by the City -- out of the Transportation Fund, for example -- are hurting.

"It means that the pensions will probably eat up a greater percentage of the city's property taxes than they do now,"

With 26 cents of every property tax dollar already going to UR debt the city will soon have to find a way to spend more of the same dollar more than once.

As for the stalling?

I suspect because of the city interest in, share of PMLR and many other intersected interests all of the local cronies/agencies are stalling their bad news in hopes of first securing that $750 million federal match for PMLR.

I have no doubt TriMet is stalling itself and holding back reporting their budget hole is much bigger than they have reported. Maybe twice the size they now claim.

There too many ways to make those millions fungible and misused.

This is why the Clackistanis are causing panic. They are collapsing the facade the feds are looking at.

Jack and other folks -

Serious question here. I may be misremembering the several years ago "reform", or I may have been told a tale tale by a neighbor who is on the City Council -

Its my understanding that for brand new hires at PPB, for retirement purposes they are in PERS like the rest of the law enforcement folks at every police agency in the state other than the PPB folks who were hired before the last set of "reforms".

Similarly, for new hires after the date of the passage of the reforms, PPB folks are covered by the same workers comp system that covers every other police agency in the state.

Surely Amanda and Dan weren't "funning" me two yaers ago when Dan was running for re election and Amanda was campaigning for him at various Neighborhood Association Meetings.

I agree that the existing Portland Police and Fire Retirement and Disability Fund mechanism is not economically sustainable and can eventually bankrupt the City of Portland.

I am under the impression that the existing PPB /PFB R&D mess peaks in about 17 years and than reduces over time, eventually going to zero after those vested in it all die off.

Please, some actual knowlegible person comment.

Thank you.

A few years ago Leonard was quoted as saying "It's not unfunded. It's funded by all of the property on the tax rolls in Portland which is constantly appreciating."

They've already quit paving the roads and laid off those without political connections.

We can assume that not responding to "low-priority" 911 calls is next. To be followed by not cutting the grass or emptying trash cans in the public parks.

But the union members will still get their COLA's: it's in the contract.

As more retirees pass away and as fewer and eventually no more retirements occur, the current unfunded liability will drop.

Yes, eventually the liability will drop precipitously once all of the Baby Boomer police and fire retirees, well, to put it bluntly, die off. The question is whether the City can remain solvent long enough to make it through to the other side of the retiree tsunami. Its current profligacy and racking up unprecedented levels of debt suggests it may not . . .

On the bright side, I found a great tool to allow Sam and Randy to express their views on the subject. Since it involves the Interwebs and bright flashy buttons, it should keep Sam busy for months.

"Yes, eventually the liability will drop precipitously once all of the Baby Boomer police and fire retirees, well, to put it bluntly, die off."

Actually, it will take a bit longer than that - spouses get a survivors benefit that varies, but probably averages about 50% of pension or so.

The good news is that both Oregon and Portland have reformed their pension systems, so new hires don't add to the pension burden. The bad news is that the unfunded pension overhang in both cases is huge (PERS does have assets, but assumes it will make a completely unrealistic 8% return when estimating its pension shortfall).

Why all the negative talk? Sam says we have plenty of money for a sustainability center, toy trains and new bridges. Don't worry, there is plenty of money to go around. Sam says that his check book still has checks in it so there is nothing to worry about!

The only solution remains getting out of any "pension/slushfund" scheme, paying employees money today for work they do today and that they do with as they choose.

William said: From an actuarial standpoint, the City's unfunded liability attributable to its current employees has decreased, not increased, ever since.

Is that really true? Don't the current employees still in the old system that get raises/promotions earn more money from their retirement? What about health care costs? Isn't that covered and ever increasing?

Yes it will eventually start going down, but I suspect we haven't hit the peak yet.

I think TriMet may be the first local government agency to need a massive bailout or face default.

I think TriMet eagerly wants to call Chapter 9 on itself...but it knows that if it does that, it'll kill off its agenda of "light rail everywhere". So its own management ineptitude has become its own check - and because of it it has decided to unleash an unusually public assault on its own employees.

Never mind that simply killing off WES would say $5 million a year; killing off the City of Portland Streetcar subsidy another $5 million. Congrats, I just knocked TriMet's shortfall to $7 million. Shut down the Capital Planning, Marketing and Government Affairs departments and we're almost there. Outsource I.T. and H.R. Sell marketing space at MAX stations. Eliminate Fareless Square, and charge for parking at TriMet owned park-and-ride facilities. Institute distance-based fares for MAX. Replace its oldest buses using federal funds - that would decrease maintenance and fuel expense. Purchase 100 articulated buses for its busiest routes, that would allow the reduction of vehicles (and thus labor) needed to operate a route. Reduce MAX service west of Beaverton and north/south/east of Gateway to 20 minute headways. Institute an across-the-board 20% wage cut for all non-represented (management) staff. Eliminate all travel. Eliminate landscaping...all those "industry memberships"...eliminate the management motor pool (why can't managers just ride the bus?)...before long, I've saved at least $25 million - AT LEAST.

According to the Mult. Co. Tax Supervising and Conservation Commission, the unfunded actuarial accrued liability for the Portlnad police/fire pension fund was $2.584 billion as of June 30, 2011.

If there is a more updated number I'm not aware of it.

That's what I wrote.

The PP&FDP fund still exists and according to this has 20 employees (who will likely get a PERS pension).

http://www.portlandonline.com/index.cfm?c=39684

the City's unfunded liability attributable to its current employees has decreased, not increased, ever since.

Even if true, misleading. That's the Portland City Hall way.

"Yes it will eventually start going down"

I'll give you a clue - Randy's bump in property taxes that the voters passed two years ago (don't ask me why) expires in 2031.

"Portland is getting near the point at which it will be paying more for retired public safety officers than for currently active ones."
===

Many school districts face that exact problem.

Retire the PERS Tier1 folks (at $70K/yr, 80-95% of last paycheck), and pay them that for another 20 yrs, while also trying to pay for a teacher to replace the retiree.

Howz that work? The new teacher is a newbie making $30K, with a 401K non-PERS retirement package, and a class size of 40-45 kids. The new teacher is left holding the bag, while the old teacher and his clown friends are all laughing to the bank saying "But we didn't make the rules, don't blame us, we earned every last dime!"

I really do feel sorry for the new teachers.... twice the work load, with half the pay of previous leaches.