* MOFD Long Range Financial Forecast

On November 14, 2012 MOFD released a new Long Range Financial Forecast. It differed from previous versions as it:

  • Extended the analysis term from 5 years to 15 years
  • Focused on funding currently underfunded or unfunded long term liabilities

The Task Force has reviewed this forecast and makes the following determinations:

  • The Task Force commends MOFD for extending the term of its analysis, even beyond the ten years the Task Force extended the previous MOFD forecast (Tables IV-4a and IV-4b).
  • The Task Force commends MOFD for taking on the tough job of focusing on underfunded liabilities.  The District's current assets will cover liabilities for at least two decades but ignoring the underfunding today could leave future generations with hundreds of millions of dollars of unfunded liabilities.
  • The Task Force agrees with the current forecast for revenue growth which, by 2022, is about 20% greater than the previous forecast (in line with the Task Force's revised projection - Table IV-4b).
  • However, the Task Force believes that the current forecast seriously understates the magnitude of unfunded future liabilities and overestimates the ability of existing assets to fund those liabilities.  The discrepancy is substantial: between $2 and $5 million per year (10% - 25% of MOFD's current budget) for 25 years.
  • Seeing as 85% of the budget is devoted to personnel costs, there is only one place these funds can come from.  In May the Contra Costa Grand Jury released a report on the county's emergency service providers which stated "fire agencies should conduct evaluations of alternative service models."  It appears that past promises are impacting the ability to do business the same way we have been.  Maybe there is a better way.

Click here for the Task Force's detailed comments and analysis