pages: CityCouncil/2013-07-23.pdf, 14
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CityCouncil | 2013-07-23 | 14 | bonds for infrastructure or other things; a plan needs to be in place to improve the City's bond rating. Councilmember Daysog stated the public should realize there will be some sacrifices; residents have to be prepared; not meeting OPEB obligations right now has led to an unfunded liability of roughly $90 million; questioned how the City would be able to fund the trust fund; stated during the budget sessions, the Library Director indicated both branch libraries cost around $176,000 to run, which totals almost $400,000; an example of a sacrifice would be rolling blackouts-closing one branch library to generate savings which would be dedicated towards the trust fund; the Council and community have to discuss such real life situations; narrowing the plan and the amount that has to be set aside is important because on one hand, the City needs a plan to meet long term OPEB obligations; on the other hand, the City wants to maintain services; something has got to give. The Finance Director concurred with Councilmember Daysog; stated it is a balancing act; if the City were funding its arch, an additional $4.5 million would have to be paid every year, which is 6% of the budget; continued the presentation. In response to Mayor Gilmore's inquiry about the lowering delta, the Finance Director stated the City had its own pension plan for police and firefighters, called the 1079 and 1082 plans; the plans are closed, but still have retirees receiving benefits; the pension plan's population has become smaller and smaller, so the City has lower payments each year; the decrease in the amount paid could be used to offset some increases in OPEB payments. Councilmember Tam stated the OPEB Task Force discussed the 1082 plan; the minutes indicated $3.2 million was in the 1082 plan when the City moved into PERS in 1991; the $3.2 million was to help pay for retiree healthcare and dental benefits; the minutes were vague about what happened to the fund; the prior City Manager discussed the possibility of leveraging funds to secure a pension obligation bond; inquired whether the matter would be analyzed. The Finance Director responded that he does not know about the matter, but would speculate that the City probably negotiated with PERS to move the assets to PERS. Councilmember Tam stated all the assets, except for the $3.2 million surplus amount, were moved into PERS; that she understands only two employees remain under the 1082 plan; some funds should remain. The Finance Director stated both the 1079 and 1082 plans are similar to OPEB; the City operates on a pay-as-you-go basis; further stated the City has set aside a couple hundred thousand in an OPEB internal service fund to get it started; every year efforts are made to contribute more into the fund; encouraged getting a mechanism in place and adhering to a plan. Regular Meeting Alameda City Council 13 July 23, 2013 | CityCouncil/2013-07-23.pdf |