Speaker 0: Thank you. And we're going to start with Steph's presentation, and that goes for all four of the employees. And then we're going to have public comment on all of the employees at the same time. So that's item three, A, three, B, three C and three D, and then we will have our comments and we will vote individually on each of the employees. Got it. Okay, staff. So, three. Laurie, do you want to call the item? Oh, sorry.
Speaker 2: Is adoption of resolution approving memorandum of understanding between the Alameda Police Officers Association and the City of Alameda for the period beginning November 1st, 2015, through December 18, 2021. And this is also for the Alameda Police Managers Association, the International Association of Firefighters and the Alameda Fire Chiefs Association.
Speaker 0: Thank you. And we will now proceed with staff's presentation.
Speaker 10: Thank you, Mayor Spencer. Council members. Staff. What we are looking at in this vote tonight are new memoranda of understanding for the period beginning January one, 2016, and lasting for six years with the four bargaining units that cover public safety as laid out by the city clerk. A Both the manager associations, which is the Alameda Police Manager Association and the Alameda Fire Chiefs Association and the line employees, the officers and firefighters that that are on the line. Local 689 for the firefighters and the Alameda Police Officers Association. Now, what exactly are we doing tonight? So tonight what we are doing is amending and extending existing contracts. These contracts were originally set to expire in June 2017. The new contracts will be valid November 2015 through December 2021. Next slide, please. Now. I'm going to go over in a minute. How long Alameda has been discussing the need to take action with respect to post-employment benefits. And it has been a long, long time. Action must be taken now or this problem will get away from us. We need to begin contributing to a trust in order to generate sufficient returns to provide the city the opportunity to actually manage its long term liabilities. This has been in the public sphere and discussed for going on seven years now. Action has never been taken somewhat, I think with a kind interpretation. It hasn't been taken because the economy was very difficult in 2008, 2009, 2010, 11 and 12, and made it difficult for the city to find the extra revenues to do its part in a partnership agreement to solve these problems. A less kind interpretation would be that it's politically difficult in Alameda to do any kind of cooperative agreement with labor without having a large section of the population. Not by no means a majority, but a large section react rather than actually analyze the situation. The OPEB liability. OPEB, again, is other post-employment benefits, and that is retiree medical for public safety employees stands as of January one, 2013, the last time the independent actuaries gave us a report. There's a new one coming later this year. The OPEB liability is $91 million. That doesn't mean we have to pay $91 million today. It means given both the employees we have today and the retirees for whom we are paying today. If we wanted to solve the entire liability at once, we would need to put $91 million aside. You would then have it in the bank for 30 years. So you don't need 91 million. And this is a little understood, but that is our current liability. Pay go amounts represent. And I went over this in our last presentation where we defined all the terms. PAYGO is what the cities bill is right now, each and every year. This is what we pay to the current retirees to pay for their medical benefit, which is what the city promised them. That's what the city promised them as part of the contracts that have existed between the city and these bargaining units and are common in the field in northern California. For the past several decades now, just to go back over the city has been discussing its long term liabilities for over eight years. The Treasurer and the Auditor at the direction of the Council convened a fiscal responsibility task force some seven or eight years ago. I convened in 2012 and OPEB Task Force, which included the Treasurer, the auditor, the then Fire Chief D'Orazio, then Police Chief Noonan, a couple of investment bankers, a couple of actuaries, a couple of financial analysts and representatives of labor to discuss not necessarily just how to solve the problem, but to define the scope of the problem, because at that time our partners in labor were not in agreement with the city about the depth and the magnitude of the problem. The Fiscal Responsibility Task Force that was headed by the Treasurer and the auditor properly identified that lack of action on OPEB was going to eventually create a situation in which Alameda could no longer provide services to its residents or in the alternative, Alameda would be forced to seek protection in reorganization. The OPEB task force achieved something very important, which was it defined the numbers. Everybody came out of the OPEB task force in agreement that $91 million is the liability. Action must be taken soon or the problem gets away from us. There have been two years of discussion since 2013 here at the Council in noticed meetings with reports that have been made by me and by financial analysts to talk about what the scope of the OPEB problem is. Now, after years of informal discussions, both public discussions, but informal discussions with the Labor. Earlier this year, Council unanimously authorized me to act as in my capacity as city manager, which is my charter role to act and to negotiate formally with all of the public safety units to try to seek to find a solution to this looming and potentially bankrupting problem. Next slide. This is what happens if we do nothing. If we do nothing. You can see that our pay go, which is our annual. Our our annual nut, if you will, our annual payment goes from the $2.9 million that it will be next year. It will go. And I'm looking only now at safety that when you look at miscellaneous, that's your nonpublic safety employees. We go from 3.1 million in 2016. By 2045, the city will have to come up with nearly ten and a half million dollars every year just to pay for the benefit that was negotiated and promised by the city in its labor contracts. Now I'm going to show you the same chart without the miscellaneous employees of the city. So you can see. Now, go back one. Thank you. If we do nothing, if we stay with the existing arrangement, our PAYGO goes from $2.9 million for public safety employees who are retired to $9.2 million. It's a huge increase. And as I mentioned in my earlier presentation last month about post-employment retiree medical benefits, it will be taking place. That jump would be happening at the same time as the state of California will be dramatically and rapidly increasing our pension premiums that we owe to the state of California. For those of you who believe that there is some way to change our obligation to the purrs benefit pardon me to the purrs premium assessment. You are mistaken. Alameda exists in the state of California. Purrs cannot be moved. Let me repeat that. Our PERS premium cannot be moved. Let me say it a third time. The city tried in 2003 to impact the benefits of its retirees. The police retirees brought litigation against the city. And the consequence was not only did the city have to continue paying the benefit, but the city had to pay for their lawyers as well. It would be nice if Alameda were an independent state or an independent republic, but it is not. We are subject to California law. California law requires us to pay the PERS premium. Now, as a consequence, it was staff and council's judgment that we could impact the post-employment benefit to retiree medical because that is not centralized at the state of California. It is not run by the state of California. It was something that we could impact in a direct dialog with our bargaining units here, hence our focus. Next slide. If we go forward with the proposal that is contained within the contract, you can see that because our public safety unions will be picking up Scott rolling into 4% of their salaries will be contributed towards a post-employment benefit trust. And the city has a contribution to make here as well. I'll come back to that. It's a substantial contribution. If we do that, you can see the difference. Instead of 2.9 million. You can see that there is a huge gap. The shaded area represents the savings to the city over the next 30 years. We will show you these numbers again on a year by year basis. The savings to the city of going forward with this program total $47 million and change. The city's contribution to the program is $7.5 million over ten years. Next slide, please. If we do not do this now. Art treasurer and auditor correctly and famously stated four years ago that if the city did not address the continuing structural deficit in its general fund, that the lights would be turned off at City Hall. Well, if we don't do this, the lights won't be turned off at City Hall because our five year projections demonstrate that if we do nothing and that is not staff's recommendation, if we do nothing about our general fund budget for the next five years and just let it go as it is now, again, not our recommendation. Our recommendation is to maintain an austerity budget for the next few years, even though we're bringing in a lot more revenue. At the end of the five years, the general fund will still have 20% in reserve, which is the city's policy. So we're not going broke any time soon, even if we did nothing. However, if we do nothing, we will continue to kick the can down the road, to use the cliche of post-employment benefits. And more importantly, if we don't act now, we lose the opportunity to put the money into the trust and begin earning investment returns to make it easier. At some point we will have to address this issue. There is no avoiding this issue. We must address it. Better to address it now. While the city has come off a year where it was $7.8 million in surplus and has money to contribute to the trust and at the same time condition the city's contribution to the trust on a substantial contribution far beyond any other public safety bargaining unit has agreed to anywhere in the East Bay. And I'm going to show you a chart with what all the other public safety unions are paying in comparison to our people. We will if we delay now, rather than it being a little painful now, it will be very, very painful later. And it will mean cuts in services to Alameda. Maybe not next year, maybe not five years from now, but certainly 10 to 15 years from now and forever after liability will continue to grow if we don't act now. And the purse smoothing, which is what the state so cleverly calls the increase in purse premiums, they call it smoothing. The staff jokes about the fact that, yeah, it's going to smooth us all down to little nubs because there'll be no money left. The purse premiums that are going up will overwhelm us because the pay go for the post-employment benefits going up, as I showed you on the earlier chart, will happen at the same time as the PERS premium, which we cannot control. It will overwhelm even the strongest general fund budget. Next slide, please. What are we giving up and what are we getting? In the new contract. Our public safety unions will receive a wage increase based upon the performance of the general fund. As an example, last year the General Fund went up 8.1% and our public safety employees received a raise of just a little more than 4%. They receive half the rate of increase in the major basket of the general fund revenues. That is bracketed where it can't be less than 2% and it cannot be more than 5%. In exchange for that, you can see in the first three years, the raise will be between two and 5%. I'm later going to show you what other public safety units are getting in this same time period. Again, we are an island. We are not an independent state, which means those increases in the other units around us that are comparable would inform an arbitrator should there ever be an impasse. In terms of what contract we have, should we decide we want to play hardball with labor? And not go to contract with our with our partners. The employee contribution in 2016 will be 2%. In 2017, they will contribute 3% in 2018. And for the rest of the contract, they will contribute 4% a year to a OPEB trust that will benefit all retirees who are new retirees after January one, 2019. Why January one, 2019? Because we didn't want to establish a trust. January one, 2016 have somebody retired January two, 2016 and say Thanks a lot. I'm now a beneficiary of this trust. You have to be contributing at least three years to become a beneficiary of the trust and more importantly, to the city's position. By waiting until January one, 2019, it allows the money in the trust to grow and begin compounding before we start making expenditures. I'm sorry, go back to that. So there's a tweak in this. Employees who were hired after June 2011 have a different deal. Their deal is they get the retiree medical, but they only get it for themselves. They don't get it for their spouse. As part of that deal, we mandated all of the employees hired after June 2011 must. They are mandated to contribute to an individual account. This is the general direction that these things are going and probably not a bad idea, although I think our partners in Labor might disagree with me on that. This is an individual account. They are mandated under the new contract to contribute 2%. To their individual account. They used to be required to contribute 3%. That's why you see in year one, they're contributing 1%. That gets them to four. Anyway. In short, they're paying a smaller amount to the OPEB trust, but they're paying an amount to their own individual accounts. And the total, when you aggregate it for them, is the same 4% out of their paycheck that everybody else who is pre June 2011 is paying. Therefore, all of our employees are putting away 4%. It's just the newer ones. 2% are going into an individualized account. Next slide. Oh, I'm sorry. Go back to the last slide. Very important. In January of 2019, this one of the things we negotiated in order to help the city. And this was explained at the bargaining table, and I explained it to the council in executive session. The employees receive zero. It doesn't matter how the city does that year. If we do well or don't do well, there's a zero increase in 2019. The the theory there is to enable the city's finances to use that time to try to help catch up with the increasing PERS premiums. And then the last one, January of 2021, and remember this, I'm going to come back to it January 2021, a raise of 2 to 5% will be based on a comparative survey. Of what our folks make as a total compensation package against what, five other of four other cities and Alameda County, either sheriff or fire, depending on whether it's police or fire, what they make. And the race there will be based a minimum of two, maximum five. Based upon that comparison, we have a similar a similar item in the existing contract. I'll come back and describe that again in a moment. Next slide, please. Okay. Some folks were concerned. What happens? What is this going to cost us? I'm going to show this in a couple of different ways. Yes. The city is putting $5 million into the trust. 5 million, that is from surpluses of the last couple of years. Yes, the city is going to contribute 250,000 a year for each year of the contract. What else is this going to cost us? Well. Our current predictions over the next five years are that the increases in revenues that the city will generate are budgetary numbers. One of the reasons we've had surpluses is we are extremely, extremely tight and extremely prudent in our projections. Consequently, we are projecting revenue increases that are very small, much smaller than we've seen in the last couple of years. That would mean an increase in revenues that would generate only a 2% raise. We predict an increase in revenues of just under $5 million at the bottom of the raise packages. The employees would receive a total of six and a quarter million dollars, and that means the net that the city pays is $1.3 million. Okay. Let me repeat that. The net the city pays is $1.3 million. Remember, out of that, 6 million to 54% of the salary is going to go back into the trust to fund a benefit for which the city is already legally obligated. And that is the post-employment retirement benefit, which is the subject of this entire dissertation. Next, next slide. Okay. How do we compare with surrounding cities? Because there's this concept that I keep reading that the narrative runs like this. The reason why we're doing this is because among other reasons, the folks at City Hall just don't have the courage to stare down the unions. Okay. That may be true if Alameda weren't in the state of California or in the Bay Area. But because we are we are somewhat constrained by a state law and be the comparables around us. For those of you who have either bought or sold a house, you know the importance of comparables to the market. That impacts us because we're a binding arbitration scenario here. This is what others who are in our standard comparison. You'll note Oakland's not in here. It's not a standard comparison. And they also give away the whole store at Oakland, I can tell you. How do we compare with surrounding cities? Fremont combined four pairs and four post-employment benefits. Fremont police put up 9% under our contract that we're proposing to the council tonight. Our folks would put up 19%, more than twice as much. Berkeley, same thing, 9%. Our folks would put up more than twice that 19%. Alameda County, which so often is held forward as a beacon of what the city should be doing. They put up a total of 14.72% and nothing for OPEB. Livermore 10% to our 19. Pleasanton ten and a half. To our 19 and our closest. Competitor, if you will, in this race still loses. It's Hayward. They come up with 16% to Alameda is 19. Now let's take a look at their current raises. Everyone is under negotiation. I have information about Berkeley. I can tell you their numbers are going to be lower than our mandatory 2%. I don't know about Fremont. They're under negotiation. Livermore has one more year of a 2% raise. That's what our minimum would be if everything went to heck in a handbasket and we had no extra revenues, we'd still be obligated for that 2%. Pleasanton For the next two years, 3% revenues go up. Revenues go down. Pleasanton is paying 3%. Our revenues go down. We're only paying two. Hayward 330 and a survey to go to five. We have as our mandatories to 2 to 0 three and two. Let me put this differently for you. We are proposing to the council tonight a contract that over six years guarantees at a minimum, in the worst case scenario, from a revenue perspective, the city will increase the salaries by 11%. That's non compounded for those of you who are going to try and catch that. It's non compounded, but it's a total of 11 points over six years for the person taking home the paycheck. Because they'll be putting 4% of that paycheck back into a trust fund, which will fund a benefit for which the city is already and will remain legally obligated and cannot discharge unless we were to go belly up. That person will take home a paycheck over six years with an increase of 7%. Now look at what our surrounding cities are getting. And look at what our people are getting. And I raised this because our current contract. We're our people are already paying more because our people currently are paying 15%, which is more. Other than Hayward is more than anybody else is paying. Our current contract calls for a comparative study to be done in 2016. Were we? In my opinion. And it's an opinion, but it's based on fact. Were we to conduct a comparative study in 2016, our employees would come in below the average and this city would go into labor negotiations, which should they not result in agreed upon contract would have to go before an arbitrator in one of the most liberal and labor friendly regions in the state, let alone the country. And we would be below everybody else and we would lose control.
Speaker 1: Over what.
Speaker 10: Our eventual contract and our costs would be. And we will have made no progress on OPEB. Next slide, please. How do we compare with surrounding cities on fire? Freeman pays 12% to years. They pay nothing to OPEB. Berkley pays 10% to hers. They pay nothing on OPEB. Alameda County, which throughout my four years here, I continually hear the idea that we should contract out the fire service to Alameda County. Alameda County's folks pay 11.355% to our proposed 19. Livermore pays 12%. Hayward, as with the earlier case, pays a total of 16. Our folks would be paying 19. Remember when we go to the comparative survey? If we don't do this tonight in 2016, all of these givebacks that we received from our employees would be considered as part of the total package. And for those of you who don't believe it, tell me whether or not you've been a city attorney in a major American city. I will tell you, that is the law. The arbitrator will look at what is around them in comparable cities. Again as earlier same numbers. The raises that are being promised in Hayward are 330 and five two fire. There fire. People are not doing a comparative survey. That's 11% right there. We're doing 11% over six years. They're doing 11 over four. 2% for Livermore. That's the same as our bottom line. And then you see us bottom lines again. Two, two, two, zero, three and two. Next slide. One of the council members asked for a history of public safety pay increases over the past 15 years. I was Councilmember de sag. Here it is. It speaks for itself. 411 for 34.5452.5, and then six years of zeroes. 2014 was 1.8, which was based on the fact that the city's basket of general fund revenues went up 3.6%. And our formula is that the raises are one half the rate of growth of the basket of revenues. Last year, as I mentioned to you, it was 4.1. This year it'll be again in the bracket of 2 to 5. Notice 2016 is 2 to 5. The new contract, 2016 is 2 to 5. So if we do nothing, when I show you costs in a moment, remember that those costs for 2016 will be the same. Whether you vote this contract or don't vote this contract, next slide. Who else uses an OPEB trust? We were asked whether who's ever done this? What a shocking idea. Well, there's a lot of cities that use an OPEB trust to try to get ahead of these long term liabilities. That's the list. It's in the packet next. How does this affect the budget? So the expected cumulative salary increases through fiscal 1920 would be $1.2 million. Now, remember, I'm going to show you what the current number is, because you have to back out what they're going to get in 20, what labor gets in 2016, because it's the same whether we do the new contract or the old contract. So it's not fair to attribute that full number as an impact of the new contract because your existing contract has some of it anyway. The employee contributions to the trust through 1920 fiscal 1920 will be $4.7 million. The city, over those same five years will be obligated to contribute $6.25 million. Long term, you go your pay go costs for the next 30 years. And I'll show you the chart in a moment. Go from $188 million, a little above that down to just under $141 million. It's a reduction of a little over $47 million. And again, this is not a new benefit. This is one to which we are already legally obligated. Should we do nothing, we will still be legally obligated to make these payments. Now, before I go over these numbers. I want to briefly, if you want to add to this, you can. But I want to read a public opinion that was issued by the city attorney today. And this is responding to the question that was raised by the Treasurer as to whether establishing the proposed OPEB trust would create an additional obligation on behalf of the city. And at the same time, new entitlements on behalf of the employees. And the answer is a clear no. The memo yea, the memo used that we already have that have been negotiated over the past decades with the city. Clearly state, clearly state that we are obligated to pay these benefits. And as I said before, when the city before tried to scale back on its own without an agreement to scale back those benefits, the city was rejected in litigation. These M0 use the new ones just to make clear, because I think the question that was raised by the Treasurer is a good one. These new M0 use have express language that states that the establishment of the OPEB trust is solely to partially pre-fund the city's future OPEB liabilities which are created elsewhere in the M0 use. And in the past, M0 use. It clearly states that this is the purpose of the trust. There is no additional entitlement created. There is no benefit above and beyond the one that we adopted and absorbed many, many years ago. Now here's our five year forecast. This is what I was talking about earlier in the general fund. This is our five year forecast. And before anyone asks. This is not based on revenue projections that mirror the last two years. They are based, again on revenue projections where our revenues would only go up 2% or 3%. Remember what things looked like four years ago. Four years ago. That bottom number, the fun balance. That's what we have in the bank, in the general fund. That's not attributed to ongoing expenses in any way. Those numbers went into deep red. That was what prompted correctly the Treasurer and the auditor to come before the council and say you have to do something about this or you're not going to be able to run the government anymore. The steps have been taken. If things tomorrow, if the economy completely cools and goes down to a 2% growth rate. These are the numbers you're going to get in Alameda. And it shows that by 2019, 2020, if we did nothing and again, let me repeat that is not staff's recommendation. Staff's recommendation is to address the annual structural deficit each year as it arises. And we're going to be bringing in the budget that proposes cuts to close that 1.1 million gap in the second year of this coming two year budget. But if we did nothing, we would still have the full 20% to comply with our policies. Of reserve, and those reserves are important for those who have said, why are you holding so much money in the bank? Here's why. Because you don't know when you're going to have an earthquake. You don't know when you're going to have a massive disaster. You don't know when there's going to be another downturn in the economy. You need to have a substantial sum of money in reserve. It also helps bolster the city's very, very advantageous bond ratings. Next slide. This is what happens if you pass. This contract council members and still do nothing about cutting the budget, which again, not our proposal and staff. If you did nothing five years out, you would be still with an 18% reserve. Not enough for the policy, but more than just about any other city in the Bay Area, with the possible exception of a couple of the tri valley cities. Next slide. Some people have said, Oh my God. So this balanced revenue index means that the police and firefighters could get a 5% raise because they get half of the growth of the revenues. We should be so lucky. That would have to mean that the city was getting 10% growth in its basic basket of revenues. What that would mean is if we are in our current expected revenues over the course of the next five years and remember I gave you six years because the contract runs six , but over the next five years you would be looking at ten and a half percent going to the employees. If you have crazy growth in revenue, you'd be giving them 22 and a half percent. But. Also take a look. At the numbers of city revenues. Those revenues that are up there are not our full general fund revenues. These are the five main revenues that contribute to what's called the balanced revenue index, the BRI. To repeat, I said this in the last presentation. Those five revenue streams are property. The cities share the property tax, the city's share of the sales tax, not counting the county pool, the hotel tax, the utility tax and the real estate transfer tax, which is acknowledge, oddly, the most volatile of the five revenue streams. There are other revenues. But look at the difference. If we were to end up paying the maximum, we would have 23 million more dollars in our budget than we're projecting today, which is an almost one third increase from our very prudent projections. As I said, we should be so lucky if we had that much money coming in. We should probably think about ways to put even more toward paying down our long term liabilities, as we have done with the surpluses we achieved last year and as we will probably propose again in the future. Next slide. So what are the long term effects? This will help the city get through the purse smoothing. It buys us breathing room for the next 20 years. And it, without question, under the projections, saves us $47 million. In no way is staff asserting that this contract by itself over the next five years is a full solution and a complete solution to the the OPEB and PERS problems. This will be a continuing effort, as I said in the presentation last month. This problem has taken 60 years to get where it is. It will not be solved in five or six. This will take 20 years of determined effort and austerity budgets and clever planning, too, to get us through this set of problems. But there is no question that the city's pay go costs will be reduced by $47 million, and that breathing room will allow us to absorb the premium increases that are coming are beyond our control and cannot be negotiated away. Is that it? I hope. Any other slides? Oh, no, there's more. Okay, so I'll keep talking quickly. So there's the $47 million of savings. This shows you for each five year period what happens if you have the contracts versus if you go forward without a solution for OPEB. Next one. Again. As I said before, the city contributes 5 million to start the trust up and to 50 a year for ten years after that. The contracts are extended to 2021. Our employees under this contract continue to pay 15% toward purrs. As I said at the at the presentation last month. I remind those of you who believe that what's called for here is a get tough and confrontational policy with labor, that state law determines that no contract can impose more than a 12% PERS contribution. So if we go to war and we get through the contract imposition dynamics, which mean we have to go through a whole process that's called for in the Alameda City Charter, that means we have to go through an entire process that's called for by state law. If we go through all of that and win, we still get three points less for purrs than we're getting through cooperation. Sometimes detente is better than Cold War. This contract complies with Pepperell, which means the new employees are getting a lesser formula for pension benefits, which over the years will benefit us and was a good action by the state and requires, as I mentioned earlier, those employees who do not get spousal health coverage to contribute to their supplemental retirement plan. One more point. I mentioned that the employees continue their peers 15% employees under this contract. Again, continue to pay half of any increase in medical premium costs. Today. Our employees are the only employees in the Bay Area that I am aware of. Certainly in the East Bay, who are paying 50% of the increase every year in their premium. And all of our employees do that, not just the public safety employees, but all of our city employees are contributing toward their health care benefits. I assure you that's not happening across the estuary. Yay! I think I've talked enough. Thank you very much, council members.
Speaker 0: Okay, next, we're going to have any clarifying questions from council.
Speaker 6: Believe it or not.
Speaker 2: No question.
Speaker 10: I think I exhausted.
Speaker 0: Any other clarifying? I have a clarifying question. One thing I didn't see in here was my understanding that at some point, this trust where we're anticipating, we're projecting would be exhausted. Can you discuss that?
Speaker 10: Can we go back to this the go back to the slide that shows the shaded area.
Speaker 2: Okay.
Speaker 10: Forgive me, madam. We're going to go back. Oh, there it is. Okay.
Speaker 0: Thank you. Appreciate.
Speaker 10: Currently the trust has no money in it. We have a trust but has about, you know, a few hundred thousand dollars in it. But that's a general trust that benefits the current retirees as well. This trust will only benefit again, those who retire after one one 2019. The trust will last MBS warmer them. I know we checked the numbers changed up from Bartels. How many years until it exhausts. It's 20.
Speaker 2: 31. That's about right.
Speaker 7: 20, 34.
Speaker 10: 2034. Thank you. Because we delayed three years on making payouts. So Mayor, you are correct in 2034 that if we do nothing at the end of this contract, if the city at the end of the ten years puts not another dime in toward the benefit that it is legally obligated to provide. And if our partners in labor were not truthful at the bargaining table when they told us that they understand this is a long term issue and that in the next contract there will have to be another analysis looking at what the purse pardon me, the OPEB situation is. You are correct. If at that point nothing else has been done, the trust will exhaust in 2034. However. From here to 2034. The city is not adding any additional people into that pool of people to whom we are paying. And that's where we get that $47 million of relief. And there was actually a chart that I that the council and I'm not sure we had so many slides today but there was a chart that that we show to you which we can share at this time with the public. Put it up tomorrow. That shows when the trust exhausts and how that works. Right. There's one more dam. Yeah.
Speaker 2: That was actually attached. It's on the website. Already is on the website.
Speaker 10: Thank you. And that, by the way, just those numbers do not come from city staff. They come from Bartels, which is probably the preeminent actuarial firm for pension and post-employment benefits in the state of California.
Speaker 0: Okay. So then if it exhausts and nothing else is done at that point, then you have to. Can you carry that point out then the people that employees that would be paying at this point and then when they go to retire, we would have to come up with a supplemental. But what does that look like?
Speaker 10: So what it what it looks like is what we have today. It looks like what we have today. If in 2034 the trust exhausts, then the city is left to fall back on its own resources, which is what we've been doing over the past 30 years.
Speaker 0: Thank you. Member de Sung.
Speaker 7: Thank you, Madam Chair. I just have three points to make. The first point is I do want to underscore that the that the labor agreement in front of you does have an expiration date with regard to the revenues available in the trust fund. And that's an important point because 2035, I think the key chart that you all want to take a look at is the 30 year projections. Come the year 2035, you know, PAYGO would start all over again. And so in addition to the $3.1 million that we. Provide through PAYGO for those who are already retired or those people who were previously on the Trust. But because the the trust is now exhausted in 2035, now unless things change, there will be a new PAYGO. So that would be $2.1 million. So one could say that what we're seeing right now is really kind of a pushing out and that and that is to be a virtue. I mean, there that is to be that we shouldn't discount the upside of of pushing things out by this time. Now, the second point I want to make, and I and I think this is an important point, too, is that in order.
Speaker 1: To.
Speaker 0: Remember Jason, I'm sorry. Do you have questions? Right now we're doing clarifying questions.
Speaker 7: Okay. Let me clarify. Okay. Will that be the third point, then? The third point I would have is well, the second point is so what we're talking about is in terms of the employment structure that that unstated part of this is that we're going to have to stick to the number of workers.
Speaker 10: Yes. So this came up when we had the earlier discussion publicly. It was raised by several of the council members, including you, Councilmember Matt, R-S.C.. These numbers are premised upon the current workforce. If we were to expand the workforce, these numbers would no longer be operative. They would change because we would be assuming additional obligations to even though even though it would be the new folks who don't get the spousal benefit, they would receive the single person medical coverage and that would have to be accounted for and would change the dynamic here. Now, one point to consider is that the folks who are hired today are unlikely to be getting they're impacting our pay go for another 25, 30 years. So it doesn't really hit our smoothing period. But having said that, as I said earlier in the presentation, these long term obligations are so burdensome that it would be. This is my last meeting with you. My unsolicited advice to this council to not expand your staff any time soon. Now, we've proposed staff has proposed a couple of positions because we don't want you to be pennywise and pound foolish. There are functions that have to happen. And we also understand you don't want to do that. And as I've said to executive staff, we should be grateful that we have a council that understands that just because revenues are strong and surpluses are present, the crisis is not in any way solved yet. And this government, as most local governments, will be in an austerity mode and should be in an austerity mode for the foreseeable future. And an austerity mode dictates that you not expand staff.
Speaker 7: In the third, clarifying question is now. My sense is that in using the word savings and attributing that to the $47 million that we need to caveat that, I suspect by saying that that is more of a an Excel spreadsheet savings as opposed to an actual dollar that that we're going to have. Like, for example, right now in 2019, we were we are going to pay $102,000 towards PAYGO. But if we accept the trust, then we're not paying that $102,000. So that becomes a savings. And in the following year, we if we don't do that trust PAYGO would be 339,000 towards those who retire after one one 2019. But in that year, 2020, if we accept the trust, we're not paying the $339,000 339 300 333900 $0. So those money, no one is going to cut us a check for $102,000 as a savings or no one in the subsequent year. No one's going to cut us a check for $339,000. It's. It's it's more of a reduction in expenditures, correct. But it's but it's not a savings in the sense of like we are going to put something in Bank of America.
Speaker 10: Well, okay. So not a not I mean. Not to quibble over the term savings, we are obligated to provide that benefit. So if we don't act, that is money we will have to find. So yes, you are correct. No one cuts us a check, so it's not like getting a raise, but it is like moving to a smaller home and having a smaller mortgage. Your paycheck may be the same, but your expenses went down. That's still in my book. That's still a savings, especially when you're looking at balancing off these other long term obligations that we cannot get away from. But it's just it's just a semantic issue of what constitutes savings. I think a reduction in expenditure constantly in savings.
Speaker 1: I swear on to return to the allusion to the legal opinion I was born. If this can actually be read because there were three questions that were asked last time or follow up. One of them was was this impacts and I think it's important that this be read into the record. It's new information. It wasn't present last time. It's present now. And there was also a question about running these funds, these contributions outside of payroll. And I'd like that before we have the discussion or the public comment to have those resolved or at least responded to before we start that process. That's a pleasure of this council.
Speaker 0: We could ask our attorney to read us. Sure.
Speaker 3: I'm happy to read this statement and it is on the website. So it's updated as of today and it goes as such. In December 2013, almost a year and a half ago, the city attorney's office obtained legal advice from an independent outside legal advisor, the preeminent California law firm of Libert, Cassidy Whittemore. That law firm specializes in labor relations, public employee benefits law and labor union pension advice, including OPEB, which is other post-employment benefits, applicable law and its application to the city's myriad of public safety. Labor contracts, going back to the 1990s was analyzed. That legal advice was shared with the city manager's office and utilized in negotiations with the public safety unions. The result is the four proposed EMU's memorandums of understanding, which are before the City Council for consideration tonight at this City Council's request at its meeting on April 16th. The City Attorney's Office obtained an update from Labor Cassidy Whitmore of their December 2013 advice. That advice was shared with the City Council in closed session yesterday. Therefore, the City Council is fully apprized of the city's legal position and risks as it considers its vote today. It is not prudent to share confidential legal advice with the public because the city is currently engaged and will continue to be engaged in the future in negotiations with its bargaining units. It would be a severe detriment to the city's ability to negotiate if the public and therefore the bargaining units had the benefit of the city's risk assessments and strategies. Regarding the question as to whether establishing the proposed OPEB trust, which is described in the proposed M.O. use, creates additional obligations on behalf of the city and at the same time entitlements on behalf of the employees. The answer is no. The IMO use clearly state the establishment of the OPEB trust is solely to partially pre-fund the city's future OPEB liabilities, which are created elsewhere in the MCU.
Speaker 0: Thank you. Any other member clarifying questions.
Speaker 2: Was a member.
Speaker 4: Was there a second question?
Speaker 1: It will question.
Speaker 6: Whether the increases have to go through payroll or could somehow.
Speaker 2: Mr. Russo, do you want to answer that question? You want me to answer that?
Speaker 10: You answered.
Speaker 2: I mean, that's not what we bargained for. That's not what we bargained for. And frankly, as I mentioned last night. Not really sure how we actually would do that. Essentially, it raises a raise and the raise goes through payroll and payroll is permeable and therefore doing some sort of giving money and not having it go through payroll . Frankly, I actually don't even think that's legal. So the answer to that question is, no, we would not be able to do that.
Speaker 1: Thank you.
Speaker 0: And Brody.
Speaker 4: He commended him. I think the vice mayor asked my question on the city attorney's letter. Thank you.
Speaker 0: Thank you. Another question that I recall from last hearing I was member Desalle had asked about the parks as a percentage of our budget over time. How's that? What has happened to our rec and parks budget? And I had asked in regards to similar question safety, our public safety as a percentage of our overall budget over time . But what has happened there?
Speaker 2: We don't have that information right now. I mean, if we'd be happy to share that, we're going to be doing the rec and park budget May 12th. So we'll be happy to provide that information then.
Speaker 10: However, it as a general dynamic, it's important to note that for reasons that have nothing to do with this issue but have to do with proposition to 18 and with the sort of crazy quilt of tax laws by the state of California that over the years, cities that 25 years ago would include all kind of services as part of their general fund budget and were unable to keep revenues up, went to fees for service proposals and used separate funds. So, for example, a lot of the things that are now in a separate community development fund in this city used to be part of the general fund. Public works used to be part of the general fund. Now it's largely independent funds. So what's happened is public and this is not just true in Alameda. This is true in all California cities. Public safety is what's left in each the lion's share of the general fund. However, it's different when you look at the all funds budget, then you'll get a real picture of who spends what.
Speaker 0: Member, Ashcroft.
Speaker 6: Well, and just to comment on that observation, I think it's been noted before that cities are going to have to look to the state for some assistance on some of these. Difficult issues that cities alone can't solve. But we're very fortunate that we have in the audience today our own assembly representative. So fortunately, he is hearing all of these comments that we make tonight. Thank you for being here.
Speaker 7: Member Daisuke Here's a question perhaps for the legal staff. Now, at the last budget meeting we had discussed the possibility of raising the UUT the user utility tax through a vote of the people, whether it was general or for specific purposes. Since the UUT is part of the BRI does that I would that at the point in time that it's raised with that count towards the the BRI revenue for purposes of.
Speaker 10: The answer is yes. And should the Council place the item on the agenda, then it would be incumbent upon the council to then authorize your city manager, whoever that may be at that time, to engage in discussions with Labor about what it means.
Speaker 7: Thank you. Appreciate that.
Speaker 0: All right. Any other member clarifying questions then? We're going to continue with our speakers. Our first speakers will be Kevin Kennedy, our city treasurer, and Kevin Kearney, our city auditor.
Speaker 1: Thank you, Madam Mayor and city council. First, I do want to acknowledge the hard work that that our city manager may enjoy his last 24 hours in Alameda. And our employees, who are many of whom are here tonight, put into the effort to try to tackle this issue. This is a daunting issue. In the presentation tonight, city manager referenced the fact that this has been talked about for at least seven years and. Probably it was me and the auditor who were among the first to come up here and talk about it. We chair co-chaired the Fiscal Sustainability Committee. We were members of the of the pension and OPEB task force that the city manager put together. We've been up here many, many times talking about this issue. It is a very daunting issue, a very important issue. And it's absolutely something we need to be looking at. That said, you're probably surprised with the fact that for seven years we've been saying this needs to be addressed. That we came up two weeks ago roughly and told you that that the current proposal at our mind had some flaws to it, and that, quite frankly, it wasn't the direction that we would choose to address this. I think, again, it's this needs to be dealt with. So I'm not at all suggesting that we ignore this for the next 20 years and let this problem get bigger. But I think if you look at now and I'll talk briefly because I covered a lot of this a couple weeks ago from a from a plan standpoint on how we're tackling this issue. I said two weeks ago and I'll say it again, this is a $91 million problem today that's growing every day. I personally do not think we can fund our way out of this. This plan basically is saying that the city. Through through pay increases and through its own money is going to fund its way out of this problem. It's not going to happen. As a matter of fact, the vast majority of the people it spent six months on the pension task force agree with me. Their number one recommendation was to deal with the liability itself, negotiate that liability, not impose it. I'm not suggesting that we go to war with or with our safety units. I don't think we should do that. I think we both have a vested interest in seeing something being delivered here. The Pension Task Force very clearly stated that the number one priority and nine out of the 11 votes that were cast to that was number one. And number two in their book was to deal with the liability, then address how you're going to fund it, trying to fund $91 million again in my eyes. It's not going to happen. It doesn't happen with this plan. And it's not just my opinion. It was the opinion of a lot of pretty smart people who were in that room for a long period of time listening to this stuff and getting very, very deep into it. So from a plan standpoint. I don't think this is the way to go. That said. Looking at the plan today, looking at how this is unfolded, it almost feels to me like we decided we wanted to go drive to Yosemite and we needed to get there. So we just jumped in the car. We want to jump in the car and start driving, but we can't get to Yosemite sitting in our driveway. We need to get going. So we're just going to get on the road and start going somewhere. Maybe we'll end up in Yosemite, maybe in an hour we'll figure out if we're any closer or farther away and adjust our course. But we just need to get going. We need to do something. I disagree with that. I think there are problems with that, specifically with this plan. The BRT clearly property transfer taxes a floor. I think staff agrees with it. I think the public understands that. I think that should be out. I hope it's not too late. I hope the fact that we all didn't see this until two weeks ago, but somehow now it's too late now that we've come up with this to implement these kinds of changes. But that's a problem. Running this through payroll for every dollar. We're trying to pay this $91 million liability down. We're creating another $0.50 in liability and pensions. If anyone believes that we actually are going to be able to pay off $91 million over time, and that's today's dollars. If anyone believes that we can pay this liability off, well, why make it 50% higher? By also having to put money into purses while we're trying to pay this down. If we're going to go with the idea that this is fundable, let's fund it. How do we not run this through payroll? I don't know. I'm not a labor negotiator. Here's an idea. How about we say in lieu of raises, the money that the city saves will go into an OPEB trust directly for this problem. I don't know if it's feasible. But I get the sense that that idea hasn't been fleshed out. And I really think it needs to, because, again, we're taking a $91 million liability, in essence, turning it into $130 million liability. It's just silly. So that's a big problem. The third issue that we brought up a couple of weeks ago. Was the idea of the legal liability. And I appreciate the city attorney reading that notice. I have a couple of questions. Well, a couple of comments and a couple of questions. Number one, back in 2013, when this opinion was, I guess, first sought out about setting up a trust. I never saw it. Just to be perfectly clear, I had no idea it was done, nor did the city auditor. To the best of my knowledge. I don't know if counsel at that time was aware of it. But in 2013, we were funding this trust with the city's money. And what you read tonight, I understand it to say that, yes, putting money into a trust to pay for the benefit based on what we were doing when we set up the trust and we put the city's money in directly was fine in their eyes. I still have question. And if this has been answered, you can tell me tonight. The difference here is we're taking employees money doing it this way. This isn't the city's money. This is the employee's money. And it concerns me that if we're taking the employees money and we're going to turn around and tell the 35 year old firefighter policemen that, hey, we're taking your dough, but oh, by the way, barring some money falling out of the sky, distrust will be broke. And the money you put into it won't be there when you go to collect your benefit. I think that's really worth vetting. I also have a question about one of the one of the things that was brought up by Councilmember Federici was, can we make this legal opinion public? And apparently there are negotiating reasons why this shouldn't be made public. Well, apparently everyone's seen it except for me and the auditor and the public. It's been shared with the unions. It's been shared with the council, apparently. You mentioned in your comment that the that the unions were aware of it and had seen it in you. Correct. So is that not true? No.
Speaker 3: If I can respond to the couple of things you said. First of all, please. In 2013, the opinion that was solicited from the outside law firm was about OPEB, not about a trust, but about OPEB. What the laws. The state of the law was on OPEB and they analyzed each and every one of the city's M0 use because all of these conclusions are based heavily on the contract language. Unlike peers, OPEB is contractually driven. And so every time you read a case or what have you, it doesn't necessarily apply to what Almeida's contracts or M0 use. Say you have to look at what the language of each individual contract is. And so this law firm went through every single one of our M0 use and analyzed the legal risks, how strong they were, if they could be amended, those kinds of things, and provided us with that opinion. So it was not about the OPEB trust. Then asked, the counsel asked on April 16th. That's a year and a half later to update that information. And we also asked them to look at the provisions in our proposed M0 use, creating the OPEB trust, which this OPEB trust is different than everybody else's OPEB trust. Or maybe it's not, but this is one that is not the same as the Pars trust that we have that has a $350,000. This would be a separate kind of trust. And the question that was asked was whether that would create an additional obligation over and above the obligation the city has in the MCU, should they be adopted to to have an obligation. And the trust itself does not create an obligation in and of itself. And we had that confirmed with the law firms. Second thing you asked is on the on the opinion itself, unfortunately, my brethren in the audience and who might be listening and who sit on the dais, recognize that there is an attorney client privilege and that even though this is a public body, this body also gets the benefit of being able to get legal advice, legal strategy in a confidential way that is to the benefit of this city. If this city had to tell everybody everything they were doing at all times, we would be at severe disadvantages. So that is not what is required to be done. The unions are public and the unions did not get a copy of this opinion. The opinion in December 2013 was provided to the city manager's office for their use in going forward with negotiations. The city council, this city council sitting here received that opinion and the update of that opinion last night that is not publicly available and and the Council has not decided to make it publicly available. And I hardly believe that is the correct posture.
Speaker 1: Okay. So just just I apologize if I misheard this, but just to be clear, so at no point in the past or in the current situation has the legal opinion been shared with anyone other than counsel and the staff?
Speaker 3: That is correct.
Speaker 1: Okay. So basically, we're going to have to trust you on that, I guess. I mean, we're going to we're just going to have to we're going to have to go.
Speaker 6: I I'm sorry. I do. I understand. Are you doubting the word of our city attorney?
Speaker 1: I'm not doubting the word at all. I'm just saying that the legal ramifications of this are a big issue and we don't have any information on it.
Speaker 2: And I'm proud of.
Speaker 1: So, I mean, it's fine. It's fine. I just want to be real clear about it.
Speaker 6: Well, I'll be clear about one thing to the city attorney at the behest of the council we met in closed session last night, did provide the language from our charter that outlines the duties and the responsibilities of the city manager, the city auditor, the city treasurer. And I can't remember if you included the city attorney, but I've read those and I believe she is acting well within the scope of her duty and we have no reason to doubt her integrity. And I'm sure that wasn't your intent.
Speaker 1: I don't either. I'm not doubting it at all. I'm just saying that we that that was something we'd ask for. Continue it. So. So we'll go back. So again, from a 1/2 way.
Speaker 10: 1/2. But but what you asked for, it's customary that you don't get it. It's not unusual here. There isn't like, well, we'll have to trust you. Oh, I understand the insinuation that somehow there's something untoward in that this is standard operating. Practice. And you, of all people, being involved in a confidential profession, would understand that there are certain things that you don't tip your cards out to the other side. And I wish you hadn't suggested, because I know I'll see it on a blog, because I've seen things that you've said before taken out of context. I wish you hadn't suggested that somehow Labor had received the the nod, but that you did say that wasn't true.
Speaker 1: And I said that I that was what I thought I heard you read is that the information had been shared with the negotiating units.
Speaker 0: And at this point, if we could please continue with our speakers that we greatly appreciate. We have many speakers here.
Speaker 1: So bloggers who plan on quoting me. I misheard our city attorney and my apologies to you. I think it's a very important issue. I wanted to revisit that along with the other two points that I brought up, which is, again, the B.R. I index in the first thing again. I hope and I know that that would the work that the city auditor and I do is often taken out of taken the wrong way. People think that we dislike our public safety workers or that we dislike our mayors and council members. That's not true at all. What we're trying to do is, from a financial standpoint, work in the interests of the city. That's what we're elected to do. That's what the people ask us to do, and that's what we're here to do. This situation has been very difficult for the auto and I because we've been basically working on a very, very short time frame to try to give you what I think you expect and what the public expects from us, which is financial guidance on probably the biggest issue the city faces. The guidance we're giving you is not an agenda. We're not Tea Party people. We're trying to work in the interests of the city. And as I've said to our union members directly in the interests of the employees, to make sure that this benefit is actually delivered in some form. Well, you don't have to believe us when we say that, but that's the truth. And we've worked very hard to try to give you some feedback, which I hope is not ignored on this plan, because this is a very, very big step, and I think we really need to think that stuff through. So I appreciate your time. Thanks.
Speaker 0: Thank you. Kevin Kearney, he's our city auditor. And then we'll be Assemblymember Bonta.
Speaker 1: Mayor Council staff. I would also like to thank everybody's hard work. Tough issue. Not created by the people that are sitting here. Certainly it's our charge to try to come up with some kind of a solution that we can deliver a promise to the people that work for the city, provide great services. And it's not an easy issue. My biggest concern, we we brought up the three questions. You know, we talked about the legality. The city attorney, Kern, provided the answer that I think that, you know, there there's an answer that was provided. Okay. And I think that that was good. So now now you know, now we have an understanding on that. The the question about running through payroll, though, I respectfully disagree with that. And I think it would be very prudent to spend some, you know, more money with if the city attorney feels at this firm that she's contracted with before is, you know, a top notch firm and just spend some money and get an opinion as to the legality and in their estimation, if it's something that can actually be done, because as the Treasurer put it, and when things go through the payroll, we all know the drill. He and I have said this, you know, you know the drill. It makes it go up by 50%. I think it would be prudent to spend some more money on experts that have provided expert counsel that the council city managers used in these negotiations to see if it's possible to attain the goal to make sure. That everybody out here gets what they were promised. And in these trying times. Looks like possibly it might not work out and just see if that's a possible solution. The bottom line is these guys out here had a contract. They're supposed to get their medical paid. Okay, I understand that if I was one of those guys, I'd want my medical paid. I understand that in a heartbeat. But having said that, the mechanism in which it gets paid, we should be paying their medical. We shouldn't be increasing increasing the amount that they get in their retirement. The goal is to pay their medical. If I'm some 40 year old guy or 45 year old guy getting ready to retire, you know, and I've worked hard to in the city here to defend the city against disasters and bad people and the like. And part of my deal was I signed up to to, you know, get paid and get my medical and some, you know, suddenly these this information comes out from, you know, the treasurer, the auditor. We don't even know if we're on the side, but whatever, it's just math. And now we've come to the point, as John put, which I think was eloquent, when people were saying that we were this, that and the other thing and attacking us personally, and we're just going, Jesus, just math. Come on. I went to Edison School just like Maryland, an Alameda High School, and we came to consensus. John put that thing together. I think it put us together a little bit. Okay. It's 91 million bucks. We agree. 91 million. The guys behind me. 91 million. You guys here at home, 91 million. But if we're trying to solve that, why does it become 130 million? Let's just spend some money. That would be my recommendation. And again, you guys vote. Spend some money and just see if there's another way they can do it. If this firm that the City Attorney Trust thinks that they're going to provide some guidance and if it says, you know what, we can't run it through the payroll, here is all the reasons, as John pointed out, where we live. The rules are the rules. You know, you don't have to like them move away. The rules are the rules. We're trying to move this thing a little bit so everybody, the citizens in particular, the 70,000 people that live here and the 300 public safety guys, you know, can they can protect us. We can live with what it costs because Lord knows, everybody in Alameda would like to have twice as many policemen and firemen. Everybody would. If we had the money to do that, everybody would vote. Let's have more guys because they do a great job. We just don't have the money. So I would recommend that would be one thing that I'd absolutely recommend. Spend some more money, get a good legal opinion, and if they say, guess what? It doesn't work out that way. Like Janet Sue, the city attorney, pointed out on this other issue that it is legal, then so be it. The questions over with we forge on, so we don't need to make the decision tonight. It'd be my recommendation. Let's just see, you know what happens to that? That's one of the points. Point number three, we talked about the transfer tax. John mentioned it. That's a pretty volatile, pretty valuable index. That's the part of this computation. Liz, the prior on the 16th said it was, you know, might not be in material. I don't want to say exactly what you said. I heard it to be that it was in material. We'll find. If John Russo, with all the experience that he's brought to government, says it's volatile, it's friggin volatile. I guarantee you that it is. So it's volatile. Let's sit down and talk about it with the bargaining guys and go, okay, we understand the drill about every, you know, comparable cities. All of those things. Everybody understands that John is eloquently presented the point that the court is. The court. We're not the, you know, the kingdom of Alameda. Lord knows I wish we were. We're not. So I would suggest that. We continue to talk about this one issue because if it's not material that's been stated. Then it's not material. Don't have it in there. If it's volatile, well, then maybe that's something we can talk about. Maybe there's some middle ground. I think the one thing that that I have to tell you from a personal standpoint, after being personally attacked, I would say repeatedly, the treasurer repeatedly. We're the people with financial expertize. We got elected to comment on things we don't comment about on Del Monte or the development of the base or the golf course or how many parks we need to have. About the two things that we actually can say that we're experts on our finances. So what are they? They're the budget. There's this OPEB, anything to do with liabilities, those kinds of things that are financial things. We would like to be more included in the process because this is this is the sense that I get from the council in my discussions with council members present and past. They absolutely do not like it. And the staff, they absolutely do not like it. When we show up here and start talking about stuff we haven't briefed you. You know, we haven't let everybody know kind of what we're going to talk about. So maybe you could have the opportunity to think about some kind of an intelligent answer in front of your constituents. So we roll in here, we say this, that and the other thing. Everybody's all pissed off, man. These guys hate us. They hate the council. They hate the mayor. But here's the bottom line with this. The procedure here is really, really fraught excuse me, flawed. We get this information like two, three days before the public, and that's if we yell and scream this information before the 16th meeting, we had no idea what the numbers with. We talked with John. We had a lot of monthly meetings. And I will tell you, John reached out to us like no other city manager did. I appreciate that. He brought you know, seems to be there's a little bit of a consensus with between public safety and us and, you know, whatever, that part's a little closer. But in our discussions, we did not talk about the actual dollar amounts and the mechanism to which this worked out. So it comes before this this meeting, we have no idea, you know, exactly how this thing is going to work. That's why when we came up here, we had these three questions we didn't ask why would we have no agenda? Somebody thinks we have some kind of an agenda. There's no agenda. Why in the hell would we ask questions if we knew the answers? If we were trying to impress somebody, if we were trying to do anything we didn't know. So we asked the questions. So. I would make this suggestion going forward, since we're on everybody's side, we're on your side, we're an all employees side. It would be nice if we had some kind of procedure in place where you guys and I understand the, you know, the behind the closed doors type of thing. We've been involved in that, too, on issues. And probably I don't want to go into the detail of why, but we've been involved in those things. I think it would be better. If you want us to work together, because I want to get along with everybody. You know, being like me and him, Butch Cassidy and the Sundance Kid at the end of the frigging movie with everybody just going, You know what, Kevin? What the f? Bang. I mean, that's I'll be honest with you. That's what it feels like. Many, many times my suggestion would be this As these things go along, maybe you could say, gee whiz, this is what we're kind of thinking about. You can put us under the cone of silence so we won't talk to anybody. What do you guys think? And we could point out things. We think this we think that you guys are the people that vote, you know. But if you don't want to get some, you know, what you consider to be disrespectful off the wall comment. It would be better if we kind of knew where the boat was going. You can throw this off any time you want. You can then open your mouth and say, Well, you know what? You knew about this all along. We talked to you on this date. Get out of that one wise guy. Well, can't be that way, because you're right. You told us we might not like what you guys want to do. That's America. Okay. That's America. The other the one final point I'd like to bring up has to do with the negotiations. And this is the part that I would make another suggestion as a CPA who's really into procedures and trying when you're trying to manage a very, very large entity. It might make things a little bit easier. It is my understanding, and please correct me if I'm wrong, that during all of these negotiations, not one of you other than John conducted the negotiation. Is that a true statement?
Speaker 4: Because it's illegal for us to do that.
Speaker 1: So there's there's. Okay, so there you go.
Speaker 6: And in fairness, he asked a fair question. You know, I don't think the public has a clear understanding on him.
Speaker 2: No. Okay. Hang on.
Speaker 6: Let's have a word.
Speaker 1: Okay. So, are you putting me off?
Speaker 6: No, I'm saying I think you deserve a fair answer to that.
Speaker 1: Fair? I do, too. So if Mr. O'Reilly is is telling.
Speaker 7: Oh, I don't.
Speaker 10: Know, Mr. Vassarotti, I'm going to address.
Speaker 0: This. Thank you.
Speaker 10: The negotiations were conducted by me, which is my role under the charter. I was instructed by unanimous vote of the Council to engage this issue. I did have Ms.. Warm Autumn and Ms.. Adair in the meetings with me, assistant city manager, going to be taking over.
Speaker 1: As.
Speaker 10: Finance director. Going to be taking over. One other point, though, because I don't want this to I can't let this pass without saying this. We reached a tentative agreement with labor on a Friday, Friday, 10:10 a.m., 11 a.m.. Whatever was mid-morning on a Friday? Elizabeth, former damn and I met with you and Kevin Kennedy on Monday morning. And my point about this is only this. The charter sets out certain roles for us, right? Your role does not include being part of the confidential labor negotiations. They the council members on there.
Speaker 1: I agree. I would know. But I agree with you, John. I guess I just ask the question now.
Speaker 10: I understand you have the point. The point I'm making, though, is that what's come up throughout this process that I think is grating on both sides is this idea that we somehow held something back from you. I gave it to you as fast as I was allowed under the law to give it to you. I could not give you numbers. We've talked about concepts for years, some of which we've agreed upon, some of which we disagree. Absolutely. And I have been informed and educated and assisted by both you and Kevin Kennedy in forming my thinking on how to deal with this. But I don't want there to be this impression communicated to the public that we intentionally dropped everything on you guys at the last minute because I gave it to you the next business, a day that I could give it to you. I couldn't give it any quicker.
Speaker 1: Thank you. That's all. You know, I mean, that's that's pretty simple. Now, thank you for educating me. I appreciate that. Thank you. So. So I don't I don't have to worry about that. So. You know, you guys are going to vote on it. I would just suggest that, you know, maybe that legal opinion and think about it.
Speaker 0: Thanks. Thank you very much. Our next speaker, assembly member Bonta, and then Janette Dong on behalf of Wilmot Chan.
Speaker 1: Good evening. Good evening, Madam Mayor. Mr. Vice Mayor, city council members, city staff and fellow Alamitos. I'm Rob Banks. I'm honored to represent you in the California State Assembly and very excited to be back in these chambers today. My wife, Melissa and I are raising our three children here in Alameda, and we have a vested interest in keeping our community safe and strong. Today, I'm encouraging this council to take another prudent and responsible step in the right direction and in support of the long term fiscal health of the city by approving the four contracts before you this evening. Many of you know, I had the privilege of serving as the city's vice mayor four years ago. During that time, it was said by some that based on the decisions we were making as a council, the city would be in bankruptcy. Well, we're still here. And the city will have a general fund reserve balance in fiscal year 1516 of nearly $40 million. Based on the steps we started taking back in 2011. If you recall, the 2011 fire contract froze wages. During the tough economic times the nation was facing while emerging from the Great Recession. Increased employee pension contributions from 9% to 11%. Restructured spousal retiree health care. And took the first steps towards retiree health cost containment. I said then that while that contract did not represent the end of our attention to the fiscal challenges facing the city , it marked an important and very significant beginning. This agreement, negotiated in an atmosphere of mutual trust, respect and open mindedness, set the stage for future public safety contracts to make further progress towards the city's long term financial health and sustainability. Today, the city council has the opportunity to take another important step in addressing the funding of OPEB for its public employees. In the Assembly. I serve as the chair of the Health Committee and also as the Chair of the Public Employees Retirement and Social Security or PERS Committee. In the PERS committee, we faced a similar issue last session relating to funding for CalSTRS, the teachers retirement system, and with AB 1469, which I was proud to author, the state was able to implement substantive CalSTRS funding reform. Before A.B. 1469, CalSTRS was only two thirds funded, with the shortfall growing $22 million a day and would run out of money by 2046. But A.B. 1469 comprehensively addressed the system $74 billion shortfall through increased contributions by all parties and increased state support. A solution achieved by bringing all parties together. A.B. 1469 put CalSTRS on a course to fulfill the commitments the state has made to California's educators for the invaluable service they provide to California's children. Similarly tonight, our city council continue can continue on the course of fulfilling the commitments it has made to its public safety employees and set up a funding mechanism for OPEB. As has been stated, the solution will not solve the funding issue in its entirety, but it does represent a significant step in the right direction and will provide future councils, perhaps even this Council, with the framework for a full funding. I wanted to take the opportunity to thank our public safety employees for being part of the solution. And I urge adoption of these contracts tonight. Thank you for your consideration. Thank you for your hard work. And thank you for your leadership talent in Alameda. Thank you.
Speaker 0: Thank you. Assembly member. Next, Jeanette Dong on behalf of Wilma Chan, county supervisor.
Speaker 1: Hi. Good evening. I'm Stephen Jones, Central District director for Alameda County Supervisor Wilma Chan. My colleague had to leave early, so I'll be offering comments tonight on behalf of the supervisor who also regrets that she's not able to be here tonight. Madam Mayor, members of the City Council, I urge you to support the proposed Memorandum of Understanding between Alameda Public Safety Associations and the City of Alameda as a long time elected official. I understand the need to be fiscally prudent with taxpayer dollars while honoring the service and sacrifice of our public safety workers. I believe public safety contracts before you tonight are a win win for Alameda. The emus are the result of a collaborative process to address the rising costs of OPEB. If approved, the city's $91 million OPEB liability will be reduced by $47 million over the next 30 years. The employer contributions for retiree medical benefits outlined in these contracts are truly unprecedented. The employees require all sworn public safety employees to contribute up to 4% of their salary per year into an OPEB trust over the next ten years. This trust will allow Alameda first responders to partner with the city to help pay down its $91 million liability. Furthermore, each police officer and firefighter will continue to contribute 15% of their pay towards their pension through 2021. This amount is 3% higher than what is required by state law and 6% more than what most other public safety personnel contribute in other cities. The IMO youths also commit each active police officer and firefighter to continue paying 50% of cost increases in health care premiums when all contributions are taken into account. Each first responder will contribute nearly 20% of their income towards their active health care, pensions and retiree health care. The issue of unfunded liabilities for medical retirees excuse me, from the issue of unfunded liabilities for medical benefits and retiree pensions are not unique to the city of Alameda. Alameda County faces similar challenges. I appreciate that. Alameda County Fire Department's management and rank and file have indicated their willingness to contribute to OPEB through contract negotiations. The contracts before you tonight demonstrate your first responders long term commitment to Alameda. The proposed use will help the city plan for the future and create a framework to address future OPEB liabilities. I urge the City Council to approve all for public safety email use. Thank you very.
Speaker 0: Much. Thank you, Mayor. Yes, Vice Mayor.
Speaker 1: If I could. US staff. The speaker made a comment about our $91 billion liability being reduced. $47 million in my understanding is the liability stays the same, but the $47 million is savings against payments that total much more. Can we clarify that? Because part of the issue here, this is very complex. And for the public to absorb it and to have have it, I'm I don't want to get confused. I don't want the public to get confused. Can you please clarify that for us?
Speaker 10: Sure. And what I'm going to do is I'm going to toss that number issue to Ms.. Warmer. Damn. But there is an impact on the 91 million, but it is minimal. It's not 47. It's it. Again, this is a nomenclature question. What what are the savings? There are $47 million plus of real savings. But looking out 30 years, it's a minimal impact to that number much warmer than may have the actual number the the actual I don't know if you have that from it's.
Speaker 2: About 5 million.
Speaker 10: Yeah. It's it's an impact. Yes. But it doesn't cut it in half.
Speaker 1: I want to make sure that everybody understands. People are watching on on the video feed and. I'm getting a lot of questions about to explain it. It's it's this is this is very complex. And we all need to know the public concluded what we're committing to. Right.
Speaker 10: So go ahead. I'm sorry.
Speaker 2: I just also wanted to mention that we have a representative from Bartles and Associates, Doug Pryor, who's here tonight to answer any more technical questions, if you'd like to, to to ask him.
Speaker 1: But clarifying that particular point, we're not reducing the nine.
Speaker 2: That's right. It doesn't go from. That's correct. That is not the we're not the 4734.
Speaker 0: And that's.
Speaker 10: 21 to 86. But there are 47 million of saving between here and there.
Speaker 1: Thank you.
Speaker 2: Over the 30 year period.
Speaker 10: So it's easy to see how that.
Speaker 1: Yes.
Speaker 2: The other thing I'd just like to clarify, since I have the floor, is that Puurs does not contribute to the OPEB liability. Right. So what contributes to the OPEB liability is having extra bodies. Because now you're you're allowing them or you're giving them an additional benefit of retirement health. But pers by increasing pers, you're not increasing your OPEB liability. Those are two separate. Those are two separate things. You have your OPEB and you have your peers and they're separate from one another. By increasing one, you don't increase the other.
Speaker 0: Former assemblyman member Sandra Swanson.
Speaker 1: Thank you very much, Madame Mayor. And and Mr. Vice Mayor and city manager and members of Council for this opportunity to address you. I think that you you were extremely fortunate this evening because a lot of work has gone into addressing a serious problem, one that has faced every city in the state. So I address you today as Ellesmere resident, as a former representative at a meeting in the state assembly, as a former chair of the Alameda County Retirement Board, a $7 billion pension fund. To say to you that the solution presented to you today is a credible solution. It is unique for employees to contribute so much when the city's obligations are clear and the liabilities are certain. I will say to you that I have witnessed as Chair of the Assembly, Labor and Employment Committee scores of agreements. When I say that this one is unique in the contribution that employees have decided to make. I have also negotiated scores throughout the state, and I think that before you you have to feel pleased that the leadership of the city manager and the negotiators for for staff and for the unions that this agreement is before you this evening. I want to make another point. My grandfather came to Alameda in 1939 and he stayed here and operated a business here because of the culture in Alameda and because it was a great place to live and because the city had something to offer. And I hope that we don't forget that the contribution to the city's economy. And the ability to pay his bills has a lot to do with the service that the men and women behind me provide. It contributes to the housing value. It contributes to a number of economic indicators that you do not see in some other places. And so I hope that we can talk about this contribution, not only the one that has been presented in in the milieux, but the contribution they make on a daily basis to make Alameda what Alameda is today. And that's very important. And so as we as you consider this, please consider that the asset that police and fire provide to the city, the security, the response times, not just when you know someone's having a heart attack in your home, but to the entire culture of the city. And so, based on my experience, I offer this advice. I would encourage you to approve all the email used before you this evening to value the contribution that the employees and the first responders are offering you and continue the discussion with them so that you can get a complete solution to this problem. Do not turn back on the momentum that you have today. You should approve this email use. And I. I respectfully offer it to you that that advice. Thank you very much. Thank you for the opportunity.
Speaker 0: Alice Becker, former county supervisor.
Speaker 2: Mayor Spencer. Vice Mayor Matarese. Council Member Ask Council Member Theresa and Council Member Odie. I'm Alice Lipka. I'm a POW alum, beaten for 28 years. I love the city and I care about this city. I know the issue before you is a very complicated one. Just like you. I remember how difficult it was when I was representing you and District three on the Alameda County Board of Supervisors. We were dealing with the challenges of unfunded liability, of retirement and all packed in the middle of state budget cuts. We took action in 2005, 2006 to increase the retirement contributions from our safety employees. And recently, I find out that the county firefighters also agreed to pay into OPD. I want to recognize the work of the city's fiscal sustainability committee. Their long range physical forecast 2009 to 2019 is an excellent report. I think there's a saying a picture speaks a thousand words. So I put out this graph. It's in the report. It's on page 23. You know, it's done by Bartow Associates. So this graph really shows the benefit of pre-funding, the opiate trust that is being proposed. The city manager, your city attorney and other staff has done their diligence. And the police and the fire unions and all the employees are really stepping up. I'm impressed with their willingness to contribute 4%. I applaud this effort to put Alameda future in the right direction. I know it's not solving the whole financial problem myself, but it's the right thing to do. Thank you.
Speaker 0: Thank you. Thank the Commissioner Fong Lau. I don't know if he's your. All right. Now we're going to proceed with the rest of our speakers here. If there's any other elected officials here that wanted to speak. Your chance right now. Now we're going to proceed with everyone else and we're going to hope that you can stay within the 3 minutes. Thank you. And I think we have about 37 speakers or something, maybe 40. Kurt Petersen, Maglia Vella, and then Alan Okubo. Yeah, a.
Speaker 2: Yeah.
Speaker 0: Right. Like maybe nine. Yeah. All right. Let's go.
Speaker 1: Yes, Madam Mayor, City Council, thank you for the opportunity to speak with you. I don't think that there's probably anyone in this room that doesn't want to see something to take care of this liability problem. Okay. I would like to say my concern is the rush to judgment, I should say, as far as what we do, rather than take our time, look at it carefully. Many questions have been brought up. There is absolutely no reason to rush on this. I kind of somewhat take offense to the fact that as far as the little squabbling here between some of our elected officials, especially when they're working there, is elected once our treasurer and an auditor being pinpointed by people that are actually employees, not actually or chosen by the public. Okay. But I'd like to state real quickly. I would listen to Mr. Kennedy. He is, in fact, the investment manager of this city. This fund is an investment for this city. That's his role. His responsibility should have been included in it bar none. It should have been and it should still be included in it, because my desire and probably would make this really quick is to postpone it so people could get the input. You can come up with the best the best decision for all of us. There's no rush. There is no gun at our head. Okay. We're talking about 2045 now. Not saying 2045 isn't out there. And I hope to be around 1245. But, you know, a couple of months, is it going to make that big a difference? Because the liability won't change very, very little. It's much more important for us to make correct decision as far as it. You know, the point is. But, you know, our city manager brings up the fact, you know, we've been working on this for seven, eight years. Okay. Seven, eight years. So why does it take the very last seconds, stuff like this for seven, eight years you've been working on seven, eight years. Why didn't he come to the council? Knew that they had a problem before January. Ask them. Let's do as far as the contract negotiation. Ask their approval. Work on it. Do it. Not the last minute before the budget. And try to use the budget as a means to slam it through. It doesn't have to deal with the budget. Don't feel that you're forced. That it does. Because it doesn't it. It's a situation that involves much more than two years out. Thank you very much. Please postpone your decision.
Speaker 0: Thank you. Only Avila. Somalia. Email i a. Sorry.
Speaker 1: Yeah. My name's Marty Frater. Somalia's agreed to exchange with me.
Speaker 0: All right.
Speaker 1: And, uh, just do me a favor, because I have to catch a plane here shortly. My name is Marty Freydis. I reside at 2915 Windsor Drive for the last 40 years. I'm here to support and speak in favor. Of approving the public safety contracts. Now. There are a couple of reasons why. One. The police and the fire do an outstanding job, too. There's been a commitment from the employees to the city that they've kept. There's also a commitment from the city to the employees that has not been kept. And I would ask myself, What? Now. It's unfortunate we come to get our input here and I have to sit here and listen to a couple of gentlemen talk about their positions because they got left out. Well, they're the money guys around here. And I think their concern ought to be how do we get in this position? That ought to be the concern. The concern now is to get out of it. And here's what's bothering me the most. There was a tentative agreement reached with the city and the employees. A tentative agreement. The city, asked the employees to vote on it and ratify it. They did that. They ratified it overwhelmingly with tremendous sacrifices. They did that because they're responsible and they understand the problem. Now there seems to be, after all, the discussion and the agreement. Now there seems to be a movement not to approve it until late. I think that's absolutely wrong. I'll tell you a little bit about my job. I'm secretary treasurer of Teamsters Local 70. I've been to been an officer official that local for the last 43 years, elected every three years by the membership. So I have a pretty good understanding of negotiations and I have a pretty good understanding of politics. And I know one thing. When you reach a tentative agreement, that means both parties have sat in a room, shook hands and agreed, and then the union goes out and ratifies it. And now we're sitting here, listened to discussions, having discussions where I come from, a deal's a deal. When you give your word, you keep it. I understand politics. But I understand the reality. I think you all understand how we got here over a long period of time and a neglect to pay the bills when they were due . And so we're now in this in this position. The employees here have bent over backwards. There's a fair resolution for everybody. And yeah, I agree, there's work to be done now. But both parties have shown they can do it. So. The unions have kept their word. I respectfully request that the city council keep their word. Thank you very much for the opportunity to speak.
Speaker 0: Thank you. Alan. So it's called Allan Coover, Yamma, and then Hanover and Murphy and then Gray Harris.
Speaker 1: I'm not the mayor. Members of the Council on City Staff. Good evening. My name is Alan Kubiak and I am president of the Alameda Police Officers Association. I'd like to thank everyone who's here tonight for being a part of this very important process. And I would especially like to thank those who have taken the time to comment. Everyone should have the opportunity to share their personal beliefs and expert opinions so all of you can make an informed decision. Two weeks ago, our members were also tasked with making a very important decision. It was between doing nothing for the remaining two years of our contract or acknowledging that the unfunded OPEB liability will continue to handcuff city if immediate changes are not made. On duty. Our members are talented and well educated group of law enforcement officers. We strive each and every day to provide a high level of professional service off duty. Our members volunteer their time with local organizations because we believe in strengthening the bond between our profession and our community. We are ever so grateful to work for a community who has been so supportive of our department, and we want to ensure the financial viability of this city. For these reasons, the decisions. The decision for our members was very easy.
Speaker 0: Excuse me if everyone could.
Speaker 10: Can you hang on for a sec? Because we're obviously having a disturbance.
Speaker 1: Oh, what a surprise. Okay.
Speaker 10: I just think I couldn't help.
Speaker 0: You know? I know. All right. Thank you, everyone. If you could please take your seats. We appreciate your courtesy. Thank you.
Speaker 1: So, for the reasons that I just explained, the decision for our members was very easy. Overwhelmingly, our members chose to tackle this issue by agreeing to a structural change in our contract. This will not fix the problem overnight, but it is the first step in the right direction.
Speaker 0: Thank you. Thank you very much.
Speaker 1: Thank you.
Speaker 0: Our next speaker. My name is Nora murphy, and I'm here to speak in support of this contract. One of the things that I've found over the last 40 some years is I fought to get a new library in this town, is that it seems to take forever to get through things in this city. It only took 30 years to get that building over there. And I remember being happened to be at that meeting about seven years ago.
Speaker 3: And all the firemen, we're sitting here.
Speaker 0: And nobody was doing anything about solving that problem. It's true.
Speaker 3: It doesn't solve all the problem. But you have to step do each thing.
Speaker 0: And when everybody deals in good faith on both sides.
Speaker 3: It's a shame for the council not to vote that and to move on. This council has a lot of things that they have to deal with and a lot of pressure.
Speaker 2: And I think we have to remember that there's a lot other people in this city that have other needs, like.
Speaker 0: Parks and libraries.
Speaker 3: And things like that. And you need to be concerned about that. And this is a problem that should be solved tonight with the yes vote.
Speaker 0: Thank you. Thank you. Our next speaker, Gary Harris, and then Patty Osborne and then Jeff Del Bono.
Speaker 2: So Patty and I are going to speak together in the interests of time here. Keep everything moving. So, Patty and I. I'm Gray Harris, by the way.
Speaker 0: I am a.
Speaker 2: Resident here in Alameda. Patty and I happened to be co-presidents of the Democratic Club together. We also taught together for many, many years. I was the president, former president of the Alameda Teachers Union. So we also negotiated contracts together. And when we were negotiating contracts, inevitably there were people like the city treasurer who said to everyone and the public, if we give the teachers a salary increase, the district is going to go bankrupt. Right. And the lights will turn off and we won't have a school district.
Speaker 0: And yet somehow.
Speaker 2: Sometimes it got contentious. Sometimes it was easier. We ended up negotiating contracts with salary increases. And the district never went bankrupt, ever. The lights are still on. Everything seems to be going okay. And now I work for the California Teachers Association.
Speaker 0: Where? Out of my.
Speaker 2: Office. We represent 35 chapters. So not just one like Alameda, but 35 different chapters in Santa Clara County. And guess what all their districts say when we go to negotiate their contracts, they say if we give a salary increase to the teachers, we're going to go bankrupt and we're not going to have a school district. And none of them have ever gone bankrupt. They still are functioning fine. And in fact, they've been able to grow their reserves even over these times of recession. Kind of like the city now, I have been told, has a $38 million reserve. The districts are doing the same thing.
Speaker 0: And I pay.
Speaker 2: Taxes in this city. This is my city.
Speaker 0: And I do not pay.
Speaker 2: Taxes here for them to be saved for some unknown emergency where the sky is going to fall. I pay them to be used on city services for my city so that my city can function the way it should. The city is not a bank. The school districts are not a bank. And I would like my tax dollars to be spent on the people who do the work every day. So. I feel like you have a really great opportunity in front of you that not every city gets, that you have your employees stepping up to give concessions and work towards a collaborative solution. You have that solution in front of you. So I really, really urge you to take it. We don't always get this opportunity to have a collaborative solution. Sometimes it's contentious and people are arguing and and fighting over it, and we're not having that. So I really, really hope that you vote yes on these IOUs tonight. And I agree. Thank you.
Speaker 0: Thank you. I'm sorry to interrupt. Real quick staff, could you clarify the amount of the ending fund balance? I believe it's 30,000,030.
Speaker 2: 31 million in 1516. That's what we're projecting. Thank you. It's 38%. Yeah.
Speaker 6: So that was the general fund balance, correct?
Speaker 0: That's for the number.
Speaker 10: That's for next fiscal year, 1516.
Speaker 0: Thank you.
Speaker 1: Ma'am. Mayor, city council, city staff. First and foremost, no matter what happens here tonight, I need to put out a heartfelt thank you to Liz, John and Stephanie Sierra for your guys. It's hard work because I know what I've been doing the last three weeks and I had one more year to deal with and you guys had four. And, you know, believe it or not, it gets contentious when we're dealing with that, too. And you guys do an excellent job and thank you for that from all of us tonight. I'm here in front of you to encourage you to adopt this M.O. used to. And I'm here as the president of Alameda firefighters and a fire captain and a resident of Alameda who lives in the city, too. And I think tonight when you hear from speakers, you'll hear that there is there's two voices out there. There's a bunch of voices out there. And people do have differences of opinions. And I'm going to focus on what I do agree with Kevin Kennedy and Kevin Kearney with is that I the work is not done. We have to address this issue. We get that it took a lot of work to get to this point, not just through negotiations and hard work, but also with a group of guys and girls out here that are your public safety officers, police officers, your firefighters. And I bet you if you asked one of them when they got hired, were they going to be sitting in a council chamber worried about this kind of stuff? The answer is no. And I think most of them tonight really don't want to be here. This isn't what they do. They they signed up to serve the community. That's what they want to do. And they care about this community. I and a few others take it a step beyond. I worry about them, their benefits, their family, what they make hourly. So we negotiated this deal. We did it in good faith. We came to the table. My understanding it was at the direction because I always ask that question when I sit down to negotiate, do you have the direction of the council? And I was told, yes, all five of them. And this negotiation never got contentious. We worked within the parameters of what we've done. And this is on top of giving up spouse capping the four new hires up to 2011, capping our current health care that got rid of the Cadillac plans, changing the vesting time. This is all stuff that came out of these guys committee. You know, we've been working on this. It's just does just doesn't happen overnight to do this. And now we're looking for the other piece on how are we going to fund this benefit? And you have my word and I'm doing it in front of everybody in this room that we're partners. And that's what we are. And I don't want to go back to contentious times. I want to be partners and my guys and girls out there that I can speak for. I'm not going to speak for the other side, but I feel pretty safe doing it, meaning the police officers. We're partners and this has been a good experience on how to get things done and negotiate the right way. So I encourage you to do it tonight. And one of the things you need to think about and I know I've talked to you guys individually about this and you know, there's been a message here that OPEB is a problem in our pensions are a problem, and we're here addressing them tonight and we've been addressing them the last several years. Tonight, take this agreement when it was agreed to in closed session. It's just I'll be back at the table working on this stuff. You got my commitment. I'm a hard worker. I'll do that. But it sends a bad message to everybody else that, you know, what, is this really a huge problem? So I encourage you to do it. Thank you for your hard work once again to the city staff. I appreciate it. And John, good luck in Riverside. Thank you.
Speaker 0: Zach Goldstein. Zelda, Sadie and Andy Slovak.
Speaker 1: Hello, Madam Mayor. Council and staff. My name is Zack Goldstein. As a.
Speaker 2: Lifelong resident of the city of.
Speaker 1: Alameda, I've taken pride.
Speaker 2: In the city's.
Speaker 1: Public safety workers.
Speaker 4: Especially those who serve.
Speaker 2: And Almeida fire.
Speaker 1: And the police departments. Years ago, Alameda firefighters came to my family home after.
Speaker 2: Responding to a911.
Speaker 1: Call. It saved my grandfather's life, who was having a minor stroke.
Speaker 2: A grandfather lived for many years after that near-fatal event. Several years later.
Speaker 1: Once again answering to a911 call, Alameda police.
Speaker 2: Responded to an intruder entering my family.
Speaker 1: Home. Police were able to capture the offender and after trial, he spent time in prison. These are but two examples of the heroics.
Speaker 2: Performed by Alameda Safety public.
Speaker 1: Workers.
Speaker 3: That have impacted my family greatly.
Speaker 2: This could be the case for anyone sitting in this.
Speaker 1: Room or living in this great city.
Speaker 2: And leading us.
Speaker 1: From where you sit today. For the first time in the.
Speaker 2: City's history.
Speaker 1: A.
Speaker 2: Trust could be established that would have our firefighters and.
Speaker 1: Police officers partner with the city to address the unfunded OPEB liability. If the contract extension is approved.
Speaker 2: Alameda will have the opportunity to lead Bay Area cities in dealing with.
Speaker 3: The opioid liabilities.
Speaker 2: This is an opportunity.
Speaker 0: For Alameda.
Speaker 2: To become a role model for other Bay Area cities during the past year. I befriended several of the public safety.
Speaker 1: Workers in the city.
Speaker 2: And getting to know them. It is evident that their persistence in maintaining safety throughout the community.
Speaker 1: Goes beyond reproach. I plan on being a long time resident of.
Speaker 2: The city of Alameda.
Speaker 1: And an active member of its community. If this contract is not approved, we could lose an important.
Speaker 2: Contingent of women and men who help us remain safe.
Speaker 1: Viable and strong. I have a debt.
Speaker 2: Of gratitude towards our public safety.
Speaker 1: Workers who save lives and promote.
Speaker 2: Community well-being.
Speaker 1: It's now.
Speaker 2: Time for the City Council to step up and show their debt of gratitude.
Speaker 1: And support by voting in favor of the current proposal in front of you. Thank you.
Speaker 0: Thank you.
Speaker 1: Hello, Mayor. City Council members. My name is Aldi. Sadie and I live here in Alameda for over 25 years. I graduated from Alameda High. I'm a hornet. I run a deejay business here on our island, producing events locally and nationally. This is where I've chosen to settle with my wife and two young kids, due in large part of the efforts of the fire and the police departments. We have a safe and secure town to live and raise a family. I strongly urge you all to do what is right and vote yes for the proposed contract. It's a no brainer to move forward on a deal where both the police and fire departments are agreeing to help pay for their own retiree medical benefits. And not only does it move all parties closer to solving common problem that has been neglected for too long, but it does save the city and taxpayers like myself some money as well. So again, I ask you to please do the right thing and vote yes on the contract. Thank you.
Speaker 0: Andy Slutskaya, then Mike Williams and then Doug Clark.
Speaker 1: Good evening, Madam Mayor. Members of the council. My name is Andy Slovak. I'm a resident of Alameda, 19 949 Buena Vista Avenue. As a resident, I'm proud of the men and women behind me who have our backs in this city protecting us. I'm a representative with the Carpenters Union, and I've been involved in the many negotiations, labor negotiations in the past 20 years. Your negotiators have presented a groundbreaking agreement on your behalf. They negotiated that with your wishes. It's been ratified by the rank and file behind me. And it's your turn to approve it. I would recommend that you adopt the resolutions. And approve the ammo ammo use. And I just want to say, John, good luck in the future for you. All right. Thank you. Good evening, Madame Mayor. City Staff. City Council. My name is Mike Williams, our captain, a resident of the 300 block of Hate Avenue on the West End. I come before you tonight as a resident, as a father of two young children in grade school here in Alameda and an active community member in urging support of these two contract. Are these contracts before you? It's been a long road to this path, as the city manager stated, and there's been a lot of open public communication about OPEB. And along the way there hasn't been a lot of action until tonight. These steps before. You are not the silver bullet to the answer to unfunded liability, but they are the first steps of controlling that unfunded liability the city has in front of them. So with that, as a resident and an active community member, I support these resolutions before you tonight. And I urge you to leave the can where it's at and don't kick it down the road and move the city down the road. In the journey of fiscal responsibility. Thank you for your time.
Speaker 0: Dog back and then Lauren Zimmerman Cook and then Kathy Mooring.
Speaker 1: Good evening, mayor and council members. My name is Doug BLOCK. I live with my wife and my.
Speaker 7: Two small kids at 3418.
Speaker 1: Brett Horn Lane in Garden Isle. I'm a member of the PTA at Amelia Earhart Elementary School and an active volunteer. I skipped.
Speaker 5: Coaching Little.
Speaker 1: League tonight to come to this council meeting. Go Cubs. And I'm also a taxpayer and a voter. And one reason why I pay taxes and vote is for public safety services. It's a big reason, actually. And in my opinion, this is one of the most important services that we elect you to provide to the residents of Alameda . And we have some of the best in Alameda. I have lived in other cities in my life. I'm also a teamster, just like the men and women who pick up all of our garbage and recycling on Alameda. And in my day job, I do politics for our union everywhere, from Bakersfield up to the Oregon border, and Reno in northern Nevada. And I have to say, I was actually astounded by some of the things that I saw at this council meeting tonight and little ashamed and as a person who does politics for a living. But I'm glad we were able to clear up some of the issues. Ah, you know, I, I applaud the.
Speaker 7: City and the unions to sit down and try to work.
Speaker 1: Out a compromise. And we do this with our employers in the private and public sector all the time. The difference here is that, as one of my brothers alluded to before, when we make an agreement at the table. We don't walk away from that agreement. And my understanding is an agreement has been made here. We need to honor that. The other thing I can say from my experience is these issues are very, very complicated, as you know. There are no easy answers. There's no silver bullet. But I can tell you from experience that if you don't try to work cooperatively around these agreements, there is no answer that's going to be found. So I urge you to approve the M.O. use, and I'm glad to do whatever I can to keep Alameda going forward. Thank you.
Speaker 0: Thank you.
Speaker 2: Good evening meeting Mayor. Members of the Council and city staff names Lawrence Herman Cook. I am a resident here in Alameda. I live at 14 06e Shore Drive with my young daughter and my husband, but I'm also a business owner here in town. I run AC Living, which runs, owns and operates the water's edge lodge and elder then on Webster. And I can't tell you how important the safety members, the safety staff, the public safety staff is to my businesses and my personal life. I chose to live here in Alameda after being raised here because it's safe. I came here after four years of being stationed with my husband in the Coast Guard in New Orleans. And I will tell you, the difference between living here and there is immeasurable. And a lot of that has to do with the safety on the streets and the personality of our city, our city safety people. They are kind. They are open to it. When I had an issue with something happening at the fire department, the chief of the fire department came to speak to me about it when it came to caring for my residents. That's amazing. You have amazing people who are taking care of us here in Alameda, and I think we need to respect them for what they do. And when you go into negotiation with somebody and you they gave a lot and then you say, I'm sorry, we're not going to honor that. What do you risk by going back to the table? You risk them putting what they've given you at the table. I think that when you consider that that the cost of living, that the raise increase the 2 to 5%, what the one year of zero is totally separate from fact that they gave you 4% towards hope. The opposite two two, five, 2 to 5%. That's a cost of living increase. I go to my employees and they're going to ask me for that and they're not going to give me 4% anywhere else. That's an amazing deal that they're giving you. And yes, it's not going to solve the problem tomorrow that we have for the unfunded liability. But it's something we've been talking about for eight years. And it's not going to be solved tomorrow. It's not going to solve tomorrow. And it's an issue. We've been we've been funding it for 60 years. And you're not going to solve it in the ten year or the five year contract that you have. But it's a huge step forward.
Speaker 3: And I really urge you.
Speaker 2: To consider the fact that I don't want us to move back as a city and you want to have more business move into town. You want one. I think talk about is more senior living. What makes it that I want to build another senior living facility here in Alameda is because those people behind me because I make it safe and that I know that when I call them, they're going to come and take care of my resident and they're going to take care of them. They're going to be kind to them and they're going to make sure they get the best care possible, both the fire and the that the police. Further, I like to say that it's more than just what happened here. They're giving up. They've given a lot more. They've already said, you know, the 5050 split on the increase. They are you know, the new hires aren't getting their family members paid for. Those are all things to consider as we take steps forward.
Speaker 3: If we choose to throw.
Speaker 2: This baby out with the bathwater because it doesn't solve the problem tomorrow, then why do we do any of this other small steps? It's all gradual steps to solve this very long problem. And. So thank you.
Speaker 0: Thank you, Kathy Moring and then Bruce Chernoff and then Paul Foreman.
Speaker 2: Mayor, members of the council city staff. My name is Cathy Mooring, and I'm a longtime Alameda resident. I have. Done a lot of things in this town different wearing different hats and. Well, first of all, Lauren Zimmerman is my boss and she's one of the smartest people that I've ever met. So what she said, I agree with 100%, but I've also worked on Webster Street prior to where I'm working now in the capacity of the executive director of the district. And I have had run ins, if I might say, with the police and fire personnel of this city, not because of anything that I've done, but helping me with the issues on the street, with people living there, doing various things on the street. You know, you do events and and things happen. And I have to tell you. That the men and women of our police and fire departments have never under any circumstances been anything but respectful to those whom they've encountered in various situations on the street. I have such respect for them and my respect for them has grown immeasurably by how they have approached with you as partners. Thank you, Jeff. This negotiation. This collaboration. This is rare, and I think that we should not look a gift horse in the mouth. I think that we should show the respect that they have given this city, the contributions that they have given the city they're now giving back financially. They give back in so many ways. They participate in fundraisers. They're here. They do so much beyond their jobs for this city. They're coming in with open hearts and with a shaking hand. And I think that we really need to honor that. Nothing is perfect. Is is this amazingly complex offer perfect? No, it is not. But it is a fabulous, giant step forward. And I think that we should not not take a step. Because that is not perfect. Please. I urge you from the bottom of my heart to please approve these menus and show the respect to these men and women that they deserve. Thank you.
Speaker 1: Mayor and council. My name is Bruce Chernoff. I live at 1808 Nason Street. And I'd like to echo the comments of Assemblymember Bonta and former Assembly member Swanson and many of the other supporters who have spoken before me. Seven years is long enough, and I agree with the city manager, in fact, that defining the problem when you have a complex issue like this before you is really a very, very large task. And it's not to be underestimated. As a. Others will speak in favor of improving the staff recommendations, which I support. And it's clearly been difficult negotiations around a complex problem. But as a resident, I remember a time five or six years ago where the spirit in the community was very, very different. And it was a difficult time for the city and it was a difficult time for bargaining groups. And there was very much an us versus them feeling that was rampant in the streets. And I want to acknowledge police and fire for the investment that they have made in building trust and a spirit of collaboration with the city . I think that it is this spirit of collaboration that now exists, that is has laid the foundation for being able to negotiate a solution. And again, I want to thank police and fire for the efforts that they've made in contributing to that bank of trust that I believe has been really working very hard along with our city manager, who we are going to miss. Good luck to you. And I urge your action tonight to approve the Stack staff recommendation and approve the for Emil use. Thank you. Summer.
Speaker 0: So it'll be Paul Foreman and then Mike, Michael McDonough and then Ken Peterson.
Speaker 1: Madam Mayor, members of council. If the only issue before us today was OPEB. Certainly our safety employees are offering substantial contributions and I would be willing to respect your decision no matter what it was. But I believe that if you extend these contracts for an additional four years, you will have run through a very large and well-lit stop sign. It's the pie graph on page 15 of the proposed budget for the next fiscal year, indicating that fire and police services will eat up 79% of city expenditures. That's up from 70% this year. The budget summary five year projection states that fiscal year 20 1920, although expenditures are projected to increase by 15 million, that's 22% . The police and fire share goes down one percentage point to 78%. As our treasurer and auditor have been telling counsel for years, this is a this is unsustainable if we're going to have any city services other than police and fire. I particularly the lady was talking about the library and the parks. Well, I don't know. A survey of the 2014 budgets for four other East Bay cities reveals that our police expenditures are roughly comparable to these cities. However, our fire expenses are not our 2014 budgeted fire expenses. Expenses were 26 million, San Leandro was 21 million for 87,000 people living on 13 square miles. Pleasanton 15 million for 74,000 people living on 24 square miles. Richmond 27 million for 108,000 people living on 52 square miles. Vallejo 25 million for 220,000 people living in over 50 square miles. Now, these may not be fair comparisons, but the fact that we are on an unsustainable path and that other cities are getting fire service at a much lower cost, leads me to one sure conclusion. We need to establish a task force to determine why our fire costs are so high and look for a path out of the unsustainable road we are currently on. Everything has to be on the table, including closing the Grand Station Joint Fire Service on the Pleasance and Livermore model, or contracting out the fire service to the county like San Leandro, Union City, Newark and Dublin. I believe that running this stop sign would be a breach of your fiduciary duty to the residents of this city. We have two years before the current contract expires. We need this time to study the problem and find a solution. Thank you.
Speaker 0: Thank you.
Speaker 1: It evening, Madam Mayor. And Council members and staff. I'm Michael McDonagh. You all know me as the president of the Chamber of Commerce. What you prob some of you may not know is in my day job where I actually earn a living. I am a financial advisor as well and supplying employee benefits is a really big part of my day to day life. Before I say anything more, in case I run out of time, I want to recognize John. John, it's been a pleasure working with you. As from the Chamber's standpoint, I think that what you guys are proposing today is really reflective of the strong financial management that you've put in place, you know, in the last well, prior management. It wasn't so strong. We didn't necessarily have the budget surplus that we have today. And though I know you're leaving us in good hands, I know that in the future that budget surplus plus may not be around for us to to arrive at such a creative solution. As a financial adviser. I love the way you wave goodbye. I wish I didn't have to see that. But as a financial adviser providing employee benefits, I am more than aware of situations like the OPEB. It is not an unfamiliar problem that a lot of cities face and effectively managing the fiscal stress of that. That problem is probably the most important task that a local government body such as the city council faces. And it's not an easy assignment. According to the Yale Law Review. Between 2007 and 2013, 28 urban municipal municipalities declared bankruptcy or entered into state receivership to manage their physical insolvency. Vallejo, Stockton and San Jose are examples right in our backyard that have had to declare bankruptcy for reasons that include their retiree benefits. Now we do not want to see bankruptcy. I think bankruptcy for the future of Alameda is unthinkable. But the law states that a municipality can only declare bankruptcy bankruptcy if it's insolvent. And only after the municipality has conducted good faith negotiations with its creditors to resolve its financial obligations, which includes its retirees. And of course, those negotiations have to include its public service. Because we're a part of CalPERS, we can't change the pension liability. So we have to focus on the other retiree benefits, such as the health care insurance, which is what OPEB is all about. And the city staff has responded to the consistent requests of our city auditor and treasurer, which I respect very much as well, to develop a plan to avoid financial disaster by obtaining the abscess, the concessions from the police and fire unions in which they will contribute more than their compensation toward more than their fair share. And correct me if I'm wrong, John, the the contracts that we are voting on tonight do not give more than we already are paying next year
Speaker 10: . Yeah, that's correct. That is correct. Yeah. It's a great deal for next year.
Speaker 1: Exactly. So we're not really changing next year. And in fact, we're locking in for several years we have had already negotiated, which could be something we'll never see again. And going back, going backwards to say, you know, let's go back to the table, we could actually lose that and be paying more in the future rather than locking it in now. So I know my time's up. So I'll just close by saying, as with most major challenges, the solution consists of a multi-pronged strategy. But every journey begins with one step approving this staff proposal and this demo use is on the tape that's on the table. Tonight is the first step, but it's also a giant leap toward avoiding a future or future financial disaster that has left large number of cities across the nation bankrupt and unable to function. We don't want to be in that position in the next five, ten or 15 years.
Speaker 0: Thank you. Thank you. Can Peterson, Bill Delaney and then Brian Schumacher.
Speaker 1: Thank you again. It's amazing to me how many of the standard ideas and excuses have come up this evening. Actually, it's not that amazing, the kind of a characteristic we've seen over many years. And of course, they don't make any sense, really are repeated over and over again. I would say that if. The thing has gone on for a long time and there is a need to solve the problem. Is there a need to rush it so that people can't clearly understand? And what does it mean if it's been a long time? If what you're going to do is wrong? Now you noticed that the financial officers didn't object to having a solution. They objected, or they pointed out that there are other alternatives which would do be a better financial solution than the one this proposed. Speaking of the financial officers, I'm bothered by the comments that were made about what their position was a few years ago, and in spite of the fact that they were very clear in what they stated, and that was that unless things were changed in the management of the city, the city would be out of money. Now that's entirely different statement from that, which was represented by Assemblymember Bonta by a council member, O.D. and former council member TAM and ex-mayor. What's your name? Your. Sorry about that. And so when they when they characterized mischaracterized the statements, what these city officials, financial officials have said it has become as an attack on the individual. This was called an ad hominem argument. And another way to say it is killing the messenger. And it was wrong and it's defamatory and they should. Those who do that should apologize. Evening, everyone. I'm Bill Delaney. I'm currently the chair of the Alameda Recreation Parks Department. But this evening I am here is Alameda citizen of over 34 years. And during that period, I've not seen a public safety union contract as strategic and as sound as the one that you have before you this evening. And I'm not here because I respect our police and I respect our fire and all the staff members that are included there. I'm here because this is a very sound and comprehensive program and contract. They may not be perfect, as some people point out, but they are worthy of your approval. Tonight, I applaud the efforts of our city management department and the representatives of the police and fire unions in developing something that is so strategic and comprehensive. The overriding objective here is to gain a collaborative foundation between the unions and the city, to develop a fiscally responsible plan that offers a strong agreement where both parties benefit. I feel that what you have in front of you and what I've reviewed and what I've read over the last few weeks that this contract does that. And I'd like to just state that the fact that over the next 30 years this plan may save the city $47 million. That in itself, I think, is worthy of at least voting yes on it this evening. I would like to add one last thing, and that is the temperature in Alameda tonight right now is 56 degrees. In Riverside, it's 86 degrees. Yes. It is perfect for this guy. Thank you.
Speaker 0: Thank you. Bill Schumacher, Robin Gilbert and then Kari Thompson and.
Speaker 1: Oh. Madam Mayor. Madam Mayor. Council and staff. My name is Brian Schumacher, and I've lived here with my family since the 1970s. Thank you for your time tonight and for listening to me. And please keep listening if I refer to my notes. The Elected Treasurer and Auditor of the city and the opinions. That qualified bloggers and letter writers have laid out repeatedly and recently are that the police and fire budget. Is. Higher than others. And unsustainable. The city manager said several times tonight. We will be fine if we do nothing, even for years. So my main point is to ask, must you approve for ammo use tonight? The city manager also said, but going through his explanation. Was hard. I think. It's a real drink out of a fire hose. For most of us to go through that. I use that phrase when something is very complicated. And presented quickly. Let the bill paying taxpaying citizens learn more about the contract and listen to what they say. Before you approve it. The talk tonight has been about the increases, but little about the current level of the costs to the city. For example, is it fair to pay safety close to 80% of the whole city budget when our four licensed city engineer slots are vacant in the middle of our strong growth and transportation and housing. And when surrounding cities, as was mentioned, spend 50% or less for public safety. I asked you. You be open, be honest, be fair, be sensible. Having only a few weeks to read and understand what the new menus say and what they mean for future costs doesn't seem fair to us. If you do approve them and can't undo them. For years and years, 2022, I think. The growing I will call it progressive and populist. Citizens of Alameda will be disappointed. Thank you for your time.
Speaker 2: Madam Mayor. Would you mind if I made a clarification? Sorry. I can verify something. I just would like to clarify the numbers that seem to be floating around about the amount that the public safety consumes of our budget. People sometimes don't understand that we have multiple funds, we have the general fund, and then we have lots of other funds. The city's overall budget is about $165 million. And if you consider police and fire, that's 35% of the city's overall budget. Now, when you're talking about the general fund, police and fire is roughly about 70% of the general fund. But of all funds that we have, which is about 160 million citywide, public safety is just about 30% of that. So I just wanted to clarify that for the record.
Speaker 0: So on April 16th, we had a council meeting and it was on that presentation where it showed a 78% on that pie.
Speaker 2: We need to clarify that the city the issue with that is whether or not you consider transfers out part of the general fund and it is considered part of the general fund. That number is $80 million. So we'll clarify that.
Speaker 0: And also then if there's been an increase over years. Right. Thank you. All right. Our next speaker. Robyn Gilbert and then Kerry Thompson and then John Knox. Right. Good evening. Excuse me. I don't know that I have anything much more to say than I've said it. Three other meetings. But once again, you know, I do think John and I wish him well. I've already done that. But again, have a good time where you're going. And I do want to thank our city attorney, because one of my major questions was on the legality of what that was going to do and how that would look for the city. And this brings up the point that if we had had a little more notice, some of the questions that people have would have been answered a couple of weeks ago. So as a suggestion, I would like to see us have a little bit more notice on important things long term for our city. One thing I would like to mention is my disappointment, like a couple other people have mentioned regarding Kevin and Kevin, you know, we have elected them to provide us information. And I agree with the gentleman that said, don't shoot the messenger. That's their job to point things out to you and the citizens of what's going on. And then it's up to y'all to make the decision of how you want to move forward. One of the reasons I would like you to hold off on making a decision tonight is not that I don't love and respect our police and our firefighters. Everybody knows I think they're the greatest. I've told them that personally myself. My concern is for the longevity. We're going to be able to finance this going forward. Are we going to be able to honor commitments to our 24 or 25 year old members of our safety force when their turn comes to get their money ? I'm not sure we have the answers to those questions. I'm not sure we can't take a few more months to get those answers. So I'm asking you to take a breath, do a little more due diligence on those things. Those are still my outstanding questions. Thank you. Thank you.
Speaker 2: Thank you, Madam Mayor. City Council, city staff. I'm Carrie Thompson. I'm also with the Alameda Chamber of Commerce, a lifelong resident. I work here. I have employees. My husband is a business person. We've raised our children here, as you all know. And I think one of the things is, which I've heard several times tonight, is that we've got to remember this is just a step. This is not the solution. Nobody, I don't think, is saying that this is the solution to a very long term problem that has been in the making for over 60 years. And it's not a total answer, but it's a step. And basically because Alameda has not previously said enough money aside to fully fund, it's now facing significant long term unfunded liabilities for other post-employment benefits, medical benefits and pensions in the California Public Employees Retirement System for its retired workers. Looking forward, Alameda now has a solution available to resolve this problem, not in its entirety. You, as our city council, have the opportunity to have its public safety workers contribute to its other post employment benefits liability. This solution will require you to agree to the contract extensions, reducing by approximately 47 million the city's $91 million liability over the next 30 years. The alternative is for the liability to continue to increase and for the city to pay it alone. In the past, the City Council and Public Safety Workers partnered to work on the problem. Today, the general fund has a positive balance of nearly 31 million. The city had an $11.4 million budget surplus last year with a projected 8.7 million budget surplus this year. The proposed contract with the public safety workers represents another strong step forward in solving our other post employment benefits liability. If the contract extension is approved, our public safety workers will become among the first municipal employees in the Bay Area to help a city fund its OPEB liability. Now, you, as the City Council, have a plan to add more funding to the other OPEB trust. You have the trust. Importantly, the other post employee benefits solution must be collectively bargained. The city does not have the legal right to impose a solution on to our employees, no matter how we may wish we could under the contract extensions. The city will make a deposit of $5 million into the OPEB trust in January of 2016 that are already set aside from past budgets and $250,000 per year for ten years. Employees will contribute to the OPEB trust out of their paychecks in amounts, which will increase up to 4% of their wages for the first three years of the contract, and they will continue to contribute. More people argue that salary increases will hurt us on the CalPERS side, but keep in mind three key points. First, prior to the current contract, public safety employees went seven years without any raises. Second, while state legislation capped mandatory employee contributions for pensions at 12%, Alameda negotiated 15% contributions from its employees, the highest in the Bay Area. Finally, the city has no control over CalPERS. As we know. It's it's what the state says. You have to do it. And we are dependent on those decisions. So we now know that as the city council, you can make a step in the right direction and get our city back towards the way it needs to be going. So I urge you to actually just take care of it and move on to the other points of business. Thank you.
Speaker 0: Thank you. John Knox Light and then Melia Vella and then Danny Sly.
Speaker 1: Good evening. John Knox White. I'm not. I'm going to try not to repeat what a lot of people have said. However, I think the comments about collaborative process, our bargaining units and our highly dedicated and outgoing yet smart city manager and city staff who are staying here. Really ring true. You know, I think there have been some suggestions about how we could do that different. And I think it's really important in remembering how collaborative this has been that, you know, you're being asked to to back up a good faith effort. The recommendations that have been made on how this could be different or to give no raises or to cut people's health care and their benefits, that that's the alternative that you've been offered, that you can spend another couple of couple of months and decide whether or not after after all this time bargaining with with your with your partners in the city, whether they're going to come to the table and say, oh, now is now we're ready to just sit down and give back, give back all this stuff because you can be trusted. I think the word that you're looking for, if you vote this down tonight is bad faith. And I really would encourage all of you to consider whether or not that decision tonight leads you on a path to get more or whether tonight are public safety contracts. Over the last, there've been a number of amendments. They have brought down the liability. They have cut spousal health care. They have cut how much the city has to contribute to health care, etc.. Those have been small steps at that time. Everybody said it's a small step. There will be more. Here is the next one. You all have the opportunity as the city council to give your next city manager direction to try to open up good faith negotiations with with these collaborative partners. If if it seems possible and likely. You know, the other thing is, you know, your partners are taking a risk with this, Bry, from 2 to 5%. If they end up getting 2% raises over the next well out of four out of their five out of the next six years with the 4% give back, they will be making less money in real dollars at the end of this contract than they than they are making right now. And we've all seen those charts, you know, from The Economist, et cetera, about real wages falling in our in our across our country and our middle class, etc.. The 1% keep going up. The rest of us are making less money today than we were ten years ago. 15 years ago. 20 years ago. This contract, the economy goes sour. Our public safety folks are following in that downward trend. On the possibility we have a solid economy and the economy does well. They're barely going to be keeping even with the cost of living. This is not a huge giveaway. But the idea that somehow tying the their give backs and providing raises when we are extending their contract by four years. The argument the argument being made that we should have no raises in this is that for another four years, while the economy is booming, while people are doing well, especially in the financial service. That that these people should not make more money seems really ludicrous. And I don't know how you could ever, ever imagine that the people who have to vote on the other side of this contract are going to say, yes, that sounds like a great idea. Thank you.
Speaker 0: Thank you, Melissa Vella. And what I did was I switched the slips.
Speaker 2: Madam Mayor, as members of the City Council, my name is Melissa Vella and that long time resident of the city of Alameda was born here. I now live here as an adult. And, you know, the OPEB issue has been around for a long time. It's something that is not new and it's something that your employees, your public safety employees are trying to work with you to solve. And it is going to be incremental steps that get us to the final entire solution. And it should start with the building block that that got put in a couple of years ago with, again, concessions from your own employees. And this is a continuation of that good faith effort on their part. What we need is a solution, and they are giving you part of that bigger solution. And I do hope that you hear them out on this. My understanding in terms of what I've heard tonight and what I've been reading is that there is an existing M.O. you. There's been a limited reopening on this issue that's going to impact some of the other financials. This Council has authorized. I'm an attorney and I negotiate public sector contracts for a living. So I understand the negotiating process. I know that this council has directed its staff to go to the table and bargain in good faith. And in doing that, your staff has worked with your employees, your public safety employees to come to this tentative agreement. Not approving this agreement tonight and ratifying these for Emil use would be regressive bargaining. And I urge you as a citizen of Alameda, a voting citizen of Alameda, to vote for all four of these contracts. Thank you.
Speaker 0: Any sly. And then don't share it. And then down river. Down river. This year. I don't. It's Denise Lai here. Then we're going to go ahead, Don share and then Don Weaver. And then can Google even.
Speaker 1: Thank you for helping me win a bet back there. I beat Weaver to the podium. Who am I? Dawn Shaw, longtime resident of the city of Alameda. And my negotiations background. We'll let you in on just a little bit. I had a chance in the last 14 years and the Alameda Unified School District to be the lead negotiator for the management side of the House. Now, when we talked negotiations, we talked interest based bargaining. What I've heard here tonight is a lot of interest based bargaining. And I want to commend John Russo and his team for doing that. It looks like you put out a problem and you tried to resolve it. You may not have resolved it all the way, but at least you made a step in the right direction. So I appreciate that way. Why am I here tonight? Well, Jim Ortiz. Comments in the newspaper. Lina Tam's comments in the newspaper opened my eyes to something that I really felt I had an interest in. And then Peter Haggerty, when he wrote in the Tribune, he sort of finalized it for me. There are some issues out here that you have to address. And hopefully you're you're hearing a lot of public comment here. Tonight was a great exercise in negotiations put on by your departing city manager, and it was something that hopefully a lot of people looked at. Andy Swift, go set it directly. You have a contract. You should honor it. But fooling around. The door has been opened. It's open for you to do some other work is open for other possible ways to negotiate other things within these contracts. It's amazing ever to see a public employees union give something up and both the police and the fire have given something up. Now, guaranteed, you're giving something back in a guaranteed position, but you still have some openings that that that you can deal with. I don't know all the details, but I think you've done the right thing in the right direction to start out. I appreciate Kevin Kennedy and Kevin Kearney's comments, and you should appreciate the fact that they are the ones who are stuck with a lot of the obligations that maybe have not been directly having having them directly involved . Those two know what they're doing and they know their business. So we should listen to them. Again. The title of Peter Hagerty's column spells it out very clear to me. Trust proposed to reduce liability. That's a step in a good direction for the taxpayers. Remember Whyalla meat is a great community. It has an excellent education system. It has an excellent fire and police services. It has good commercial growth. And even though progress is slow and sometimes hard, we are making progress in this community. Hopefully you will look at this tonight and make another step in the right direction and vote yes. All five of you. I would love to see our mayor vote yes and put her thinking into a right direction. And I'll stop with that one. Thank you.
Speaker 0: Thank you. Don Weaver, Ken Goodwin, and then Bruce Carnes.
Speaker 1: Madam Mayor, members of the Council, city staff. Mr. Russo, congratulations on your departure. It's been a pleasure to work with you and wish you all the best in Riverside. It's probably about this temperature down there. I'm Dominic Weaver. I'm the former president of the Army, the Firefighters Association. I'm a lifelong resident and employee in the city of Alameda. I was born and raised here. I, like Marilyn, went to Edison School. I went to Lincoln School. I went to Encino. My mom went to Alameda High School. My daughter graduated from Alameda High School. The roots run deep. What funny thing was, I you know, I had all my facts and figures and numbers to come up here and talk about with you guys. But Mr. Sherrod, by pure luck, sitting back there next to me, reminded me of something. And it's that interest based negotiations, that interest based bargaining process that we subscribe to here in the city of Alameda back in 1998, after a long history of some pretty serious labor issues. And that interest based bargaining perspective is the thing where everybody's working together to reach that common goal. And I think that the M.O. use that you're going to be voting on tonight. Absolutely. Make that step towards reaching that common goal. It's not going to solve it. Kevin and Kevin are right. But it does take a step towards minimizing the pain that could be suffered from the expense of it further down the road. So with that I stand before you to urge you to approve the MO use. Thank you. Madam Mayor. Council members. Staff. My name is Ken Goot Laban. Born and raised right here in Alameda. Totally blessed. Like the rest of us. Love this place. I urge you to hold off on signing this contract because I don't believe all the details around. I think the Kevins need to look at it, and I don't think there's any big rush right now. Nobody's holding a gun to our head. I think we got a little bit of time today. Speaking of time, I was down at the building department today and I had to wait an hour and a half before I could even talk to a permit. Tech. And that permit tech. Been working there for 12 years. Makes one third of what a fire captain makes. And I believe that our budget is a little bit out of whack. I, I think that our public works department as just as valuable as our fire and our police. Without them, we could have an unsafe city. I paid $16,000 for this permit today. $16,000 to fix up a house to make our community a safer place. And I work with the with the public works department to make sure that it gets done. Thank you very much.
Speaker 0: Thank you.
Speaker 10: I clarify something for a moment?
Speaker 0: City manager Russo.
Speaker 10: Thank you, Miss Warm. Adam, can you please state just so we have clear information because there's there is some incorrect information being suggested. Can you please let the public know how much of the all funds budget is consumed by public works as opposed to how much of the all funds budget is consumed by police or fire?
Speaker 2: Well, I don't actually have the numbers in front of me, but the point is that really public works does not compete with public safety for funding. OC Public Works has a huge pot of money, much more than public safety does, but it comes from a lot of other different places. It comes from the state, it comes from the regional, from regional places. So to say that that public works is getting shortchanged by public safety is just not true. There's plenty I mean, we'd all love to have more money for everything. But public safety's budget is actually much larger than the public safety budget. And I don't have the exact numbers, but I'm happy that.
Speaker 10: It is larger. Public works is a larger budget than.
Speaker 2: Absolutely predicted when you consider sewer and everything like that. Absolutely.
Speaker 0: However, can you also confirm the somewhat the wage? Because that's what I heard a discussion in regards to an employee difference between about a third of a fire captain.
Speaker 7: For the budget.
Speaker 2: I can't can I mean, I don't have those.
Speaker 0: In front of me, but that's information.
Speaker 2: That's anecdotal.
Speaker 0: So I appreciate.
Speaker 10: It. Yeah, that's yeah, that's not data.
Speaker 0: So if we could continue. Bruce Carnes. Yeah. Yes.
Speaker 3: Since we.
Speaker 1: Are mayor. City Council.
Speaker 0: Sorry. Just a moment.
Speaker 3: I was just going to try it since we were taking a moment to clarify some things. I just wanted to try to make one further clarification on on the ability of what the roles are, let's put it that way. The charter provisions that establish the role of city treasurer and city auditor are very specific that the city Treasurer is to produce an annual audit and the city auditor gives advice on investment policy. The. Oh, I'm sorry. The other way around. It's late. I'm sorry, people. So the other way around. Excuse me. The charter also is clear that the city manager is the one who is authorized to negotiate with the unions, which is also very clear in our employee relations resolution. So just so people are clear, I think the city manager has made it clear over and over that he consults with the city treasurer and city auditor. So I don't mean to in any way diminish their importance. But just to be clear, they are not they are not designated in the charter to be members of the negotiating team. And so any of their advice, beyond being investment advice and auditing is really above and beyond what they are authorized to do.
Speaker 10: And I just want to clarify, I consult within the bounds of how I'm allowed to consult under the confidentiality rules, under state law.
Speaker 0: All right, let's continue. Bruce Carnes.
Speaker 1: Okay, Madame Mayor and city council members are the urge to delay in this vote. Also to I hate to say it to Kevin and Kevin can maybe add some thing to this and a lot of other people talked about this tonight. There's some glitches in this. And I think we should wait. I think city council members, it doesn't have to be done tonight. It can be done in a month. I mean, it's it's not like a burning gun or anything else. So thank you very much.
Speaker 0: Thank you. My Canterbury. They'll be my Canterbury Doug Biggs. And then Jane sold. And if the honest lie returns, let me know.
Speaker 1: Thank you, Madam Mayor. Mr. Vice Mayor. Members of the City Council staff.
Speaker 8: Soon to be departing staff.
Speaker 1: My name is Mike Canterbury. I live at 2811 Otis Drive, and I'm president of the Planning Board. Although tonight I'm here in my role as my daytime job, as Doug BLOCK referred to it on political director and communications director for United Food and Commercial Workers Local five We represent members at Safeway, Lucky Nob Hill See's Candy and it's now market and our members like firefighters as firefighters spend money in their stores and keep their hours up. So our members like firefighters. Our members like cops because the cops catch the armed robbers and they keep.
Speaker 10: The store safe.
Speaker 1: So we like public safety. Now, if you'd asked me three years ago if I'd be up here testifying on behalf of Alex Kubiak after the Nob Hill incident, I would have said, you are crazy, but tonight we're all brothers and sisters. And so I'm fully in support of my brothers and sisters at the fire department and the police department, including the managers. I do have to address some things that have been discussed tonight, though, about. You know, there's some the fix is in. There's a secret deal. There hasn't been enough time to look at things. There's some sort of conspiracy going on. There's no conspiracy going on. This these four contracts are a product of collective bargaining that everybody has bought into. The city manager has done a good job in his role as lead negotiator for the city. And the contracts are what they are. I may not know a lot about much, but I know about collective bargaining and I know how it works. And I know that when you open your contract midterm, there's something serious going on in the private sector. It's usually because of employers going out of business or the economy has tanked and they need immediate relief. That wasn't the case here. Hell, the city is in better shape than it was three or four years ago when the city treasurer was saying the lights were going to be turned out in the city, was going to be bankrupt. And while we're on that subject, I was on the Fiscal Sustainability Committee, and I remember there were people on that committee yelling and screaming to prefund OPEB. And now we get it. And it's being sneered at as if it's not good enough. I don't agree with that. I think that's a good contract. I think we should proceed on it. And you should vote on it. Another thing that I didn't realize until tonight is these contracts have been voted on when the rank and file of a union votes on a contract that's sacred ground. So for you guys to get in there and reverse, that would be wholly inappropriate. And I'm asking you, as a resident, I forgot my bonafides. Lifelong resident, Alameda High. Three kids in Alameda schools. I'm just asking you that. To do the right thing and to vote for these contracts, support our public safety folks. I was driving down in negotiations this morning in San Jose at a packing plant that I knew were going to be very contentious. And I'm driving down Gibbons Drive and the sun is filtering through the trees and I'm thinking elevators. Pretty cool place. I like living here. And you know what? That's in large part to the fact that we have a good city government, good public safety, folks. Let's keep it that way. Let's. Let's have a race to the top. Let's not have a race to the bottom. Let's increase the pay of that clerk in the public works department instead of bagging on captains in the fire department. Let's quit attacking each other like that and raise the standard instead of lowering it. Thank you.
Speaker 0: Doug Biggs and then Jane. So all. Let's try to respect the time, if we can. Thanks so much.
Speaker 1: Good evening, Madam Mayor. Members of the city council. My name's Doug Biggs. I'm a resident of Alameda, the 600 block of Hate Avenue.
Speaker 4: We have twice the fun.
Speaker 1: Of the 300 BLOCK Cafe. I'm also executive director of the Alameda Point Collaborative Serve on the Social Service Human Relations Board and involved in the Resiliency Committee of the city. The OPEB is an issue that the city has been grappling with for a long time. The problem wasn't created overnight and the solution.
Speaker 4: Won't be reached in a day. And it's kind of sad to hear people say Either fix it today or don't fix it at all. Many positive steps have occurred over the last few years and have helped us go.
Speaker 1: From a less than desirable.
Speaker 4: Rating to an A-plus rating at a time when other cities were going.
Speaker 1: Bankrupt. We're going in the right direction.
Speaker 4: The M.O. used under consideration tonight.
Speaker 1: Continue to help us move in that direction.
Speaker 4: The establishment of the OPEB trust begins to reduce the liability we face without, as the city attorney pointed out, and it's worth repeating, creating additional obligations on behalf of the city.
Speaker 1: Or entitlement on behalf of the employees. I think the terms of the memo, you are incredibly fair. I run a nonprofit.
Speaker 4: That counts every single penny we have and the minimum wage raise I would be giving.
Speaker 1: Employees in the years 2%. And so this is well within the realms of reasonableness. As a resident, as a community member, closely.
Speaker 4: Involved in disaster.
Speaker 1: Preparedness and response and as a person responsible for a.
Speaker 4: Significant impacted population that has a lot of interaction with the police and the fire department, I constantly look at the value I'm getting out of these services. I can't tell you the number of conversations I've had with specific fire and police staff where they're working with me to seek out proactive solutions that ultimately.
Speaker 1: Will save a lot of money. The paramedics in program is a really good example of that. I just came from a meeting with the Police Officers Association about a grant program they're.
Speaker 4: Going to do with at risk youth.
Speaker 1: That really going to turn some lives around. That's a cost saving measure that's.
Speaker 4: Above and beyond what they're really.
Speaker 1: Required to do. In an age where there's a significant distrust of law enforcement.
Speaker 4: It's a testament to the quality of community policing provided by Alameda Police Department that over 90% of the police calls to Alameda Point are initiated by residents.
Speaker 1: That's a huge level of trust among people who typically don't have a lot of trust. That says a lot.
Speaker 4: They trust police enough to want their assistance and support whenever it's needed.
Speaker 1: That's true value to this community.
Speaker 4: We're very fortunate to have the services we have and the people we have providing those services. I think they've done their part in supporting these avenues and making them happen.
Speaker 1: And I asked you to do your part and approve them as well. Thank you.
Speaker 0: Thank you. Jane. So, Walt. And then Dr. Hahn. And then Irene Dieter. Good evening. I'm Jane Solberg. I want to start by addressing something Mr. Hannah Berry said. I kind of upset about his suggestion that everyone who's come before you to say don't vote yes tonight is somehow.
Speaker 2: Smearing.
Speaker 0: The public safety workers of our city of Alameda. I, for one, agree with everybody who said we love our police, we love our fire persons. It's just a question is can we afford this new contract? And we're asking and I think.
Speaker 2: Everyone.
Speaker 0: Who's gotten up here who said vote no tonight has asked you to not.
Speaker 2: Vote no ultimately.
Speaker 0: But just vote not vote in favor tonight, wait a little while longer. So some of these issues can be vetted.
Speaker 2: I'm concerned that this.
Speaker 0: $47 million savings and it's not, by the way. With all due respect, Councilmember Brody, it's not a $47 million reduction in the $91 million unfunded liability, but a potential $47 million savings. I'm not even so sure that that's really there. It's dependent upon the notion that we're going to get a 6.25% guaranteed return on our investment. I don't know about you, but our investments aren't making anything like that. It's also dependent on the fact that they'll be 4% contributions from public safety personnel after this six year contract ends. It will contrast those 4% contributions have to continue after 2021 to get the $47 million. It's only a net $47 gain if we don't give any salary.
Speaker 2: Increases or.
Speaker 0: Purse increases after the contract is over with and it is.
Speaker 3: Still triggered.
Speaker 0: The bonuses are still triggered by one time transfers in property transfer tax revenues that can't be necessarily duplicated. So you might have raises as to 5% one year and then the economy tanks the next year and the economy tanking. We're in a situation.
Speaker 2: Where we're.
Speaker 0: In a four year drought and some experts are predicting that maybe this is going to be a permanent condition in California. You can't tell me that our economy isn't going to turn around adversely if the drought continues, because that's all going to trickle down to every city in California. I don't want to be in a position where we've run our general fund budget down to zero, and I'm concerned that this contract might do that. One question I have haven't had answer tonight is what about this $7.5 million contribution from the city? Doesn't that also affect our general fund reserves? Where is that coming from? Do we have $7.5 million banked away?
Speaker 10: Yeah, we do. May I may I can I address that?
Speaker 0: Because I asked before let her finish. And then you can.
Speaker 10: Choose asking the question.
Speaker 0: Well, as long as I can get my 3 minutes.
Speaker 10: Okay, that's fine. I'll wait till you finish and then I'll answer that.
Speaker 0: Okay. I think it's better. Appreciate that. Thank you. Give you a I also want to talk again about the legal issue. I know that it hasn't been disclosed. And frankly, I'm very frustrated.
Speaker 2: As a lawyer to not see.
Speaker 0: What it is that the experts have told you on these legal ramifications of the contracts.
Speaker 2: But Mr. Russo said.
Speaker 0: Something that I think means that those those opinions were based upon the unchangeable nature of our OPEB obligation.
Speaker 2: Based upon what happened in the arbitration in.
Speaker 0: 2004. And so if the legal opinion takes, that is a start and says, Gee, these new contracts don't change our obligations because our obligations are fixed and can't be changed. Then I would question whether that legal opinion really validly addresses the questions that we have. I don't know. I'm not going to be privy to it. But I ask you as council members to look into that before and delay voting on this, just to give us time to answer these many questions.
Speaker 1: Thank you.
Speaker 10: So let me answer a couple of those questions right now, since we've addressed them earlier. And I don't think you were here on that presentation. The $5 million deposit that the city would be required to place into the trust as part of this has already been set aside by the Council, is not in the general fund reserve at this time. It was set aside when we had the $7.8 million surplus last year. The council voted wisely to set aside $3 million for future liability reduction. Another $2 million was set aside in two $1 million increments over the last two years by the Council in the Budget for OPEB. So these have already been offline, so they're not in there. Secondly, just just as a clarification, the arbitration that I discussed had nothing whatsoever to do with the legal opinion. My point on the arbitration that the city lost was that the city did try to impact unilaterally retiree benefits and was slapped pretty severely by the arbitrator in that case. But it's nothing to do with the opinion that the city attorneys solicited from the independent law firm.
Speaker 0: But that happened eight years before the California Supreme Court ruled that these liabilities can.
Speaker 2: Under certain.
Speaker 0: Circumstances, be changed. And so I'm not.
Speaker 2: Sure it really has any bearing on any.
Speaker 10: Well, I'm not prepared. I'm not the city attorney. I'm not prepared to make a legal argument. I'm simply making the point that retiree benefits in that field cannot be impacted.
Speaker 0: Appreciate that. Thank you very much, Dr. Hahn, Irene Dieter and then Torres Hall.
Speaker 1: Madam Mayor. Vice Mayor. Council staff are 86 degrees. Have you used the air conditioner lately?
Speaker 10: Maybe. I like warm weather.
Speaker 1: Congratulations on your move.
Speaker 10: Thank you.
Speaker 1: Doug. I am. I am undressing today, this evening. And there's a lot of questions that come up that we. This thing's a novel. New approach. We started this in 2012. In 2012, we had an OpEx requirement of somewhere around $75 million. Today we have $91 million. So we did not correct anything. And it was a step in that direction. And I believe that's where you're going today. Let me share something and I'm going to reminisce a little bit, but it's extremely important. And I address this to Frank and I address this to Tony, because you both were here. On AT&T our telecom we. Somewhere around 2005, we asked our pleasure and ordered here to sit in on a closed session meeting with appointees board. In doing so, the next evening we had revelations real quick during our discussions. We knew we had some major problems. We could not meet our our commitment. This city, this city lost $70 million. And in doing so, it took us five years to unravel that many lawsuits. I'm not here tonight to say, gee, we need to, you know, declare bankruptcy. We went through our counsel went through back then, made steps in 2006 all the way up in 2011 that were quite contentious in nature. But we did what we had to do. You're living with some of that excess. We all would like to take a. Pride in saying that we did that. But no, all of us jointly did that. Let me take it one step further. If you take $91 million. And you pay off that debt, too. They take a loan out as a bond, whatever. It would cost you somewhere around $5 million a year for the next 30 years. We're starting off with 5 million in the following years. We're putting into that $250,000 to a $50,000. That does not come anywhere close to retiring that. Let me give you a quick other example today. And it's in your budget and you probably will discuss it. We're still paying $1.9 million for a contract that we buried back in the mid 1970s. We're still paying for that today. So what we do and don't take it very cavalier. What we do today is important and it has long term effects. As a former vice mayor, we all took it very seriously. As we move forward, I think you've got to really. It just might be a starting point. But, boy, it sure doesn't come close to the starting point that you really have to get to. Thank you.
Speaker 0: Thank you. Irene Dieter Torres Hall. And then Margaret Hall.
Speaker 2: Hello, Mayor and Council. I'd like to say that this has been a very good meeting. I think that the public understands that negotiations have been going on between the city manager and our bargaining unit. And you've come to a recommendation and now for the first time, the city council needs to weigh in. Our two elected officials, the city treasurer and the city auditor, have raised a couple concerns that they would like you to direct the city manager to go back to the table and discuss a couple of things with these units. And I personally, I can't see what's so scary about that. It's our union representatives here have said that that they are our partners and they want the best for us. I think it would answer some questions if we come back here at the next budget meeting and we're in the same boat and we move forward, so be it. But I think it is part of the process, and I think that our elected officials deserve that respect to have their issues addressed. And as for me, you know, when they say wages are stagnant and income inequality is real, it truly is. I am a state employee and I have not had a COLA since 2007 and at that time furloughs were implemented. And so we are still waiting for a cost of living. So the state is hurting. And I know that the county workers have had even a harder hit than state employees. And in terms of income inequality, I think since we have been reassured that we are all partners here, I would bet that the people at the top of the income scale would be willing to take a pay freeze until the next contract. It would not hurt them at all, especially those making over 200,000 a year. It would just be showing good faith to the members of the public for those people who are trying to live on 60,000 a year. And I just think that once again, that, you know, our elected city treasurer and city auditor, the respect to go back to the table, talk to our partners and see if anything can be changed and then come back again and then vote. Thank you.
Speaker 0: Thank you. Dress hall in the Margaret Hall and then John Spangler. And then those are the rest of the slips that I have. If you want to speak on this item, please turn on your slip.
Speaker 2: All right.
Speaker 3: Ken. Evening, Madam Mayor. And City Council. It's been. I'm back here again tonight. I was here last night. And I just wanted to state for the record that I'm just a concerned citizen that knew that budget talks were under way. I also knew that there was a continuing discussion about the unfunded liability. So I'm not here to discuss the ammo use. I'm not here to discuss the fire and police department who I, I. I'm just not here to talk about that. I wanted to ask about our budget and what we owe. And as a concerned citizen, I think I have that right to understand that. I certainly don't want to stand in the way of any negotiations with our fire and safety, but I do think it's premature to make any agreements until the rest of Alameda has had a chance to understand what's going on with our budget. What I have come away with is after listening to your presentation this evening, Mr. Russo, it's Mr. Maharishi just finished saying that it was a very complex issue and it's actually been made much more complex to me because what I saw was a discussion of both apples and oranges . I thought we were just discussing the unfunded liability, which is kind of a house that we've already purchased and we're making monthly payments on. And, you know, we're going to have to continue making payments on into the future ad infinitum until it's paid off. That would be 91 million. Then we have this other thing that we do pay as you go on a monthly basis that would include salaries, I'm guessing are CalPERS. And then our monthly payment for the OPEB. Then that's where I need as a citizen, I guess I need to understand because I was what I understood was that this trust only funded our outstanding unfunded liability, which is the 91 million. What you've just what you've just described to me is it's going to bring down our pay as you go monthly payment. And at the end of. 30, 20 years, 30 years, we're still going to have this tremendous debt. So I think I would like a better understanding of all this before we go forward with them with our fire and safety contracts. And I certainly hope that you take the advice of our auditor and treasurer to get more information, both legal advice and financial advice, and share it with the rest of Alameda, both in our our publications, the Alameda Sun and the Alameda Journal and online, if at all possible. And I guess I'll look towards future budget meetings for any of the answers to these questions. Thank you.
Speaker 10: The last report that I did last month where I covered a lot of this. Yes, it's all online to the city's website.
Speaker 1: Okay. All of.
Speaker 10: The graphs, all of the charts, everything I.
Speaker 3: Saw, all of that, as.
Speaker 10: Has been for a month.
Speaker 3: I, I looked at all of that, Mr. Russo. I looked at all that. And what's really helpful to me are little pie charts like this for me to understand, you know, where our tax dollars are going. That's all I ask. I'm not asking I'm not asking that we deny our public safety officials, officers, their due raises, any benefits, any of that. All I would like to know, as I would like to understand our budget and how we are going to fund this going forward.
Speaker 10: Keep coming to the budget meetings.
Speaker 3: I don't get, you know, funding for a public library or funding for a park or that we have to pursue more development to pay for things that we've promised. So I think that's the those are the questions I'm asking. Thank you. Prudent savings is prudent.
Speaker 0: Thank you. Your next speaker. Margaret Hall, John Spangler, and then Carol Goldstein. And those are the last laps. And anyone else want to speak? Please turn your slips. Thank you.
Speaker 2: It's me again. I talked to you guys last night, too, and I appreciate Marilyn and Frank trying to to answer the questions that I had last night, but. No, no, you tried to, you know, during the meeting today. I appreciate that.
Speaker 3: I'm even more confused now.
Speaker 2: But no kidding. As a third generation alum, um, and more generations behind me, I worry a lot.
Speaker 0: About you speaking to the mike, please.
Speaker 2: About our our viability as a city. And I this isn't about, you know, public safety workers against, you know, wanting to pay them or something or they make too much. I am not opposed to anyone making a great living with great benefits. What I want to make sure is that we have the money there to meet our obligations. I too have to use the building department quite often. They're not open on Fridays. We you know, I can't get a building inspection on a Friday. I went through periods where building inspections were three weeks out and I had, you know, jobs on the line. So there's other things in the budget that that need to be addressed. And as my sister before me mentioned, the budget is all kind of intertwined in this. That's what's that's why I think I feel like we're putting the cart before the horse and not a lot of respect because we're going to we're going to enter into contracts and and we don't even know where our budget stands right now. We're in or we're just talking about it. I really appreciate the negotiations you have.
Speaker 3: Done, Mr. Russo. I know that that's a difficult task. And and and I wish you.
Speaker 2: Well in Riverside. And and I appreciate the time that the council puts in. Here's another super late night for you guys. I mean, and you were here last night and.
Speaker 3: And I'm.
Speaker 2: Really impressed that you guys are that devoted to our city. And thank you.
Speaker 0: Thank you. John Spangler.
Speaker 1: Thank you, Mayor Spencer. Members of the council and staff. John Russo. I'm going to miss you. You're one of the best people I've ever argued with. It's been a lot of fun. I argue with everybody. Godspeed. Thank you. I'm John Spangler. I've lived in Alameda since 1997 when Linda got a job at Wood River and didn't want to drive 80. So we've lived in Alameda since 97, and I really appreciate this community. And I want to frame what I'm about to say in terms of community stabilization, which is a term that those of us in the renters coalition are using specifically around housing. But I see this issue as community stabilization. The OPEB and PERS crisis, as all of us know, is a statewide crisis and thematically a national crisis, because California's not the only state in this leaky boat. It did take us decades to get here, and it's going to take us a while to dig us, dig ourselves out of this mess. I am very impressed with the city of Alameda having acted since the elections of 2010, especially to reverse the negative course. And it's sort of like turning a battleship in 100 yards. It's almost impossible to do it compared to our sister cities across the state. We're doing very well, and I commend you for that. And I commend Doug Duhon for his part in that role to. But we can't do all this alone. It is a statewide issue that needs answers out of Sacramento and every other city in the state. But that said. These emo youths should be approved tonight. They represent significant incremental steps towards a more sustainable future, a more stable future, and a more stable community. In Boy Scouts and on South Bay. If you troll with my dad and flotilla, our Coast Guard Auxiliary Flotilla 46, I learn that you make course corrections as soon as you know you have to make it. You don't wait for three miles anymore into the woods on a hike to change your course if you know you're going not going the right way. You stop and you figure out what you're going to do. Alameda has done that. We cannot stop making those short course corrections while we wait for the state. And we cannot wait until all the facts are in because they're not all going to be there. This is a fuzzy business of working on government because not all the facts are clear. We don't know as Jane. So Walt said, what the future is going to bring. We have to make the best choices we can now. And this is what's before you. And I urge you to approve them. So let's keep making progress one step at a time. It's the only way any of us can walk. This is a marathon. It is not a 100 yard dash. Thank you.
Speaker 0: Thank you. Carol Goldstein. And then this is the last speaker step. If you'd like to speak, please turn in your slip.
Speaker 3: Hello. Carol Gladstone. I guess I'm bringing up the rear with the other third generation Alameda meetings. I grew up riding horses in the Oakland Hills with Terrace Hall, and I think we're concerned about similar things. Our parents, grandparents and ourselves are paid a buttload of property taxes over the last hundred years, I'm sure. So we just want to know how our money's going to be spent and whether it's going to be enough to.
Speaker 1: Go.
Speaker 3: Around for the whole pie. I mean, that 80% of the pie really stood out. And I'm glad some of you explained that that's not all there is. I did want to give a vote of confidence to the Treasurer and the auditor because councils and city managers and city attorneys have come and gone. But no one ever seems to run against the Kevins. The Treasurer and the auditor have remained the same year after year. Administration after administration. They get reelected.
Speaker 1: I don't know what the job is.
Speaker 3: Like, why nobody else wants it, but that does make them an island of stability on this island and it gives them a perspective that few other people have. I think it should be respected. The other thing is, I would also agree with Teresa. I would agree with Jane. I would favor a more conservative estimate on return than 6.25%. That seems generous to me. I actually agree with Mr. Spangler in spirit. It seems to me that OPEB is equivalent to the price of health insurance, and that is largely determined by negotiations between Kaiser and the Blue Cross and the unions, which is out of any city in California's hands. But one thing is clear. Health insurance costs.
Speaker 1: Go up.
Speaker 3: Every year. There's as definitive of death and taxes and as certain. I'm also sure that no one in the union is going to have their health insurance canceled by waiting and considering another opinion on the IMO use tonight. Thank you very much.
Speaker 0: Thank you. All right, counselor, that was our last speaker. Do we want to take a short recess or. I assume we're going to take a short recess. We're going to take a short recess. Thank you. Five minute recess.
Speaker 6: I say no to short.
Speaker 0: So.
Speaker 9: I don't want to. If everyone can go back to your seat of carriage.
Speaker 0: Members can return to the display. Council members return to the Dallas. Everyone could take your seats so we can proceed.
Speaker 9: With extreme caution. I'm not sure I think the better.
Speaker 2: Well, Frank's right there. There's Marilyn right there. Great. Thank you.
Speaker 0: It will now be council's turn to discuss the issue. And we'll wait a few minutes or moments for people to take their seats. Really appreciate everyone's cooperation this evening and very courteous. All right, council members.
Speaker 6: Madumere. May I ask for clarification? Yes. So I wonder if we could ask the assistant city manager this former dam to clarify the term PAYGO, what it is and what it isn't.
Speaker 2: Sure. Matamoras. So the pay go has nothing to do with salaries. PAYGO is actually what the city pays on an annual basis for health care for people who are actually retired. So it does not include any salaries or anything like that. Pay go is strictly for the health care benefits for a retiree. So I think that that answers that question.
Speaker 0: I also.
Speaker 7: Okay. And just a minor add on. It's an outlay that does not help buy down whatever your unfunded liabilities. It's just this outlay that you make. Correct. So the unfunded liability is the difference between the pay go and what you really should be paying. That's the unfunded liability.
Speaker 0: I also want to clarify there of there were two votes by this council during closed session. Councilor, would you like to. Would you like to explain what the two were? Okay, I'll I will. For the first vote. My understanding city manager, you can share if you disagree or whatnot. But the first vote was unanimous by council, and that was to proceed generally with negotiations. It was actually we are a new council. And at that point, during closed session, city manager Russo brought us up to speed and we gave general direction to proceed with or to continue with the negotiations that had been occurring under the prior council. Then at a subsequent meeting there was a second vote, and at that vote three council members Ashcraft, vice mayor and Odie. Voted to proceed with the tentative agreement of member de SAG abstained and I voted no. And I want to clarify that because some people have seemed to think that it was a unanimous decision to go to the tentative and that that decision was not unanimous. I think it's important to clarify that. Thank you, Madam Chair.
Speaker 1: Yes. Just to be clear, it wasn't a tentative agreement at that point. It was the terms that the city manager mentioned that set up the city's contribution to the trust. It set up the 4% contribution to and to for some of the employees. To that same trust. And when that trust would start the payout and what the intent of that was in our direction was to go to the table. And negotiate those terms along with the extension of the current contract. Did I get that accurately?
Speaker 2: I don't know.
Speaker 1: And then it became a tentative agreement after he came back. So that was direction to negotiate.
Speaker 10: That's I think I think what you both said is correct. The five zero vote was authority to go formal negotiations because we'd never been in formal negotiations. And then the 311 vote was the envelopes of authority, if you will. But what the general areas were going to be and how far we would be allowed to go.
Speaker 0: And the actual specifics, I think we've seen with all of you, but most of you, if not all of you, were in this document when we saw the red line changes and what the actual changes were going to be, that that was the first time as a council we have seen the actual proposal.
Speaker 6: And those are attachments to the specifics.
Speaker 0: The specifics?
Speaker 4: No, we saw something.
Speaker 2: You had a term.
Speaker 1: Sheet. We didn't see the read right until this.
Speaker 0: Correct. So do you want to clarify that? So I was saying that this this was when we saw the specific languages when it came out in the red line.
Speaker 2: That's correct. But you had a term sheet and the term sheet essentially outlined every piece of what was going to be in the red line of the MEU.
Speaker 1: And that the red line came out subsequent.
Speaker 2: That's correct.
Speaker 0: And subsequent to.
Speaker 10: The sheet was was published 15 days prior to tonight's vote, which is five times the requirement under state.
Speaker 1: Law. Right.
Speaker 0: Do you want to stick it to the mike, please?
Speaker 1: Yeah.
Speaker 10: You want to speak?
Speaker 3: I'm sorry. All I was correcting him was that the redlined agreement is what came out 15 days ahead. Not the term sheet. We're talking term sheet and redlined agreement.
Speaker 10: And and again, let me reiterate that is five times longer than required under the Brown Act, under state law, pursuant to the Sunshine Law that was implemented within the last.
Speaker 1: Year in Alameda.
Speaker 0: Thank you. All right. Remember comments, committee member Ashcroft.
Speaker 6: Thank you, Mayor Spencer. And thank you to everyone in the audience. It's joined us a little since we started, but this was a good discussion, a little heated at time, but not bad, in fact. Quick anecdote, I'm working on an issue with Congresswoman Barbara Lee's office, and I had a chance to talk with her director of constituent services on the phone the other day. And I mentioned I was a city councilmember in Alameda and he said, Oh, Alameda, I've attended some of those meetings. He said, You're always so dignified in Alameda at your city council meetings, unlike and I'm not going to mention the name of the city you mentioned, but dignified people. And I think we were I think, you know, these are heated issues. So tonight and before tonight, we've talked about a very serious issue and others have thanked staff. And I do as well for all the information they brought to the table. And I thank the heavens, too. We had a spirited exchange ourselves yesterday, which is good because it only makes an issue better to have people look at it from all different angles. And we would really not be asking questions that should be asked in looking at this. And you will be surprised. But some of the things that you're concerned about, I think are going to be addressed. And the other thing is, and you know this from having participated in the previous Fiscal Sustainability and OPEB trust fund, OPEB Task Forces Force, Task Force, that it's very difficult, maybe impossible to get complete unanimity, but that's the value of some consensus and building consensus. And and, you know, we don't all get everything we want, but it's you know, we have to also recognize the very differing positions of the different sides. For me, there is one basic question that must be answered when we vote tonight for me anyway. And that basic question is what course of action is best for this city? We've heard it said, and I think we could get unanimity on the fact that there is no magic solution. It will take a combination of measures, the ones that are before us this evening and more to come. And public safety has said they understand this is not the end of the road. It is the beginning and we intend to hold you to it. And is it prudent, though, for the city to allow a debt to keep growing when we have an opportunity to start reducing it? Now, there seems to be some second guessing, maybe out and about in the community that these ammo use memorandums of understanding could have gone further, that more concessions could have been extracted. And yet, bear in mind, public safety didn't have to come to the table at all. Their contracts don't run out until 2017. But we asked them, and when I say we, I do mean our city manager, John Russo, I believe Stephanie Gerber Sierra, also from our part of the negotiating team, got these folks to the table and it didn't happen overnight. So again, to the inference that, you know, you're rushing this through at the last minute, we get it. He's going to Riverside this started months and months ago. It takes time to get everybody four different bargaining units we're talking about to the table back and forth. Was it better would it be better for the city to wait until the contracts run out in 2017 and essentially roll the dice and hope that this agreement or a better one will still be available? And if we were to do that, the city, though, would lose the agreed upon contributions both from the city and from public safety, as well as as the time value of the money put into the trust fund between now, whenever the contract would would take effect under the agreement in 2017. And is there some value in trying to work amicably, amicably with our labor unions, or is it when when this is important? I think when there is still more changes to these agreements that we are going to want to see explored going forward. And we heard some of them discussed tonight. I personally think there is little to be gained and much to be lost by creating a hostile environment between public safety and the city. I don't think that the agreements that we're considering tonight could ever have happened under those circumstances. One thing that I would like to see going forward is another task force can. And similar to the fiscal sustainability and OPEB task forces that we benefited from in the past. And in fact, I know a couple of councilmembers. I'm one of them. I recently read the the current issue of Western City. That's the magazine that the League of California Cities puts out and cover article was about how to how cities are reducing their OPEB liabilities. And in the city of South Lake Tahoe, which, you know, has some significant differences, they they are not under the prison system, but there is still some other things that they're doing. They have convened a health care cost containment committee of employees at all levels of the city. And I think it's time to think about the issues that are still before us, how we want to grapple with them in putting a task force together because some very good, productive things came out of the last one. And finally, I just I was really touched to see a Norm Murphy speak before us tonight, because I think the vice mayor and I would agree that if it weren't for Norah, we would not have a new Maine library because it was she who got us together first around the dining room table in her house. And she's a very wise woman and a very hard worker.
Speaker 2: And she.
Speaker 6: We've got public safety in the room anyway. So and what and Norris said that really, really stuck with me. Hey everyone. Is that it would be a shame to do nothing. It it would be a shame to let this opportunity pass by. And I agree with that, too. I think this is by no means the end all and be all, but it's a good, solid step forward. We're going to expect even more steps to come. And I very much support going forward with these ammo used. Thank you.
Speaker 0: You. Yeah. The council members.
Speaker 7: Yeah. Thank you. Thank you very much, everyone, for coming out tonight. I just want to make several quick points. This is an incredibly important topic, and I appreciate the various members of the community who took the time to schedule coffee shop meetings at various coffee shops. They come to my office hours and also to send their emails and also for opening up their homes so that I could talk with a variety of people and get different perspectives. This is that much of an important issue. I think we all know that. Let me begin by saying this. I really don't see anything magical about making a decision tonight. We want to hold off for four weeks. If there are issues that the two Kevins have that we can vet in those four weeks. Okay. Let's do it. And if we can't vet it and we can't vet it, I mean, if we can't do whatever, then we can't. But it's just four weeks. And frankly. From my perspective, I would like a little time because I kind of have an idea let me that that I'd like to raise up the flagpole. Let me begin by saying that, you know, the reason why I voted to abstain and that closed door meeting was because in particular, because I wanted more information. I wanted to understand what were the how did the all the different ratios that we are looking at, all the different percentages, how did they play out in terms of real numbers? In addition to that, in all meetings, closed door meetings, as well as in the subsequent budget meeting that we had after, I was always harping on the issue of the comprehensive plan regarding the unfunded liability. So the information that has since come forward has been spectacular in terms of its detail. And I think the most from my perspective, the most important information that I saw was the 30 year chart that was put together by Bartell and Associates. And that 30 year chart basically compared the OPEB pay as you go system versus the OPEB with the trust fund system. And it's that chart that showed on an annual basis in clear numbers numbers that the trust fund as it currently devised works from 2019. But then by 2034, it goes to goes to zero and we're back to pay go. Now, it doesn't mean that we're stuck at PAYGO. It just means that sometime in the early 2020s or the late 2020s, we just have to keep negotiating these these kind of trust funds. But to me, though. One of the bigger issues with regard to the trust fund idea, and I think it was a spectacular idea that the city manager put forward because there really is no other mechanism by which to generate dollars to help bring down the the unfunded liability amount. And that's the that's the crux of it, is that it temporarily funds the unfunded liability amount, and that's in the Bartel Associates Report on page nine. But again, because the trust fund runs out by 230, 2034, you know, we're back to an unfunded OPEB liability. So the idea that I wanted to run up the flagpole was that, you know, right now we're paying council member Doug Dugan kind of referenced it obliquely, but right now we're paying roughly $2 million. It's going to go down, but we're paying paying $2 million a year towards another retirement account called the 1079. And the 1079. Was your retirement account that existed, you know, prior to the for those workers in the fifties and maybe the sixties. And there is a select number of people who are still accessing the 1079 account, such that every year we in the city of Alameda are cutting a check right now of roughly $1.9 million. Now, back in 2002, we were cutting a check of $4 million towards 1079. But alas, as people passed away, that that that that liability went down. So one of the things that I would really like to see is we need to basically, I think the the trust fund is just wholly undercapitalized. And the and we need to find an additional source of revenue that's outside of, you know, the general funds. And, you know, I think we need to look at the 1079 as a way to supplement the trust fund idea. So that's why, from my vantage point, it's not really so much, you know, the two Kevins giving them four weeks or three weeks, but it's also a way to give the police and fire an additional supplemental source. I know people want a decision tonight. And maybe if we don't if we don't give the decision, maybe the bargaining groups will be so upset that maybe they don't want to do the trust fund idea. I don't know. I hope that doesn't come to pass. I hope four weeks doesn't really jeopardize that, especially when all I'm really looking to do is supplement. The trust fund that's in place. I transitioning work going to the 1079. The supplement. The trust fund. So that's my perspective. I hear people's concerns. I mean, I heard people's concerns about 4% raises and the prospects of 4% raises and 5% raises. I raised that in meetings with staff. And staff again, has come back with with, I think, reasonable numbers to suggest that. You know, the prospects of that, while it's speculative, the prospects of that for those who are concerned about, you know, giving raises that of 4%, 5%. And let's not forget, actually, we're not really giving raises. The police and fire have earned raises. But but the staff is giving me numbers that kind of calm me down. And so I think really for me, the focus is on what has always been the focus. Always when you look at all the budget meetings, I've always said, let's look at the comprehensive addressing this trust fund in a comprehensive manner. So I do think that the Mr. Russo's trust fund idea was well worth the time to move forward. But I do think that we should take the time to improve it even more. And while members of the bargaining groups might be upset with what I'm saying in spending four more weeks. If you step aside and think about it, all I'm trying to do is supplement the trust fund, not in any way make anything out or. Or do any. So.
Speaker 1: Thank you.
Speaker 0: Madam Vice Mayor.
Speaker 1: A question to the city manager, interim city manager, whoever can answer this. In the scenario that was just proposed, taking the 1079 payments that are currently made, they got quite a while as they go down, as people die off out of that fund, unfortunately. Right. The the premium goes down, correct?
Speaker 2: That's right. That's actually a retirement fund, not a health care fund. And it's not that much. Actually, we've looked at it, but we have looked at it before. I don't know the exact numbers, but we have maybe.
Speaker 6: Can I just stop you just for members of the public who beyond public safety, who might be a little confused about give it just a little primmer about what's the 1079 plan?
Speaker 2: Right. So as Councilmember De Saag mentioned, the we have two plans. There's the 1079 and 1082 and there pension plans that were put into place a long time ago. One of them I can't remember which rolled into PERS. The other one did not. And we're still funding a pension fund. It's a city pension fund, so it's not pers. There were people had an election to go to pers. Some people did. Some people actually decided they wanted to stay with the city's plan. So that's what the 1079 and 1082 are. They are pension funds and. Thankfully, we don't have that many people who pass away every year. We only have maybe two or three. I think it's a good idea. We can quantify that for you to see what that number is and. I would hate to speculate.
Speaker 1: I guess my question is, is, can that be done? I'm not going to say independent, but it seems to me if it's going to contribute to a trust, if the whatever money is not being put into that fund is, if we extend that line item out and take whatever the differences is, that fund rolls down and and put it put it into the cities as an advance contribution to the trust. Is that separate precluded it? Can it be separated from the issue that's at hand tonight?
Speaker 10: It's not involved with the issue that's at hand tonight. It's really a separate issue altogether. And I think well, first of all, it's not just because of one's pension, it's being funded out of the general fund that the 1079 and the 1082. So consequently, when that begins to go down, it will be incumbent upon the council and it's not a big number anymore, but as it goes down, then that money becomes available. And then it's at the council's directive at that time to decide whether you want to use it to fund your 250 a year in the future if you want to use it, because you don't have to find that, or would you want to put that towards some type of pre-funding in addition? Or do you want to reengage labor and say We'll add this amount to what will you give in order to call this money out from us?
Speaker 2: No, we would not.
Speaker 10: It's not it's not here and it's not here right now. It will be here. And it's an opportunity for the council and one that should be used toward the management of long term obligations.
Speaker 7: Because that's what it is.
Speaker 6: Is in question for the city manager. Is is this more appropriately raised when we're doing our budget talks?
Speaker 10: Well, I think it's honestly, I think it's premature. I think it's something that has to be considered as a mid and long term situation, but it's not a big ticket item and it's not going down enough right now to impact what you're doing. It will. And again, I think it's broad guidance. My suggestion would be as that. Phases out. You should not spend it on new programs. You should spend it to address long term obligations because that's the big long term problem.
Speaker 7: And just quickly, just to give you a magnitude of how it's going down, again, just to repeat, in 2003, we are spending point $4 million off the top of our general fund towards the 1079. And unfortunately, because people passed away, now we're spending, I think, 1.8 million. So what I'm just trying to say is lockbox that 1.8 million. And as it draws down, you know the difference. You lockbox it or it's the.
Speaker 10: Right. But that's but that that's it for another evening. And I might I might also suggest that as that rolls down at the same time, that's a pension fund. Your peers obligation is rolling up. So you might want to lockbox it and say. If we end up in strain because we can't meet the pur smoothing, this is a way to help assist us meet the smoothing.
Speaker 7: But the point the larger point, though, is I think it takes time to figure these things out. So that's why I think we don't want to like, you know. Roll the dice on one night.
Speaker 4: So was the question. Thank you.
Speaker 7: Thank you.
Speaker 0: I remember already.
Speaker 4: I just had a question on on that. That proposal. Was that something we'd collectively bargain with our current employees.
Speaker 10: No, you don't have to. That money is in the general fund as it as your obligation goes down. As long as you're meeting your obligation to the beneficiaries of that pension fund. There's nobody to negotiate with. But what I was suggesting was if you wanted to take that as it reduces and add money to the OPEB trust fund, then my advice to you would be to engage Labor to see if you were using it for that purpose. Is would it call some additional contribution out from them? Maybe it does, maybe it doesn't. But you're not doing it right now because the money's not here right now.
Speaker 7: If I can cancel it, I can say I in pursuing this idea, I don't want to use it to begin bargaining again. Like, Oh, if we do this, I want, you know, public safety now to give something else. I think everything is set in place. My only concern is and I think you're doing it, you know, the effort was great City Manager Russo but my only concern is I don't think this is comprehensive enough and this is one tiny way of getting at it. Okay. Actually.
Speaker 0: I'm Brody.
Speaker 4: But I thank you, Madam Mayor. I also want to thank the public who came out today. I mean, there were some very thoughtful questions, and I could tell that a number of people took the time to study the contracts, the study, the documentation that was posted on the city's website, you know, and make some independent judgments. And I really appreciated everyone taking the time to to do that. I also want to thank my staff for all of the time that they have spent educating us on this issue and answering all our questions. And I also want to thank my colleagues for taking the time and digging deep into these contracts and the financial impacts of them and, you know, asking a number of questions in last night's meeting and today's meeting. And I just want to say that, you know, when I looked at the election results last year, I thought that, you know, based on the information that the vice mayor and I were talking about on the campaign trail, that we had a mandate to fix this problem. And this was something we talked about. This is something the public talked about. This is something the mainstream media talked about. So I think it's an important issue. And. I guess I could. If I only had a short amount of time, I would say we gave counsel direction or we gave staff direction to negotiate a partial solution to start funding the OPEB trust fund of 5 to 0. And then staff came back with a framework, a term sheet. That the council also gave direction to trying to reach an agreement on the vote that the mayor mentioned three 1 to 1. And then our public safety employees ratified and created and resulted in a tentative agreement that we're now here to either vote up or down today. I mean, I think to do anything but. Well, first of all, I think any but to do anything but approve it I think is bad faith negotiation. And if we want to sit here and say, yeah, well, maybe we could do this or maybe we can do that, you know, it's kind of regressive bargaining. And I think that's that's at least from my perspective, I think it sets a bad tone and I think it sets back a lot of the progress that we've made in maintaining labor peace and maintaining cooperation and getting folks to the bargaining table to come to a deal. So, I mean, if I only had my 2 minutes, I think I would I would just say that. But I do want to go a little bit a little bit longer, and I apologize. Some of this stuff has been said already, but I do want to get this on the record. So I just want to analogize a little bit here, because what this looks like to me or what this problem is to me, it's kind of like building a house. And anyone who's ever renovated or built a house here in Alameda knows you have to start with the foundation. Whether you're building a new house, whether you're reinforcing, whether you're retrofitting, and you have to start with the foundation. Then comes the framework, you know, the wiring, the plumbing, the framing, all the infrastructure that you need to do everything else. And then only after those steps are done, you know, can the contractor or the builder, you know, do the finishing touches, the painting, the tiling, the cabinets, the appliances, screwing in the the light switches and all that stuff. You know, I look at securing our future fiscal and service because I think service is also just as important as as fiscal, our service stability of the city. I think that's no different than than building a house. So I want to talk a little bit about the foundation now. The folks that have come before me, including, you know, three of my colleagues sitting up here today are former Vice Mayor Doug Hahn, who was here. And I always appreciate hearing from, you know, Beverly Johnson, Leah Tamari Gilmore, you know, everyone that came before, you know, they've laid this foundation. You know, we've talked a lot about and I think her comments have been a little misunderstood. But we've talked a lot about the. With the meeting four years ago. When the doom and gloom and the turn off the lights and. The message in that turn off the light speech was you got to do something about these these structural issues facing the city. And rather than, you know, shoot the messenger and run away from the messenger, this is what my predecessors on council did. They took steps necessary to put us where we are today. And we saw the slide, the proposed city budget. We have end of year reserves, 30.9 million. It's 30.8 million if these contracts are approved. The $21.8 million deficit that was projected to be on fiscal year 2015. Now 2016 has been turned around. So I think the fiscal the fiscal discipline that was exercised by our predecessors, many of them sitting here today, and the strong collaboration with our public employees union to control the causes got us to a position where we could sit here and we can address the OPEB issue and we can talk about ways to fund it and pre-fund it. So let's talk about some of the other foundational items that put us where we are today. You know, we had Peprah that was the state's pension reform legislation changed the formula under which pension benefits are calculated. So new employees, you know, now they cost less than employees prior to 2013. You know, this legislation, it capped the amount that we could ask our public safety employees to contribute to their pension benefits at 12%. Well, what our men and women of public safety did was they agreed to contribute 15%, 3% above the amount that we were legally mandated to to ask of them. And then we changed, as was discussed by many of the speakers today, the vesting of the we changed the vesting of the of the health benefits we required after 2011, June 2011. Spousal medical benefits were not given to safety employees hired after 2011, we implemented cost sharing for health increases. Now it's shared 5050. And then the city set up this OPEB trust fund that that we heard about earlier from the city attorney. So it has $300,000 in it that that's not enough. I think we we've heard the numbers and we know that's not enough. It needs much more. So the foundation is, you know, in the last four years, you know, we had doom and gloom, we had red ink, and then we had sound financial decisions, you know, based on those warnings. And we now have a $52.7 million positive swing in our fund balance over what it was estimated to be. Now. That's black and white or black and red or however you want to put it. So as I recall it, at our April 17th meeting, our financial officers, you know, correctly praised the actions of the previous councils in making some of these changes that allowed us to buy time to address our unfunded liabilities. So where are we today? Now, if we're building a house, we're at the framework and the infrastructure. So. We're following a similar collaborative approach and working with our bargaining unit to find a way to fund our OPEB liabilities. You know, we've gone through through the numbers, the city's going to contribute $5 million, and then that's already set aside. That's not something that's coming out of our general fund this year. Starting in 2016, the city will contribute 250,000 a year over ten years. And there's nothing to say that in the next contract, or we can even reopen it in two or three years and extend that or increase that. There's nothing that's stopping us from doing this. But the point is we have to start somewhere. And this is what we how we decided to start. You know, and one of the critical things I think to remember is if we adopt these contracts today, our public safety employees will be among the first municipal employees in the Bay Area to make these contributions. You saw the numbers. Even the ones that were doing it are doing it 1%, not 4%. So when all is said and done, our public safety employees who will contribute 19% of their salaries to fund their future pension, their retirement benefits or medical benefits, and these are medical benefits that we as a city I say we even though I was not on council's but you know, we now are the body we as a city promised. Not only not only do we promise them now we're going and asking our public safety employees to pay for some of the promises that we made to them. So I think it can't be understated that this 19% number is just amazing. And I recall, you know, the BART the BART strike in my day job, you know, we had an opportunity to be close to the BART strike, and it wasn't wages that they were fighting over. The BART employees had contributed zero to their medical premiums and they contributed zero to their pensions. So what that contract that was ultimately agreed to did was for the first time, BART employees contributed to their pensions and for the first time, BART employees contributed to their medical expenses. So once you crack that nut and you get in there, then you have an opportunity in future negotiations to to change that, to up that, to modify it. And I think that's what we've done today. You know, we're we're asking our employees and they've agreed to for the first time to give part of their salary, to pay for their medical benefits that we promised them. And next time, maybe we ask for 5%. I don't know, maybe we ask for 6%, whatever it is. You know, I think. The second thing important to remember is that this has to be collectively bargained for. And we've gone through the good faith bargaining process. I described it in my opening comments. What we what we've done and where we are today. If we want to impose, we don't have the legal right as much as somebody would like to say. You have this tremendous liability. You need to go off and you need to just fix it and you need to solve it and impose something that makes everyone pay or impose something that takes away their benefits. We can't do that. No matter how good it sounds to people that want us to, we can't do that. And my personal feeling is, if we reject or we delay this vote tonight, you know, I fear, you know, most that we're going to have a deterioration of the hard work that we've all put in to build this collaborative relationship over the last 4 to 5 years. So. The city engaged and actuarial firm. You know, we've seen the numbers at the request of of the public and the council. The city attorney engaged not one, but I think two independent pension legal analysis analysts to do something to evaluate this. You know, I trusted her legal analysis because I think pensions and benefits are part of part and parcel of the qualifications to be a municipal attorney. But she went above and beyond it, and it got the answer. You know, some people may not like the answer, but the answer is the answer. So I think about. This doesn't fully fund our unfunded OPEB liability, but it gets us closer. And I think that the the extension now and the extension of the BRI and the minimal raises and especially the year 2019, which is zero raise, I think that's a fair price to pay. So finally, you know, then there's the finishing touches and I hope that, you know, this council can actually take some of those steps. Right. I don't want to have this issue delayed until 2020 or 2025 when the the trust fund is running out of money. I hope that we can we can continue to make progress on that. And I'd like to see I'd like to see a labor management committee, you know, right after if we approve this put together and we keep talking and we keep working on ways to to solve the problem. So some of the things we could do, as I mentioned earlier, now that employees are contributing to the OPEB trust, no future increases in that 4% amount can be bargained for. And that could help strengthen the trust. The city can on its own elect to make contributions to the trust, either voluntarily. You know, we could say when we look at our surplus in a couple of weeks and decide what we're going to do with it, we could say, you know, we think this is so important. We're going to dedicate, you know, X dollars of that 8.6 million to the to the trust fund. Now, we can collective collectively bargain. You know, as the city manager suggested, we we will add money from this fund in exchange, you know, the bargaining units will do something else. You know, we we could even on our own just make our own decisions on the other fund, like like Councilmember Daisuke suggested, you know, the by all alternative. I was interested to hear that Councilmember Duggan said, you know, that's $5 Million a year, over 30 years. It's that's $150 million, I think that. Even after the war, with the savings of the 47 million, we still don't have $150 million obligation over the over the course of the next 30 years. I think it's the one. Is it the 140? Sorry. I think turns off. I think it's 140, 40 million. So that what's left to be resolved, even if we fund this trust, is still less than, you know, paying off a bond. We could engage in, you know, selective buyouts of some of our younger employees. But my point is, there are a lot of things we could do. There are a lot of things we can try. There's a lot of things we can evaluate. But we have to put this framework in place first. And we have to. Pass this contract. So we have the trust fund and then we're able to find other ways that we can we can we can fund it, you know, and there's other options, too. You know, we've made some progress in the past four years on on cost sharing. You know, there there were discussions in the OPEB taskforce about capping benefits and about increasing the share of of of cost or sharing the cost of increase. So those are things, I think that are all on the table. And if we continue in a collaborative manner to work with our our public safety employees, we'll be able to accomplish a lot of those. If we sit there and we we sit here tonight and we say, you know what? You know, we went to bargain with you in good faith. You reach a tentative agreement, which was a tough sell to your members. But yeah, we don't really like it. I don't think that's going to be create the environment that we need to collaborate long term and solve this problem. So and I just want to close I'm sorry. I'm okay. I'm almost done. Sorry. So I think the window is closing. I just want to talk briefly on where we would be in 2017 if we decided we weren't going to do this. I think we have kind of three different alternatives. One, you know, we could have an increase in revenues over the next two or three years like we've seen the last two years. So if we have those huge increases, eight, nine, 10 million, how are we going to be able to go to our public sector unions and say , in good with a straight face, we're in trouble. You need to help us. You need to contribute some of your money. That's not going to happen. You know, we could stay and be exactly where we are today and have our conservative revenue forecast and our our pension smoothing. And then but I think those numbers for the budget estimate are based on doing something today. Or we could go.
Speaker 0: I'm sorry, I.
Speaker 6: Have to go.
Speaker 4: Sorry, I'm almost done, but that's okay.
Speaker 0: Well, we can.
Speaker 4: I'll make a motion that we go.
Speaker 0: So by 1030 we need to vote to continue with the remaining item. And it's the presentations, nine different presentations. We whether or not we want to do that and.
Speaker 4: Move we move to continue the meeting and consider other agenda items after this.
Speaker 0: I'll second that. So that we wouldn't proceed with. We would tonight we would be minus two.
Speaker 4: Yes. Proceed.
Speaker 2: Oh.
Speaker 0: I didn't want a second thought. Three is nine different presentations.
Speaker 3: We we clarification, if I may, with the city clerk she called the four M0 use already. Those are the action items so those are already on the table.
Speaker 6: We're going to hear the.
Speaker 3: Presentations are not action items, is that correct?
Speaker 2: They're agenda items.
Speaker 3: So I thought they were action.
Speaker 2: So there's no action on those items. Action. It's just for information.
Speaker 0: Okay. We're going to have vice mayor speak at this time. Thank you.
Speaker 1: So. Can we get clarification from the clerk? We finished the M.O. use, but we're not going to proceed with three e. I would support that, but I don't know how we do that administratively.
Speaker 4: That was in my motion. But if that's the will of the counsel, it's not.
Speaker 1: But I'm just asking how we do that.
Speaker 6: Maybe you'd like to hear that.
Speaker 0: We did have we had already agreed to vote on the three for my use right at this time. So we don't need a motion for that. That's part of treating that together. The issue is whether or not we want to proceed with.
Speaker 2: Three E.
Speaker 0: If we have four votes to do that.
Speaker 6: So my. Thank you, Mayor Spencer. My feeling is that we wouldn't really be giving these very important departments their due to have them come in. I'm guessing it'll be around 11:00 to get started. So I think the city clerk has been working here magic and figuring out when when we could do this at another time, if that would help people make it. Well, that would help their make their decision about whether they want because we still need a four.
Speaker 2: If I can clarify one thing, if you continue it to a date certain like next Wednesday, if you could meet on the fifth for your regular meeting and then the sixth for the rescheduled budget items, we would need to continue it to that date certain because we don't have the seven days to notice. But if you continued it to the seventh or the 20th to other date options that happen to be maybe a hopefully available, I would have to re notice that.
Speaker 0: Which states are you looking at?
Speaker 2: So the dates are next Wednesday the sixth. Next Thursday the seventh or after your regular meeting on the 19th? Wednesday the 20th.
Speaker 0: So we have a council meeting on the fifth, don't we? Yes. So you're proposing that we have a council meeting on May 5th and then another one on May 6th.
Speaker 2: You could continue to that date or the seventh or the 20th where the three available dates, if anybody, when you hear those.
Speaker 7: I'm fine with.
Speaker 0: After the seventh. What date?
Speaker 2: 20th. But that would be two. Back to back again. The seventh.
Speaker 6: Don't we have to hear them before?
Speaker 2: Oh, yes.
Speaker 6: We have to hear them before. A certain date, I believe is in the seventh or last possibility.
Speaker 2: Yeah, the six of the seventh. Yeah.
Speaker 0: So the seventh is a historical advisory board meeting. The sixth. As far as I know, Chambers is available.
Speaker 6: It. I'm thinking that it might be nice to have a buffer day in between, but promises to be a long meeting on the fifth.
Speaker 2: Right. And we could be. I don't know if they're meeting.
Speaker 6: They don't always have an agenda.
Speaker 0: So do we know if they have a meeting scheduled that night?
Speaker 1: Hmm.
Speaker 2: I don't know if they do or not. I only check.
Speaker 6: I says. Sometimes it's nice to give the public a little buffer between attendees, you know, who are interested.
Speaker 0: But I don't want to have the public have to choose between two councilmen, between two city meetings. That's why it's set up in a manner. So we're on different nights, but they may not be meeting that night. But they have already given their notice of their. For May 7th.
Speaker 2: Checking.
Speaker 6: You don't have it on your calendar.
Speaker 0: I have it on my calendar.
Speaker 2: But we could we could ask them if they could get it. They haven't.
Speaker 4: So they all withdraw my motion and then move that we continue item three, four or five to May 7th a second.
Speaker 0: All those in favor.
Speaker 3: I want to go ahead and vote for 11:00 right now.
Speaker 0: I'm sorry. Let's finish the one motion, please.
Speaker 6: I think.
Speaker 0: So. So my understanding is that there were three people that voted for that. So. Okay. Okay. But we need four votes to not proceed with three tonight.
Speaker 2: Well, it. You just needed four votes in order to be able to consider it. It's okay that you voted three to move it to another nine.
Speaker 0: We didn't do it. We never had a vote with four of us this evening.
Speaker 2: Just if you wanted to consider it tonight that you needed four votes. Oh.
Speaker 0: Okay. Tonight. Okay. So to continue. Okay. Great. Wonderful.
Speaker 2: That's done. Okay. Sorry I missed the vote. Who. Who were the threesome? Um, yeah, but who are the three I's member?
Speaker 0: Member? Ashcraft is Odie.
Speaker 1: And no.
Speaker 2: I also said no. Okay. Thank you. Well, sorry.
Speaker 4: I can reconsider if the vice mayor is not available.
Speaker 2: Yeah, I mean, we need to have everybody there. This is a general fund, right? Yeah.
Speaker 0: So you're not available at night? Yes. I don't.
Speaker 4: I really I'll probably make a motion to reconsider that previous motion.
Speaker 0: And so if we.
Speaker 4: Complain to the seven, six.
Speaker 0: Another six here.
Speaker 6: You say.
Speaker 0: May six, but. So. Okay, I'll second that motion. Then all those in favor I. Did you know.
Speaker 6: I would have preferred the Wednesday, but.
Speaker 2: That is. It's now the Wednesday.
Speaker 6: No, no, it's the oh, the Wednesday. And that is I would have preferred the Thursday. I think back to back city council meetings.
Speaker 0: Are a bit mad. However, he's not available is.
Speaker 4: What it is.
Speaker 0: So I'm happy to have him here. Thank you. Okay, so we have that now. You may continue.
Speaker 3: I want to do the 11:00 vote now seriously, so you don't have to interrupt.
Speaker 2: If we're going to do.
Speaker 0: So. All those in favor of proceeding or actually we need a motion or something.
Speaker 4: So I'll make a motion to continue the meeting after 11:00.
Speaker 0: I'll second all those in favor. I thank you. You may continue member.
Speaker 4: Madam Mayor and the leave the legislative process at work. So I was just kind of wrapping up here, you know, talking about the windows closing. So the, you know, the third option is that, you know, the economy crashes and if the economy crashes, we're not in any position to be, you know, making any contributions, any long term liabilities will be worried about, you know, survivability. And and our employees will also be, you know, worried about, you know, facing cuts. So I think that's why the window is now and it's closing and we have to do it. So I just want to close Councilmember Ashcraft, you know, referred to the article from the city manager of of South Lake Tahoe, and she closed her article quoting Franklin Delano Roosevelt from his 1936 speech, A Rendezvous with Destiny, and said, there's a mysterious cycle in human events to some generations. Much is given of other generations, much is expected. And the way that the reason why she quoted this and I'm just going to quote her now and her name is Nancy Carey, city manager of the South Lake Tahoe. She goes to some much is expected of today's public managers and employees to bear the burden of reducing these obligations. Talking about OPEB obligations, however, the financial impact of the communities we serve is worth the effort. Although the OPEB numbers are staggering, they are not. Insurmountable. Resolution can be accomplished by bringing everyone into the discussion and collaborating to customize alternatives for each agency situation. If we leverage our collective wisdom and get this right, the next generation will realize, to paraphrase Roosevelt from us, much was given and I think we made. We can make the first step in doing that today. Thank you.
Speaker 0: Thank you. A vice mayor.
Speaker 1: I think it's been a very interesting night and I appreciate. The information that was provided closing the loop from the last meeting. And I was an optimist going into this meeting tonight thinking that a. I agree with the terms. Otherwise, I would not have voted to have the city manager take them to the bargaining table. I think they do not solve the problem. They do not reduce our liability. But for about 5%, $5 million. But they do provide. Up to 47 million in savings just on what we would have paid out of for OPEB payments. Versus what would be supplemented by. I think the most important part of this deal is getting a 4% contribution from our employees where there there's no contribution at this point. That is that is a valuable concession, I think, that we've we've gotten. I looked at the other side and I thought that, you know, if we have a little more time, because my biggest concern on this is that the general public and even some knowledgeable speakers here, I think, have not understood. What the mechanism is and what the liability stands for and what our trust fund, when we contribute as well as when the employees contribute in aggregate what it does to that liability, because it doesn't reduce the liability liabilities there. It helps correct a structural defect in our budget and that that liability was there with no mechanism to pay for it. Now we've got a portion of that, and I heard one of the union reps leave the door open to continue talking, and I think we need to direct that as part of whatever motion we make. And I've completely changed my mind. If I thought that additional time, a week or two weeks for the public to absorb it would be worth the delay. I don't think so. I think that our job is to educate and continue to educate the public on what this particular funding mechanism does. And we were handed by one of the speakers who I have high regard for a list of of objections. And most of these objections are separate and apart from this particular solution. And there's suggestions. Are there issues that require us to be able to have a dialog with with public safety to address them because they're daunting? It's the cost of our services versus cost of our comparable services in dollars, not percentage. That question was asked on the 16th, and we're going to have an answer on the 12th. Right. On why the dollar figure raised up. And that that's to me is a it's a related but separate issue than this. And there is this is a limited time offer in the real world and the world that we're working in. Because we're in a collective bargaining environment and there's ebbs and flows of it. And I think we have to at some point follow through with. When the numbers work and when the numbers are favorable to both organizations, maybe not 100%, but then no one's going to be satisfied. I think we have to move forward with regard to the figure of 47 million. I'm not naive enough to think that that's a $47 billion net savings to the city because, as was pointed out, the purse prices are going up and. We have to resolve that issue in the same time frame. And what I'm looking at this is from 2022 through 2000 and. 33 when the bulk of our savings are accrued, and then the fund loses steam and as it was mentioned before us will have to. Open talks. With a target of bolstering that fund and looking at how we could reduce the liability. And I'll finish with we were provided with the 2007 report to the city council. I was there. I don't know if anybody else was there. Tony, I keep thinking you were there, but you weren't. And Laura was there. And I do remember. I think it was Mr. Bartle himself was there and showed the curve where the costs are going up like a malthusian curve and very steep. And then they level off in 2013. And we all asked, why is that level off in 2013? That's it says there were. The answer was that's when they figure out whoever they is, the health care crisis, the health care costs. And we have seen some of that effect because it was double digits a couple of years ago, has gone down to single digits. And the assumptions that we have here on these figures. Start out at 8.5%, if I'm not mistaken, and ratchet down a series of five or six years and. Of top out it or bottom out at 5%, which is fairly conservative, which I think will offset the 6.25% expected annual rate of return, which I do think is generous . But. I think it it it is a it is a signal that we need to keep this a keep a working group together, because I don't think it can be a committee or a temporary thing. This is what we live with. And I think a working group that is essentially permanent. Is one of my conditions of of voting for this.
Speaker 0: All right. So I also want to thank all the speakers that were here this evening, everyone that sent emails, staff on your efforts and the council members. For me, it's actually, I would say, simpler than everything we've heard tonight. I do look at the budget and I want it to go through this process. I don't believe it's appropriate to enter into a long term agreement that takes us through 2022 prior to going through this budget process. We did have discussion, I believe, recently in regards to asking all of our departments to reduce their expenditures by one and a half percent. Every department I will be. I don't know if you've plan to have staff plans to come back with that suggestion. It will be difficult for me to support such a such such a solution. We have a we have a structural problem. I agree with your member already in regards to a structural problem. And how do you build a house? All of us when we have our home, when we have our personal budgets, we have to be aware of expenditures and we have to be aware of revenues. And if you look at today's presentation, page ten and page 11, page ten shows expenditures out this year of just over 1.3 million from our revenues next year. 1.1 negative is our loss. And we are using up our reserves. Our expenditures are greater than our income. And when you look at the revised after the safety contracts. The loss increases. And that's the reality. Based on these numbers, based on these projections. As a community, I believe we had an opportunity to seriously consider our budget and to figure out how we're going to solve this long term. I disagree that this meets the needs of our community. If you carry out the numbers on this five year forecast, with or without these contracts, you end up in 1920 being down to the 18% in reserves. And I appreciate the comment in regards to we don't. Reserves are not there to sit in the bank that it's okay to spend them. However. It is not appropriate to exhaust your reserves use knowing that your expenditures are greater than your revenues. So when you look at your year 1920 on on the projection, our negative is $5.4 million. It is a serious problem. We will have to address this budget. I don't think it's I don't know how. So I disagree with counsel. This has to be addressed. In my opinion, that's where we are. So I did it. And yeah, everyone has spoken. I'd like to call for the vote. Do we have a motion to move?
Speaker 4: Adoption of resolution approving a memorandum of understanding between the Alameda Police Officers Association APOA and the City of Alameda for the period beginning November 1st, 2015 through December 18th, 2021.
Speaker 7: Madam Mayor, if I can make an amendment. You know, I, I came into my council ship. One of my arguments was to strike the best possible reforms of our unfunded liabilities. There were three promises that I made being open. Pursuing an Alameda point that has the least traffic impacts. And the third point was seek the best solutions to unfunded unfunded liabilities. And I think what the city manager has put forward is a yeoman's effort in working with the bargaining groups. But in my estimation, it does fall short. I mean, especially when you look at things looking starting out at 2037. I mean, the $47 million that's so-called saved in the 19 years between 2016 or 2019 and 2037, the $47 million so-called saved in that period. If you just go back to chart 30, it's eaten up. And then in the next eight years. So I do think that the fundamental problem is that the trust fund idea is just woefully undercapitalized. And so I would only support this if there was language in there directing, creating, looking at transitioning the. The 1079. Balance into some kind of supplement to this.
Speaker 4: Yeah I'm not sure if I would accept that amendment, but I would accept the one that the vice mayor.
Speaker 6: But the the working group to.
Speaker 4: Staff to put together a labor management. Well, you can phrase it in your words.
Speaker 1: It was a labor standing labor.
Speaker 4: Management management committee to investigate other possible solutions. In that one. I would, except.
Speaker 2: One of which could be the 1079 difference. We can actually include that.
Speaker 1: Yeah.
Speaker 0: Member Ashcroft.
Speaker 6: Thank you. I was gonna say I don't see the harm in in looking. I mean, it's part of the everything should be on the table. I'm looking at the numbers. They're not earth shattering, but I don't see the harm. And in.
Speaker 1: It, we.
Speaker 4: Really haven't had it a chance.
Speaker 6: Well, we.
Speaker 4: Can talk about, you know, sunshine, you know, that's an idea has not gone before the public at all. And it could be an idea that this management labor committee comes up with. And we're not closing the door to it by not including it in the motion.
Speaker 6: Okay. So on the on the I do understand your concern about the Sunshine Ordinance. I actually would have liked to have been privy to whatever the reference was and for the public to be as well. So I guess I would I'm more comfortable with just going with the vice mayor's amendment.
Speaker 4: Assuming he an that I mean.
Speaker 0: Yeah.
Speaker 1: I would second it with that.
Speaker 0: All those in favor.
Speaker 1: I.
Speaker 0: Abstentions or opposed? Abstentions. Also abstentions. Oppose.
Speaker 7: Oppose.
Speaker 0: I oppose. Thank you. And motion passes 3 to 2. And now you want to make the second.
Speaker 4: I mean, I'd like to move. Adoption of resolution approving a memorandum of understanding between the Alameda Police Managers Association, FEMA and the city of Alameda for the period beginning November 1st, 2015 through December 18th, 2021, with direction given to staff to form a management labor committee to consider other alternatives to reducing the OPEB liability.
Speaker 6: I would second.
Speaker 0: All those in favor.
Speaker 1: Of my.
Speaker 0: Post oppose motion passes 3 to 2.
Speaker 6: And I'll move. Adoption of resolution approving a memorandum of understanding between the Alameda Police Managers Association.
Speaker 4: I did that one.
Speaker 6: You did. Which we did to three c.
Speaker 2: I.
Speaker 6: Sir. Rich. Thank you. See, I AFC okay. Adoption of resolution. I will move adoption of resolution approving a memorandum of understanding between the International Association of Firefighters and the City of Alameda for the period of November one, 2015, through December 18, 2021, with the same amendment as has been previously offered by the Vice Mayor and Councilmember Ody to direct staff to convene a Labor Management committee. Standing. Standing Labor Management Committee.
Speaker 4: Second.
Speaker 1: Oh.
Speaker 0: All those in favor.
Speaker 1: I.
Speaker 0: Oppose. Oppose. Motion passes 3 to 2.
Speaker 6: Okay. Then I'll move. Resolution of Adoption of resolution approving a memorandum of understanding between the Army two Fire Chiefs Association and the City of Alameda for the period of November one, 2015, through December 18, 2021. Also with the amendment that the resolution include direction to staff to convene a standing labor management committee to continue searching for solutions to the OPEB liability.
Speaker 1: I can.
Speaker 0: All those in favor, I suppose. Oppose motion passes 3 to 2. And at this point so three is going to come back. Number City Manager Communications no communication.
Speaker 10: Thank you very much, Alameda, for the opportunity. I've loved every minute of.
Speaker 0: Council communications. You a member?
Speaker 4: I just have one quick announcement on Monday, May 18th. I'll be holding a town hall light at Lydecker Park on Bay Farm. 6 p.m. to 730 with the police chief, Mr. O'Leary and the Public Works Director, Mr. Hahn to discuss issues relating to police and public works on Bay Farm Island.
Adoption of Resolution Approving a Memorandum of Understanding (MOU) between the Alameda Police Officers Association (APOA) and the City of Alameda for the Period Beginning November 1, 2015 through December 18, 2021.  (Human Resources 2510)