"America's Finest City" is in a fine mess. Its unfunded
pension liability -- the gap between the value of its pension assets and its
obligation to retirees -- stood at $1.17 billion at the end of January. It
faces an additional shortfall of $545 million for retiree medical benefits.
The seaside city of 1.3 million people would need to double its pension
contribution to $259 million next year -- or about one-tenth of its annual
budget -- just to avoid falling further behind, said April Boling, who heads
Mayor Dick Murphy's Pension Reform Committee. That's more than three times
what it spends on parks and seven times what it gives libraries.
Later retirement age proposed
Boling, who is also Murphy's campaign treasurer, isn't shying away from
the b-word. She says the city will need to sell $600 million in bonds over
three years and raise the retirement age to 62 from 55, among other things.
"If the city doesn't follow our recommendations, we will be headed toward
bankruptcy," Boling said. "That is a fact."
