East Contra Costa Fire Request to CCCERA Could Result in $1.3 Million Annual Savings


On August 26, the Contra Cost County Employees Retirement Association will continue discussion on an item that could provide as much as $1.3 million in annual relief to the East Contra Costa Fire Protection District.

The item is a continuation of a 2-hour discussion from the August 12 meeting where the Board heard from their consultant, The Segal Group, who made the case that East Contra Costa Fire was actually supplementing Contra Costa County Fire in its CCCERA Safety Cost Group 8.

After 3-years of investigating their math, the East Contra Costa Fire Protection District made the request to CCCERA for depooling which aims to correct the way their pension contributions were set-up. The Board challenged the math and confirmed the error.

This dates back to 2009 when the Contra Costa County Board of Supervisors pooled East Contra Costa Fire with Contra Costa County Fire.

According to the presentation by Segal, this would save East Contra Costa Fire $1.2 to $1.3 million each year.

Highlights from the 2-hour meeting include:

  • Segal confirms ECCFPD is cross-supplementing CONFIRE. Several times referenced the “little guy” is funding the “big guy”.
  • Goal to “pool” agencies was to protect smaller agencies, in this circumstance, the opposite is happening, ECCFPD is being penalized.
  • CONFIRE is getting $149 per resident tax dollar, ECCFPD is getting just $94 per resident.
  • ECCFPD would see a 85% decrease in its Unfunded Actuarial Accrued Liability rate while CONFIRE would see a 3.43% increase.
  • ECCFPD has just 8% of the Active Payroll while CONFIRE has 92%, but CONFIRE has 95% the liability to ECCFPD 5%.
  • This dates back to 2009 when Board of Supervisors was the Governing Board and made the decision to pool ECCFPD and CONFIRE.
  • CONFIRE opposes depooling as Chief Broschard highlights they are supplementing ECCFPD with service each day. Says change would cost CONFIRE $1.6 million annually.

According to Chief Brian Helmick, this is just another rock the District has turned over in an attempt to seek additional funding where available and within the law. Helmick stated the District has been challenged by the way it was set-up or dotting its I’s and crossing its T’s by correcting any oversights of the past to correct mechanisms that take away from the District finances.

Here is a recap of the meeting:

Paul Angelo, FSA, MAAA, FCA, EA, explained that East Contra Costa Fire has requested to be depooled as of Dec. 31, 2019 valuation. If they are depooled, it would mean the contribution rates for ECCFPD would be determined based on assets and member demographics.

“The thing is right now there is only one pool that underwrites the assets for both ECCFPD and Contra Costa Fire and so at the point of depooling, we would have to divide the assets and that is where methods for that, one we will call liability  and the other is payroll. ECCFPD is requesting the depooling on liability, not payroll,” explained Angelo.

Angelo further highlighted if you depool based on the ECCFPD request, they would see a 0.66% increase, while CONFIRE would see a decrease by 0.06%, however, the unfunded liability would create more activity. ECCFPD would see a 37.85% decrease in its Unfunded Actuarial Accrued Liability rate while CONFIRE would see a 3.43% increase.

According to Angelo, back in 2009, when the ECCFPD was still under the direction of the Contra Costa County Board of Supervisors, CCCERA only had four rate pools. The Board acted to depool employers within General and Safety Membership. Employers with 50 or more employees were depooled. However, ECCFPD had slightly less than 50 employees and the Board opted not to depool them from CONFIRE.

Angelo further highlighted through the request, they found there is a “little bit of cross subsidy” and that the real discussion is on the unfunded liability. During his explanation on slide 13, he confirmed there is actually a subsidy where East Contra Costa Fire is subsidizing the larger entity in Contra Costa County Fire.

“If we have each employer fund their own liability, that basically shifts cost from East Contra Costa Fire to CONFIRE,” stated Angelo (31:30 minute).

Angelo further explained under a change in the depool based on the liability method, the normal cost changes are the same, except the difference being CONFIRE no longer being subsidized by East Contra Costa Fire, they will see a rate increase of 3.5% while East Contra Costa Fire will see a rate decrease of about 38%. (36:00 min)

Andy Yeung highlighted that with this change, East Contra Costa Fire would see a $1.2 to $1.3 million rate reduction. Contra Costa County Fire would see an increase of $1.2 to $1.3 million.

Angelo explained to the board that currently East Contra Costa Fire has 8% of the Active Payroll while CONFIRE has 92%, however, with the liability, CONFIRE has 95% and East Contra Costa Fire has 5%. He shared that for the retired liability, CONFIRE has 98% while East Contra Costa fire has 2% and under the current approach if you depool by payroll, East Contra Costa Fire is paying the same proportionate share of the liability as CONFIRE even though East Contra Costa fire has only 2%.

Angelo then stated if you allocate by liability,  they would split the assets 95% to 5% which means that East Contra Costa Fire would get a smaller share of the unfunded liability.

Angelo then stated that because CONFIRE has more retirees and higher liability and benefits compared to East Contra Costa Fire noting that if you allocate on liability, you are making East Contra Costa Fire only responsible for their own retiree headcount and liability which is why they have a smaller share of the unfunded liability and contribution rate would go down.

He then continued into member contribution, for the PEPRA Tier D would see a decrease by 2.97% for East Contra Costa Fire while CONFIRE Tier D would go up by 0.65%. What they found for this was the average age of entry into East Contra Costa Fire was 25-years-old versus CONFIRE who was 31-years-old.

According to CCCERA, the reason for the decision back in 2009 was because the County was funding many other groups at the time. They said this idea that the county was subsidizing other groups seems to be turned on to its head in this case.

CCCERA Board against asked Angelo to confirm the idea that the smaller agency was subsidizing CONFIRE.  He explained that it had to do with over time that CONFIRE had more retirees than actives—it came down to CONFIRE being a more mature employer with higher proportion to actives to retirees.

John Phillips, Board Member, stated ECCFPD would not be doing this if they didn’t see this as an economic benefit, but asked if there was any other groupings that had similar patterns stating this would set a precedence “that if the subsidy is not in my favor, don’t do anything. If the subsidy goes to my detriment, I want to depool.”

Angelo replied East Contra Costa Fire was in a unique situation because of their size, they are close to being able to stand on their own—it makes them a candidate for depooling.

CCCERA asked in 2009 why the number “50” was chosen. Angelo replied it had to do with CALPERS being around 25 employees. They wanted to be more conservative than CALPERS but admitted there was no formula and was “subjective” while CALPERS was aggressive in depooling.

Mike Sloan, a CCCERA Board Member, stated that East Contra Costa Fire was basically on life support right now and have just 3 stations covering 249-miles and there only getting $94 out of their tax base per resident, where CONFIRE is getting $149 per resident while other fire districts are getting more than that and if they went down further than that, they would just be non-existent (1:11:00).

CCCERA asked Angelo about fairness who replied East Contra Costa is only asking for their portion of the liability which would mean their liability would not be as large as it would have been if they depool and argued the sooner the depool the better.

“I don’t see any reason to delay the depooling in order to synchronize it by 2022,” stated Angelo. “If anything, I would argue for depooling now that way you get a more fair split later when the layers drop off.”

CONFIRE is opposed to the depool and are seeking to delay it according to CCCERA.

East Contra Costa Fire Chief Brian Helmick spoke during the meeting highlighting to CCCERA that back in 2002, their board was overseen by the Contra Costa County Board of Supervisors all the way until 2010. In 2010-19, they had a 9-member board appointed by the city councils of Brentwood (4) and Oakley (3) and the Board of Supervisors (2).

He further stated the District has looked into the risk and fluctuations should they be depooled here are his comments during the meeting:

Chief Brian Helmick Comments:

Thank you for this opportunity to present East Contra Costa Fire Protection District’s (“District”) response to CCCERA’s actuarial consultant’s August 2020 report on our District’s request to de-pool from Cost Group No. 8. As I presented to you on July 24, 2019, our District requests that it be de-pooled from ConFire based upon the accrued liability method, effective as of the December 31, 2019 valuation. Our District should only be responsible for contribution rates based upon assets and member demographics. We propose to de-pool prospectively and avoid attempting to reconcile the historical financial inequities from this Board’s 2009 initial decision, which was retroactive to 2002. Further, in return for a favorable decision today, our District is willing to waive any challenge to the detrimental financial impact caused by ConFire’s pension obligation bond.

Our requested Actuarial Accrued Liability (AAL) method is fair to both parties and will accurately reflect each agency’s own pension costs. In 2017 our appointed, and now elected, governing board grew concerned about what they perceived as an unjustified Unfunded Actuarial Accrued Liability (UAAL). Our directors, just like this Board, must exercise their fiduciary responsibilities. Our Board initiated an evaluation of Cost Group No. 8 and concluded that the financial burden imposed on our District is inequitable with ConFire and that this burden has and will continue to detrimentally affect our service delivery, our firefighters, our employees, and our strategic planning. The estimated 38% decrease in unfunded liability (Segal, Slide 4) that would flow from de-pooling helps to rectify these impacts. CCCERA’s Actuary Report Supports our District’s Request Quite simply, our request to de-pool based on actual liabilities is necessary due to the historical differences in demographics (active vs. retired) between ConFire and East Contra Costa Fire Protection District. Our requested AAL method best reflects our District’s, and ConFire’s, true pension status. On the other hand, the payroll method fails to reflect the significant demographic differences between our two agencies and creates significant financial inequities. In fact, Segal concedes in Slide 17 that the “AAL Method [is] more consistent with how assets would be allocated if employers had never been pooled.” Further, on Slide 16 Segal concedes that the AAL method “recognizes different proportions of payrolls vs. liabilities for different employers” and is “[a]ppropriate for permanent change in proportion of payroll among employers…” On Slide 17 Segal also recognizes that the AAL Method “eliminates any historical cross subsidies across employers.” The Segal chart at page 13 confirms the significant financial detriment the current pooling and active payroll allocation imposes on our District. It should be noted, however, that Segal does not show the asset split under the payroll and AAL methods.

Those differences are significant:

To put these numbers in perspective, the $7.1 million difference above represents over 2 times the District $3.344 million pension pay shown on slide 18 of Segal’s presentation. While we recognize that no asset allocation method is perfect, this wide range is unacceptable to our District’s ratepayers and employees. As we have explained, the AAL method is more equitable. There is no CCCERA Policy Preventing De-pooling by the Accrued Liability Method; CCCERA already uses this Method. Significantly, Segal further notes that CCCERA’s Funding Policy “does not specify the method used to allocate assets when de-pooling.” Segal also observes at Slide 21 that “EastFire’s request to de-pool based on AAL does not deviate from any provisions of the Funding Policy.” It should be also be noted that the Segal Report at Slide 12 acknowledges that the AAL method is used by CCCERA in its declining employer payroll policy for employers with substantive and permanent decline in payrolls. This is necessary to accurately allocate the costs between agencies. This is the same situation we have here. Allocation by active payroll does not accurately allocate pension costs There are deficiencies in the “payroll method” as shown by Segal’s own descriptions: Slide 17 assumes that the UAAL is proportional to active payroll yet Slide 18 clearly shows that the AAL is not proportional to active payroll, so the UAAL would also not be proportional to payroll. Segal also implicitly assumes a similar proportion of active to retired members for all employers, whereas Slide 18 clearly shows that there is not a similar proportion of active to retired members between the District and ConFire. In fact, Segal shows the retiree/active ratio is 71% for the District and 200% for ConFire.

Finally, at Slide 17 Segal admits that the payroll method maintains any historical cross subsidies across employers. These inequitable historical cross subsidies are precisely the problem we face today. Response to ConFire’s Opposition By letter dated April 10, 2020 ConFire opposes our District’s de-pooling request, and, if granted, asks for a delay until December 2022. ConFire’s position is understandable: For some 11 years ConFire has enjoyed a rich financial benefit as the far larger demographic member of Cost Group No. 8 and it has reaped benefits from its Pension Obligation Bond.

In simple words, East Contra Costa has historically cross-subsidized ConFire.

Any further delay simply compounds the inequities imposed upon East Contra Costa. In closing we strongly believe that CCCERA has a fiduciary duty to rectify these historical inequities that have been imposed upon our agency, our firefighters, our employees, and our ratepayers. Any delay in this Board’s decision-making will simply cause further financial hardship upon our District. Moreover, if you vote to allow de-pooling, but restrict it to the payroll method, the historical cross-subsidy of ConFire pension costs by East Contra Costa Fire will go unrectified with significant negative impacts on our critical service delivery and future strategic planning. Therefore, we ask that you decide today to allow de-pooling based upon the AAL Method.

Lewis Broschard, Contra Costa County Fire Chief, spoke about CONFIRE position saying depooling Cost Group 8 would be contrary to CCCERA policy but argued that the Districts share a border with each other and share resources on a daily basis—with automatic and mutual aid assistance at a rate twice to what East Contra Costa provided.

He argued that within the system of fire service, East Contra Costa Fire relies on CONFIRE to provide resources to assist East Contra Costa Fire everyday citing they are not financially able to provide a “robust” service to the large geographical area it serves.

“It’s simply underfunded,” stated Broshard. “That is not through any fault of Chief Helmick or the current management team or their governing body. Over many years, their governing board has put many tax measures on the ballot without success. We acknowledge all of these issues but its these very issues, the fact that their unable to be solved over a number of years that make future structure sustainability and strength of fire service in East Contra Costa fairly uncertain.”

Broshard further highlighted that for East Contra Costa Fire to have a full response capability on a fire, CONFIRE is part of that response and thus stated depooling doesn’t make sense.

“It will cost our agency, CONFIRE, an additional $1.6 million annually,” stated Brochard who noted the numbers earlier were too low. “We did our calculation on actual payroll cost and factoring in raises.”

Brochard challenged that the savings East Contra Costa Fire would receive would improve services, but rather just improve their balance sheet, but wanted to know what would be achieved through the savings of depooling. He also stated CONFIRE would have increased costs while providing the same services.

Brochard urged CCCERA to maintain the current pooling of cost group of 8 and policies of the retirement association. He also stated Contra Costa County Fire is also underfunded citing they still have two closed stations as a result of the great recession.

Scott Gordon, Vice President of CCCERA, stated he was not prepared to take on a decision because of the amount of information they had to digest and urged the board to take it on in two weeks.

Prior to the vote, Board Member Jerry Holcombe told chief Helmick what he had been watching from afar and was disappointed in not seeing much support for the fire district from the residents.

“I just don’t see why there is this lack of interest, concern or commitment on their part of supporting the fire district. I’ve never understood that and I wish you luck on any future tax,” stated Holcombe. “My concern is while this proposal has logic to it, it seems like it’s a one-off for trying to balance the deficit or potential deficit of the District and spin it to make up for the lack of support you have for the District.”

Russell Watts, County Treasure, stated the way he understood pooling was a way to help the “little guy” and not the “big guy” so they do not go under because the big guy usually has more resources.

“This seems from what I understand in watching the presentation, its gone the opposite, the little guy is helping the big guy so the big guy doesn’t go under,” stated Watts. “I don’t think we are setting a precedent here if we talk about depooling when the little guy is getting penalized.”

Watts suggested when they come back in two weeks, talk about the philosophy of pooling versus depooling.  He also stated that when things are balanced, things are fair. When they get unbalanced, its to the detriment of one agency which suggest the idea is the pooling concept even working.

“I am hearing East Contra Costa Fire saying its not working, they are getting penalized by the big guy and its turning out to be unfair,” stated Watts. “I do have some sympathy for the little guy trying to stay in service with little resources.”

The board opted to table the item for two weeks to continue the discussion on August 26, 2020.

Regular Board Meeting

Board of Retirement meeting will be accessible telephonically at +1 (408) 650-3123, access code 508-462-629 due to the Contra Costa County and State of California Coronavirus (COVID-19) Shelter In Place Orders, and as permitted by Executive Order N-29-20 issued on March 17, 2020.

Persons who wish to make public comment may submit their comment to [email protected] on the day of the meeting, either before or during the meeting. Public comments are limited to any item of interest to the public that is within the subject matter jurisdiction of the Board of Retirement. (Gov’t Code Section 54954.3(a).) All comments submitted will be included in the record of the meeting. The comments will be read into the record at the meeting, subject to a three-minute time limit per comment.



  1. Just one more example of the county screwing East County. The Supervisor for east County at the time took it upon herself to ruin our fire service for political purposes. It was suppose to be an independent district then. Yet no decisions were allowed outside the Supervisors Office. When Brentwood forced the issue of independence for ECCFPD, these costs and many others should have been exposed and a true tax exchange should have been negotiated. Instead it was a dictatorship and East County was told what they would get. I applaud those at ECCFPD for exposing the truth and seeking out just tax transfers and unfair liabilities.

  2. Great job Chief Helmick,

    August 7, 2020
    Office of Assessor
    2530 Arnold Drive, Suite 400 Martinez, California 94553-4359 FAX: (925) 313-7660 Telephone: (925) 313-7500
    Gus S. Kramer Assessor
    Sara Holman
    Assistant Assessor Administration
    Param Bhatia
    Assistant Assessor Valuation
    Administration Building
    Martinez, CA 94553
    Dear Board Members:
    I wish to advise you that the 2020-2021 County Assessment Roll has been delivered to the County Auditor, as required by law.
    The increase to the local tax base for 2020-21 is nearly $10.5 billion. This represents a 4.87% increase in assessed value and brings the total net local assessment roll to over $225.7 billion. The 2020-2021 assessment roll is the highest to date in Contra Costa County’s history.
    Cities with the largest increases in assessed value from the prior year include El Cerrito with a 6.62% increase, Oakley with a 6.59% increase, and Hercules with a 5.99% increase. Clayton and San Ramon saw the lowest assessed value increases― Clayton at 3.53% and San Ramon at 3.90%. The assessment roll now consists of 375,163 parcels, an increase of 1,108 over the previous year.
    I would like to acknowledge and commend the employees of the Assessor’s Office for their continued dedication and hard work which resulted in the completion and delivery of the 2020-2021 assessment roll.
    GUS S. KRAMER Assessor
    Enclosures (2)
    cc: David Twa, County Administrator

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