The city council finds as follows:

     (a)  The council and the community are justifiably concerned about the city’s ability to adequately fund post-retirement health care benefits of city employees; and

     (b)  The council, a council task force, the city administration, interested citizen groups, and state officials have all evaluated options for actions and made recommendations; and

     (c)  On September 7, 2006, the mayor presented to the council a long-term plan for funding the benefit. It included:

           (1)  A transfer of $10 million from the community investment fund to an OPEB trust, which will be authorized by the legislature;

           (2)  Assigning to the same OPEB trust the portion of property tax revenue from TIF districts 2, 3, and 4 which is currently tax increment (about $1.1 million each year) as those TIF districts expire in 2007 and 2009;

           (3)  Transfer to the same OPEB trust $2 million of the $6 million current balance in the health care fund;

           (4)  From utility funds, each year transfer $500,000 to the same OPEB trust fund;

           (5)  Receive from the legislature authorization to have the community investment trust invest as does the state board of investment, which higher rate of return will, over the term, replenish the CIT for the money withdrawn;

           (6)  Continue the current practice of annual budgeting of payment for current health care claims at an affordable level as needed while the OPEB fund grows; and

     (d)  The plan is consistent with the task force recommendation to use a viable alternative funding method if one can be found.


     (a)  That the council supports the plan described above, including the revenue sources set out therein, and adopts it as the conceptual model and policy to be used as a guide for future action;

     (b)  By this action, the council is committing itself to a significant revenue dedication for the purpose of creating a sustainable retiree health care benefit. In making this commitment, it encourages and expects leadership from all other involved parties to make the sacrifices necessary to solve this impending financial crisis by the end of the calendar year;

     (c)  That the council will enact specific measures to carry out the plan and policy after the new collective bargaining agreements are negotiated and approved;

     (d)  That this resolution commits the council to this policy until December 31, 2006. If contracts for all bargaining units are not approved by the council by the end of the calendar year, this resolution will be considered null and void. The council would then reconsider its position in the new year.

STATEMENT OF PURPOSE:  This resolution adopts a new policy and model for funding post-retirement health care. An OPEB trust will be created and funded with tax revenues currently going to TIF, transfer from the CIT trust, utilities, health care fund, and continue some annual budgeting for current expenditures.