pages: CityCouncil/2008-10-21.pdf, 8
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CityCouncil | 2008-10-21 | 8 | Councilmember Matarrese stated the question is whether principle payments should be made; decisions need to be made on the best place for cash flow. Mr. Kenney stated the City is trying to work another $2.5 million into a budget that is already strained to ensure that obligations are met the City may get to a point where the retiree budget will engulf the entire budget for current services. Mayor Johnson questioned how the City would provide needed levels of public safety when payments are required for retiree health benefits. Mr. Kennedy stated that a lot of cities are looking at the issue; the current economy is exposing a lot of weaknesses that were hidden by a strong economy. Vice Mayor Tam inquired whether the Committee's recommendatior is Alternative B, which requires raising an additional $2.3 million on top of $1.2 million; stated Alternative B would increase the shortfall of approximately $4 million next year to $6.3 million; questioned whether the Committee is suggesting that the City not tap into the fund balance for said amount. Mr. Kenney responded in the affirmative; stated the General Fund balance could be spent down to zero if significant changes are not made to free up revenue going forward; stated the City has a $75 million liability; staff presented a variety of payment options; there is a lot to be said for pre-funding as much as possible. Mayor Johnson inquired how many retirees are assumed on Attachment B and what are the premiums. Mr. Kennedy responded the current population was considered and assumptions were made regarding turnover and change in demographics. Councilmember Matarrese stated no one is supporting the pay-as-you- go approach; the question is how much the City will pay over and beyond the annual premium; the money needs to be squeezed out of an already tight budget that he appreciates the work of the Fiscal Sustainability Committee; he prefers a fixed figure even if adjustment would be needed; the obligation is real and contracted; that he likes the idea of taking the from an ARRA loan to help fund the obligation. Mayor Johnson concurred with Councilmember Matarrese; stated a fixed number has to be set; funding was not provided for the 1079 Regular Meeting 8 Alameda City Council October 21, 2008 | CityCouncil/2008-10-21.pdf |