Petaluma lags behind other California cities in its ability to pay employees? promised retirement benefits, having amassed a $24.5 million unfunded liability that grew from $9 million three years earlier.
The 58 percent increase revealed in the latest financial statements from California?s Public Employees Retirement System is more evidence of the spiking retirement costs that have plagued Petaluma and other California cities.
Petaluma, like most cities, contracts with CalPERS for its pension plans. A combination of stock earnings, employee contributions and city payments fund the two-pronged plans ? one for police and firefighters and one for everybody else.
In 1999 and 2000, the stock market performed so well that the pension accounts were overfunded. Recently, though, it?s been a different story.
A 2001 downtown in the economy left cities like Petaluma with diminished returns with which to pay the promised retirement costs. That meant local governments had to make up the balance from their general funds.
Cities and CalPERS talk about that liability in terms of percentages ? how much of the promised retirement payments are funded.
In Petaluma, the funded percentage for ?miscellaneous? employees went from 103 percent to 88 percent from 2002 to 2005, the latest year figures are available.
For police and firefighters, who can retire at an earlier age than other workers with a higher percentage of their final pay as a pension, the funded percentage went from 85.3 percent in 2002 to 79.4 percent in 2005.
So how does that compare to other cities? According to CalPERS figures, while Petaluma has funded 88 percent of its ?miscellaneous? workers? pensions as of 2005, the average of other cities in the CalPERS system was 91.9 percent.
For police and fire, Petaluma?s 79.4 percent was less than the average of 87.6 percent.