CORRECTION (Published 11/17/2012)
A story about a Moraga-Orinda Fire District plan to reduce pension debt incorrectly reported the assumed property value increase for each of the first three years. The assumed increase is 2.75 percent above current levels, with 4 percent assumed for the fourth year

MORAGA -- ¿The first draft of an ambitious plan to reduce $60.4 million in Moraga-Orinda Fire District pension debt by slashing capital spending, diverting residents' "fire flow" tax payments and taking other austerity measures was unveiled this week.

According to the draft long-range financial plan released this week, the 15-year-old district hopes by fiscal year 2027-28 to eliminate $24 million in employee pension debt administered by the Contra Costa County Employment Retirement Association; $24.7 million in pension obligation bonds borrowed to pay a portion of retirement costs; and $11.7 million in retiree health care and other benefits.

To do that, the district is relying on several significant assumptions, outlined by Fire Chief Randy Bradley this week. They include 2.75 percent annual growth in Moraga and Orinda property tax revenues for the first three years (then 4 percent), and positive returns on pension plan investment performance.


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Last year, assessed property values in Moraga and Orinda grew by 0.85 and 1.04 percent, respectively.

The district is using the employee retirement association's assumption that the fund can earn a 7.75 percent return on investments annually, even though last year's total return was 2.7 percent

Some of the plan also hinges on the outcome of ongoing labor negotiations; Bradley said the district does not want to reduce salaries, but the plan assumes 1 to 2 percent permanent salary increases and holding medical and dental costs at current rates.

The district has been negotiating contracts for two years with firefighters who continue to receive salary and health contributions at 2010 levels.

"I do believe this plan reflects where the district is today," Bradley said. "It's really a good draft plan to begin the discussion on how we're going to address our long-term unfunded liabilities and long-term sustainability for the district while maintaining a quality workforce."

Board President Fred Weil stressed the financial blueprint is still in draft form and that assumptions should be examined. "This is a plan that we control in a sense, and don't control in a sense," he said, stressing it will take discipline and creativity to reach the goal.

Earlier, Weil formally announced the district has placed labor negotiations on hold until early 2013. The idea is to let administrators evaluate recent pension reform in the wake of new state law projected to save the state billions of dollars in retirement costs. The district says the "time out" will hold salaries and health care at their current rates until a negotiated agreement is reached -- or until a contract is imposed.

The delay also means the board will vote on the contracts with five members; trustees-elect Steve Anderson and Alex Evans are scheduled to be sworn in Dec. 13, along with Weil, whose seat went uncontested.

Anderson and Evans are replacing former directors Richard Olsen and Brook Mancinelli, who resigned in February.