Government employees in California receive guaranteed annual pensions that can be nearly the same as their final year's salaries.

And as investments have fallen short of expectations, local and city governments across the state have had to pour more money into pension plans at the expense of basic services.

Even so, Oakland's three major retirement plans are still underfunded by $1.5 billion, Ruby found in the report.

The real figure is even higher because while Ruby said she used the same figures that California Public Employee's Retirement System has used to determine the city's annual pension payments, Calpers has told public agencies to use less optimistic market-based valuations it also provides, reports the Oakland Tribune.

"You have what the market says you have," former Assemblyman Joe Nation, public policy teacher at Stanford University, told the newspaper.

"The other number just provides a lot of excuses for actuaries to argue that (pension funds) are in better shape than they are."

The market-based figures provided by Calpers shows that Oakland's pension plan is only about two-thirds funded, well below the 80 percent level recommended by the U.S. Government Accountability Office. Total unfunded liabilities are actually about $2 billion, roughly double the city's annual budget.

"Oakland has to get its head out of the sand and be very clear that we have significant unfunded liabilities and we have to have a plan to deal with this," Ruby said in her report.

"It's such a complicated problem that there is no prefabricated solution."