By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Elephant in the room
quill pen

No question that City of Turlock expenses are exceeding revenues, which in turn has depleted the General Fund Reserves to a point that the City has less than two months of reserve funds available to cover any emergency. The City is facing a “benefit crisis” driven by spiraling costs of employee pensions, medical insurance costs, and retiree health care costs. In its current state, the budget is structurally unsound because, without structural adjustments in benefit expenses and enhancements in revenue sources, expenditures will always exceed revenues. The current City of Turlock pension and benefits program is unsustainable.

City of Turlock employee health benefit costs are the third highest in the state at an annual average cost of $23,933 per employee. Of the 446 cities included in this 2018 survey, the median cost is $14,250. Under current union contracts, the City of Turlock (taxpayers) cover 100% of this cost with no employee cost sharing for a premium plan that includes dental and vision coverage for the entire family.

The real “elephant in the room” that no one is willing to address is still CalPERS — the public employee retirement system. Ever increasing pension costs are not only a Turlock problem, but one that every California governmental agency is facing. It is projected that Turlock will see annual payments to CalPERS nearly doubling from $7.3 million in FY 2017/18 to $14.1 million in FY 2024-25 with no end in sight for annual increases.

CalPERS is a flawed system that is unsustainable. Investment returns have been forecast at 7.5% when actual returns have averaged 6% for the past 20 years. This coupled with enriching public safety pensions, and under estimating impacts of longer retirements have led to an unfunded liability of $146 billion – Turlock’s share of this unfunded liability stands at an estimated $87 million.

The current system is unfair to taxpayers as it transfers 100% this shortfall to us. The greater the assumed return from investments, the less money employers and employee must kick in upfront. But when investment earnings fall short, the City (taxpayers) have the sole responsibility to make up the deficit.

The challenge to City leadership and City staff is to find more cost effective and efficient methods to deliver the services that are essential to a quality of life that we deem important to make Turlock the place we want to live and work. The City Council faces a number of very difficult decisions in the effort to balance the quality of life with fiscal prudence. The Council and City leadership must clearly define to the residents of Turlock the steps to be taken to correct the past fiscal missteps and move quickly with resolve and determination to return Turlock to a solid fiscal status.

— Jim L. Theis